Organizational Dynamics, Vol. 30, No. 2, pp. 149-161, 2001© 2001 Elsevier Science, Inc.www.organizational-dynamics.com

ISSN 0090-2616/01/$-see frontmatterPIl S0090-2616(0I)00049-3

Applying an OrganizationalDevelopment Approach to

Creating DiversityRICHARD S. ALLEN KENDYL A. MONTGOMERY

Diversity is fast becoming a businessimperative in the new millennium.

The U.S. Labor Department predicts thatby 2005, 85% of new workers entering thelabor force will be women or minorities. A1998 study by the Society for Human Re-source Management found that 75% of theFortune 500 and 36% of firms of all sizesalready have some sort of diversity programunderway.

Studies of diversity in organizationshave shown that that an exposure to di-verse colleagues helps managers make bet-ter decisions and cultivate new ideas bydrawing on a larger pool of informationand valuable experiences. A diversifiedstaff can also help an organization increasemarket share by better enabling the orga-nization to understand how to market to anincreasingly diverse customer base. Thisserves to increase the agility and adaptabil-ity of the organization. Additionally, mi-nority customers often feel that a compa-ny's diversified staff can better identifywith their everyday experiences, thus en-hancing company credibility.

McDonald's Corp. and Wal-Mart Storesare prime examples of organizations that arereaping the benefits of an increased under-standing of how to market to ever more di-verse customers, based on their own internaldiversity strengths. Both organizations, real-izing that the U.S. Hispanic market grew at a

tremendous rate in the 1990s, decided to at-tempt to improve their marketing to the His-panic community. Because of an increasedunderstanding of the importance of the ex-tended family in Hispanic cultures, Mc-Donald's has reconfigured the seating inmany of its restaurants to provide largergroup areas where extended families can sittogether. Similarly, Wal-Mart has begun toadvertise heavily in Hispanic areas duringthe period between Christmas and ThreeKings Day (January 6) in recognition of thetradition of Hispanics exchanging gifts onThree Kings Day.

An organization that has achieved diver-sity throughout ail levels of managementalso stands a much better chance of recruit-ing, motivating and retaining talented mi-nority eniployees. Diversified leadership inthe organization increases productivity andinnovation through the generation of newideas, and the development of more moti-vated minority employees. Minority employ-ees at lower levels in the organization feelmore committed to the company, becausethey find it easier to identify with minoritymanagers at higher levels in the organiza-tion. This results in employees who feel val-ued, competent, and enjoy coming to work.Further benefits include improved decisionmaking and better quality management in-stilled by increased breadth and opennessfrom a happier workforce.

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Richard S. Allen is an assistant professor ofmanagement at the University of Tennessee atChattanooga. Allen received his B.S. fromPennsylvania State University and his Ph.D.from the University of Pittsburgh. Before enter-ing academia, he spent over 15 years in a va-riety of corporate management, training andconsulting roles at FedEx Ground (formerlyRPS) and Texas Instruments Inc. He has alsodone extensive consulting with a wide variety ofbusinesses in organizational development andchange, management skill development, team-building, process improvement and reengineer-ing. Allen's research interests are in the area oforganizational development and change. Hiscurrent research projects and publications ex-amine the role of the reward system in supportof organizational strategy and the relevance ofequity sensitivity.

A Typology of DiversityTaylor Cox has developed a framework thathelps explain why organizations on the fore-front of diversity are significantly differentfrom other organizations and better able toreap the benefits of diversity. Cox's typologyconcerns the attitudes that organizationalmembers have towards diversity. There arethree levels of organizations in the typology:monolithic, pluralistic, and multicultural.

Monolithic organizations are at the leastdeveloped level with regard to diversity.One large majority demographic group (typ-ically white males) manages them. Womenand minorities are present in these organiza-tions, but they are expected to conform to thenorms and values of the majority group.

The next level of diversity developmentis known as a pluralistic organization. Thistype of organization is typically populatedby a much more diverse set of employees,because the organization has made a specialeffort to hire and promote minority groupmembers. A pluralistic organization mayhave special affirmative action programs orminority mentoring programs to help ensuremore representation of minorities through-out the organization. But minority membersof these organizations are still expected toadhere to the norms and values of the over-riding majority group.

