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What measures can be taken within a Target Operating Model to enhance diversity, equity, and inclusion (DEI) in the workplace?


This article provides a detailed response to: What measures can be taken within a Target Operating Model to enhance diversity, equity, and inclusion (DEI) in the workplace? For a comprehensive understanding of TOM, we also include relevant case studies for further reading and links to TOM best practice resources.

TLDR Integrating DEI into the Target Operating Model involves Strategic Alignment, Leadership Commitment, unbiased Recruitment, Development, Advancement Practices, and cultivating an Inclusive Culture, improving overall organizational performance.

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Before we begin, let's review some important management concepts, as they related to this question.

What does Strategic Alignment mean?
What does Leadership Commitment mean?
What does Equitable Recruitment Practices mean?
What does Inclusive Culture mean?


Enhancing diversity, equity, and inclusion (DEI) within an organization's Target Operating Model (TOM) is not just a moral imperative but a strategic one. A diverse workforce fosters creativity, innovation, and resilience, contributing to better decision-making and improved financial performance. According to a McKinsey report, companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. This underscores the importance of integrating DEI principles into the very fabric of an organization's operating model. Here are specific, detailed, and actionable insights to achieve this.

Strategic Alignment and Leadership Commitment

The first step in enhancing DEI within the TOM is ensuring strategic alignment and leadership commitment. DEI initiatives must be woven into the organization's strategic objectives, with clear goals and KPIs that are regularly reviewed at the highest levels. Leadership must not only endorse these initiatives but actively participate in and advocate for them. This involves setting a tone at the top that values diversity and inclusion as a business imperative, not just a HR function. Leaders should undergo training to understand their unconscious biases and learn how to foster an inclusive culture. Additionally, tying executive compensation to DEI outcomes can significantly enhance leadership commitment and accountability.

Real-world examples of companies that have successfully integrated DEI into their strategic planning include Accenture and Deloitte, both of which have publicly committed to increasing the representation of underrepresented groups in leadership roles. These organizations have established clear metrics to track progress and hold leaders accountable for meeting DEI objectives, demonstrating a strong alignment between DEI initiatives and business strategy.

Furthermore, embedding DEI objectives into the organization's Balanced Scorecard or similar strategic performance management tools can ensure that DEI is considered alongside other critical business priorities. This approach facilitates a holistic view of performance, encouraging leaders to balance financial outcomes with social and human capital objectives.

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Recruitment, Development, and Advancement Practices

To enhance DEI, organizations must revisit their recruitment, development, and advancement practices. This includes implementing unbiased recruitment processes, such as structured interviews and blind resume reviews, to minimize unconscious bias. Leveraging diverse recruitment channels and partnering with organizations that focus on underrepresented groups can also widen the talent pool. Once talent is onboard, providing equitable access to development opportunities is crucial. This can be achieved through mentorship programs, leadership development initiatives, and targeted training that prepares underrepresented employees for advancement.

For instance, Google has implemented AI and machine learning tools to identify and mitigate bias in hiring and performance evaluation processes. Additionally, companies like IBM have established robust mentorship programs that pair high-potential employees from underrepresented groups with senior leaders, facilitating knowledge transfer and accelerating career advancement.

Equally important is creating transparent pathways for advancement within the organization. This involves clearly communicating the criteria for promotion and ensuring that all employees have equal access to the experiences and assignments that are critical for career progression. Regularly reviewing promotion data for disparities and adjusting processes accordingly can help ensure fairness and equity in advancement opportunities.

Culture and Inclusivity

Creating a culture that celebrates diversity and practices inclusivity is essential for enhancing DEI in the TOM. This involves fostering an environment where all employees feel valued, heard, and empowered to contribute their unique perspectives. Organizations should encourage the formation of employee resource groups (ERGs) that provide support, advocacy, and community for underrepresented employees. These groups can also serve as a valuable feedback mechanism for leadership on DEI-related issues and initiatives.

Companies like Salesforce have led the way in creating an inclusive culture by actively supporting ERGs and leveraging them to drive policy changes and community engagement initiatives. Salesforce's approach to inclusivity extends beyond internal policies to influence its ecosystem, including customers and partners, demonstrating the far-reaching impact of a truly inclusive culture.

