Employee Resource Groups (ERGs) are often seen as a box-ticking exercise—a way for organisations to signal diversity and inclusion without genuinely harnessing the value these groups can offer. But when approached strategically, ERGs have the potential to become integral assets. While they aren’t assets in the traditional financial sense—something you can buy or sell—they offer tremendous value by shaping company policies, influencing culture, and guiding corporate social responsibility. Doing so helps drive long-term success and sustainability, making them invaluable to the organisation.
Let’s explore how ERGs can move beyond their box-ticking roles and contribute meaningfully to an organisation’s success. We’ll define what it means for an ERG to be “strategic” and introduce practical steps to elevate their impact.
Defining “Strategic” for ERGs
To understand how ERGs can be strategic, we must clarify what “strategic” means within a business context. At its core, being strategic involves making decisions and taking actions aligned with long-term organisational goals. For ERGs, this means going beyond social activities to influencing the direction of the company in a way that enhances both business performance and the experience of employees.
When ERGs are utilised strategically, they act as a bridge between diverse perspectives within the workforce and decision-makers in leadership. They become critical in shaping policy, developing a purposeful culture, and even guiding corporate responsibility efforts. The result is an organisation that is more aligned with the needs of its diverse employees and stakeholders.
David Glasgow’s work offers a valuable framework for understanding how organisations can evolve their ERG strategies. He outlines a progression of models, starting with the Do No Harm approach, moving to the Embassy Model, and eventually advancing to the Advocacy Model.
Do No Harm Model: In this model, companies seek to avoid making the situation worse for marginalised employees, particularly in regions where legal or cultural restrictions may limit their ability to support diversity initiatives. The organisation focuses on compliance and risk management, ensuring they don’t create harm without actively promoting inclusion.
Embassy Model: Here, companies provide safe internal spaces—much like embassies—where employees can feel supported. ERGs in this model primarily focus on internal initiatives, creating a culture of inclusion without challenging external cultural or legal norms.
Advocacy Model: The final and most proactive stage is advocacy, where ERGs actively push for change within and outside the organisation. This could include influencing public policy, forming external partnerships, or aligning corporate giving with the values of the community the ERG represents. The ERG becomes a powerful driver of positive social change in this model.
Real-World Examples of Strategic ERG Involvement
Organisations such as Dow, Ernst & Young (EY), and Microsoft have been recognised for strategically integrating their ERGs into broader business goals. However, it’s essential to acknowledge how these initiatives evolve in the face of internal pressures and external political climates.
Dow: Dow continues strengthening its DEI efforts, as reflected in its 2023 INtersections Report. The company has increased ERG participation, improved workforce diversity, and maintained its focus on inclusion as a core business driver. Dow’s strategic approach has seen them leverage their ERGs, particularly the PRIDE network, to guide corporate giving decisions. By drawing on the expertise of its LGBTQ+ employees, Dow has ensured that their charitable investments align with the values of these communities, reinforcing both internal culture and external impact. Their approach exemplifies how ERGs can support long-term innovation and sustainability goals.
Ernst & Young (EY): EY remains committed to advancing DEI as a business imperative. Despite shifting market conditions, EY’s transparency in publishing DEI data underscores its belief that inclusive leadership fosters better decision-making and resilience. EY’s ERGs play a central role in shaping internal policies and culture. They actively contribute to discussions around workplace inclusivity and equity, ensuring that underrepresented voices are included at the highest levels of decision-making. By aligning ERG contributions with the firm’s broader goals, EY has managed to keep DEI at the heart of its long-term business strategy.
Microsoft: Recently, Microsoft faced public scrutiny due to perceived cuts in its DEI team. However, the company clarified that these cuts were limited to specific roles within its events team and did not impact the core diversity efforts. Microsoft remains committed to its Global Talent, Development, Diversity and Inclusion (GTDDI) team. In addition to internal DEI efforts, Microsoft has successfully integrated ERGs into its product development, marketing strategies, and hiring practices, reflecting how DEI can fuel innovation and inclusivity. These developments highlight large companies' challenges and opportunities in maintaining robust DEI initiatives amid economic pressures.
Actionable Steps to Leverage ERGs Strategically
So, how can your organisation take its ERGs from well-meaning support networks that foster community and belonging and transform them into critical drivers of organisational strategy and impact? Here are some actionable steps:
Policy Creation and Review: Involve ERGs in developing and reviewing organisational policies. While ERG members may not all be HR experts, they bring valuable lived experience and insights into their communities' needs.
Cultural Development: Engage ERGs in shaping your organisation's culture. These groups can offer key perspectives on values, behaviours, and language that resonate with diverse employees, helping to foster a more inclusive environment.
Corporate Giving: Leverage ERGs in your corporate giving decisions. They can guide your organisation to invest in initiatives that align with the values of their communities, ensuring your charitable contributions have a meaningful and lasting impact.
ESG Reporting: With the rise of Environmental, Social, and Governance (ESG) reporting, ERGs can play a vital role in the “social” component of your strategy. By involving them in initiatives contributing to ESG goals, your organisation can better align its diversity efforts with its long-term sustainability objectives.
Move from “Do No Harm” to Advocacy: Encourage your ERGs to move beyond simply mitigating harm. Please support them in becoming advocates for positive change through public partnerships, external advocacy, or community engagement. This benefits the company and fosters a deeper connection with external stakeholders.
Why ERG Leaders and Members Should Make Their Work Strategic
The shift from a supportive network to a strategic driver isn’t just beneficial for the organisation—it also offers substantial rewards for ERG leaders and members. When ERG contributions are recognised as strategic, the work becomes a measurable and compensated part of their role rather than something done ‘off the side of the desk.’ This recognition validates the time and effort invested and enhances credibility, offering career-boosting visibility and influence within the company. Furthermore, ERG leaders and members gain access to senior leadership, mentorship, and networking opportunities, increasing their chances of career progression and potentially helping to break through corporate barriers, like glass ceilings, that disproportionately affect marginalised communities. For many, contributing to strategic initiatives provides a deeper sense of purpose and fulfilment, as they see their work have a meaningful impact on the organisation and the communities they represent. Additionally, ERG leadership develops valuable skills—such as advocacy, project management, and leadership—that will serve them well in future opportunities, making the work personally fulfilling and professionally rewarding.
ERGs are far more than networking groups. When strategically utilised, they can drive significant organisational change, enhance company culture, and make a lasting impact on both the organisation and its wider community. By deliberately elevating the role of ERGs, organisations can unlock the full potential of their diverse workforce and position themselves as true leaders in diversity, inclusion, and corporate responsibility.
If your organisation is ready to elevate its ERGs from community-building groups to strategic assets, I can support you in defining that journey. Whether you’re establishing ERGs from scratch or seeking to enhance existing ones, I offer tailored strategies to align ERGs with broader organisational goals. My expertise also includes facilitation between leadership and ERGs to ensure a collaborative approach that maximises value for the organisation and its people.
Get in touch to explore how we can work together to unlock the full strategic potential of your ERGs. Email me: cynthiafortlage@cynthiafortlage.com
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