The organizations leading the pack interms of diversity and reaping the greatestbenefits have reached the final level of de-velopment. They are classified as multicul-tural orgaruzations. These organizations ac-tually value the diversity that they havecreated within their workforce. Unlike thepluralistic organization, multicultural orga-nizations encourage members of differentgroups to learn from each other; they adoptsome of the norms and values of minoritygroups. These practices help create an envi-ronment in which differing viewpoints arevalued and given consideration. Multicul-tural organizations have created a uniqueorganizational culture. This new organiza-tional culture is better suited to deal with anincreasingly multicultural and fast-changing

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marketplace. In short, these organizationsgain a competitive advantage.

WHEN DIVERSITY FAILSOrganizations that fail to make the transitionfrom the monolithic stage run the risk ofserious public relations incidents and nega-tive bottom-line financial implications. Therehave been many highly publicized examplesof organizations failing this diversity test.Texaco Inc. provided one example, whentapes surfaced of executives using racial ep-ithets and planning to destroy evidence oftheir discriminatory practices. The Denny'sracial discrimination suit that alleged thatblack customers were being discriminatedagainst, and that black employees were be-ing systematically fired, was another highlypublicized case. Likewise, MitsubisW MotorManufacturing and Astra Pharmaceuticalsare prime examples of organizations that lostbig sexual harassment suits. State Farm In-surance also lost a gender bias suit. These areall extreme examples of monolithic organi-zations that have struggled with the issues ofdiversity, discrimination and bias, and havepaid a high price in terms of corporate rep-utation and customer goodwill.

Given the serious implications of failingthe diversity test on one hand, and the pre-viously discussed potential benefits ofachieving diversity on the other hand, it is amuch more common practice today for com-panies to actually attempt to create diversity.U.S. companies spend an estimated $200 to$300 million a year on diversity training pro-grams. But unfortunately most diversity pro-grams tend to meet with mixed results oreven failure. Discrimination lawsuits filed bywomen and minorities continue to rise.

Organizations typically attempt toachieve diversity through a special programor a series of initiatives. These attempts atcreating diversity are often poorly plannedand disjointed in their implementation. Atbest, many of these organizations move tothe pluralistic level of diversity develop-ment. More minorities are hired and eventu-

KendylA. Montgomery is currently a doctoralstudent at Emory University concentrating onorganizational and stratification theories. In ad-dition, she is completing her M.B.A. at the Uni-versity of Tennessee at Chattanooga, She re-ceived her B.S, from the University ofTennessee at Chattanooga. Her current re-search interests include organizational culture,diversity issues, industrial sociology, globaliza-tion and organizational comparisons, with aspecial interest in health-care systems. Mont-gomery was previously employed as a clientservices officer for Human Resources Develop-ment Canada, where she specialized in inter-pretation of unemployment insurance law.

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ally promoted, but they are expected to con-form to the majority organizational culture.A truly diverse, multicultural work environ-ment is never realized. These organizationsbecome stuck in the pluralistic stage of de-velopment and fail to reap the true compet-itive rewards of a multicultural workforce.

An excellent example of a company notdoing enough to bring about full multicul-turalism in their organization is Publix SuperMarkets. In January 1997, this company set-tled an $81.5 million gender discriminationsuit. To avoid such suits in the future, Publiximmediately responded with a diversity pro-gram. Their program included increased jobpostings, the ability for employees to applyfor openings, the administration of standard-ized skill assessment tests and increased in-formation dissemination about the differentjobs that the corporation offers and the skillsnecessary to qualify for them.

While this ser\'ed to improve the equityof promotion decisions, and Publix exhibitedan increase in women and African Ameri-cans within their management ranks, theyfailed to directly target the imderlying cul-tural aspects of the lawsuit. As a result, Pub-lix has been subsequently hit with two addi-tional suits—one for racial discriminationand a second for gender discrimination. Thenew lawsuits suggest that Publix's diversityprogram is not having a corporate-wide im-pact on its organizational culture. It appearsthat Publix has become stuck at the pluralis-tic stage of development.

