TABLE OF CONTENTS The financial impact perspective reflects a statistical summary of the organization's diversity efforts' influence on its financial performance. This perspective often includes an analysis of dollars saved as a result of diversity initiatives, reduced litigation and complaint costs, incremental increases in revenue resulting from successful penetration into emerging markets, and the like. This index perspective is typically tracked to determine if the organization has experienced direct and indirect financial effects caused by implementing its diversity strategy. This perspective should show the results of the strategic choices made in the other perspectives, while targeting several of the long-term goals. The financial impact perspective sets a large part of the general ground rules and premises for the other perspectives.
In an earlier chapter, the balanced diversity scorecard was introduced as a method any organization can turn to for overcoming their almost exclusive reliance on financial measures of performance as the prime indicator of a department's success. Several issues relating to financial measures were discussed (Niven, 2002):
They are not consistent with today's business environment in which intangible assets create most of the value.
Financial measures provide a great "rearview mirror" of the past but often lack predictive power.
Consolidation of financial information tends to promote functional silos.
Long-term, value-creating activities may be compromised by short-term financial metrics from activities such as employee reductions.
Most high-level financial measures provide little in the way of guidance to lower-level employees in their day-to-day actions.
Despite their apparent shortcomings, a well-constructed balanced diversity scorecard is...
