Making ihe Business Case

Diversity: business necessity based on business

realities? According to business leaders like CEO

Michael J. Critelli of Pitney Bowes, "It is a busi­

ness necessity. The ultimate question is, how do

we value it and optilnize the attributes for con1 -

petitive advantage? Any company that wants to

be successful will have to do it. 11 BankBoston CEO

Charles Gifford agrees, "Diversity is a strategic

opportunity, if we understand how the work force

is changing and its impact on the labor pool,

new markets, and a growing global economy, we

will be better able to capitalize on opportunities."

Diversity is seen as an opportunity to increase competitiveness and organiza­tional effectiveness by maximizing tal­ent, fostering innovation, and tapping into the skills and creativity of an increasingly diverse work force. Com­panies are finding a variety of ways to do so, and are being driven by a number of business realities. Effective diversity strategies can help businesses:

+ Increase market share+ Compete more effectively

globally+ Create better organizational

structures and policies+ Enhance recruitment, retention,

and development efforts+ Move toward full-utilization

of all employees+ Imp.rove morale and commitment

+ Smooth transitions in mergersand acquisitions

+ Be more responsive to technologicaland business climate changes

Compru1ies are making a strong business case for diversity and many are taking the lead in demonstrating how diversity is becoming an impor­tant strategy for success. But first, making the business case requires an understanding of the term "diversity."

WHAT IS

DIVERSI1Y?

Too often tl1ere is the 111.istal,en notion that everyone has a common under­standing of the term "diversity." Based

upon the 1988 Hudson Institute publi­cation Workforce 2000, which predict­ed significant changes in the composi­tion 0£ the work .force, "diversity" pri­marily came to represent the increas­ing number of women, minorities, older workers, and immigrants in the work force. But diversity is about much more than visible, physical dif­ferences and demographic shifts. Pills­bury simply defines diversity as, 11 All those ways in which we cliffer." This includes the obvious differences such as race, gender, age, disability, and more subtle differences such as education, sexual orientation, religious affiliation, and work styles.

.. BOUNDARYLESS"

Recognizing that differences often cre­ate barriers to productivity in an orga­nization, General Electric's CEO Jack Welch, in GE's 1994 annual report called for a company with boundary less behavior: He says, "Boundaryless behavior is the soul of today's GE. Sim­ply put, people seem compelled to build layers and walls between themselves and others, and that human tendency tends to be magnified in large, old insti­tutions like ours. These walls era.mp people, inhibit creativity, waste time, restrict vision, smother dreams, and above all, slow things down." 3M's def­inition begins to capture the spirit of diversity and provides a fow1dation for creating "boundaryless behavior." 3M defines diversity as: valuing 1.mique­ness, while respecting differences, max­imizing individual potentials, and syn­ergizi.ng collective talents and experi­ences for the growth and success of 3M.

"GLOBAL IN SCOPE"

Dive rsity is also primarily a domestic term . Nicol e Barde, mana ger of Intel business practices network explains , "The word diversity has no mean ing

outsid e the U .S. But we are global in scop e, our values are global in scope.

The use of the U.S . paradigm , mostly focus ed on race and gender , is very con­strictive to us. We expect all employees

to perform to values. Ours is a mor e multicultural appro ach. " Defining div ersity is critical for effectiv ely m ak­ing the busin ess case. It ma y impact how diversit y is perc eived in an organi­zation and how strategies will be devel­oped. Definitions that are limited to visible aspects of diversity limit oppor­tunity and can reinf orce th e myth that

. diversity equals Affirmativ e Action.

"INCLUSIVE"

Broader definition s create opportunity that help th e business, individuals, and ultim ately , society. A rule of thumb , definit ions must be inclusive. Perhaps Ron Baukol, executive vice-president of int ernational operations at 3M says it best : "By maximizing the in dividual, you maximiz e the company." Her ein lies the chall enge and opportunity to maximize the individual and create environment s for full utilization of th e

Customers and Markets

Global Diversity

Productivity Impact

Work Force 2000

Internal Demographics

More Creativity

Retain Minorities

Recruit Minorities

Work and Family

Compliance

Benchmarking

Upward Minority Mobility

Reduce Liabilities 0

work force for corporat e success and competitiveness. Len te Louise Louw , co-author of Valuing Diversity: New Tools for a New Reality, expl ains , "Whereas the strength of many of the nation's competitors is their homo­geneity, it is Am erica's diversit y that represents both its biggest crisis and its greatest opportunity. Th e real chall enge is to grasp the opportunit y diversity presents ."

20

SEIZING THE OPPORTUNITIES "Opportunit y" is the operative word for diversity. Practition ers argue the cost for creating diversity initiatives is low, especia lly in the potential gains that it offers. Th ey say that not responding to work forc e and work­place realities far outweighs costs of implementing initiatives . Costs come in missed market and product opportu­nities, failed marketing attempts, inability to enter foreign markets , low morale and product ivity , absente eism , high turnover , and litigation. The proof

of impact of diver sity initiatives is not necessarily the argument for the busi­n ess case . Rather , work forc e and workplace realiti es provide the com­pelling argument for business leaders. Confinn s Dave Drury , CEO of Principal

30

...... ;. ......... : .... . CHART I :

MAKING THE BUSINESS CASE ...................... . . . . . . . . . . . . . .

: : . . : : . . : : . . . . . . . .

40 so

"' ~

j 60

PERCENT OF RESPONDENTS

Financi al, "Ou r senior management

believ es the bu siness case is over­whelming. It is clear th at to serve cus­tomers you mu st hav e employ ees who can work with th em. It is a commit­ment, a strategic decision for both the short- and lon g-term. We are a practical, prudent , and successful organization. We don 't do things just to feel good, but also always believ ed doing th e right thing was good for business. Diversity is the right thin g to do for cust omers , emplo yees, and the company. "

A recent Conference Board study, Diversity: Business Rationale and Strategies, found among the following business realities the m ost comp ellin g arguments for leading global compa­nies to address diversity (SEE CHART 1):

+ Increasingly diverse customers and markets

+ A global economy + Ne ed for incr eased productivity

+ Chan ging composition of th e work force

INCREASINGLY DIVERSE CUSTOMERS AND MARKETS The most pressing, most immediat e, and most clearly link ed bottom-line

argument is about customers and mar­kets (this one also makes the "easiest sell" according to Conference Board sur­vey participant s). Bob Lattim er, global practice leader at Towers Perrin explain s that, "The typical consumer is radically chan ging. Today, women spend 85 percent of the consumer dol­lar. Older Am ericans now control mor e than 50 perc ent of all discr etionary incom e and spend more than $800 bil­lion annually. By the year 2000, African­Americ ans, Hispanics, and Asian-Amer­icans will hav e an annual spendin g power of $600 billion. These are dra­matic numbers ." In compani es whos e customers repres ent a broadly defined cross-section of the population, th e

motivation for addressing diversity issues is already closely tied to prof­itability. Deborah Yarborough, diversity manager at Silicon Graphics, explains, "An increasingly diverse customer base is looking for marketing, service, and sales of products that suit their individ­uals' tastes, needs, and style . If these customers don't feel respected and lis­tened to, they will take their business elsewhere ." Diversity initiatives help drive effective management and utiliza­tion of a diverse work force as well as the potential to enhance marketing strategies by bringing insights from a variety of cultures into an organization.

EMPLOYEES TAP MARKETS

BankBoston has found advantage in its internal diverse work force to respond to changes in market demographics. Gayle Snowden, president of First Community Bank of BankBoston says, "We have community development officers, people who are Latino, Cambo­dian, white, male/female, who go out and deliver seminars to bring people into the system. We try to tailor prod­ucts to meet the needs of the commu­nity." Based upon research on emerg­ing markets, First Community saw a potential market in the Latino commu­nity. To tap that market, it meant looking closely at how they did busi­ness, including:

+ translation-within all aspects of the business

+ changes in backshop operations + assessing how loans were sold + creation of an 800 line for people

who speak Spanish + identifying effective advertising­

radio was identified as a powerful medium

+ utilization of vendors who understand diverse markets and translation

+ opportunities for Spanish speakers within the bank

The stories of tapping into niche and targeted markets are growing. Sim­ply taking the time to learn about the

unique needs and opportunities within markets through research and the uti­lization of employees internally who know those markets is reaping benefits for companies. The St. Paul Companies has reengineered its apphcation process to meet the needs of the Native Amer­ican communities enhancing access and service. Eric Watson, corporate diversi­ty officer at the St. Paul Companies explains, "the application process did not fit who they were. By building rela­tionships with them we were able to better identify and meet their needs." The St. Paul Companies has estab­lished a multicultural marketing group of vice-presidents who research mar­kets and populations, and work with various functions in the company to tell them where targets and opportuni­ties are. American Express Financial Advisors, like The St. Paul Companies, has tapped into the gay and lesbian market expanding their customer base while providing a needed service. The

community has responded positively to the company's outreach and innova­tive initiatives that say, "We value you as a customer."

SUCCESS IN DIFFERENCES

Some important learnings from these targeted markets have been the realiza­tion that not only "like-people" can mar­ket to certain groups . While companies are utilizing their various networking groups and individual employees from different groups-whether Hispanic, Black, Asian, female, disabled, gay/ les­bian, or others-to gain cultural aware­ness, understanding of and access to ethnic markets; there are high perform­ing individuals who have demonstrated tremendous success with people outside their own group. For example, Allstate found that their most successful sales­people had learned on their own how to respond to the needs of different groups. Jennise Henry, Manager, Diver-

EXHIBIT 1: FOUR FAULT LINES IN THE

GLOBAL WORKSPACE

Global Workspace

Sour ce: Mary O'Hara-Devereaux and Robert Johans en, Glo bal Work: Bridging Distan ce, Culture & Time , (San Francisco: Jossey-Bass Publishers, 1994).

sity and Affirmative Action at Allstate explains, "Generational differences were one of the findings that required different marketing and relationship techniques. Our salespeople found that the older generation preferred more relationship oriented sales, in the home, at a slower pace, whereas the younger generation was much more interested in quick interactions, via

faxes and cell phones." Allstate is preparing a video with interviews from their top salespeople about their insights on changing markets. It's not called diversity, but it's about diversity.

Companies also find white sales­people selling effectively to blacks, and black salespeople marketing success­fully to whites. Thomas Mack, director of multicultural marketing at Lincoln Life says, "The myth in multicultural marketing is that people can only mar­ket to communities they are from. If you hire the right caliber of employee, they will be able to work across cul­tures successfully." A critical compo­nent to diversity is teaching people

how to successfully work with people

different from themselves. Companies are drawing upon their internal role models to help others learn.

LEARNING LABS: American Express Financial Advisors has developed an unusual tool for driving diversity in its field locations. It has established 15 Diversity Leaming Labs throughout the company. These learning labs

receive concentrated funding, resource and training support from the Region and Corporate Office . They're focused on diverse segments in the African­American, Gay and Lesbian, Hispanic, and women's m;irket. The labs are not only experiencing increased diverse client acquisition but are also surfacing key learnings such as: diverse client targeted acquisition drives diverse advisor acquisition; there must be a diversity business plan with diversity measurement to effectively drive diver­sity; leaders of diverse client acquisi­tion efforts must not only have demon­strated client acquisition expertise in

that specific diverse segment, they

must also have strong project manage­ment experience .

The labs have grown from five in

1995 to 15 in 1996. With two additional lab start ups in 1997, plans are to keep the lab level at 17, capture the learn­ings, and eventually weave the funding

support from the Corporate office into the field offices. Internal expertise and competence is also helping on the global scale.