Why Diversity Programs TypicallyFailDiversity programs are doomed to fail if theyare instituted in the wrong way or for thewrong reasons. Diversity consultants haveidentified a number of reasons why diversityprograms typically fail. First and foremostare companies that start these programs be-cause diversity is viewed as the latest humanresource fad or because an outside consul-tant or agency recommends that they imple-ment a diversity program. Unless the impe-

tus to create a program comes from within,the battle often becomes hopelessly difficult.

Many companies, even if they recognizethe need for a diversity program, fail to im-plement a plan that is custom-made for theirorganization. Instead, many organizations tendto choose an off-the-shelf, one-size-fits-ali pn>gram. Unless the program is based on tlie orga-nization's own unique culture, internal sti engths,weaknesses and needs (disco\'ered through re-search), and implemented by an intonial consul-tant who knows the organization, the likelihoodof buy-in from the staff in not great.

Another common reason why diversityprograms often fail is that they go only as faras awareness training, and never get to thepoint of providing employees with the toolsnecessary to put the theory into practice.Management may give lip service to the pro-gram and not take the time or effort to ensurethat there is adequate follow-up. In thesecases, individuals are not encouraged topractice what they have learned, and no realculture change takes place. Frequently re-sources are not allocated to support thechange, and if money is made available,managers often fail to expend personal effortto practice what they preach. Shoney's Inc.restaurants are a case in point. When thechief executive officer (CEO) attempted toorganize diversity sensitivity sessions for topmanagers, the board fought the sessionsbased on their cost.

In summary, diversity initiatives often failbecause they typically use a scattershot ap-proach instead of a planned apprtiach to orga-nizational diange. Top managers often identifya need for diversity—tliey want tlio bene-fits—but the implementation is frequently dis-jointed and takes on a "program of the year"approach. Employees instinctively realize this,and real cultural change is not enacted.

APPLYING ANORGANIZATIONALDEVELOPMENT APPROACHAs we reviewed the literature regarding thecurrent diversity landscape, it became appar-

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ent to us that what has been learned by over50 years of theory, research, and practice onhow organizations can best implementchange is essentially being ignored by thevast majority of organizations attempting toachieve diversity. We asked ourselves what adiversity initiative would look like, if it werebased on what has been learned from thefields of organizational development andculture change. In other words, how canpractitioners interested in applying a sys-tematic and carefully planned approachbased on theory and research help their or-ganizational change into a diverse, multicul-tural environment? How can managers at-tempting to achieve diversity use thisknowledge to make sense out of the widevariety of diversity practices and activitiesthat are commonly available and develop acoherent approach with a greater chance forsuccess? The remainder of this article dis-cusses an approach that answers these im-portant questions.

What We Know About HowOrganizations ChangeIt is not enough to say analytically that di-versity is what an organization needs. Aplarmed course of action is necessary. How isa company to go about gaining a diverseroster of skilled employees who comeequipped with the necessary skills to gener-ate corporate sustainability in the decades tocome? We propose that diversity programswould stand much greater chances of suc-cess if they used a planned approach basedon what is known about how organizationschange from the fields of organizational de-velopment and culture change. An organiza-tion that wishes to develop diversity as anenabler of competitive advantage can bemost effective if it follows a set plan. Thisorganizational development plan of actionmust start with increasing awareness of di-versity and its associated benefits. Once theorganization, starting from the top down,,has gained awareness that diversity is bene-ficial, then the organization can movethrough a series of steps geared toward in-

stilling a new culture throughout the organi-zation. Finally, an organization must put inplace mechanisms that will ensure the newculture is perpetuated, and the organizationdoes not revert back to its original state.

The field of organizational developmentis based in large part on the original theoryand work done by Kurt Lewin. In his seminalresearch on organizational change, Lewintheorized that the forces driving changemust be increased and/or the forces resistingchange must be decreased to a point at whichthe driving forces overcome the resistingforces. Lewin believed that organizations,with their associated patterns of attitudes,expectations and behavioral norms, behavemuch as other living biological systems andare influenced by the concept of homeostasis.In other words, organizations tend to resistchange and retum to a previous state after adisturbance- In observing instances of suc-cessful organizational change, Lewin notedthat they these organizations experiencethree distinct phases: freezing, moving, andrefreezing. His model of organizationalchange and resulting research was builtaround these three stages.

