This item was contributed by Kate Headley, a director of Dextra Executive Search and Selection. She is also founder of the Dextra Diversity Network. Here she examines the rationale behind the management phenomenon, diversity.
Nobody seems quite sure when the concept of diversity first entered the management vocabulary but it’s generally agreed that it’s a fairly recent addition to management theory and practice.
The first hints that a new order was replacing traditional recruitment assumptions emerged from the United States in the mid-nineties. A number of American corporations realised they weren’t achieving optimum results despite favourable market conditions and record levels of investment. On closer examination, these companies found that they weren’t retaining key staff and that many of those who were staying were not particularly happy, motivated or productive.
On the premise that nothing stands still for long, corporate theorists began examining changes in the underlying demographic of the marketplace. They discovered that many of the received tenets of corporate wisdom had been overtaken by profound shifts in social structures and attitudes.
The time for an equally profound change in management philosophy had arrived, and with it, a move towards mining the vast untapped human resources lurking behind the job titles and specifications that were defining - and limiting - everyone’s corporate role.
Fresh thinking
A new ideology began to spread through the ranks of progressive management. Diversity became the byword for a very fundamental leap in management thinking, gaining particular acceptance in the financial services, retail, local government and other sectors where there is a direct interface with the end-user.
The diversity concept revolves around the argument that humans are anything but stereotypical. We belong to an infinitely varied and complex tribe that contains people with differing races, languages, cultures, religions, ages, sexual orientations, physical and mental abilities, backgrounds, ambitions and inclinations.
These differences should not be seen as making the individuals who manifest them obstacles to corporate uniformity and the antithesis of some archetypal corporate ideal. Rather, harnessing them is the key to a more productive, enduring and empathetic relationship between the individual, the employer and the marketplace.
Inertia
Despite the welcome that this stance received across the Atlantic, the majority of British and European companies have been slow to shift their ground. Because of deep-seated cultural and legislative differences, transferring the accepted stateside model to Europe proved to be a much more complex matter, even for proselytising US corporations.
Those of us in the pro-diversity camp must share the blame for having failed to convince more UK and European organisations of the weight of our argument. We have witnessed the commercial sea change that has taken place in the USA but have failed to clearly expound the tangible benefits to sufficient numbers of key European corporate influencers.
Of course, the drive toward such a fundamental behavioural change must begin at the very top. Senior management must pay more than lip service to the belief that diversity can bring innovation to the workplace and ultimately boost profit performance. For traditionally autocratic leaders, this requires a quantum leap into unfamiliar territory. Signing-up to the objective doesn’t provide the mechanism for change.
Other senior managers are trapped by an incorrect interpretation of diversity. They use it as a handy catch-all expression to cover issues of equal opportunity, age, sex and race discrimination. Their mission statements and policies tend to be based on mere legislative compliance. They miss the point entirely. It’s not about including a few minority groups that might otherwise have been excluded, it’s about including everyone in the process of commercial innovation.
I believe, nonetheless, that as more of them come to understand the bottom-line benefits, diversity will rapidly gain momentum.
So, what is diversity?
The academic business definition is ‘the use of strategies that acknowledge the value of recruiting and retaining individuals with exceptional characteristics and qualities which, when appropriately developed and deployed, enhance their contribution to the success of the enterprise’.
Diversity is to do with the imaginative, sensitive and intelligent use of employees’ talents and capabilities. Instead of assuming, for example, that twenty equally qualified engineers are merely ‘engineers’, the organisation must learn to see them as individuals, with differing lifestyles, life skills and expectations.
Some of them might be good organisers, some innately inventive and others have outstanding interpersonal skills. By focussing on their differences, rather than similarities, the organisation can interact with the employee on a level that encourages deeper commitment and belief in the mutual advantages of the employment arrangement.
It’s about listening to the feedback from end-users then re-focussing the wealth of human potential in a company on its marketplace. It’s about customers recognising that an organisation understands their changing needs, too. If a company is to remain successful, its employee profile must mirror the marketplace and customers they serve.
Making it happen
Earlier this year I founded Dextra Diversity Network. One of the first things we did was to draw up a definition of what diversity means to us: "Achieving business excellence through valuing and respecting individual differences and leveraging the advantages they bring."
By focusing on the unique contribution of every individual in the workplace, diversity clearly goes far beyond the notion of equal opportunity. It is inclusive in that it not only acknowledges and understands the differences between people - it also seeks positive ways to focus these differences – to celebrate them, even.