AGROWING GLOBAL ECONOMY A global economy provides a compelling business rationale from a variety of per­spectives:

+ global markets represent billions in spending power;

+ operations for multinationals requires cultural sensitivity, understanding, and awareness;

+ countries have their own "diversity" related issues around race, gender, and immigration; and,

+ the work force increasingly reflects a global labor pool.

Mary O'Hara-Devereaux and Robert Johansen, authors of Global Work: Bridging Distance, Culture & Time, explain that economic, social, political, and technological changes "have con­

verged and emerged to change the con­tours of the world of work, leaving us with new markets, new corporate institutions to serve those markets, and new jobs to produce new goods for the world's new consumers (SEE EXHIBIT 1 ). Corporate success is contingent upon the understanding of global eco­nomic trends and the implications for diversity, say business leaders.

Procter & Gamble's CEO John E. Pepper explains, "Our success as a glob­al company is a direct result of our

diverse and talented work force . Our ability to d~velop new consumer insights and ideas and to execute in a superior way across the world is the

best possible testimony to the power of diversity any organization could ever have." Chuck Reid, director of Ethnic External Relations at Kraft Foods Inc., a Philip Morris Company, concurs, "Being global means that our customers are diverse, our stockholders are diverse, the population which is available to us is diverse, our productivity, creativity, innovation, and people who supply us are diverse . There is no way we can run a business effectively without a deep understanding and accommodation of these elements."

A global economy impacts not only large, multination al corporations, but companies across the entire coun­try. Joe Driskill, director, Missouri Department of Economic Develop­ment, explains, "Missouri is a state with a great diversity of economy and we are changing rapidly. Most of the companies we deal with in our state employ 50-500 people . Increasingl y our businesses are connected to a global busine ss environment. Exports are up 80 percent. Companies tell us diversity is important . We help them identify the talent and find the resources they need to do business effectively here and abroad."

THE UNITED STATES REFLECTS THE WORLD

The diversity that exists in the United States provides an opportunity to build on this domestic capability for global competitiveness. Virtually every coun­try in the world is represented in the United States . For example, Bank of America's 95,000 employees work in 3 7 countries, and service 11 million households in 10 western states. The California customer call center staff covers at least 13 languages , 2A hours per day. They do this because 32 million people in this country speak a language other than English at home; 8.6 of them are in California alone . Valerie Crane, senior vice-president and direc­tor , corporate diversi ty development , at Bank of America explains, "Those nnmh ers reoresen t a verv sizable se_g-

.. ment of our actual and potenti al cus­tomer base, as well as our labor force."

RECIPROCAL LEARNINGS: There are some reciprocal learnings that can take plac e within global companies. In other words, domestic diversity initiatives can promote understanding for better global operations, and international experience can bring insight into domes­tic initiatives . Principal Financial found complimentary efforts during simultaneous development of diversity initiatives and global operations. Says Dav e Drury, CEO, "We are rel atively new in th e international arena-Princi­pal Internation al was formed in 1990. In six years we have started businesses in Spain, Mexico, Argentina, Indonesia, Chile , and Hong Kong. This has been an important imp etus for increasing th e awareness of diversity issues. More and more people in our organization hav e contact with not only domestic , but international customers, suppliers, and

tial and our m1ss10n, we absolutely have to be in a global market. Resp ect for everybody's opinion is one of the keys to establishing centers of excel­lence throughout the world." Employ­ee networking groups, such as those at Silicon Graphics, have provided insights into expanding markets globally. Their Asian networking group was pivotal in helping them gain access in the Pacific Rim. Similarly, their African American networking group played a significant role in exploring the expansion of their markets into South Africa. At Pitney Bowes, they are finding important per­spectives from employees educated outside the United States. Their Asian and Japanese employe es have raised awareness around cultural issues of sending and receiving mail. In the United States, mail is merely a way of getting a message to someone. In Japan, and many other Asian countries, mail reflects the sender. Hence , Pitney Bowes has found that quality of printing and

CH OUR POTENTIAL AND OUR

SOLUTELY HAVE ID BE IN A GLOBAL

CT FOR EVERYBODY'S OPINION IS

TO ESTABLISHING CENTERS OF

OUGHOUT THE WORLD."

work associates. Learning about cultur­al differences in international settings is important for set-up of diversity issues on a domestic scale . Our domes­tic and global initiatives are tied in very well-they reinforce each other."

INTERNAL RESOURCES FOR GLOBAL ACCESS

Corporations often have internal global and cultural expertis e at their fingertips. Jim Brewington, president of product realization at Lucent Technologies explains, "If we are to reach our paten-

attributes of mailings are much more important in some cultures and subse­quently responded to those cultural perspectives .

DuPont has over 100 networks. Bernie Scales, manager of diversity , edu­cation and development at DuPont explains, "Networks play a unique role in providing for organizational growth and development, while helping DuPont meet its business goals and objectives. Network members have pro­vided important insights regarding eth­nic markets here in the United States as well as in other regions of the world . For

•

example, the company recently test­marketed a new hosiery fiber with women in its Asian network. In addition, African-American networks helped our Agricultural Products business build a closer relationship with black farmers, a major customer base for DuPont." Net­working groups provide opportunities for employees to excel and develop while making real contributions to the success of the company.

GLOBAL TEAMWORK

Diversity is not just about working with customers externally, but being part of a global team. Nicole Barde, manager of Intel Business Practices Network explains, "We are a global company and we rely on global teams. We have major design projects such as the Pentium processor. Teams are multicultural/ multifunctional, often involving people across three to five geographies­domestically and internationally. Our highly integrated management approach helps us get things done. The global team approach has paid off in a short time to market innovative ideas and product design. The business case is predicated on utilization of global teams. Diversity is built in." Pitney Bowes, Michael Critelli agrees, "We, like many other companies, have tremendous growth opportunity from around the world. That allows us to get the perspectives of people, products, or services to grow and prosper. Whether talking about diversity or out-of-the-box thinking, it can provide opportunities for new business ideas and can help insulate us against competitive threats. Through our people we will have a bet­ter ability to look at the world." Corpo­rations need to ensure management and employees understand how to work internally and externally with people who are different. Deborah Yarborough explains, "Cultural competence is no longer an option."

While a growing global economy and increasingly diverse customers and markets make a strong business case, there is still often the question of impact . How do we know that diverse

employees are more productive employees? How do we know that diversity can help us make our organi­zations more effective and profitable?

NEED FOR INCREASED PRODUCTMTY Unlike the very real, direct, and easy sell of diverse markets, productivity is not as easy to quantify. Business leaders argue, however, that productivity gains are contingent upon the full utilization of the work force . Shirley Harrison, director, diversity management at Philip Morris says "In organizations that value diversity, employees are more able to express creativity, contribute ideas and solutions, seek challenges, and assume leadership. Different perspec­tives contribute to creative problem­solving. Productivity increases when employees perceive that they have full opportunity to achieve." Barbara Stem, vice-president of diversity at Harvard

Pilgrim Health Care also explains, "Valuing diversity not only allows peo­ple to be more fully engaged and pro­ductive; we believe it enhances our ability to better service our patients. Employees who are valued are more likely to value the customers they serve . Valuing diversity will help us meet our strategic goals and allow us to: recruit competitively for new talent; cultivate a high-quality work environ­ment and positive staff morale; serve and satisfy our increasingly multi­cultural membership; maximize talents in the organization and minimize costs; and generate more perspectives and, therefore, develop better ways to

solve problems."

DIVERSE TEAMS ARE BETTER

There are some indications that diverse work teams really do make sense. Intel conducted research on their global team effectiveness. Nicole Barde explains, "We selected 10 to 15 high-performing Intel teams (one of them designed the Pentium processor). We wanted to

understand what it was that made them successful." The research indicated a number of successful components:

+ attitude + high motivation + respect among team members

+ goals and focus + understanding mutual expectations

+ trust + cooperation

+ listening + strong internal business relationships + diversity

Vicky Jones, director, diversity management and community relations

at General Motors Corporation, attrib­utes the success of Saturn Corpora tion to diverse groups. She · says, "Diverse groups of employees conceptualized product development, manufacturing and the marketing of strategies." Gary Masada, manager, work force planning and leadership development at Chevron also agrees, "Committed teams generate more profits through their efforts. We link building diversity to building com­mitted teams . It's part of our corporate values." At Pitney Bowes, self-directed work incentive teams have been set up to increase revenue and reduce costs. Critelli confirms, "The teams are diverse and we have seen many benefits as the result of their recommendations."

Years of academic studies demon­strate that heterogeneous groups out­perform homogeneous groups, over time, in providing better problem solv­

ing and more creative solutions. The studies also demonstrate that homoge­neous groups tend to be faster in the short-term. Hence, one of the challenges for corporations is putting in the work

up-front for long-term success. Just as Intel has done, there remains tremen­dous opportunity for companies to study the impact of groups within their organizations. Effective teamwork requires skills and understanding of how to manage diversity effectively. Joseph Medellin, manager, human resources, at Inland Steel Flat Products explains, "It is not just getting people on teams, but drawing them out. Man-

agers and employees need good facilita­tion skills and an understanding of how diverse groups interact."

UNITY AMIDST DIVERSITY

Within the corporate context, it is imperative to remember that even

though diversity may be embraced, there must be a commonality of organi­zational values and goals. Taylor Cox,

noted author and academic, explains, 11 A core of similarity among group members is desirable. Members must share some common values and norms to promote coherent actions on organi­zational goals. The need for heterogene­

ity, to promote problem solving and innovation, must be balanced with the need for organizational coherence and unity of action to provide competitive advantage." This concept helps drive Proctor & Gamble's success. 0 . LaVelle Bond, vice-president-diversity, Procter

& Gamble Worldwide, confirms, "Every­one at Procter & Gamble is united by the commonality of the company's values and goals. Diversity is the uniqueness

each of us brings to fulfilling these val­ues and achieving these goals. By build­

ing on our common values and goals, we are able to create advantage from our differences." Nicole Barde explains that "creating a set of values holds us together and keeps us all moving in the same direction. We understand those values. Each culture might look slight­

ly different, but the intent is the same. We do extensive education around

Intel's culture and values globally. It is important to us." Creating unity, while valuing diversity, is increasingly chal­lenging as the work force changes visi­bly, and attitudinally.

CHANGING DEMOGRAPHICS­THE WORK FORCE ISDNERSE Workforce 2000, or the "work force of the future" is here. Ronald Glover, Direc­tor of Employee Relations and Diversity at Digital Equipment Corporation

confirms, 11 A diverse work force is no longer a theoretical discussion. The current talent pools, no matter what level we look at, are made up of people who are diverse. Furthermore, people

businesses. Internally, it is about having policies, procedures, and environments that access, value, and utilize the diverse work force. Externally, it is about markets, communities, and even

RICA CAN ILL AFFORD ID BE

A FALSE SENSE OF COMFORT

UPWARD MOBILilY GAINS. DESPITE

E IN THE U.S. WORK FORCE BY

N AND PEOPLE OF COLOR OVER ----~ THE PAST DECADE, WE ARE FAR FROM HAVING

A CRITICAL MASS IN UPPER MANAGEMENT

POSITIONS. THE GIASS CEILING IS ALNE AND WELL~

who are different are less likely to be part of an organization that is not going to respect those differences and indi­viduality." The following are among the key work force trends impacting businesses:

+ The number of workers is falling + The average age of workers is rising + More women are on the job + People of color are a growing

percentage of the work force + Immigration is increasing + The world is becoming a global

labor market + White males are a decreasing

percentage of labor force entrants + Disabled are gaining more access

to the workplace + Gays and Lesbians are becoming

more visible and outspoken + Skills gaps are increasing between

employer needs and employee ability + Work/Life Balance is more

demanding for employees + Employees are more demanding

and less loyal

The implications of these trends are significant and complex. They are both apparent and subtle. Each has internal and external consequences for

social concerns that impact business environments and economic viability . Increasingly, companies are becoming aware of their organizations within an economic ecosystem connected local­ly, domestically, and to the world .