Edgar Schein, building on Lewin's work,has refined the model and extended it to thechanges in psychological processes that arenecessary for an organization to successfullychange its culture. During the initial stage, itis critical that the motivation to change isincreased to the point where the present or-ganizational culture is ur\frozen. The presentstate must be disconfirmed and sufficientanxiety or guilt must be aroused in the mem-bers to create this motivation. A state of psy-chological safety must also be created to al-low the organizational members to changewithout making them overly defensive.Once the uiifreezing has taken place, initia-tives can be put into place that actually serveto change the existing culture and move it ina new direction. Once the change has takenplace, systemic refreezing must occur to en-sure that the change fits the organization as awhole and its various subsystems. Culturalchanges must be accepted at the individual,group, and functional and organizational

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levels if they are to be long lasting. Other-wise, the organization, based on the conceptof homeostasis, is likely to retum to its pre-change state.

Applying What We Know AboutOrganizational Change to DiversityInitiativesBecause the transition from monolithic orpluralistic organizations to diverse, multicul-tural environments is essentially a change inorganizational culture, we propose that thismodel of planned change can be applied toincrease the likelihood of achieving true or-ganizational diversity. Failure to address allthree phases of the model is likely to result inan organization either becoming mired in thepluralistic stage of diversity development orreverting back to the monolithic stage, thusfoiling any attempt at achieving the potentialbenefits of true multicultural diversity.

Our review of the business practices as-sociated with diversity suggests that thereare a wide variety of practices that help abusiness move forward on the path towardsachieving competitive advantage through di-versity. But most managers fail to view thesepractices as parts of a holistic, systemic effortof planned organizational culture change. Inother words, many mangers see the individ-ual trees {practices which they believe willpromote diversity), but fail to see the forest(develop an overall plan that will use thesepractices to evoke lasting cultural change). Inthe remainder of this article we use theLewin-Schein change model as a frameworkto organize common diversity practices intoa coherent program of planned organiza-tional change. Our model is summarized inFig. 1, and each stage of the model is dis-cussed in greater detail with examples fromreal-world organizations.

UnfreezingFor unfreezing to occur, the forces advocat-ing change must be increased to the pointthat they overcome the forces resistingchange. Something dramatic, such as serious

financial problems or a high profile lawsuitor public relations fiasco like those experi-enced by Dermy's, Texaco, or Publix, canserve to unfreeze the organization. But thereneed not be such a high profile e\'ent forunfreezing to occur. It may be a gradualrealization on the part of top managementthat diversity is necessary to be competitivein the present or near-term future.

Top management support for diversity iscertainly critical, Management needs to be-gin the process of unfreezing the current cul-ture by changing the system within which itoperates. One indicator of successful diver-sity programs is diverse company leader-ship. Companies with diverse top manage-ment teams and boards of directors are in abetter position to gain the advantages of di-versity. Diversity in high-profile positionssends a strong symbolic message to the restof the organization.

But monolithic or pluralistic organiza-tions do not commonly start with diversity atthe top. At the very least, the existing topmanagement team must be exposed to andconvinced of the potential benefits that di-versity can provide their organization. Oncecommitted, top management must then cre-ate a vision for the future and communicateit to the rest of the organization. Manage-ment must then begin to show symbolic sup-port for the diversity vision in their wordsand actions. For example, speeches, letters,and other communications should includepro-diversity rhetoric. Xerox Corp. is an ex-cellent case in point. As far back as 1972, thenXerox CEO Peter McCollough announcedthat diversity was as important a businessresponsibility as profitability. Likewise, thenCorning Glass CEO James R. Houghtonmade diversity a primary business goal asfar back as 1983. These organizations thenwent about the business of making their di-versity visions a reality.

Management must also devote adequateorganizational resources to diversity. A di-versity steering committee comprised of topmanagers should be formed to oversee andcoordinate the organization's diversity ef-forts. This steering committee is responsible

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FIGURE 1

Model for Creating Diversity

Unfreezing

• Top Management Commitment and Vision• Management Symbolic Communication And Actioos• Goal-setting

Moving

• Recruiting and Outreach Programs• Co-op and Internship Programs• Training and Education• Mentoring and Career Development

Refreezing

• Policies & Procedures• Job Descriptions• Reward System

Competitive Advantager

• Improved Creativity and Decision Making• More Agile and Adaptive Work Force• Improved Ability to Market to a Broader Demographic• Increased Market Share

for overseeing and guiding the overall diver-sity plan. It is also responsible for makingsure that sufficient organizational resourcesare committed to achieving the plan andmanagerial follow-up is applied.

