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Embedding Diversity: Three Key Steps - Ideas for Leaders
Idea #027

Embedding Diversity: Three Key Steps

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KEY CONCEPT

Diversity within an organization is now obligatory, and management policies in this domain are a must. However, implementing such policies is only the first hurdle in diversity management. In this Idea, two other hurdles faced by executives charged with this are presented, as well as tips based on others’ experiences on how to overcome them.


IDEA SUMMARY

Diversity management has become a key instrument for employers in recent years. University graduates around the world are no longer predominantly white males, and most companies now have a diversity policy document, with the larger ones also instating Diversity and Inclusion (D&I) Officers.

However, companies nevertheless face a triple hurdle in implementing diversity management policies, and most companies have only tackled the first hurdle: to establish a credible diversity policy and get high level buy in. While large firms have been able to deal with this first hurdle, many others are still struggling to overcome it.

The second hurdle is making a difference; after the first hurdle has been taken, nice words have been spoken, and the image brochures have been printed, it’s time to show that the diversity commitment leads to measurable change. Of course, this is easier said than done.

Managing diversity is the third and final hurdle. The business case for diversity is less developed than many believe; academic research shows inconsistent findings when it comes to the effect of diversity on team or firm performance. High levels of diversity may have either positive or negative effects, depending on different background characteristics within the team and the impact of such characteristics on team dynamics. In short, measuring (let alone managing) the diversity-performance relationship is very complex and still poorly understood.

So, how can leaders turn the diversity rhetoric into action efficiently?


BUSINESS APPLICATION

This Idea provides a number of examples of diversity and inclusion by leaders, including the following:

  • IBM’s Tom Watson Jr openly stated he would only invest in new plants if Southern US States allowed equal opportunities for black and white employees. He went on to become CEO of the company.
  • Pepsi, Areva and Deutsche Bank have all effectively appointed non-male and non-white CEOs.

Most managers think that if they focus on several dimensions of diversity at the same time (i.e. gender, age, nationality), they do not focus at all and are less likely to succeed. But this is a miscalculation.

The diversity agenda needs to be broadened and not only focus on the gender dimension, even though the gender imbalance continues to pose a formidable challenge at most companies. Instead, companies need to look for ways to manage other diversity aspects such as age, ethnicity and nationality as well.

In addition, the third hurdle is often the most difficult to even identify in the first place; one example of how a group of D&I Officers in Switzerland did so is as follows: they analysed their internal data in order to identify the diversity value drivers in their organizations using sophisticated statistical methods.


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Idea conceived

January 1, 2012

Idea posted

Jan 2013
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