ORGANIZATIONAL BARRIERS

Companies are addressing some seri­ous issues related directly to changing demographics. Many corporate diversi­ty initiatives place significant empha­sis on human resources initiatives such as retention, development, and upward mobility of women and minorities. Most companies have done well at recruiting a diverse work force. Keeping women and minorities and developing their skills, however, is often another story.

THE GLASS CEILING: One of the primary reasons for turnover or attrition in companies, especially among women and minorities, is the "glass ceiling"­an invisible but real barrier in many of America's corporations. Claudette Whiting, a director of human resources at DuPont and chair of The Conference Board's Council on Work Force Diver­sity, says, "Corporate America can ill afford to be lulled into a false sense of

comfort regarding upward mobility gains. Despite progress made in the U.S. work force by white women and people of color over the past decade, we are far from having a critical mass in upper management positions. The glass ceiling is alive and well. More­over for women of color, this disparity has been described as a 'concrete ceil­ing.'" Reflecting the reality of her statement, a major East coast firm found that 100 percent of its black employees from a representative sam­ple survey perceived that a glass ceiling existed in the organization. Manage­ment was astounded.

A national work force study by the Families and Work Institute found women in management were more than twice as likely as men to rate their career advancement opportunities as "poor" or "fair." Women who said they saw little opportunity for career advancement also tended to be less loyal, less committed, and less satisfied on the job. Often top management is not even aware that these issues exist. If the best and brightest are not valued, or do not feel valued, they go to compa­nies that provide opportunities, or they become entrepreneurs. The biggest per­centage of new company growth is among women and minorities.

Turnover costs alone provide a good business rationale for addressing the issue of attrition. The director of diversity at a worldwide, high-tech company explains that it costs $12,000 to $14,000 to recruit new employees and $100,000 to train them. The loss of those employees costs the company about $112,000 per employee. These figures do not incorporate the costs of lost accumulated company knowledge, current contribution and future poten­tial, and poor morale where high turnover might exist.

DIVERSITY IS NEEDED IN TOP MANAGEMENT

The glass ceiling barrier prevents the full utilization of employees, creates boundaries, and prevents valuable input to decision-making where it

counts-at the top. One African Amer­ican executive shared his experi ence when the senior management team of a major multinational firm was deciding whether or not their insurance should include pap smears-there were no women executives in the room to con­tribute to the decision making process. If nearly 50 percent of the work force is female, so this is an important benefits issue. He also asked, what would have happened if he were not in the room when the issue of coverage for sickle­cell anemia came up 1

Good decisions require different perspectives. This is a key reason for emphasis on upward mobility and Iep­resentation in top management. In fact, business leaders argue that a market focused approach will have a positive impact on internal representation. One vice-president of a major financial firm explains, "We are finding that client acquisition is driving internal diversity. The numbers are going up. If you try to push people to higher goals, we find out that they are hiring to meet those goals."

DIVERSITY CAN MEAN CONFLICT

Increased diversity means increased complexity. It also means more oppor­tunity for misunderstanding and conflict. Companies which have not created environments where all employees are valued, or that have created real and artificial barriers toward any group of employees, are at greater risk of liti­gious action. Fear of litigation is a "powerful, but unhealthy motivation for promoting work force diversity" says Robert Hayles, consultant and for­mer vice-president of diversity and human resources at Pillsbury . Litigious action against a company based on dis­crimination or sexual harassment can be very costly with significant bottom­line impact. Sybil Evans, a conflict management expert, claims: "Judgments often run in excess of $1 million, to which companies must add an addi­tional 10 to 15 percent in legal fees. This is not to mention wasted man age­ment time, morale, and lost productiv-

ity. Furthermore , negative publicity could cost a company millions-image is costly to build and maintain."

VALUING EMPLOYEES = EXTERNAL SUCCESS

Diverse perspectives work internally to serve the varied needs of diverse employees and improve business envi­ronments, and externally to respond to markets and global trends. At Merck, CEO Raymond Gilmartin says that, "Our company's lifeblood is innova­tion and creativity. We need access to talent from everywhere . We want to make sure it is not restricted ." What kinds of external opportunities are missed, or mistakes made when some­one is not in the room to provide a dif­ferent perspective , to ask the kinds of questions that need to be asked, to challenge the status quo? Some well­known failed marketing attempts have demonstrated the backlash, negative publicity, and lost marketing opportu­nity resulting from not having someone who might have noticed simple over­sights with big consequences.

Richard Notabeart , CEO of Ameritech says , "There are a lot of

thin gs we would just not be tuned into if we were not tapping into our diverse work force . Our advocacy groups help us be sensitive to issues within our corporat e context. For example, our Hispanic and Polish advocacy groups helped us provide services for those communities so it would be easier to do business with Ameritech. Their recom­mendations h ave resulted in tremen­dous successes. " Pitney Bowes ' Critelli explains , "People need to be in environ­ments where th ey are comfortable to be themselv es. Work is intense. People need to feel valued so that they can contribute fully to the organization." By listening to employees from different groups, decision making improves, and aware­ness and sensitivity to issues increases. Companies are striving for long-t erm culture change to ensure that the work environment is not excluding particular groups or individuals from maximizing their abilities and contributions. Santi­ago Rodriguez, director, multicultural programs at Apple Computer, Inc. asks the simple question, "How does differ­ence or absenc e of difference affect our design of products, our marketing of services , and our customer satisfac­tion? A questi on worth pondering.

EXHIBIT 2:

"' "' ::; i «: "-< ..., ..., ~

" 0

b z "' u "' "' p..

THE CHANGING LABOR FORCE PATTERNS OF FAMILIES

70 .............. ................... ................................ ........... ............ .. .

40

30

20

10

0

......................................................... ····.;;•·· ·· ·

•• • •• .......................................................................

.. ... . ., .. "!.!'!. Dual-worker families

• .• ._ .,,.• ,, .. 1 Other families **

............... ,. ....•. ~ .~-~ ...................................... ,,.&J1?'!~::~::...... Traditional families"' .... ""'''''''' ,,,,,,,,,.•"' ,,,,,,11u101n1on• . ,.,,,, ,,,,,,, ..• l ......... ;.'!tfl"H~~~~---······ ······· ····················· ········· · ..... _. ..... . Female single parents ---

- - - - - - - - Male single parents ································ .... ,. 1940 19SO 1960 1970 1980 1990

·T raditional Family: the husband, but not the wife is in the work force. • · o ther: the "head of the househo ld" is not in the labor force (e.g., a couple in whi ch the husband is retired, but the wif e is not in the work force). Source : "Balanci ng Work Responsibil ities and Family Need s: The Federal Civ il Service Response," a report to the President and Congress by the U.S . Merit Syste ms Protecti on Board, Howard V. Hayghe, "Family Members in the Work Force," Monthly Labor Revie w, vol. 113, no. 3, p. 16.

THE FLEXIBLE WORKPLACE

From a human resources perspective, there are many challenges of respond­ing to the needs of a diverse work force. At first glance, the issues might seem overwhelming. In fact, it does require an overall assessment of corporate

practices-from recruitment, to career development, to benefits, to compensa ­tion, to accommodation, among oth­ers. Flexibility is key in today's envi­ronment. Helen Axel, Senior Research Fellow and Consultant to The Confer­ence Board says, "Flexibility is a defin­ing attribute for corporations hoping to survive in the 1990s and beyond. Although corporations can develop

greater flexibility in a variety of ways, one arena that has been significantly affected is the workplace and, inevitably, the work force. The changes that are occurring today can be seen in the way companies are dealing more strategically with work force issues. They can also be seen in the way tech­nological advances are altering the nature of the workplace itself ."

WORK-LIFE DRIVES FLEXIBILITY: Work­

life initiatives have been in direct response to increasing numbers of women in the work force, (still prima­ry care givers) and the changing com­position of the family (SEE EXHIBIT 2).

With more females, dual-earner cou­ples, single parents and individuals with child care and elder care responsi­bilities, the workplace has had to respond with flexible work arrange­ments and employee assistance pro­grams to help employees balance work­life needs. Work-life has provided a

foundation for diversity in recognition that employees have needs that can prevent them from contributing fully to the organization without some flex­ibility. It has raised awareness to the fact that all employees are not alike,

that work can get done in different ways (e.g., flex-time and telecommuting).

BENEFITS FOR A DIVERSE WORK FORCE:

Benefits, too, are changing in response to increasing costs and the diverse

needs of employees. Brian Hackett,

senior research associate in the human resources /organizational effectiveness department of The Conference

E XHIBIT 3: GENERAL ELECTRIC ­

ON AFFIRMATIVE ACTION

Board explains that an emerging "life-cycle" approach to benefits is the "ultimate flex bene-

GE is committed to equality of opportunity as a basic goal of a free society. Consistent with this goal and in compliance

with the law, GE bases all employment decisions on merit, qualifications, and other job-related

criteria-not on any irrelevant factors. fit." He says, "by provid­ing flexible benefits and giv-ing an equitable share to

each person, allows them to decide how

Our use of affirmative action programs ensures that we have

diverse candidate pools and a work environment where everyone is valued

and empowered to contribute to their highest potential.

to spend it. What a single employee in

his or her twenties needs for benefits will likely differ from the

GE will continue to be

a national leader in programs to improve

education and to increase employment opportunities for all

citizens in communities where we have

facilities. needs of a parent or older employee near retirement." As the work force ages, benefits become a major consider­ation for corporations. And, as gays and lesbians become more visible, compa­nies are finding increasing pressure to respond to the need for domestic part­ner benefits. Kodak, IBM, and several other major corporations now offer domestic partner benefits. Kodak CEO George Fisher found customers posi­tively responded to Kodak's commit­

ment to diversity and its employees: "We received letters from customers

and the community regarding our offering of domestic partner benefits . We stood up on an issue we felt was a diversity issue . The fact that we stand behind our employees makes a strong statement to our customers and com­munities. Our customers are more loyal because of it ."

BENEFITS OF FLEXIBILITY: The work­place can benefit from more productive, and dedicated employees as a result of those supportive initiatives. Advan­tages of effective use of workplace flex­ibility are:

+ productivity gains + reduced absenteeism and turnover + heightened employee morale + remuneration method for survivors

of downsizing + positive recruitment tool + improved customer satisfaction.

Across the company,

we envision a great opportunity for competitive

advantage in an empowered, culturally diverse, boundaryless

GE work force.

Compensation, rewards and recog­

nition, career development, education, performance evaluation, succession planning, and other human resources initiatives all need to be responsive to changing work force requirements. In

general, human resources initiatives, along with business planning and strate­gy initiatives, need to be flexible to, and aligned with, a diverse work force. Helen Axel explains, "As companies move for­ward into the next century, workplace

flexibility will continue to gain favor as a strategic management tool. But intelli­gent management practices are needed to secure the commitment of employees so that flexibility can satisfy both indi­vidual and business objectives.