Microsoft Corp. is an excellent exampleof a company that has achieved a multicul-tural level of diversity. Microsoft's top man-agers proclaim that their greatest assets aretheir employees, and that their continuedsuccess is reliant upon fostering diversity.They have created a diversity department,which works to uphold the firm's vision, "to

maximize the company's performancethrough understanding and valuing differ-ences. " A key Initiative of the vision is toincrease the number of women and minori-ties within company ranks. Microsoft be-lieves that when a company sells products topeople in 150 countries who speak 50 differ-ent languages, a singular point of view canbe detrimental. The company has created aDiversity Advisory Council, which targets anumber of specific groups and tries to keepMicrosoft an attractive place for all individ-uals to work. These targeted groups include

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African Americans, employees with atten-tion deficit disorder, Chinese, deaf or hard ofhearing employees, Filipinos, gay, lesbian,bisexual and transgender employees, His-panics, Indians, Koreans, Native Americans,single parents, women, and working par-ents. Santiago Rodriquez, Microsoft's diver-sity director, states that:

We need to stress that all humancultures have common needs, a com-mon sense of humanity. But thereare differences, too. How in theworld do yovi please a customer, forexample, if you don't know what heor she values? That's what culture isall about, that's what differences are ''all about. Diversity assumes not onlythat people are different—we knowthat—but that their difference is val-ue-added. If you know how to har-ness that difference, you'll be morecompetitive as a corporation thanthose firms that don't, whether in thedomestic marketplace, and certainlyin the global marketplace.

As part of their diversity vision andplanning process, top management and theDiversity Steering Committee should iden-tify a list of critical diversity-related skillsand competencies that will be required forthe organization to be successful in the fu-ture and set measurable diversity improve-ment goals. -

MovingOnce an organization has taken the initialsteps to unfreeze the culture, managementmust then move through a number of stepsto achieve a complete organizational culturechange. This movement toward diversityshould include such practices as recruitingand outreach programs, co-op and intern-ship programs, training and educational pro-grams, and mentoring and career develop-ment programs. The diversity vision andsymbolic actions of top management in theunfreezing stage can only be translated into

widespread organizational diversity throughthese sorts of concrete activities. But it isimportant to note that each of these practices,if done separately and not as part of aplanned approach to organizational change,is much less likely to be successful in chang-ing the organization's culture. The synergiesbetween the practices and application at ap-propriate points in time help to ensure amore successful diversity implementation.

Recruitment of new staff from underrep-resented groups starts the process of culturalconversion. Targeting recruitment efforts inregions or schools with high percentages ofminorities is one potential strategy. Like-wise, placing ads in publications or Web siteswith high minority readership is anothermethod to help increase diversity in the can-didate pool. These programs are useful inthat they can supply the necessary minoritycandidates, but often fail to deliver what theorganization really needs—candidates withthe skills necessary to succeed in corporateAmerica. This issue is compounded by thelack of opportunity for minority students togain practical work experience. As a result,minority students are often placed at a dis-advantage when entering the workforce, re-sulting in the employer overlooking theirtrue potential. Corporate recruiters, whohave been frustrated with the experience ofrecruiting qualified minority applicants us-ing these traditional approaches, may alsoturn to co-op curriculums and internshipprograms to help meet their needs.

One way is to increase access and oppor-tunities for minorities. We suggest that thistake place through the use of targeted re-cruiting and development of those who havebeen traditionally overlooked. An exampleof this sort of recruiting and outreach is IN-ROADS, a national internship and placementprogram for minorities, which helps corpo-rations not only discover minorities, but alsodevelop highly skilled employees. IN-ROADS' mission is to develop and place tal-ented minority youth in business and indus-try and prepare them for corporate andcommunity leadership positions. Collegeplacement offices and corporate recruiters

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can apply lessons learned from the IN-ROADS model to more effectively promoteminority placement and diversity in theworkplace.

