Business Purpose Essential for Employee Resource Groups

NEW YORK—Employee resource groups (ERGs)—also known as business resource groups (BRGs), networking groups and affinity groups—work best when they have a clear purpose, executive support and a business focus, experts said June 29, 2012, at the Diversity Best Practices Network & Affinity Leadership Conference here.

Howard J. Ross, founder and chief learning officer for Cook Ross Inc. in Silver Spring, Md., gave attendees a list of 10 best practices for ERGs:

• Set direction and secure buy-in. ERGs need C-suite support and executive champions. But don’t overlook middle managers. They’re a key audience that needs to be engaged, Ross said.
• Have a strong foundation. Don’t operate without bylaws, a corporate charter or a leadership mandate. It’s your “corporate permission” to exist and critically important, Ross said. There is no need for a 50-page contract. But do articulate commitments, obligations and the ERG’s role, he said.
• Know your purpose. Is the ERG purely social or does it drive talent, performance and profit? Some groups have an identity crisis, he said: “Sometimes they want to be social, sometimes they want to be business drivers. It’s important to have clarity about that.”
• Leverage ERG leadership. Provide opportunities for emerging leaders “to show their stuff” and even to “fail” in their volunteer role, Ross said. Some may have no experience managing a budget or running an event. ERGs need to be a safe place for people to “have the kind of trial and error that is fundamental to what we know about the science of human learning,” Ross added.
• Connect to the bottom line. Companies that don’t use their ERG to connect to new product development, gain market share, and enhance the brand and public awareness, are “really missing the boat,” Ross said.
• Have a “big tent mentality.” If a white man wants to join an ERG for black employees or a straight person wants to go to LGBT group meetings, let them. Doing so promotes a dialogue and a culture of inclusion “that you sometimes don’t see in other pockets of the organization,” Ross said. Some veterans ERGs even have anti-war members. But if someone is disruptive and causing problems, get a senior leader to intervene, he added.
• Connect with other ERGs. Opportunities for collaboration are key. “This is really where the learning and development grows and where you can have the multiplier effect,” Ross said.
• Secure funding. An ERG without a budget is not a corporate priority. If there’s no budget or not enough money, get it. Otherwise, Ross said, “You can end up doing a lot of treading water.”
• Choose your battles. Some ERGs view themselves as responsible for addressing grievances of specific groups, Ross said. Be aware this might be happening and try to shift the focus back to how the ERG can impact the business.
• Be accountable and transparent. Establish metrics and goals. Don’t be afraid to measure yourself and to tell people if you fall short of expectations, Ross said.

“Unless you’re thinking about all of these things at once, you can’t have a comprehensive approach and you can’t grow,” he noted.

‘We Treat It as a Business’

The Travelers Cos. in Hartford, Conn., wants ERG leaders to be strategic partners who make real contributions to their organizations. Instead of holding elections, the company works closely with HR and managers to choose leaders to head up its ERGs and to serve as executive sponsors. Thus, the groups are used for leadership development. “We treat it as a business, just like HR or sales. And the pre-selection of the leaders is a critical component of that,” said Marco Irizarry, manager of diversity for Travelers.

The minimum requirement for someone to be an executive sponsor is that they be a front-line manager and high potential. Potential leaders are vetted through HR and other managers. “That buy-in from their leader and from their HR person is so critical,” Irizarry noted.

Leaders are asked to serve two-year terms. Travelers also provides resources from its enterprise learning & organizational development department for issues like presentation or communication skills, among other things.

“We’ve actually developed a leadership curriculum … to help them be successful,” Irizarry said.

About 60 percent of the network leaders work in the company’s home office in Hartford, while the balance is in the field since the company wanted the program to not be “just a Hartford-based organization pushing it out,” Irizarry explained.

How They Operate

In 2011, the company launched five ERGs, which it calls diversity business networks. They include Asian-American, African-American, Hispanic-Latino, Women and Women in Actuarial & Analytics groups.

“This is unlike other companies where ERGs are very local and grassroots,” said Irizarry, who oversees the diversity business networks. Travelers developed leadership and budget plans and a core vision for each of the ERGs.

Travelers’ groups focus on 3 P’s, according to Irizarry:

• People—by ensuring employee engagement, retention and development.
• Productivity—by figuring out how group events benefit the organization and employees.
• Profitability—by answering the “where’s the money?” question.

The executive sponsor for each group provides business oversight and exposure but doesn’t have to be a member of the group’s demographic. Each group has an advisor who is a member of the demographic group, to provide day-to-day coaching and mentoring for the network as well as help develop events.

Travelers’ employee networks are based on a national model, so there are no local chapters, as there are in other organizations. “We really wanted the opportunity to attract members and to have members network across the entire organization,” Irizarry noted.

Looking Ahead

Many ERGs are successful and have an impact for years, then bottom out. The members might not change, but often the leader or a change in leadership can be to blame. Irizarry said he hopes Travelers’ model helps solve that problem.

In the end, Irizarry said having “the key talent and key resources available on the people side” to make ERGs successful is “the key critical component to the success and sustainability of these networks.”

Pamela Babcock is a freelance writer based in the New York City area.

Related Articles:

Women’s Networking Groups Develop Key Skills, SHRM Online Diversity Discipline, June 2012

Employee Resource Groups for Veterans Deliver Results, SHRM Online Diversity Discipline, February 2012

Resurgent Employee Resource Groups Help Build Leaders, SHRM Online Diversity Discipline, October 2011

Employee Resource Groups Drive Business Results, SHRM Online Diversity Discipline, February 2011

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