THE HUMAN RESOURCE­BUSINESS DISCONNECT

Despite strong business arguments for diversity initiatives, connections

-

Cross-Functional l Quality Teams j

Mergers ······... Relationship Process 1,,,

Technology\ .... ~

Decentralization \11-..... ... '."~

Globalization \...... ~ l :i i

Competition \. Diver~e Marketplace .:t: : . ~ i \ ..... R. edeployment O i

Cooperation Work force 2000

...Ii \ ...... _Flatter Organizations ~ j

C i

\\~::::~::. '" i,,,':,. \ ..... ~estructuring

\. . Management \.. Philosophy

··· ...

Teamwork Co-workers / .. ··•

Cross-Cultural Teams Partner~_,... . ...-·

Creativity

Learning

...........

A_~.//

~~/ o~ ..

*~/ ~~~/

t_. .. / Cross-Cultural

.?... Cross-Functional

.........

_../// Teamwork

Mentorship

Looser Value

Balance LEADERSHIP Facilitative Networking

Systemic Human Resources & Management

Development Challenges

EMPLOYEE Boundaries PARTICIPATION Diversity

Response Control

Relationship Counts More Than Structure

Labor Practices···/

Cross-Cultural Conflict ./

Capital Investment ...... / ...

Teamwork///

Retention,... ........

..... ···

s-1-........... £~/

O~ / Education & Skills ~ /

_; ...-· Resource Allocation

Trust

Competitors

Stakeholders c. + Customers ~ + Employees z + Shareholders 0 + Community j:: 5 Synergy

~

Value

"No Potential Lost"

Incentive System

& Manage Diversity

Participative Management

Empowerment

EXHIBIT 4: _.// Openness to Competition

/ Technological Innovation

Conflict

Ecology

Cross-Functional Retention/Recruitment

Cross-Cultural

THE GRIGGS MODEL

Communication

Diverse Marketplace

-between the business case and human resources-related diversity initiatives are not always made clear or not clear­

ly understood. For example, initiatives created to ensure the development and upward mobility of minorities may look like affirmative action to some. Companies like General Electric and Philip Morris have printed statements to dispel myths and clarify the distinc­tions between Equal Employment

Opportunity, Affirmative Action, and diversity (SEE EXHIBIT 3). Although dif­ferent from diversity , Affirmative Action is seen by many as a compli­mentary tool to the work of diversity . Claudette Whiting, reflecting on a recent meeting of The Conference Board 's Council on Work

EX H IBIT 5: LINKING DIVERSITY AND

TOTAL QUALITY MANAGEMENT

The key concepts of total quality management

are close ly linked to those of managing work force diversity.

The principle goal of quality improvement is improvement of the organization which, in turn,

increases the reliability of service to the customer and raises

customer satisfaction .

Customer satisfaction and the concept of the internal customer :

THE MORE SUBTLE DIVERSI1Y/ BUSINESS NEXUS While human resources initiatives com­prise a large part of diversity initiatives, there needs to be more. It is about a way of thinking, a way of doing business . Redia Anderson , headquarters director of people and cultural diversity at Sears,

Roebuck and Co., explains , "I try to think about diversity as part of every­thing that we do. When working with

Managers and employees cannot focus constructively on improving quality to external customers until they understand the importance

of meeting requirements within and across

various departments and functions, I try to provide a 'diversity infor­mation overlay' to enhance and

improve the work that is being done. I challenge people to think departments and functions .

Force Diversity explains , Alignment concept: beyond convention. " Diversity is a crit­ical piece of ensuring that the Sears' mission to be a "compelling place to

Organizations function "We examined our com­panies' pos1t10ns on Affirmative Action . The consensus was that Affirmative Action , one

most effectively when employee goals are aligned with the

organization's goals. Organizations are more successful in uniting

different groups in the pursuit of common goals when individuals

feel secure that their differences are valued.

Employee empowerment:

shop , invest , and work" is achieved . This way of

thinking expands diver-component of a broad­based diversity program, is

Employees at all levels are "empowered" to participate in decisions affecting their

work; the team is the organization unit of sity, taps into its

broader definition, and helps establish a compelling rea­son for action.

still a necessary tool. Many council members pointed out that

white women , and to a greater extent, people of color, are far from

choice, from problem-solving groups to self-management work teams. Effective team

performance requires trust and open communication among team members. Employees' understanding

and valuing each oth ers' differences is seen as the key to trust and effective communication.

achieving parity within the The changing

role of managers:

Unmanaged diversity can undercut trust, sabotage communication and create

barriers to employees and teams achieving their potential.

management ranks at the majority of our major corporations. Recruit­ment , development

Mangers are becoming responsible for working in new

ways, from directive to facilitative, to coach and counselor, to

empowerer. They are charged with creating effective teams of employees who are unlike themselves in gender,

race, religion, culture, language, education, values, lifestyle and family

relationships. In total quality management, effectively managing

a diverse work force becomes

A SYSTEMIC APPROACH

and upward mobility are the keys to achi ev­ing this parity and

Affirmative Action was designed to address all three ." One conc ern is that in the absence of effective Affir-

an integral part of enabling employees to perform to their

potential. mative Action programs, organizations will not have a diverse work force to value, respect, and utilize to its full potential.

The business rationale for devel-opment and upward mobility lies in the full utilization of all employees and in ensuring that the decision-making ranks include individuals who repre­sent the internal and external work force, markets , and the world. That

rationale can be enhanc ed, supported, and given sustainability within an understanding of diversity in a broader, business context .

Griggs Productions ha s cre-ated a systemic human resources

and management developm ent chal­lenges model which demonstrates the many diversity linkages and opportuni­ties that exist within companies (SEE

EXHIBIT 4). There are tremendous opportunities to build upon what we already know, on work in place , and for shaping the workplace of the future. For example , in companies like PPG Industries, Inland Steel, Whirlpool, and Harvard Pilgrim Health Care, diversity is strongly linked to total quality man­agement (TQM) , which emphasizes customer satisfaction, teamwork , prob­lem solving, and employee empower­ment (SEE EXHIBIT 5). Barb Stern, explains, "Every three years, we partic­ipate in a major accreditation and review process which focus es on our

clinical quality management and improvement efforts. We are continu­ally evaluating better ways to deliver care across diverse segments of our community. So, diversity and quality are a natural link for us."

Understanding the various link­ages between diversity and the work­place can help diversity managers and business leaders develop a strong busi­ness rationale and strategies by clearly identifying the various ways in which a changing business environment is impacted by diversity.

DIVERSITY SUPPORTS CHANGE

Diversity has several implications and opportunities in the area of change. Lolita Chandler, vice-president, diver-

sity at The McGraw-Hill Companies says that, "Change is a way of life. We have to be aware of change, anticipate it, and be proactive. When diversity is positioned in the context of change, it is easier to embrace the business ratio­nale. When aligning diversity with change, we have to think about processes and assumptions that under­lie policies and practices. We don't do business the way we did it in the past. We have to have the courage to chal­lenge assumptions and be flexible."

MERGERS & ACQUISITIONS: Under­standing the cultural implications of diversity on mergers and acquisitions can help ease the process and optimize the effectiveness of two or more organi­zations and cultures coming together to

create a new organization. It can do the same in joint ventures. Faridah Suluki, Manager; Diversity, Work/Home Life, AA/EEO, Northern States Power Com­pany (NSP), talks about her experience: "In the midst of a merger with Wiscon­sin Electric, NSP is also facing deregula­tion in the utility industry. NSP leader­ship is aware that 'doing more of what we've always done will get us more of what we've always gotten. Creating our business case for diversity has allowed our officers to begin leveraging diversity for the competitive advantage of the organization. Inclusiveness is now rec­ognized as being critical to our ability to generate new ideas and come up with creative solutions to business chal­lenges. Our merger, as a merger of equals, has allowed us a unique opportunity to examine and enhance all of our business

processes to create the best possible combined organization (PRIMERGY). Diversity was approached not only as a human resources concern, but as a key business opportunity. Diversity figures prominently in the Business Strategy for PRIMERGY. In every decision that has been made in the merger process, thought has been given to leveraging diversity as a strength in an increasingly competitive environment."

DOWNSIZING: Downsizing has diversity implications, too. Eric Watson explains, "Downsizing can be analogous to diver­sity. If you do things the same way you did a year ago, you probably won't be successful. Something has to be done differently . And, amidst downsizing, people have to feel valued if they are

going to be expected to do more with less." The manifestation of downsizing has been that people do not feel valued. Companies often do not communicate or overtly state the value to those who remain. Diversity initiatives, such as teamwork, valuing employees, develop­ment programs, and work-life help to create a sense of belonging and commit­ment which helps establish more loyal­ty and commitment among employees.

TECHNOLOGY CREATES DIVERSITY

Technological changes are having a profound impact on companies in many ways. Eadie Ferretti, manager of corporate diversity at NationsBank explains that : "Thinking out-of-the­box became a strong theme for us. Our

success and survival will depend on whether we can place technology in a strategic role within NationsBank. By building an ideal environment for diversity, and hence technology, differ­ent types of people can thrive and be successful based on their abilities, interests and skills; not on non-perfor­mance based factors such as race , gen­der, or ethnicity." For NationsBank, technology has required they change the way they look at work processes, where work gets done, who does the work, and what the top technologists require for their work environments. Ferretti explains, "We are broadening the range of people who need to be here and who have the skills we need. They are coming from non-traditional areas. We have people coming out of

Wyoming or Colorado who want to hook up to modems, not wear suits, and who are not concerned about typi­cal hierarchy. These are the best. We need to ensu re users and those who come in are also part of the environ­ment . How we used to develop people is very different from how we will develop people in the future. Old stan­dards are bein g challenged and are changing ." Some examples of Nations-

p iversity mission statement

:EDUCATION AND TRAINING

C LASSES/LECTURES/ SEMINARS

Diversity briefings for senior management

Diversity integrated ·nto executive education

Board of Trustees orientation

Awareness training

+ for managers

:+: for employees

Diversity Skills training

+ for managers

training

New manager training

~ QU1RED CORE COURS ES

Train-the-Trainer rograms

Change-agent seminars

Cross-race/gender training teams

Partnering in-house trainer/external consultants

EMPLOYEE INVOLVEMENT

Task forces

Task teams

Issue study groups

Focus groups

Diversity council

Corporate advisory committee

Corporate steering committee

Business unit steering committee

Networking groups

entoring

dentification rocess for "high

11otential" employees

Bank's broadening range of differences issu es are:

+ Business people vs. techno logist s + Old development approaches

vs. new continuing learning styles + Mainframe skills vs. client

server skills + Old standards of office work

hours vs. 24-hour telec omm utin g opport unit ies

PERFORMANCE AND ACCOUNTABILITY

Link diversity performance to other corporate objectives

Develop diversity performance measures

+ quantitative

+ qualitative

Incorporate diversity in management by objectives

Define and reward behaviors that reinforce d_iversity

Monitor and report progress

Evaluate business units' performance

Evaluate mangers ' performance

Evaluate all employ­ees ' performance

Tie diversity performance to:

+ business unit head's compen­sation

+ business unit's bonus pool

+ individual incentive compensation

+ direct compensation

+ other rewards and recognition

CULTURE CHANGE

Conduct internal diagnostic studies

+ glass ceiling audit

+ equity studies

+ culture audits

Incorporate diversity items in employee attitude surveys

Benchmark other companies

Develop corporate diversity strategy

Integrate diversity into total quality strategy

Establish stand-alone diversity position

Add diversity responsibilities to EEO/AA position

Emphasize line man­agement ownership

Adopt flexible managerial style, not "one size fits all"

Revise policies/ benefits to support diverse needs

+ Banking industry dress vs. casual anytime

+ Traditional hierarc hic al management styles vs. coaching styles required for different skills, communication sty les, work habits , and motivations.