INROADS seeks out high school minor-ities who are headed for college and pre-pares them for the corporate world by pro-viding them with valuable work experience,business savvy, and developmental assis-tance throughout their collegiate experience.Through summer internships with compa-nies, employers gain the opportunity togroom, pre-train, mentor and mold theseprospective entry-level minority candidatesfor permanent employment. A survey of 258corporations conducted by NorthwesternUniversity indicates that the INROADS ap-proach is quite successful. A key barometerof success of co-op and internship programsis the percentage of participants who areeventually offered full-time positions. Only37% of all students nationwide who workedin an internship capacity were offered full-time employment. INROADS posted an im-pressive 75% offer rate.

While the organization is recruiting itsfuture diverse staff, and nurturing currentminority employees, it also needs to provideexisting staff with diversity training. Mo-torola Inc., for example, requires that all em-ployees enroll in 40 hr of training per year.While not all of this training focuses specif-ically on diversity, any employee can enrollin courses covering diversity as a competi-tive advantage, the spirit of diversity, or thetransition to diversity. Senior managers mustattend two-day diversity seminars; there arediversity and sexual harassment courses forall managers, and diversity awareness andinterviewing courses for managers and di-rectors.

Companies should approach this com-ponent of their diversity strategy with care.There are tradeoffs that must be weighed toensure that each chosen practice fits wellwith the overall organizational diversity vi-sion and plan. Diversity training, while use-ful in making people aware of differences, isoften flawed, in that the training assumesthere will be an immediate change in peo-

ple's behavior after training. This is not nec-essarily true. Training may address discrim-ination and oppression that is deep-seated,and often makes members of dominantgroups uncomfortable. This creates resis-tance because it uncovers the true levels oftension that exist among organizationalmembers and may point to specific conflictsthat are present. It is for this reason that theorganization first needs to go through theunfreezing stage—in which members be-come psychologically prepared for thechange, and a safety zone for change is cre-ated. Diversity training and education initi-atives can then be more effective. The focusof this training should be on helping employ-ees work better together, opening better linesof communication and dialogue betweengroups, increasing understanding of thevalue of individual differences, and aiding arealization of how individual differences canhelp make a company more competitive.

Training and education programs cantake two different approaches—individualawareness or systemic cultural change. Wesuggest that companies address both tracksby creating diversity awareness within thecompany, while also working on team-build-ing and problem-solving efforts targeted ataddressing systemic issues. These steps canbe accomplished in tandem by creatingworkshops for increasing diversity aware-ness, airing complaints, and deriving solu-tions. Additional efforts can be expendedthrough diversity support groups for minor-ity employees.

R.R. Donnelley & Sons Co., a leader inthe printing industry, presents an excellentexample of an organization that is followingthis approach. R. R. Donnelley, in responseto a 1996 multimillion-dollar race-discrimi-nation suit that effectively unfroze the orga-nization, has implemented its own steplad-der approach based on education andtraining. R.R. Donnelley employees havereached a point of diversity sophisticationwhere, as they identify instances of non-di-versity, they immediately stop to evaluatethe underlying causes, develop solutions,and then take steps to ensure that the prob-

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lem is corrected. This company's policy ofinclusion begins with recruitment, and ex-tends to hiring, training and promotion. Di-versity councils are in place at each of thecompany's 40 plants and ensure that thesepractices are supported at the local level.

The next two practices that can help acompany evolve through the moving stagetoward multicultural diversity are mentor-ing and career development. Mentoring is away of ensuring that minority individualswho normally miss out on in-company net-working and promotion possibilities gainthis valuable opportunity while being ad-vised by a more senior manager. Career de-velopment is the process of helping employ-ees work toward and attain their personalgoals through continued education and en-hanced training. These two processes, whiletheoretically separate, work together in prac-tice. They are paramount to retaining a di-verse workforce and preparing minorities forhigher-level management positions. Compa-nies can improve employee loyalty by ensur-ing that individuals are inspired and chal-lenged to perform at their best. Reassuranceand support that proper opportunities andguidance w ill be available to achieve per-sonal goals must also accompany this chal-lenge.

