Diversity as a Core Business Strategy

1

THE COSTS OF FAILURE

Much has been written about the changingface of America and the correspondingincrease in workforce diversity. The fact is,diversity is here, in the population, in theworkforce and in the marketplace. Whencompanies fail to create a culture of diversityand inclusion effectively, the costs can behigh. Consider the multitude of well-knowncompanies that have spent millions of dollarson “diversity training,” after settlingdiscrimination lawsuits totaling hundreds ofmillions of dollars. These settlements alsomandated the creation of internal diversityinfrastructures as well as oversight by theEqual Opportunity Employment Commissionon the companies' diversity-related progress.For several of these companies, the corporatecosts of diversity-related programs increasedenormously without a corresponding realimprovement in interpersonal relations andcommunications among employees, asindicated by the fact that discrimination andclass action lawsuits reoccur.

DIVERSITY AS A BUSINESSOPPORTUNITY

Companies that have succeeded in fosteringa culture of diversity approach it proactivelyas a business opportunity. These companieshave realized that diversity can have apositive impact on the bottom line. Ratherthan working to minimize differences, theyfind ways to leverage them for betterbusiness results. For example, by workingtogether, a diverse team of customer servicerepresentatives can more effectively understandand meet the needs of customers with arange of backgrounds. A diverse productdevelopment team can find ways to expandthe use of a product, and ways to make theproduct more effective for a wider customerbase. By expanding the perspectives of anyteam, traditional processes are questioned,and the quality of decision-making improves.

Diversity can also impact the bottom line interms of capturing new and diverse markets.According to a recent Harvard BusinessReview article that profiles IBM's strategy ondiversity, “workforce diversity [is] the bridgebetween the workplace and the marketplace

— in other words, greater diversity in theworkplace could help IBM attract a morediverse customer set.”1 People tend to dobusiness with people they believe canunderstand their unique needs. Companiesthat demonstrate an ability to meet thoseunique needs are going to win customers inany market.

A corporate culture that fosters diversity andinclusion can support recruiting and retentionefforts as well. Employees choose and remainin jobs at companies where they feel welcomeand comfortable. A company that embracesdiversity can offer that kind of workenvironment, and as a result, can attract andretain top talent with diverse backgrounds.

Lastly, there is a connection betweendiversity and increased productivity. One ofthe key findings of the National UrbanLeague's Diversity Practices That Work reportis that effective diversity programs areassociated with higher productivity.According to the report, “it is likely that theeffective diversity practices — exemplaryleadership and management practices —also result in productivity gains.”2

CHALLENGES TO A SUCCESSFULDIVERSITY INITIATIVE

Diversity impacts every person, every project,and every transaction in today's businessworld. Some companies approach it in termsof the noticeable differences among people.What many fail to realize is that diversity isreally about personal interaction andemotions, and creating a corporate culturethat welcomes all kinds of differences.Diversity needs to become an integral part ofthe company's culture, and be reflected in itsinternal and external brands.

The components of corporate diversityinitiatives and the ways they are implementedare just as diverse as the workforce itself.However, many are not effective at the mostimportant task — affecting corporate culture.The failure to affect the corporate culture ispredictable when considering many of theflaws contained in various diversity initiatives.

Companies that

have succeeded in

fostering a culture of

diversity approach

it proactively as a

business opportunity.

These companies

have realized that

diversity can have a

positive impact on

the bottom line.

INITIATIVE FLAWS:

The initiative takes a reactive approach.

In some companies, a diversity initiative isimplemented to comply with an affirmativeaction policy or to quell fears about lawsuitsbrought under the Equal EmploymentOpportunity Act. This kind of reactiveapproach is a quick fix that looks good at aglance but often does nothing to impact thecompany culture in a positive way. In fact,reactive approaches can actually do moreharm than good in terms of workforce moralebecause they don't appear to be a genuinecommitment to diversity.

Companies looking for a fast solution oftenchoose a packaged diversity program that isa 'bolt-on' rather than an initiative tailored tothe needs of the company's workforce andintegrated into the daily work environment.A related problem is the transient nature ofdiversity manager positions. For instance,companies delegate this role to a high-performing employee, and then transfer thatemployee to another role before he or shecan make significant progress. In other casesthe manager starts to achieve diversity, and ismoved to a position of perceived greaterresponsibility due to their apparent earlysuccess. Furthermore, in some cases thediversity director's progress is surprisinglyeffective, and therefore uncomfortable tomanagement, resulting in a change in theposition. Or, transversely, the diversity leaderis moved due to a real or perceived lack ofprogress. In all of these cases, the employeecharged with managing the initiative does nothave the time needed to move diversity to anadvanced level that allows that company toleverage it.

The initiative is not tied to the company’s

bottom line.

Even though top management may make thecommitment to diversity, if the initiative is nottied explicitly to the company's bottom line,it does not become a priority for middlemanagers. The diversity initiative is notintegrated into the tools and processes

they use to manage employees, includingorientation, training and education, andinterpersonal communication. As a result,current employees see a lack of progress withdiversity, and new employees attracted bythe company's stated diversity commitmentquickly become dissatisfied and may leave.Top management must ensure that thecommitment to diversity has buy-in at alllevels of the organization by making diversityan integral part of company success.

The initiative is narrowly focused.

Responsibility for a diversity initiative oftenrests in the human resources department,where it becomes an “HR issue.” HRdepartments sometimes respond with one oftheir strengths - training, which can beeffective if it is used in conjunction with otherstrategies. Companies that relegate diversityto a single department miss out onopportunities to improve and integrate thediversity initiative into other areas of thecompany. For example, a communicationsdepartment has the expertise to effectivelycommunicate the initiative company-wide. Apurchasing department that already has asuccessful supplier diversity program canoffer insight. In fact, in some cases supplierdiversity departments lead the company indiversity progress, which may lead to internalcompetition between the two areas, resultingin hyper-segmentation, thus eliminating theopportunity for cross-leveraging diversitybest practices within the organization.