One of Nations Bank' s key objec­tives is to create a results-or ient ed work environme nt that provides peo­ple th e flexibility they need to get the job done. Th ey also want to illustrat e a diversity perspective and strategies beyond the race and gender discussion, whil e still demo nstratin g the advan ­tages to understanding ongoing race and gender challenges.

In the lat e 1980s Pitn ey Bowes was presented with th e challenge of trans­forming a manufacturing plant from an elect ro-mec hani cal plant to a high-tech operation. Their diversit y issues : a work force that spoke 19 primary lan­guages , sk ill s gaps between what employees kn ew and what they need ed to know, and employees accustomed to isolated assembly operations. Pitney Bowes' Michael Critelli attrib utes the tran sforma tion succes s to investing in the work force by providing a compre­hensive educational process that includ ed reading, math, team buildin g, and conflict resol uti on. Employees were also taught about electron ics, comput ers, and softw are. Now, what would have taken 311 hour s to produc e takes 45 minut es. Empl oyees have learn ed to work in team s, and there hav e been trem endous productivity gains. And, even those who have left th e company, have done so with high er esteem and greater employability.

In an environment of com pet ing priorities and responsibilities , only those things that provide ways to enhance the business or help individuals achieve objectives will prevail. Although th ere is a lot progress being made in compa­nies, there is much work to be done. In Th e Conference Board's study, a major­ity (72.6 percent) of participants ranked their overall initiatives between three and six on a scale of one to 10 with 10 being, "expert, we ll-developed." No

respondent rated their company higher than an eight. The study also found that although there tends to be very high awareness of diversity, there still remains a lack of understanding of its implications. The better the under­standing of how diversity ties to busi­ness, the way people do their jobs, the more effective initiation will be. Chuck Reid says, "diversity is not adding to the business , but multiplying the possibilities ." Multiplying possibil­ities does require additional work and is a long-term investment . Many com­panies are demonstrating just how they are responding to workplace and work force realities by making diversity a

strategic plan .

CORPORATE DIVERSI1Y STRATEGIES Creating organizational effectiveness through diversity requir es a variety of initiatives and an integrated approach to business processes. Lente Louise Louw explains, "Only an integrated response embedded in the context of the organization's broader strategic challenges and objectives can achieve lon g-term results." Jose Berrios, vice­president, diversity and headquarters personnel, at Gannet & Co., Inc. agrees: "By making diversity a business strate­gy and making it a business objective

of senior management, you show the value of having diverse views, diverse people, and a creativity that is generat­ed that ultimately allows you to attain your business objectives."

One of the first challenges in diversity is establishing a strategy for a long-term process in a short-term soci­ety . Charles Gifford explains, "The most successful companies are those that look at any investment as long-term economic value . That is true if building a plant, buying a bank, or making an investment . Diversity should be viewed the same way." Nicole Barde ascribes Intel's success to their successful archi­tecture. "I believe it is our smart peo-

EXHIBIT 7: IMPORTANT COMPONENTS OF A

DIVERSITY STRATE G Y

Management commitment , leadership, and support

Integration of diversity initiatives into business and organizational objectives

Communication and continuing dialogue among all employees

Education and training

Accountability with consequences , especially for senior and middle management

Employee involvement

Measurements of initiatives

Line-driven initiatives

Inclusive definition of diversity

Culture change

Clear dive rsity vision and objectives

sity-and virtually 100 percent identi­fied CEO involvement to some extent. Many CEOs have made internal announcements to employees, while

others have been outspoken publicly on the benefits of diversity. Involvement may vary from minor participation to a very visible , active role. At Sara Lee Corporation, a three-day conference was sponsored where top management played a key role in launching Sara

Lee's diversity initiatives. When Bank of America began to explore how to strategicall y approach diversity , a three-day off-site meeting was set up , attended by four members of their

managing committee-the top nine officers of the bank-and a diverse group of employees from various geo-

Access to decision making and decision makers graphic areas , job levels, racial groups ,

Champions of diversity at all levels

Resources

Strong recruitment, retention, and promotion efforts

ple , innovation, how we work, how we manage, that makes us a tremendous success ." Intel's architecture reflects some key concepts around diversity .

Although there are a variety of tac­tics and activities being undertaken by

companies (SEE EXHIBIT 6), there is agree­ment among leading edge-companies in The Conference Board's study about some key ingredients that lead to a suc­cessful strategy (SEE EXHIBIT 7). The two most important components of a strate­gy are: management support; leadership and commitment; and integration into business and organizational objectives .

TOP MANAGEMENT INVOLVEMENT AND COMMITMENT : WALKING THE TALK

There is nearly unanimous agreement that top management commitment is essential for the ultimate success of corporate diversity initiatives. One­third of the companies surveyed by The Conference Board identified their CEO as the greatest supporter of diver-

ages , and sexual orientations. This facilitator-led workshop explor ed the

stereotypes, power structures, and the subtle and not-so-subtle barriers that get in the way of developing a rich and diverse work force . Valerie Crane explains. "That exercise led us to examine some fundamental questions in our company, questions that the CEO and managing committee are committed to answering :

+-How can we develop all employees so that they are ready for opportu­nities that arise in the company?

+-How can we be sure that minorities and women gain access to better jobs, as they become available?

+-How can we make sure that we give minorities and women opportunities without discriminating against white men?

+-How can we show all employees that we value their contributions?

+-How can we change attitudes of both employees and customers?

+-Will the same approach work for new employees and those with many years of service? "

Like several companies, Hewl ett­

Packard has established a Diversity Leadership council made up of vice­presidents from each of their major businesses to provide on-going leader-

EXHIB IT 8 : HEWLETT - PACKARD'S WORK FORCE D IVERSITY STRATEGY

EXTERNAL FORCES 111 ..

Changing Demographics

Future Talent Base

Global Market Place

Diverse Customer Base

Government Legislation

Societal Issues

Rising Average Age

Competition

ship and commitment to the attai n­ment of Hewlett-Packard's business mission and diversity objecti ves. Emily Duncan, diversity manager at Hewlett­Packard, explains the ben efits of top executive involvement, "They know the organization and how to make change. And, when th ey speak, people list en."

MIDDLE MANAGEMENT COMMITMENT:

Even when top management is com­mitted , its vision may not be readily apparent and therefore persuasive to other levels of management-particu­larly in the early stages of a change process. DuPont's Claudette Whiting explains that top management com­mitment is not enou gh. ''Oftentimes, diversity is embraced at the top levels of the organization, which is appropri­ate and necessary to drive this initi ative. However, it is at th e mid-and lower management levels where the diversity process becomes a reality. To be effec­tive, diversity must be emb race d all the way down to the employee's immedi­ate supervisor." Th roughout m anage ­ment lit erature , middle management is often seen as a barrier to change in organizations. A 1992 survey by The Conference Board of 131 companies found th at 69 percent of responding companies identified lack of middle­management support as one of the

Driving Forces

HP WAY

• COMPANY PEOPLE HOSHIN

• DIVERSITY GOALS & OBJECTIVES

• GLOBAL STRATEGY Management Leadership

Diversity Learnings Outreach & Recruitment

Development Program Work/Life Balance

Employee Participation

• METRICS & FEEDBACK

most serious barri ers to implementing a diversity initiative . Recognizing that middl e management often feels th e imp act of restructured organizations, downsizing, broader spans of control, and responsibility for a variety of ini­tiati ves and bus iness trends, it is not surprising. Managers who are grapplin g with day-to-day issues do not see any immediate positive impact from diver­sity initiatives. No company is immune to this un certainty and lack of agree­m ent about basic issues surrounding diversity-its priority and relationship to other issues, the degree of impact it will have on the organization, and even how it is defined.

Those implementing diversity in i­tiatives, who want to drive it throu gh­out the organization have an opportu­nit y to do so by integrating it into the business. If middle management per­ceives diversity as another program, flavor of the month, or "one more thing to do," it is unlikely they will ever buy into it beyond personal con­viction. Yet, if they und erstand that it is integral to their busin ess, and they und erstand how they can be more effective and profitable, they will sup­port and drive init iat ives. Furthermore, if it becomes a measurable business objective, it becomes a business priori­ty for which they are responsible.

..Ill INTERN AL FORCES

Em ployee Morale

Underutilization and Attrition

Perception o f Glass Ceiling

Lack of Role Model s and Mentors

Harassment

Work Fo rce Balancing

Increase d Productivity

Teamwork -

INTEGRATING DIVERSITY INTO BUSINESS OBJECTIVES

A succ essful initiative requires an inte ­grated strategy that addresses all com­ponents of the business. In fact, diversity is increasingly becoming an explic it , or implicit component of corporate mis­sion statements, strategies, and objec­tives. An evolutionary process, it can be supported by a strong, well developed strategy. Hewlett-Packard, for example, has created an integrated diversity model and framework that incorporates external and internal forces into corpo­rate objectives (Hoshin) and diversity goals and objectives (SEE EXHIBIT 8). FMC has created a Diversity handbook for Managers which provides guide­lines and examples of how business strategy, human resources strategy, and diversity are linked (SEE EXHIBIT 9). Diversity is being integrated int o busi­nesses in a varie ty of ways strategica lly, and tactically.

MISSION STATEMENTS: Companies like Inland Steel , FMC Corporation , Digital Equipment Corporation, and NASA have all made diversity a part of their mission statements. Two key diversity elements in FMC's mission statement and strategy are : "getting, developing, and keeping more than our

fair share of the best people; and glob­alizing business ." Inland Steel's mis­sion statement places a strong empha­sis on total quality, employee involve­ment, and teamwork with diversity as a core element to achieving the mis­sion. "The steep challenges facing us can only be met when each employee is truly a stakeholder in the company," says Inland Steel's president.

Mission statements and objectives mean little unless there is a strategy for achieving them and the company demonstrates the action and support of those affirmations.

ACTION PLANS: Action plans are becoming both organizational and indi­vidual tools for creating clear diversity

Inland Steel's objectives fall into five categories: education and training , employee retention, external hiring, communication and awareness, and diversity plan progress and measure­ment. Each worksheet helps clarify goals, obtain commitment, and estab­lish measures as well as ways to achieve specific goals. When management and employees know what they are supposed to do, it is easier to create accountabil­ity and create metrics for success.

ACCOUNTABILITY: When managers and employees are seemingly asked to do more with less, diversity is not likely to become a part of management and employee priorities without real accountability for specific objectives.

EXHIBIT 9: FROM FMC's DIVERSITY HANDBOOK FOR MANAGERS

BUSINESS

STRATEGY

HUMAN RESOURCE STRATEGY

eed more talent

D IVERSITY

LI NK

ttracting and retaining the best ssible employees

~mployees doing more and developing broader skills

aximizing the potential of all employees

All cultures working ogether effectively

Develop employee teams close to customers

ncreasing sensitivity to and nderstanding of multicultural employees, stomers, vendors, and government

ccepting and building on diverse rspectives

ultifunctional teams operating ffectively and creating an inclusive nvironment for all participants

Create independent, skilled, treating self-directed work teams that and motivated employees everage differences and operate with

minimum of barriers

objectives, goals, and accountabilities throughout organizations. They also help drive the process. Honeywell has utilized action step guidelines based upon Ann Morrison's work in her book , The New Leaders. Their action steps are:

+ discover and rediscover diversity problems in organizations

+ strengthe n top management commitment

+ choose solutions that fit a balanced strategy

+ demand results and goals + use building blocks to maintain

:nome ntum .

