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By Laraine Kaminsky
Most people understand the ethical case for
diversity, but many do not realize there is also a business case to be made.
Leveraging diversity can have a positive impact on an organization’s bottom
line — but first, practical steps must be taken to build an inclusive
association that is reflective of its membership.
Defining Diversity
Before you can begin to leverage diversity, you need to define it. One of
the more inclusive definitions is that used by the Society for Human
Resource Management, Alexandria, VA., in its Workplace Diversity Toolkit:
“Although the term is often used to refer to differences based on ethnicity,
gender, age, religion, disability, national origin and sexual orientation,
diversity encompasses an infinite range of individuals’ unique
characteristics and experiences, including communication styles, physical
characteristics such as height and weight, and speed of learning and
comprehension.”
It is up to your organization to develop its own definition of diversity,
but having a more inclusive definition at the core of its diversity strategy
will set it on a path toward a long-term cultural shift that focuses on
maximizing the talents of all members.
Why Build A Reflective Association?
A company that is reflective of the population it serves is much more likely
to be able to understand the requirements of its diverse membership —
meaning it can provide services in multiple languages and styles, and is
less likely to offend and exclude groups. Furthermore, when looked at from a
pure dollars-and-cents viewpoint, having a diverse organization pays off.
In studying Fortune 500 companies between 1996 and 2000, the women’s
research organization Catalyst, New York City, found that companies with the
highest percentage of women in top management teams had better financial
performance than those with the lowest representation — total return to
shareholders was 34 percent higher and return on equity was 35.1 percent
higher (as reported by Workforce Management). Furthermore, it is estimated
that by 2010, women are expected to control $1 trillion, or 60 percent of
the country’s wealth, according to research conducted by BusinessWeek and
Gallup. With this in mind, why shouldn’t women be consulted and included at
all levels of an organization?
An organization with a low representation of African- Americans, visible
minorities, Native Americans and other traditionally underrepresented groups
is excluding significant parts of its membership and/or customer/client
base. This is becoming increasingly critical. The Selig Center for Economic
Growth, Athens, Ga., projects that by 2009 the combined buying power of
African-Americans, Asians, and Native Americans will more than triple its
1990 level of $242 billion, and will exceed $1.5 trillion — an increase of
$1.1 trillion, or 242 percent.
There is also much discussion today about the gay, lesbian, bisexual, and
transgender community and inclusion. We need to consider the cost of the
closet when people have to mask who they really are. Again there have been
studies to show the enormous purchasing power of this particular segment of
society. According to MarketResearch.com, this market represents more than
14 million consumers in the United States, and is projected to wield more
than $607 billion in purchasing power by 2007.
Why Exclusion Exists
So why is it that people are excluded and g roups
continue to be significantly underrepresented at the executive table?
Answers range from the extremely obvious of all of the “isms” (i.e., racism,
sexism) to the explanation that exclusion occurs because of flawed
organizational practices, such as informal hiring practices or not having a
diversity strategy that actively mandates an organization to be
representative and reflective as a business requirement — and to act on that
business requirement accordingly.
Another reason relates to biases and assumptions made about certain groups,
such as people with disabilities. A major factor contributing to the
statistic that between 60 and 70 percent of people with disabilities
experience under- or unemployment is the misconception about the cost of
accommodation. In reality, according to the United States Government’s Job
Accommodation Network, 20 percent of accommodations made for people with
disabilities cost nothing, with a further 51 percent costing less than $500.
Furthermore, they found that for every dollar spent to make an
accommodation, a company gets $40 in benefits.
Leveraging Diversity For Success
The cornerstone of a successful diversity strategy is true leadership
commitment, and with that comes accountability. It is important to implement
a systems approach so that diversity is enshrined in the mission, vision and
values of an association. Organizational attitudes and behaviors should be
measured, and required changes outlined in an explicit communication
strategy. A diversity strategy must comprise both internal and external
initiatives, which are aligned with human resources strategies, but do not
rest exclusively in human resources. To reinforce the strategy, there needs
to be ongoing education and communication organization-wide that is current
and relevant.
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TAKE
HOME POINTS
• By 2009 the combined
buying power of African- Americans, Asians, and Native Americans will
more than triple its 1990 level of $242 billion, and will exceed $1.5
trillion — an increase of $1.1 trillion, or 242 percent.
• It is important to implement a systems approach so that diversity is
enshrined in the mission, vision and values of an organization.
• A diversity strategy must comprise both internal and external
initiatives that are aligned with human resources strategies but do not
rest exclusively |
In their book The Power of Full Engagement: Managing Energy, Not Time, is
the Key to High Performance and Personal Renewal (Free Press, 2003), Jim
Loehr and Tony Schwartz cite recent studies that show less than 30 percent
of North American workers are fully engaged. In another study cited in the
Fall 1998 issue of McKinsey Quarterly, 58 percent of respondents defined an
organization’s values and culture as the top talent motivator. Promoting an
organizational culture that supports its members — and recognizes, respects
and values their differences — will encourage employee engagement,
strengthen relationships with clients and drive organizational success, and
ultimately its survival.
Raymond W. Smith, chairman and CEO of Bell Atlantic, said it best:
“Diversity isn’t an idea. It’s a competitive weapon.”
Laraine Kaminsky is
executive vice president of Graybridge Malkam, Ottawa. You can e-mail her at
lkaminsky@graybridgemalkam.com. |
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