Lucent Technologies and General MillsInc. are examples of organizations that do anexcellent job of combining these two aspectsof diversity advancement. Lucent has de-signed leadership programs to develop fu-ture leaders. In addition to these comprehen-sive and proactive opportunities foradvancement within their company, they ad-ditionally promote mentoring relationshipsthrough 30 women's employee networksthat help to foster women's development.General Mills has a formal mentoring pro-gram in which mentors work with minorityemployees on individual development plansthat will enhance personal growth and pro-mo tability.

All of these practices, when rolled out aspart of a comprehensive plan following aperiod of unfreezing, will help to change theculture of the organization. Members will

begin to understand the importance and po-tential payoffs of diversity. New minoritycandidates will be recruited, hired and even-tually promoted. The organization will beginto value differences and assimilate new waysof thinking and problem solving into the or-ganizational culture. A new multiculturaltype of organizational culture will result thatwill be better able to compete in the increas-ingly diverse marketplace. But a final criticalstage still exists for the organization intenton gaining the fullest benefits of diversity.

Refreezing *Finally, the organization must ensure thatthe changes of the moving stage are institu-tionalized. This objective is accomplished byaligning the organizational policies, proce-dures and reward system to perpetuate thenew culture. Without this critical, final step,the organization runs the risk of revertingback to its original pre-change culture.

The refreezing process begins by review-ing existing policies and procedures to en-sure they support rather than conflict withthe new culture of diversity. Most notably,job description and job evaluation languageshould be edited to reflect inclusive lan-guage. This stage also entails updating exist-ing performance appraisal and compensa-tion plans to make sure that they reinforcevalues of diversity. This is often a difficultissue to tackle, and encompasses the issue ofcomparable worth. Creating fair pay stan-dards that reward comparable pay for workof comparable value should eliminate paydisparities between niinority and majorityemployees.

Programs that include manager account-ability, directly linked to sustained diversity,and that are tied to manger bonuses, com-pensation and advancement are exception-ally effective in sustaining change. One cor-poration that has effectively createddiversity as a business priority and has takensteps towards diversity sustainability is theGannett Company. Gannett has establishedmanagement responsibility for diversity andincorporated performance and accountabil-

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ity measures that insure that managers aremotivated to achieve diversity goals. Finally,they have created human resource policiesthat are supportive of their diversity visionand goals. Managers are responsible for per-petuating diversity and are accountable fortheir people as well as profit and productgoals. Gannett calls this the three P's, and hasbeen practicing them since 1980. Perfor-mance appraisals for managers at Garmettreflect the importance of diversity by hold-ing management accountable for minorityrecruiting, development, promotion and re-tention. This process is backed up by incen-tives to managers as well as individual or-ganizational units who use diversity togarner exceptional quality. The entire pack-age is called Partners in Progress, a programwhich focuses not only on issues of race andgender, but also on issues of community de-mographics, harassment and discrimination,and matters of work/life, flexible benefitsand training, in addition to general diversityinitiatives. The success of the Partners inProgress program at Gannett is evidenced bythe fact that minorities comprise 33% of theBoard of Directors, 13"/,. of middle managers,and 15% of front-line managers. Accord-ingly, women comprise 25% of the Board,25% of middle managers, and 35% of front-line managers.

Motorola and Xerox are other prime ex-amples of organizations that realize the im-portance of the refreezing stage. Much likeGannett's, the two companies' diversity ini-tiatives also include manager appraisals andcompensation packages tied to achieving di-versity goals.

GAINING A COMPETITIVEADVANTAGE THROUGHDIVERSITYDiversity is a competitive advantage that isindispensable in the 21 * century. Previousresearch has shown that diversity can pro-vide the benefits of increasing and keepingmarket share, cost savings derived from re-duced turnover, increased productivity and

innovation, better quality management, anda corporate resiliency born of a multiculturalworkforce. Diversity will allow an organiza-tion to better achieve a sustainable competi-tive advantage in a quickly changing globalmarketplace.

To be successful in gaining these advan-tages it is important for diversity to be prop-erly and completely implemented in a holis-tic, systemic, and planned fashion. This canbe best accomplished by applying an orga-nizational development and culture changeapproach such as is presented in this article.

