Doing Diversity

By Prince, C. J. | Chief Executive (U.S.), April 2005 | Go to article overview

Doing Diversity

Prince, C. J., Chief Executive (U.S.)

The question isn't why to do it-but how. Here are a few savvy strategies that really work.

To chief executives who "get it," corporate diversity is a no-brainer: Create an organization that respects and welcomes all employees regardless of gender, race, ethnic background and sexual orientation and you win top talent from every group. What's more, you assemble a work force of happy, loyal employees whose diverse perspectives combine to spark innovation and who can market to the spectrum of customer niches from which they hail.

To those who don't get it, the diversity mantra sounds like an ill-conceived liberal notion that hamstrings companies with artificial hiring quotas and costly, touchy-feely programs.

Then there's the group in the middle-the CEOs who kind-of-mostly get it, but are not yet sure how to draw the direct line from diversity to profits. The CEOs in this group have heard the startling projections: According to the most recent U.S. Bureau of Labor Statistics, by 2008, women and minorities are expected to make up 70 percent of the new entrants to the work force. If realized, that seismic shift promises to forever change the complexion of U.S. companies, large and small, spawning a host of new challenges for CEOs-and not just those heading up bnsiness-to-consumer companies either. Business-to-busincss companies are already finding homogenous teams are at a disadvantage when they face more diverse groups at the negotiating table or when they pursue government contracts. And then there's the global issue; as more companies spread out across culturally disparate continents, seamless operations depend on the ability to recognize, appreciate and even celebrate difference.

So how do yon "do diversity" without either blowing the budget on wasteful programs that don't show sufficient return, or alternatively implementing one-off solutions that make nary a dent in the company's culture? How, for that matter, do you even know what yon need?

Fortunately, the leaders in diversity, most often in "consumer-facing" industries such as hospitality and consumer products, have paved some of the way with their own trial and error, and have managed to trace some of their initiatives directly back to profits. These best practices involve serious CEO commitment, clearly outlined policies, measurable goals and a compensation system that includes incentives for meeting those goals. As with any other companywide initiative, diversity efforts won't survive a halfhearted attempt.

Finding Out Where You Stand

One of the biggest roadblocks to implementing successful diversity initiatives is a lack of information about where the company is and where it needs to go. Many CEOs aren't aware that they're specifically failing to promote minorities or women, or mat they have a serious discrimination problem brewing, until they're served a subpoena. "They don't know what they don t know," says Mauricio Velasquez, president of the Diversity Training Group, based in Herndon, Va., whose clients include Coming, Merrill Lynch and Sony Pictures. Often, he adds, they don't want to know. "Denial is usually the first reaction of the executive suite," says Velasquez.

That attitude may carry down deeper into the organization, particularly when a work force is homogenous-i.e., white male. "People who have advantage don't like to lose advantage," says Krroll Davis Jr., CEO of energy holding company Alliant Energy, based in Madison, Wis. Davis, himself African-American, says his favorite question from an employee illustrates the point: "He said, 'Why are we hiring all these females and minorities? Why don't we just hire the best people like we always have?'" People have a tendency to "gravitate towards comfort," Davis adds, and that means towards people more like themselves. As a result, they're a lot less likely to be diversity whistle-blowers.

Given that hurdle, CEOs who want to get serious have begun asking diversity experts for organized assessments, also called audits or diagnoses, of their companies, complete with focus groups and employee surveys, as well as retention data analysis to find out who's staying, who's going and why. …

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