Increasingly, too, external vendors, cus­tomers, and shareholders are holding companies accountable. Faye Richard­son, director, organizational effective­ness and inclusion at Steelcase explains, "Some companies ask very explicitly, in submitting vendor qualification forms , what do we do, what values we hold , what our composition is. They may ask about who we do business with. We have a number of customers who visit on a regular basis and provide feedback on what they see. Th ey comment on teams working together on the work environment. They see that we demon­strate what we say." Barbara Stern agrees, "The community, employers,

employees, vendors, stakeholders, cus­tom ers, all are now raising the bar, expecting that people pay attention to this issue." Several companies have shared Steelcase 's and HPHC's experi­ence, and many are holding their own vendors and suppliers accountable.

Internally, accountability often starts at the top. For example, in 1994 NASA released its Equal Opportunity and Diversity Management Plan for the National Aeronautics and Space Administration. The booklet opens with an executive foreword stating, "Each of the undersigned embraces the value of Equal Opportunity and diver­sity in th e NASA work force and is fully committed to making NASA's Equal Opportunity vision a reality, and accomplishing the goals and objectives outlined in this plan." The statement was followed by a signature page of NASA's top 32 administrators. Hewlett-Packard's CEO driven objec­tives create a natural accountability among his direct reports as part of over­all business objectives. Similarly, at General Public Utilities, John Fidler , Corporate Affairs Director explains, "One of our major accomplishments has been a diversity accountability for officers. They must join the CEO in commitment by making sure that their visions reflect the overall corporate commitment to diversity ." If the CEO makes diversity a priority, then it will likely become a priority among his or her reports, and theirs.

Accountabilities range from a sim­ple checklist of activities and actions, to a comprehensive, weighted measure­ment system . Among the accountabili­ty tools us ed are 360 feedback (written and verbal), employee attitude surveys of management behavior , evaluations that incorporate diversity objectives, and self-evaluations. Some companies attach a percentage of compensation and bonus directly to diversity objec­tives. At Harvard Pilgrim Health Care , 20 percent of management 's bonus is contingent upon completing measur­able diversity objectives.

Several companies have recog­nized the need to provide managers with

the tools to help them achieve their objectives-and to understand exactly

what they are accountable for. One of the criteria is behavior. Jerry Gills of Norwest Corporation explains, "One of the biggest mistakes for successful diversity initiatives is to go after peo­ple's belief systems. What we can do is create expectations, standards, and then measure behavior." Behaviors include treating people with dignity and respect, sensitivity, flexibility, and encouraging contributions from all employees. General Electric has estab­lished a self-assessment tool with sev­eral key diversity practices including:

+ top management commitment and involvement in diversity initiatives

+ recruitment objectives + attendance at education and

training + how well employees are helped

in career management + support of work-life programs

+ communication of diversity strategy

+ involvement in outreach programs

+ reward and recognition of those who walk the talk

+ how well diversity is integrated into business strategy.

Inland Steel also provides a model of expected behaviors for all employees ( SEE EXHIBIT 10).

The rules for success include a number of accountabilities for man­agers to move initiatives forward, model behaviors, create a healthy and productive environment, develop peo­ple, and meet business objectives. The challenge to accountability is to have people actually internalize corporate and diversity values so that they have ownership. Many take on ownership through involvement.

EMPLOYEE INVOLVEMENT: Employee involvement is an integral part of most diversity initiatives. It not only con­

tributes to a more effective strategy, but also helps get ownership, buy-in and commitment to initiatives, and

EXHIB IT 10: INLAND STEEL DIVERSITY BEHAVIORS

Treat individuals at all levels with dignity

and respect .

Recognize, value, and respect

individual, social, and cultural differences.

Take the time to expand

my comfort level with employees

of different styles and cultural

backgrounds. Provide needed experience and

knowledge equitably to individuals, and resist

providing unfair advantages to certain

individuals.

ees ' convictions that the company will support them, respect their differences,

and provide opportunities for them to make contributions to the organiza­tion." At Principal Financial, resource groups are represented on the diversity

council which acts as an advisory board to human resources and senior

management. They give input on pro­grams and often for programs not specifically part of diversity, but that have implications for diversity.

CAREER DEVELOPMENT AND PLANNING:

There is growing interest in establish­ing more effective career development and planning initiatives, especially as they apply to women and minorities. The re-evaluation of development sys-

Identify and acknowledge my own contributions

tems actually results in overall process improvement that eventually impacts all employ­ees. Clearly, there are still sig­

nificant segments of the work

force which have not been provid-

Model behavior supportive of ISC's diversity objectives

and goals and serve as a positive

change agent (e.g., stereotypical

comments are acted upon).

to personal prejudices and stereo­types and take appropriate

action to correct them.

Understand, communicate,

and demonstrate commitment to the company's diversity

philosophy.

Objectively value different perspectives.

drives diversity throughout the organi­zation. Employee involvement takes

many forms, including task forces, spe­cial committees, and networking groups. Task forces and special groups often identify issues, make recommen­dations for diversity strategies, and help develop initiatives. Many compa­nies have networking or affinity groups

representing women, African-Ameri­cans, Hispanics, Asians, gays and les­bians, disabled and others. Charles Gif­ford explains, "I was introduced to our gay and lesbian alliance leadership group. I want to let them know I'm proud of them and want to help them contribute fully to the organization. In my opinion, our company is clearly becoming stronger because of employ-

ed the opportunity or access-for a variety of reasons-to programs that would enable growth and upward mobility in organizations.

Northern States Power (NSP) cre­ated a voluntary career development model within their human asset plan­ning process as one way to address glass ceiling issues for black women . The model will eventually be applied to all employees throughout the orga­nization. Following their established development model, participating employees develop a career plan, look for development opportunities, learn of new job openings, and get more visibil­ity in the organization. Job offers are purely on merit, but a traditionally

underrepresented group now has a bet­ter opportunity to be integrated into the career development process. NSP's Suluki explains about participants in the initiative , "Understanding their role in the career development process was key to the advancement of many participants in this process."

The pilot program is the model for a long-term strategy to ensure the full utilization and employability of NSP's work force .

More broadly, as the work envi­ronment changes, so do the develop­ment needs of employees. Develop­ment must be viewed in the broad con­text of the changing workplace realities for full utilization of talent, productiv­ity, and ultimately bottom-line impact. Dr. Gene Andrews, GE Manager of Work force Diversity, provides an example, "At GE we recognize that we are increasingly relying on teams and that our teams are increasingly diverse . Because of this, it just makes sense for us to put emphasis on ensuring that all our team members feel and experience a real sense of inclusion and that they are afforded the opportunity to ramp up the learning curve as quickly as possi­ble. We do this through recently intro­duced practices such as a buddy system to assist new employees with their transition to GE, a high-impact and business-focused employee orienta­tion , and a mentoring program to help all employees with career and personal developm ent issues. We expect that these practices will also contribute to the bottom line in terms of both indi­vidual and team productivity and reduced turnover costs resulting from an anticipated increase in employee retention." At Hewlett-Packard, the diversity department is partnering with business units to identify skills and competencies needed to take them into the 21st century. Investment in the work force is also a critical issue for future investment through community outreach.

AN INVESTMENT IN THE FUTURE: For the long-term, many companies invest in their future work force through a variety of ways. General Electric, like many companies, provides scholarships and internships to minority students to help enhance educational and profes­sional growth opportunities.

Increasingly, companies are part­nering with organizations and founda­tions to provide opportunities and expand participation in a variety of industries. In the process, students not only gain professional experience and learn about career opportunities, but

also learn about diversity. For example, The AdClub Foundation provides opportunities in the New England media and advertising communities to foster a more diverse work force and introduce minorit y students to the field. Through classes, internships, and mentor relationships, students gain valuable experience. The Creative Arts Team (CAT), a professional education­al theater company in residence at New York University has pioneered original programs that motivate stu­dents to examine social issues such as prejudice and racism, violence, ethnic heritage, and community awareness.

The LEAD (Leadership Education and Development) program is a non­profit, national partnership of corpora­tions and top graduate business schools that has developed a highly effective system for identifying and channeling top minority young people into future careers in business. Columbia Business School offers a course titled, "Leading and Managing in the Global Work force." Dr. Anna Duran , an innovative educator, mentor, researcher, and con­sultant who designed the course has her students work in teams as consul­tants on real diversity and internation­al initiatives in major corporations.

-=:-.:::e Ph.D. Projec t, is a nationwide by a :;=ership of busin ess and academia - ·2ich identifies and encourages talent­e.: · orities, many of whom are

2-..cea y uccess ful in business, to ;:.:come bu sines s school professors. :-2.e Ph.D. Proje ct was created by ~- tG Peat Marwick with backing :... :::;:;.: rhe Gra duate Management

_-.....:::ii ion Council (GMAC), C:~. the American Assembly of C ·- · te Schools of Business (AACSB),

C-"':sler Corpo ration, Fannie Mae : o=darion, Ford Motor Company , C-e::::eral :.\1.ills, and Texaco. Bernard J. _ '...:2.no of KPMG, says, "Companies

:ea.i=e today that attracting more :::i:.:::oririe into managerial positions ::ZS becom e essential to their business."

CO M UNITY INVOLVEMENT AND

OUTRUI CH: Recognizing that its com­==iry i the source of employees, sup­

:;:::e , and customers, Chuck Reid e:x;.:.ains that "Kraft Foods Inc. wants to =Y in those communities and ensure :::::i::_. are ,iable ones with a good work ~ _ e econo my, and education sys­= · At Kraft Foods, managers work LJ ,e and beyon d the call of duty to be

~ o: their communities. They work - -:::::: contrib utions , have budgets, and :se dollar as they see fit in the com­

=::'.illty. Gene ral Electric provides 5:2.o}ar-.;Jiips and internships to minori­:-::,:, en to help enhance education­a.. = profes sional growth opportuni­:.::~. BankBoston is also closely tied to ;:~din comm unities. One of their - -...;~o iende rs hel ped create a program

~ _ :'...2tino busine sses. Gayle Snowden =x;:2.!Il.S, "It's about customer, employ­ee 3.22reholder, community viability­-·-; , s where the passion comes from."

Commu nity involvement helps

::::e comm unity, but also provides .:e-~ :opme n tal opportunities for ~:; ~oyee . :\llany already have talents - -::..:-· oiten go unrecognized. Joseph _ ~"Ce~ explain s, "We must recog­= -· e weal th of experience, knowl­

e;:ge .nd pra ctica lit y that each person .:--;3 -o the workplace each day. We

--= :.cl to reco gnize that outside the ·':':z ce, many of our employees are

recognized as leaders in their commu­nity, churches, and other organiza­tions. It is obvious that the outside world has recognized their talents. We should do likewise and take full advan­tage of each person's potential to help make better decisions at the work­place, which should translate into increased productivity, company profit, and individual wealth ."

Companies need viable communi­

ties . And, as they compete for top tal ­ent, they need communities where people can live comfortably. Tom O'Neill, executive director, Partner­ship for New Jersey explains, "If you are depending on top talent, that talent is going to be interested in the commu­nity they will be living in. You can't be an island that values diversity in a sea of intolerance." Increasingly, com­panies are creating partnerships to address diversity issues beyond their

own doors. For example , The Partner­ship for New Jersey, a coalition of lead­ers of the state's major corporations in associat ion with nonprofit institutions and smaller business firms, acts in par tnership with government and the independent sector to make New Jer­sey a better place to live and work.