This is a far cry from the stoical and conformist mantras of management generations past. It must be remembered that we live in a world of unprecedented international mobility, prosperity and economic flux. Management ideas advocated as incontrovertible only a decade or two ago are open to scrutiny in this new world.
Benefits
Many companies have realised that paying the highest salaries isn’t enough to attract and keep top talent. In fact, a recent survey (The Quality of Working Life Report published by the Institute of Management) found that 41% of managers felt the quality of their working life had deteriorated over the past 3 years.
Conversely, another recent survey of 140 leading UK organizations, found that 7 out of 10 respondents believed that diversity had improved the performance of their business – in terms of better recruitment and staff retention, improved understanding of markets and communities, enhanced reputation and cost savings.
To win the war for talent, companies must create a working environment that encourages loyalty, commitment and dedication. It’s a truism that a happy workforce is a productive workforce. However ‘right on’ this might sound, events have proved that it’s nonetheless true. Employee satisfaction leads to greater productivity and higher retention, which can produce significant savings in terms of recruitment and training. Employee satisfaction can also bring greater profit, as happy staff are more dedicated, involved and passionate about their role and the value of the contribution they make to a company – be it hard work, motivation of others or ideas.
Says who?
Ford is an example of how diversity in action can bring tangible benefits (it’s even more interesting given how unusual it is for a manufacturer to re-focus to mirror its market more closely). The company credits the introduction of a diversity policy and the setting up of a dedicated diversity team as essential factors in turning the business around from losses counted in the billions to break-even in under 3 years.
Likewise, BP believes the diversity programme it introduced just two years ago is already having an impact. Earlier this month, the company announced that it was seeking more homosexuals, women and non-UK nationals as part of a recruitment drive aimed at improving diversity throughout the company. Why? Because it will give them a competitive advantage in a badly over-crowded market.
IBM set up diversity task forces in 1995 and initiated the scheme by making small gestures – for instance, they worked to make every one of their ‘constituents’ feel genuinely welcomed at IBM and truly valued as an essential member of the corporation. They have subsequently recruited more women and candidates from minority groups and instigated training, mentoring and leadership development programmes. One of IBM’s most successful diversity initiatives has been in taking aggressive steps to mirror the changing demographics it sees in the marketplace. In the United States, for example, IBM has recruited large numbers of Hispanic executives to reflect a 44% growth in the Hispanic population between 1996 and 2001. Another example of a company supplying diverse markets that believes internal innovation can improve profit outcomes.
Who would benefit most from a diversity culture?
Perhaps surprisingly, I find that many people running small businesses have an instinct for diversity. They often find it necessary to employ people who will fit in well, as opposed to people who might have the best experience and paper qualifications.
Sadly, as such companies grow, their recruitment techniques become more remote. They hand the task over to recruitment professionals, who don’t necessarily have a real ‘feel’ for the business. Conventional and out-dated practices become entrenched. In my view, every organisation of every type should aim to adopt a diversity culture.
Practical steps
It’s firstly essential that staff understand the diversity concept and don’t confuse it with basic ‘equal opportunity’ legalities. It’s simply not enough to distribute a handful of internal memos to cover the subject. Although this helps, a structured training programme to ensure staff are receptive can be more useful. It’s also worth remembering that small, inexpensive measures can prove to be just as effective, persuasive and successful.
Remember, it’s important that staff feel some ownership of the diversity policy and empathy for it – they need to understand how it will influence their work and their roles and responsibilities within the changing management climate. Managers charged with introducing the diversity policy need to thoroughly understand the issues and be able to sell the concept to the workforce convincingly. They’ll need to know why diversity works – how it brings social, ethical and pecuniary benefits to the business and the individuals working in it.
Most people intent on introducing a diversity culture come up against the same barriers internally. Joining a network of similar organisations undergoing change will give managers the opportunity to compare notes with others who have covered, or are covering, the same ground.
For a culture of diversity to gain acceptance throughout an organization, the vision and policies must form part of an overall strategic framework that supports long-term profit goals. The most able, imaginative and innovative managers need to be given responsibility for diversity implementation. Not everyone in HR fits this description. In some cases, HR professionals will need to be among the first to be persuaded to embrace change.
A new world
We live in a changing world. International boundaries have all but disappeared. Populations are on the move. Tens of millions of people travel by aircraft every week. Business has become a global endeavor with larger corporations exceeding smaller countries in terms of annual revenue. The values of our parents’ generation have been completely re-addressed.
The business methods of the past will simply not suffice for the future. We all need to constantly change. The human population is characterized by huge diversity and those of us with responsibility in business ignore this at our peril.
