Managing the Diversity Revolution: Best Practices for 21st Century Business

Article excerpt

Diversity Today

It's every CEO's worst nightmare. He's packing his briefcase for the evening when he gets a panicky call from his public relations firm. There's a story set to appear in tomorrow's Wall Street Journal: A class action suit is going to be filed against the company alleging pervasive racial discrimination. The lawyer spearheading the case has won multi-million dollar lawsuits against several Fortune 500 firms. Worse, there are rumors that a major civil rights figure may be launching a boycott against the company, damaging its reputation in ways that will take years to undo.

Then a call comes in from the VP in finance: The company's shares in early evening off-hours trading have dropped by three points, and are falling fast. Oh, and there's probably nothing to this--the VP's voice drops to a whisper--but has he heard anything about an incriminating audio tape? Something about racist language at a recent executive staff meeting?

Still consulting with finance, the CEO is interrupted by the persistent beep of call waiting. It's the New York Times. The questions come fast--faster than he can answer them. Any response to the lawsuit? Was he aware of the racial tension at his Decatur, Illinois, plant? How many senior VPs in the firm are African American? Just the one? Out of how many?

Nothing quite this dramatic, of course, has ever occurred to any real company. Even when disaster strikes, it's usually spread out over a period of weeks or months. Still, if the timeline has been condensed for dramatic effect, the incidents it describes are real enough, as any reader of the business pages will recognize. The $132 million dollar settlement at Shoney's is dwarfed by the $176 million settlement at Texaco, which in turn is trumped by the $192 million settlement at Coca Cola. Small wonder that diversity and anti-sexual harassment training have mushroomed into a billion dollar business, or that company chieftains woo civil rights leaders today as assiduously as they romance Congress.

As companies scramble to avoid lawsuits, however, they're discovering something surprising: Diversity, it turns out, can be good for them. "How well an enterprise works--how productive it is in a highly competitive global economy--depends on whether it has people who are comfortable working across lines of race, class, religion, and background," say former Ivy League university presidents Derek Bok and William Bowen. "Diversity is a business imperative because it affects competitiveness."

This article takes that proposition as its theme. In a nation that is becoming increasingly multiethnic, and in a world that is ever more interconnected, diversity has become an inescapable business reality. Managed well, diversity can be a source of competitive advantage; managed poorly (or simply left to its own devices), a source of frustration, resentment, and yes, even disaster.

Business can't be given the task of reforming society or of righting the nation's historical wrongs. That is a task for everyone--individually and collectively. But business can make sure that the doors of opportunity are held open to all. If there is one consistent message to be gleaned from the existing research and from the experience of countless corporations, it is that responding proactively to diversity is not only the right thing to do, it's also the smartest. As Jocelyn Roberts, a human resources manager for a DC-based technology company, noted, "We view diversity as something more than a moral imperative or a business necessity. We see it as a business opportunity."

The Demographic Revolution

The challenge of the 20th century, the great African American scholar W. E. B. DuBois wrote prophetically in 1903, would be the problem of race. For American business leaders, the challenge of the 21st century may also prove to be race--as well as ethnicity, gender, age, religion, disability status, and sexual orientation, to list just a few of the many ways that Americans now define and distinguish themselves. …