Dear CEO: If You're Not Uncomfortable, You're Probably Not Making Progress
Debora Aydelotte

DENVER, Colo., April 18, 2017 - When it comes to diversity and inclusion initiatives, discomfort is a leading indicator of progress.

In a 2016 interview, Mortgage Bankers Association Chairman (then Chairman-Elect) Rodrigo Lopez, CMB, described diversity and inclusion as "a business imperative" for the real estate finance industry--and leaders across the sector have begun to heed his words.

Encouraged by initiatives such as the MBA Summit on Diversity and Inclusion (held in Washington, D.C., last November) and propelled by demographics that point to a diverse future home buying population, mortgage industry executives are increasingly making the decision to tackle diversity and inclusion in their own organizations.

They've chartered committees with participants from a variety of departments. They've begun receiving regular activity updates from human resources. They've announced their good intentions to their boards of directors and perhaps added a paragraph on diversity and inclusion to their websites or annual reports.

It feels like real progress, and these executives should be applauded for their efforts--but they should know they've only just begun. Monumental as it may feel, getting started is the easy part. The real work begins when companies start aligning activities to move the needle on concrete diversity and inclusion goals.

The question CEOs should ask themselves is, "Am I feeling uncomfortable yet?" If not, it's likely they're using the diversity and inclusion platform as a way to promote feel-good activities rather than digging deep to address the core issues.

In my experience, there are three distinct stages of a successful diversity and inclusion program, and discomfort is the hallmark of the transitional middle stage:

Stage 1: Building Momentum
In this stage, a small budget is set, a committee is formed and a calendar of events is developed. Internal activities focus primarily on line-level employees and their direct supervisors. Executive involvement is limited to token appearances, such as judging employee competitions or distributing occasional awards. External events are chiefly philanthropic in nature, like participating in a fundraising walk or day of service. These activities are a good fit for the corporate culture, and employees seem to enjoy them.

Stage 2: Asking Tough Questions
This is the stage where someone asks whether efforts have directly addressed or improved the company's diversity and inclusion challenges as identified through employee surveys or in HR reporting. Usually, the answer is "no" or "not sufficiently." The timing of this realization can vary depending on what's being measured (e.g., recruitment, diversity at various job levels, advancement). It's a critical inflection point for the CEO, who must decide whether to dig deep and get uncomfortable or continue with the "feel good" activities already in place.

For most CEOs, this is not a particularly pleasant stage--but it's a productive one.

As the MIT Leadership Center's Hal Gregersen observes in the latest issue of Harvard Business Review, "The process of discovery almost always takes you outside the zone where you feel competent and in control"--something many CEOs have not experienced since early in their careers. Yet, Gregersen says, this very discomfort has the beneficial effect of putting CEOs into an "alert mode" where the struggle to find their bearings makes them extra inquisitive and receptive to new ideas and information. Uncomfortable CEOs tend to ask more questions and gather more opinions and information before making decisive moves.

Stage 3: Turning Discomfort into Action
In this stage, companies pave the path to real diversity and inclusion by challenging the status quo and getting to the heart of issues. CEOs will be challenged to make decisions for the good of the firm, putting themselves aside.

If data show managers are failing to meet recruiting and hiring goals, the CEO must take action. If evidence suggests the HR and recruiting teams are not up to the task, it's time for change. If survey feedback shows employees are questioning whether minorities are receiving fair opportunities--or, conversely, disparaging the company's focus on hiring and promoting minorities--it's got to be addressed. Perhaps most importantly, when CEOS have openings on their own executive leadership teams, they need to walk the talk of inclusivity by opening the opportunity to all qualified candidates.

Make Planned Obsolescence a Goal
My advice for diversity and inclusion committees is that they aim to one day make themselves obsolete. By embracing discomfort as a means of achieving meaningful change, companies will gradually progress beyond mere feel-good activities to develop a culture where diversity and inclusion are inherent considerations in every decision.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor does it connote an endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org.)