Moreover, regular training on topics such as unconscious bias, cultural competency, and inclusive communication is critical. These training programs should not be one-time events but part of an ongoing education effort that evolves as the organization and its understanding of DEI deepen. Implementing regular DEI climate surveys can help organizations gauge the effectiveness of their inclusivity efforts and identify areas for improvement.

In conclusion, enhancing DEI within the Target Operating Model requires a multifaceted approach that includes strategic alignment and leadership commitment, equitable recruitment, development, and advancement practices, and the cultivation of an inclusive culture. By taking these steps, organizations can not only improve their DEI outcomes but also enhance their overall performance and resilience in an increasingly diverse and global marketplace.

Best Practices in TOM

Here are best practices relevant to TOM from the Flevy Marketplace. View all our TOM materials here.

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Explore all of our best practices in: TOM

TOM Case Studies

For a practical understanding of TOM, take a look at these case studies.

Target Operating Model Transformation for a Global Financial Services Firm

Scenario: A multinational firm in the financial services industry is grappling with a fragmented Target Operating Model.

Read Full Case Study

Operational Excellence & Target Operating Model (TOM) Design in Specialty Chemicals

Scenario: The organization is a specialty chemicals producer in North America facing challenges in aligning its operations with strategic objectives.

Read Full Case Study

Target Operating Model Refinement for Education Sector in Digital Learning

Scenario: The organization is a mid-sized educational institution that has recently transitioned to a hybrid learning model.

Read Full Case Study

Target Operating Model Transformation for an IT Services Firm

Scenario: An established IT services firm in North America has been struggling with its Target Operating Model due to a rapid expansion into new markets and technologies such as artificial intelligence and cloud computing.

Read Full Case Study

Live Events Strategy for Independent Music Venues in Urban Areas

Scenario: An independent music venue located in a major urban area is facing a critical juncture in defining its Target Operating Model to stay competitive and profitable.

Read Full Case Study

Strategic Target Operating Model Redesign in Telecom

Scenario: The company is a mid-sized telecommunications provider facing significant market pressure due to rapidly changing technology and customer expectations.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

What role does organizational culture play in the successful implementation of a Target Operating Model, and how can it be aligned?
Organizational culture is crucial for the successful implementation of a Target Operating Model, requiring alignment through leadership, strategic planning, and communication to achieve strategic objectives and adaptability. [Read full explanation]
How can a Target Operating Model facilitate a company's agility in responding to market changes?
A Target Operating Model enhances a company's agility by defining operations, roles, and processes for Strategic Agility, Operational Excellence, and a Culture of Innovation, enabling swift adaptation to market changes. [Read full explanation]
How does the integration of sustainability goals into the Target Operating Model influence business strategy and operations?
Integrating sustainability goals into the Target Operating Model transforms Strategic Planning, drives Innovation, enhances Operational Excellence, and necessitates Leadership and Culture shifts, leading to improved profitability, brand reputation, and resilience. [Read full explanation]
What are the key considerations for integrating ESG (Environmental, Social, and Governance) principles into a Target Operating Model?
Integrating ESG principles into a Target Operating Model involves Strategic Alignment, Leadership Commitment, embedding into Core Business Processes, robust Data Management and Reporting, and fostering Continuous Improvement and Innovation for resilience and value creation. [Read full explanation]
How can the integration of digital technologies in a Target Operating Model improve operational efficiency?
Integrating digital technologies into the Target Operating Model enhances operational efficiency by streamlining processes, improving decision-making, and enabling agility, as evidenced by Amazon, GE, and Netflix. [Read full explanation]
How can the principles of a circular economy be incorporated into a Target Operating Model to drive sustainability and innovation?
Integrating circular economy principles into a Target Operating Model involves comprehensive Strategic Planning, Operational Excellence, and Innovation to minimize waste, optimize resource use, and drive sustainable growth through redesigned products, processes, and business models. [Read full explanation]

Source: Executive Q&A: TOM Questions, Flevy Management Insights, 2024


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