Tom O'Neill adds, "One in eight of our population in New Jersey was born somewhere else. In our school system, almost 100 different native languages are represented . Eventually , this will be our work force. The need is particu­larly urgent . If diversity is a strength, then New Jersey has to build on it."

CORPORATE DIVERSITY LEADERSHIP

POSITION: The position of diversity manager is relatively new to corporate America. In 1994, reflecting a growing trend and business need, The Confer­ence Board added The Council on Work Force Diversity to its roster of business executive counc il s. This group of 30 executives from leading companies have entered their third year of tri-annual meetings. Claudette Whiting, chair of the Council explains, "The Council provides an excellent forum to share best practices and more importantly to get a reality check on what is happening in the diversity arena within all our corporations ." The Council is a major contributor to The Conference Board 's research, and through the research is collectively providing leadership in educating busi­ness leaders about the issues of diversi­ty. They are among the corporate lead­

ers who are paving the way toward effective diversity strategies.

What does a diversity manager do? Practitioners point out than an important consideration in establish­ing responsibility for work force diver­sity is positioning it so that it's aligned with, and reinforces other organizational strategies. This had

led some companies to separate EEO and diversity while others are forging strong functional relationships between diversity and EEO. Another approach is 'mainstreaming' responsi­bility for diversity into other manage­ment functions.

EXHIBIT 11: DIVERSITY POSITIONS, TITLES AND LEVELS

MANAGER/COORDINATOR DIRECTOR

ultural Diversity

iversity

Work Force Management EEO/AA Div:ersity

iversity and Affirmative ction

Work Force Diversity i:orporate Diversity

lWork Force Development

lWork Force Planning and Development

Diversity Management

Organizational Effectiveness

VICE-PRESIDENT

EEO/People Diversity

Diversity, EEO

M'ork Force Diversity

Divers.icy"?- ...:. · erally are

located z: - ::-=?= 6cc:or le-el , and abo-~ ~ Er-:::::;:-: __ Respons ibilities of

~ :::;;=:=cr:::;_e:rs can include:

. --;- relatio ns • =-.::.0 . .\A

• Work-family + Training + Community relations + Communications

• Recruiting and staffing

The role is evolving from a func­tional role to one of functional expert and change agent. Emily Duncan

explains her role as corporate manager of work force diversity, at Hewlett­Packard, "We act as internal consul­tants and work with management to develop strategies, programs and resources to accomplish their diversity objectives and business objectives. We help develop the plans, provide the

education and resources and help make it happen ." Many diversity practition­ers have access to their CEOs, conse­que ntly, they have an opportunity to sh ape the organization strategically. inc reasingly they are helping to shape organizational strategies and culture

change efforts. Companies are still experimenting

wi th a variety of organizational models for diversity management. This respon­sibility is continuing to evolve as cor­porations develop their diversity strate­gies . Organizations in different stages

of developing diversity initiatives are lik ely to have different needs and

expectations from diversity manage­me nt positions. For example, based upon a rationale reflecting 3M's cul­ture and upon the belief that everyone in the company should be responsible ior diversity, their initiatives are still pro vided leadership by a global team­The Human Resources Advisory Com­:nitt ee on Diversity. The Committee is headed by the executive vice-president of in ternational operations. Hundreds of employees worldwide, including a ,ari ety of corporate advisory groups,

hav e assisted the committee and its rask forces.

EXHIBIT 12: R.R. DONNEL LY & SONS COM PANY

Diversity Deliverables:

Initiative Goal:

Improved understanding of how to effectively manage a diverse, global work force

To effectively support the increasingly global

nature of our operations through valuing every

employee's contribution and their unique perspective, skills

and abilities.

Increased measurement of progress toward greater work force diversity

Strengthened employee commitm ent through reinforcement of each individual's dignity and value

Enhanced individual and team performance

A designated professional or com­

mittees such as those at 3M can pro­vide the continuity needed to ensure the ongoing commitment to drive diversity initiatives forward for organi­zational effectiveness.

CULTURE CHANGE: The many initia­tives which are being implemented by

companies are all part of a long-term strategy toward culture change. Girl Scouts U .S.A. has created a strategy to create an "Inclusive Team" environ­ment characterized as, "dynamic, inno­vative , visionary, collaborative, and responsive." Their strategy involves a

seven-step process to "institutionaliz­ing pluralism" in their organization:

• Recognizing the benefits of pluralism

• Identifying diversity within jurisdictions

• Reflecting diversity at all levels

• Managing diversity • Eliminating barriers that inhibit

easy access • Initiating effective interactions with

diverse groups within jurisdictions

• Valuing diversity by institutionalizing the process

Based upon a 1994 Leadership Conference, R.R. Donnelley & Sons established employee ownership, a learning organization, an empowered organization, and open and direct communication as key principles for their future business culture . To sup-

Excerpted from Business Culture Leadership: R.R. Donn elly & Sons

port business strategies and principles,

10 Business Culture Leadership initia­tives were established; one of those was diversity (SEE EXHIBIT 12). The intended outcomes of Business Culture Leader­ship at R.R. Donnelley & Sons is to cre­ate an organization that:

• is fast, flexible, efficient, and customer focused

• is aware of and responsive to changes in its competitive environment

• quickly recognizes and adapts to new business directions and challenges

• continuously analyzes current processes and seeks ways to further improve

• has people who understand they have the ability to influence company performance and are responsible for

contributing to its success + operates on a foundation of integrity

and direct, open communication

Joanne Olson, vice-president, employee relations and corporate human resources at Donnelley explains , "We have learned that diver­sity is key to cultural change insofar as every employee relates to diversity in a personal way. We need and seek the unique and innovative perspectives generated by a diverse work force." Diversity will help R.R. Donnelley

achieve its business objectives . Operating principles and values

are becoming strategic foundations for

EXHIB IT 13: EX AMPLE OF DIV ERSITY CURRI CU LA (A CTUAL CORPORATE O FFERINGS )

CORPORATE TRAINING

CURRICULA

iversity Awareness and Interviewing for a Diverse Work Force

ork-Force Diversity: A Com etitive Advantage

A Skills Approach to Managing a Diverse Work Force

u ervision of Minorities

nion Management/Race and Gender

ATTENDEES

Managers and supervisors

Anyone with lending responsibility

People managers

People managers

Senior management

Supervisors

Managers

Diversity council/human resources

Executives, managers, supervisors

Senior level

Manager/directors

All employees

Mid-level to senior management

All employees

All employees

Senior/Cascade down

Women

Minorities

1st and 2nd level managers

Union representatives and managers

LENGTH OF

COURSE

8 hours

2 days

N/A

3 hours

long-term organizational effectiveness and culture change . Kodak's CEO, George Fisher explains that "The full potential of every employee is about getting them to aspire to, and living by a certain fundamental set of values." Kodak has focused on five:

resources. 3M's human resources prin­ciples state, "The people of 3M are the company's most valuable resourc e. they are the primary means by which 3M goals and objectives will be attained. 3M management, therefore , believes that it is essential to provide an organizational structure and a work climate which:

+ respect for the individual + uncompromising integrity

+ trust + credibility + continuous improvement at

the personal, corporate, and operational level

Doing business with thes e princi­ple s will ultimately help individual employees, suppliers, customers, and shareholders . It will help Kodak achieve o jectives for a performance-driven

_ anization . The idea of principles and - aiues is not new.

E KEY FOUNDATION OF LONG-TERM

s CCESS: Companies like Hewlett­::' ~~d and 3M were founded on such :;::--.::ciples of valuing their human

+ respect the dignity and worth of individuals

+ encourage the initiatives of each employee

+ challenge individual capabilities + provide equal opportunity

It is this foundation on which 3M attributes its historical and ongoing success.

Successful culture change requires a multifaceted strategy, including many of th e aforementioned initiative s that are especially designed for a specific organizational setting. Diversity issues, organizational culture, corporate objec­tives, resources and priorities all play a critical role in what works best for a company. There is no one best way.

A CONTINUOUS LEARNING PROCESS Education and training are among the foundations of diversity initiatives and a critical component of the continuous learning process. And, lik e a set of val­ues, education provides an ongoing foundation for keeping an organization focused on objectives. A survey by The Confer ence Board found that 60 per­cent of 406 responding companies had diversity training , and that more were planning to implement it .

Training, practic es and approach­es vary greatly among companies (SEE

EXHIBIT 13), but most hav e a common them e: to raise awareness of the issues and help drive long-term culture change . In its most narrow sense , diversity training is about compli­ance-Equal Employment Opportuni­ty , Affirmative Action, and sexual harassment . Although there is a strong sentim ent that diversity moves far beyond compliance, practices demon­strate a strong link betwe en the two . Diversity training and education is generally categorized into three phases or types of training: awareness; skill building ; and integration into other training. Forty-sev en percent of the responding compani es in The Confe r­ence Board study provided training to all employees.

DuPont offers a wide range of diversity education and development programs. Many of th e workshops have become industry "best prac­tices," and cover race and gender issues , personal safety and rape prev ention, leadership development and management skill building . A recently designed and innovative new addition is the Men's Forum Work­shop. " This is an 'industry first .'" says DuPont's Bernie Scales. "The workshop enables m en to deal with issues such as privilege and entitle­ment, backlash, and ex clusion ." Reflecting management's commitment to diversit y, DuPont 's top managers are required to attend an extensive

EXHIBIT 14: DIVERSITY COMPETENCIES

wareness of self

nderstanding that iverse means ifferent, but not ecessarily wrong

nderstanding f individual

rceptions

SKILLS

Ability to change personal/individual behavior

Ability to practice objectivity

Ability to analyze unique situations

Ability to listen to others

Ability to build teams

Ability to resolve conflict constructively

Ability to recognize situations of harassment of discrimination and prejudice

KNOWLEDGE

Knowledge of EEO/AA law

Understanding of dimensions of individuals, groups and organizations

Understanding of acceptable/ unacceptable behavior within the workplace

Understanding of demographics

Understanding of impact of diversity on business

Understanding of clients and customers

Understanding of work/life issues and alternative work options

CoID.ID.unities Our community of top performers includes Little League

MYPs as well as experts in MYS. Home Ee chefs as well as

home page designers. In other words, people who show

their respect for your work by respecting your need for a

life away from work. We know from experience that

making time for what matters to you helps us meet the

standard of achievement that matters to us all. That's why

NationsBank is the employer to choose when you choose ,._ L ___ _ -----

illingness to evelop and

continue the diversity dialogue

five-day multicultural awareness workshop aimed at increasing their understanding of race, gender, and other cultural issues. Training and education can help equip people with the knowledge, skills and tool s- in other words, the competencies-for working in a diverse work environ­ment. Th e Confer ence Board study , Diversit y Trainin g, found a number of desired competencies based in four areas that all employees need. They include awareness, skills, knowledge and personal attributes (SEE EXHIBIT

14). Increasingly , diversity is being integrated into other training and managem ent development programs rather than as a separate, stand-alone initi at ive . As Bernie Scales points out, diversity trainin g and development is only a primer, not an end. He says, "Companies must focus on organiza­tional changes and back this up with metrics and accountability."

Net-works At NationsBank, one of the largest and fastest-growing financial

institutions in the US, we invest more than $200 million a year in

new technology. Our projects offer you the opportunity to network

with accomplished technology professionals. Collaborate on

projects that involve everything from major legacy systems to

client/server and object-oriented technologies. And play a role

in the advance of WANs, Internet/Intranet , Sybase , Lotus Notes,

Objective C and C++. And because we're committed to supporting

your needs as well as your ambitions, you can balance professional

performance and personal priorities as a member of our team.