Implementation should start with theprocess of unfreezing at the top. Movementtoward full diversity will evolve as the newphilosophy fvmnels down through the orga-nization with the help of new recruiting, out-reach practices, diversity training and edu-cation of the current staff, mentoring, andcareer development. Once this momentumhas been established and the organizationalculture begins to transform itself, changes tothe formal policies, procedures and rewardsystem must be put in place to ensure insti-tutionalization of the new culture of diver-sity. The organization will then be in a muchbetter position to realize the potential bene-fits of diversity. The plarmed program oforganizational change proposed in this arti-cle will assist the company in gaining a sus-tainable competitive advantage as opposedto the disjointed, piecemeal approach usedby many unsuccessful organizations.

One final example of a successful ap-proach is Sears, and Roebuck & Co. In 1992,Sears posted its worst net loss of $3.9 billion.This major event effectively caused the Searsculture to unfreeze and become receptive tochange. Sears responded with a movingphase of major restructuring, closing imder-performing stores, discontinuing its tradi-tional catalog business, and spinning offnon-core businesses. Part of the new organi-zational vision was to change the culture atSears and become more diverse. Valuing di-versity is now one of the 12 key leadershipskills for managers. Various diversity initia-tives were put in place at Sears to effect thechange. For example, the ethnicity and gen-

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der of store location personnel are now ex-pected to mirror the community that theyservice. Recruiting and hiring practices werechanged to reflect this goal. Sears advertisingand marketing strategies now incorporatediversity themes. The ranks of managementare expected to more closely resemble thegeneral population. Mentoring, career devel-opment and promotion practices have beenchanged to help achieve this goal. To ensurethat these initiatives have a long-lasting im-pact. Sears has addressed the refreezingphase with a measurement system for track-ing progress on diversity goals. Managers'appraisals and bonuses are tied to perfor-mance on these measures. The new emphasison diversity appears to be showing positiveresults. Sears now reports that 17% of itsemployees are black and 11% are Hispanic.The company also reports that 17% of man-agers are minorities, with an even split be-tween males and females. Women and mi-norities now account for 29"{j of executives.Sears reports that measures of employee andcustomer satisfaction are on the rise. Theyestimate that these improvements havetranslated into more than $200 million inadditional annual revenues.

Many forces are combining over the nextfew decades to make diversity an evengreater concern to business leaders. The la-bor market will most likely remain tight. Asbaby boomers retire, the workforce will ac-

tually shrink, and unemployment is ex-pected to stay in the 3.5 to 6.5% range. Newentrants into the U.S. labor force are fore-casted to be comprised of 70 to 80% women,minorities and immigrants. Minority andwomen consumers will control an evenlarger share of the U.S. marketplace. Global-ization of corporations is expected to accel-erate, which will force organizations to beable to think even more internationally.

It certainly appears that multicultural di-versity will be required to be able to effec-tively compete in the future. The bottom-line, competitive implications of notachieving diversity are clear. Our htipe isthat leaders of organizations interested increating a diverse, multicultural environ-ment will use our model, which incorporateswhat has been learned from over 50 years ofresearch on organizational development andculture change, to develop and implementcoherent, holistic plans for creating diversitywithin their organizations. This approachwill help them attain the full benefit of mul-ticultural workforce diversity and competemore effectively in the increasingly diversemarketplace.

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16O ORGANIZATIONAL DYNAMICS

SELECTED BIBLIOGRAPHY

For more on the advantages and differentforms of diversity, see Ann Morrison, TheNew Leaders: Guidelines on Leadership! Diversityin America, 1 * ed. (San Francisco, CA; Jossey-Bass, 1992); Taylor Cox and Stacy Blake,"Managing Cultural Diversity: Implicationsfor Organizational Competitiveness," Acad-emy of Management Executive, 1991, 5(3), 45-56; and Taylor Cox, "The Multicultural Or-

ganization," Academy of ManagementExecutive, 1991, 5(2), 34-47.

For more on the seminal work done onorganizational development and culturechange see Kurt Lewin, Field Theory in SocialScience (New York; Harper and Row, 1951),and Edgar Schein, Organizational Culture andLeadership, 2"' ed. (San Francisco: Jossey-Bass, 1992).