The initiative does not include technology.

Technology is a significant factor in mostbusinesses today, but too often, corporatediversity initiatives are devoid of a technologycomponent. This can be especially problematicat companies where diverse employees usetechnology daily to meet job responsibilities.Technology can be used at the beginning ofa diversity initiative as a survey mechanismfor collecting data that will be used tostructure the program, and throughout theinitiative as a tool for gathering feedback. Itcan also be used to communicate about theinitiative and to collect data for measurementof an initiative's success.2

Companies looking

for a fast solution

often choose a

packaged diversity

program that is a

‘bolt-on’ rather than

an initiative tailored

to the needs of the

company’s workforce

and integrated into

the daily work

environment.

Diversity as a Core Business Strategy

3

Any corporate

initiative that does

not benchmark its

own progress, or

continually adjust

and move forward

along with the rest

of the company will

likely fail or

become irrelevant.

The initiative remains static.Too often diversity initiatives begin and endwith the first efforts undertaken. Diversity andinclusion are part of company culture, and likethe culture, diversity continues to evolve. Anycorporate initiative that does not benchmarkits own progress, or continually adjust andmove forward along with the rest of thecompany will likely fail or become irrelevant.

MOVING DIVERSITY FORWARD

Though companies in the U.S. haveimplemented diversity initiatives, many arenot responding well to diversity in the eyes oftheir employees. According to the NationalUrban League, less than one third of Americanworkers believe their company has aneffective diversity initiative.3

Companies need to ask:

• What is the state of diversityin our company?

• Are we making the most ofdiversity?

• Do we speak with one voicewith respect to diversity?

As American companies become increasinglyconnected to the global economy, the abilityto foster a corporate culture of inclusionbecomes even more important to businesssuccess. Companies that ask these questionson a continual basis, set strategic goals,measure their progress and evolve theirprograms in sync with their overallorganizational change will be the ones toleverage the full potential of diversity.

EXECUTIVE BRIEF REVIEW

1. Diversity is a business opportunity.

Companies that succeed with diversity today approach itproactively as an opportunity for business success.

2. Changing corporate culture is the most important task.

Many diversity initiatives fail to recognize that diversity is aboutpersonal interaction and fostering a corporate culture thatwelcomes differences.

3. Avoid the mistakes other companies have made.

Diversity initiatives will not succeed if they take a reactiveapproach, are not tied to the company's bottom line, are toonarrowly focused, do not leverage technology, or remain static.

4. Companies need to assess their state of diversity.

Diversity is here. The question is, “Does the company speak withone voice in terms of diversity”?

Diversity as a Core Business Strategy

Diversity as a Core Business Strategy

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REFERENCES1. Thomas, A. (2004, September). Diversity As Strategy. Harvard Business Review, p.4.

2. National Urban League. (2004). Diversity Practices That Work: The American Worker Speaks. Available: http://www.nul.org/Publications/pdf/ERAC-NUL.pdf

3. National Urban League. (2004). Diversity Practices That Work: The American Worker Speaks. Available: http://www.nul.org/Publications/pdf/ERAC-NUL.pdf

LEF T: Brandon Adams R IGHT: Will Ruch

About Brandon AdamsG Communications, Inc. President and CEOBrandon G. Adams possesses more than 17 yearsof multicultural communication experience. Aseasoned business executive, Brandon hasprovided consultation services to executivemanagement and key leadership inprocurement, human resources, corporatecommunication, and advertising departments.

Over the years, Brandon has developedcomprehensive communications strategies toimplement various corporate diversity programs.Under his leadership, G Communications hassuccessfully developed and implementedvarious diversity initiatives and multiculturalcommunications programs for many organiza-tions and institutions, including Archer DanielsMidland Company, Deere and Company,Harley-Davidson, Johnson Controls, MillerBrewing Company and the State of Wisconsin.

About Will RuchWill Ruch is the CEO and Managing Partner ofVersant, a marketing communications firm withoffices in Milwaukee and New York City. Willhas helped to establish Versant as a leader inemployee communications and recruitmentmarketing, with expertise in generationalworkforce issues, and strategies for theretention of high performing employees.

Through working with several Fortune 500companies, Will has become a leadingauthority on Employer Branding and its abilityto align associates and drive results. Under hisleadership, Versant has also worked ondiversity initiatives at Bridgestone/Firestone,Sears, Walgreens, The Thomson Corporation,Northwestern Mutual and Ralston Purina. Willhas presented at numerous national seminarsand conferences, including the Association forCorporate Growth and the National RetailFederation.

PARTNERING FOR DIVERSITY

Experts in diversity communications and employer branding respectively, G Communications andVersant are partnering to help organizations integrate diversity into their mainstream cultures.Diversity is a key component of an organization's image and operations, requiring expertise,strategic planning and systematic measurement in order to convert it from a challenge to an asset.Our partnership exemplifies the practice of walking the talk when it comes to engaging diversityin concept and in practice to produce effective, holistic solutions that serve our clients'comprehensive communications needs.

For more info: wishrm@versantworks.com

www.versantworks.com

11414 west park place, suite 202 milwaukee, wisconsin 53224 414.410.0500

48 wall street, suite 1100 new york, new york 10005 212.918.4755

www.gcom-marketing.com

11414 west park place, suite 202 milwaukee, wisconsin 53224 414.225.9901