We 'd like to tefl you more about our career opportunities in

some of America's most livable communities, including Charlotte, Richmond, Dallas and Atlanta. For consideration, please

send your letter-quality resume to: NationsBank Management Recruiting, NCl-007-21-10, Job Code: BW1209, 100 N. Tryon Street, Charlotte, NC 28255. Or by email: recruit@nationsbank.com

To learn more about NationsBank , visit us on the Internet at http:/ /www.nationsbank.com

Nations Bank ® NationsBank is an Equal Opportunity Employer M/F/D/V.

MEASURING IMPACT AND EFFECTIVENESS The business case for diversity is about understanding how diversity ultimate­ly impacts , positive ly or negatively, the

bottom-lin e of the corporation. Although everyone would like to be able to directly tie-in the positive impact of diversity on business, there are genera lly too many variables. The sentiment of one diversity manager is that "we can 't measure diversity with regard to prod uctivit y. There are too

business. It is important that we recog­nize th e relationship of diversity to profitability. Growing our business rec­ognizes the importance of redefining our understanding of our customers. Increasing ly, we will nee d to be com­petitive and skilled leaders in our understanding of diverse customers . Moreover, we will need to fully mea­sure the impact of this understanding relative to profitability and growth."

A recent study by The Conference Board, Corporate Practices in Div ersity Measuremen t, found that proof of impact on the bottom- lin e is not the focus of diversi ty metrics, rath er mea-

many factors that make up revenue per surement is seen as a tool for change,

employee . We don't assume you can carve out a diversity factor. " On the other hand , St. Paul Companies' Eric Watson explains "Th e execution of a global marketing strategy that recog­nizes customer differences and new emerging markets will give us an important edge and create profitab le

urgency , sustainability , success , value­addedness, and the creat ion of more effective organizations. The fact that companies like St. Paul Companies , Allstate, and R.R. Donnelley & Sons have made diversity a key component for a "balan ced scorecard" for success ,

confirms the need for measures that

EXHIBIT 16: WHAT GETS MEASURED IN DIVERSITY

REATING A DIVERSE WORK FORCE

MANAGING A DIVERSE WORK FORCE

Promotions

Movement of career paths

Cutbacks/hiring freezes/downsizing

Succession planning

Performance reviews

Reasonable accommodation

Litigation

Complaints/grievances

Mentoring

Parity

Compensation analysis

Attendance at training for employees and management

VALUING A DIVERSE WORK FORCE

Culture and environment

Research & referral usage

Toi> management accessibility

Inclusive language

Barriers to contribution

EVERAGING A DIVERSE WORK FORCE

Customer satisfaction

arket segments-sales marketing data

articipation in vendor fairs

elationship with local communities

Successes/failures in foreign cultures and markets

· Measures are not necessarily exclusive to each category, nor is this an exhaustive list.

EXHIBIT 15: STRATEGIC

MEASUREMENT MODEL

Creating Leveraging

Compliance

identify, when possible, the bottom-line impact. But more importantly, metrics drive the process for organizational effectiveness. If the argument has been

made that diversity is a business imperative, then it is no longer about proof , but process and environment .

At The St. Paul Companies it is recognized that there are many elemen ts to measuring impact on the business , which requires a holistic measurement strategy. Measures for profitability at St. Paul Companies include:

+ Organization and culture­where the company stands in regard to diversity

+ Growth-what the company is doing

+ Leadership commitment-how diversity is being driven

+ Education and development­where learnings are taking place

+ Demographics-what the work force looks like

St. Paul Companies' Eric Watson explains, "T he se five dimens ions offer valu able results that gauge our suc­cess , our readiness, our level of aware­ness, and our understanding about our emplo yees, our environment, and our customers. Drawi ng from th e "bal­anced scorecard" philosophy, these five dimensions collective ly addr ess the internal organization, the cus-

tamer, our financial status, and our general growth and organizational innovation."

In an attempt to better understand the strategic opportunities for the diversity measurement process and to provide a developmental framework, The Conference Board created a focus group consisting of individuals from

.. --n ife

work force that represents an organiza­tional internalization / integration of diversity. Each piece of the model pro­vides a framework for establishing tac­tics which address the necessary com­ponents around creating, managing, valuing, and leveraging diversity (SEE

EXHIBIT 17). Organizational emphasis will vary based upon business needs

corporations and academia with experi- and progress on the continuum from ence in diversity, human resource, total quality management , and finance. During their day-long session, the group was assigned the task of develop­ing a strategic measurement model (sEE

EXHIBIT 15). The model represents four interdependent and necessary compo­nents for a dynamic measurement strategy: There are a variety of mea­sures within the four categories-creat­ing a diverse work force, managing a diverse work force, valuing a diverse work force, and leveraging a diverse work force- which ultimately provide a gauge for overall effectiveness (SEE

EXHIBIT 16). The ultimate organization­al goal is to achieve a leveraged diverse

creating a diverse work force to lever­aging it.

MEASUREMENT ALLIANCES: Every department function and business unit within a corporation is a potential part­ner and reciprocal beneficiary in under­standing diversity measures in the business context. Many such alliances already exist . Allstate's research center has been very helpful in the develop­ment, analysis, and presentation of their data and measurement process. At Harvard Pilgrim Health Care, clini­cal quality measurement is a method­ology that will help them better under­stand how patients receive care across

ethnic and cultural backgrounds. At American Express, customer service, which addresses customer issues in 41 languages , can provide feedback to marketing about what customers are saying and what they are responsive to. They can also provide ideas on how to expand real and potential customer­based marketing.

DEMONSTRATED RESULTS: Richard Gaskins, vice-president at American Express Financial Advisors developed a business case report for their diversity project . The purpose of the report was to apprise senior management their task force findings, to extrapolate the successes to diverse markets and expanded business opportunities, and to share best practices among their planners working in diverse markets. Based upon this work, Richard Gaskins can demonstrate the positive business impact, in dollars, on expanding mar­kets. Similarly , at 3M, where innova­tion is key to their success, they have witnessed an increase in the number of

E XHIBIT 17: TACTICAL MEASUREMENT MODEL

"' ... :::E 0 u I­::, 0

CREATING MANAGING VALUING LEVERAGING

Increased Increased retention rates Increased

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women and people of color contribut­

ing to patents. FMC's initiatives have helped reduce absenteeism, and Silicon Graphics has penetrated markets out­side the United States while improving the promotion and retention numbers for women and Asians. Often subtle changes are taking place that are diffi­

cult to assess, yet are visible through general observation.

MEASUREMENT CHALLENGES: Corpo­rate practitioners caution on measure­ment opportunities and drawbacks. Measures can drive change, create com­mon efforts toward common goals, and contribute to organizational success.

On the downside, measures are often one-dimensional, are limited outside of a context, and are generally interdepen­dent on other organizational measures.

Many challenges face corporations as they try to measure diversity. Many questions remain . For example, how do you measure biases, core beliefs, and attitudes? Or, how do you determine the tolerance level to differences? How much can a person take? How much diversity can an organization take? Creating "inclusive" measures also creates a challenge. How do you identify growth in purchases of service among different groups when people still don't want to identify themselves according to a particular group? And, how do you assess long-term impact in a society that is short-term focused? From a global perspective, one diversity man­

ager asks the question, "How do you create a measure that indicates how flawlessly the company does business across cultures?"

Jerry L. Gills, vice-president and director of employee relations/diversi­ty at Norwest explains it is important to "recognize that success is not always quantifiable. Measures may look differ­ent. It is about culture and environ­ment. People expect hard numbers, but it is not only about the hard numbers." The key behind measurement, say practitioners, is sustaining momentum while building people capability and skills around what people need to know to be successful.

THE FUTURE OF DIVERSITY:AN ONGOING REALITY Principal Financial's Dave Drury says,

"The future is more of the same. Any­one who gets involved in this sort of initiative understands that it doesn't happen overnight. It is about long-term growth, additional education and train­ing, emphasis where necessary on recruitment and hiring, and working in communities we live in to make them welcoming and viable. At the center, is the continued customer focus on needs of increasing diversity. We have a lot of growing, we don't know all the answers, or each point we need to be successful, but we are making progress. We need to keep focused and keep moving. It is part of building a long-term future for the company and society."

There are many challenges and barriers facing corporations, and the individuals doing the work. The most common barriers according to partici­pants in The Conference Board study, Diversity, Business Rationale and Strategies are:

+ existing corporate culture + attitudes that are resistant to

change and differences

+ lack of understanding of diversity issues

+ integrating diversity into business strategy

+ competition with other pressing business issues

+ middle and senior management resistance

One director of diversity adds, "As we go forward, our critical issues are continuing skepticism, diversity in

senior positions, full inclusion of gays and lesbians, and the challenges of suc­cess-creating mutual support within underrepresented groups."

COMPETING SOCIAL AND ECONOMIC FORCES:

Many of the concepts and objectives of diversity work seem almost antitheti­cal to concurrent business trends. "Valuing employees" seems like an oxymoron in an age of downsizing and permanent job loss. The fact is, a new employer-employee relationship is emerging which requires a complete rethinking of what employment means to employees and employers. Loyalty and lifetime employment is being replaced with employability and con­tractual work agreements.

The concept of teamwork in a cap­italist society where competition is the name of the game, where individual­ism reigns, and many rewards are still based on individual accomplishments

presents another challenge. Further­more, individualism is reinforced as people cling to remaining jobs. And, competition for all jobs is increasing. Companies are faced with the chal­lenge of creating healthy competition internally, where employees are in a win-win environment. The win-lose competitive spirit can work externally, but not internally. A new individuality is emerging-that which recognizes the potential and contribution of each individual within a larger whole. Upward mobility for women and minorities is challenging because organizations are now flatter with decreasing hierarchies and greater spans of control-and again exacerbated by increased competition. The whole concept of career, success, and "working your way up" is chang­ing. There are fewer jobs in upper lev­els of management .

Racial tensions seem to be grow­ing in society. Meanwhile corporations are faced with a long-term process which often leaves them short of goals

and objectives from where they are, to where they would like to be. The gap between practices, innovative policies, and initiatives sometimes seems great . The distance between where compa­nies want to be and where they are is sometimes far, but demonstrated progress is being made.

Based upon the realities of chang­ing demographics, diverse markets and a global economy, and social realities of racism and discrimination, diversity initiatives are not likely to disappear. The success of those initiatives, how­ever, will be contingent upon under­standing the context of diversity with­in a corporate environment and how it can or cannot contribute to organiza­tional effectiveness and success. Cor­porate practices and responses to diver­sity indicate that diversity is indeed a business issue-an opportunity that can become an advantage by enhancing the organization's ability to compete, increase its productivity, and respond to diverse markets. Concurrently, there is opportunity within corporations to positively impact their communities and society by providing models of how people of difference can work together.

Michael L. Wheeler is a Research Asso­ciate in the Human Resources / Organi­zational Effectiveness research pro­gram at The Conference Board. His publications include: Corporate Prac­tices in Diversity Measurement; Diver­sity: Business Rationale and Strate­gies, Diversity Training, and Work­Family Roundtable.

Mr. Wheeler is a trainer for The Anti-Defamation League's A World of Difference Institute, has been a volun­teer cross-cultural facilitator for AFS International, and speaks at universi­ties and corporations on the topic of diversity.

A special thanks to The Confer­ence Board's Council on Work Force Diversity for their support and contri­butions to his work.

DESIGN : MICHAEL ARON AND COMPANY ILLUST RATIONS : OTTO ST EIN INGER