Diversity as a Strategic Advantage

Alaina Love May 14, 2010, 3:15PM EST text size: TT

http://www.businessweek.com/managing/content/may2010/ca20100513_748402.htm

It's about more than filling quotas, as such companies as Turner Broadcasting, IBM, and Pfizer have discovered

By Alaina Love
Since the establishment of affirmative action in the early 1960s, organizations have struggled with shifting their focus on diversity from a numbers exercise of quota achievement to leveraging the benefits that can be derived from employees with different backgrounds and perspectives in a way that provides a commercial advantage.

While we've seen startling advances in technology and radical shifts on the political, cultural, and demographic fronts over the past 50 years, the utilization of diverse talent in organizations has not kept pace. Leaders often intuitively understand the advantage of a diverse workforce, especially in today's global economy, yet many organizations grapple with how to develop and apply diversity principles in a way that will affect revenue and market position, as well as reputation.

For companies to capitalize successfully on diversity, they must develop a robust and comprehensive strategic framework that not only considers how to attract and retain diverse employees but also is anchored in a culture of inclusion. In the 16 years I have consulted to multinational companies on issues of leadership, including diversity, some common characteristics have emerged among companies that utilize diversity as a strategic lever for growth and innovation. These are the hallmarks of organizations that have successfully moved beyond the numbers:

1. A Prepared Leadership and Workforce

Leaders and managers of cutting-edge companies are exposed to training and development that enhance their understanding and valuing of differences and allows them to examine the tenets of race and ethnicity that have shaped their perspectives on diverse groups. Accountability is key in these organizations, so diversity goals are built into annual objectives and progress is measured. Diversity results are linked to rewards and recognition, and there's a consistent process for promptly addressing intolerance and inequities. Diversity competency among senior and emerging leaders is achieved through stretch assignments, project participation, and opportunities to interact with and lead diverse groups and operate in diverse cultures.

2. Sophisticated Programs to Attract, Engage, Develop, and Retain Diverse Talent

The best companies actively seek diverse talent and foster relationships with potential recruits at an early stage through internships and, after hiring, through talent-development programs. The road to career success is clear and unambiguous, with required competencies and skills for every position widely communicated across the organization. Management invests in nurturing relationships with diverse individuals who might be recruited to their organization. Also, top companies require that the composition of their boards and management committees reflect their goals, which provides added credibility with potential new hires.

3. Measuring and Demanding Inclusion

In companies that leverage diversity, the process does not end with recruitment; it shifts to including diverse views and perspectives in developing business strategy and meeting challenges. How well diverse groups are included across the organization in both formal and informal networks is examined and efforts are made to enhance those opportunities. There is also a commitment to and a process for addressing pay inequities.

Often, employee resource groups (ERGs)—which are support and career development groups of employees with common bonds, such as race, gender, sexual orientation, and even parenting—become a formal structure for inclusion. Beyond that, these groups are offered a seat at the table when they demonstrate a willingness to lend valuable input and relevant perspectives about important business decisions. Finally, mentoring programs and informal mentoring processes contribute to inclusion initiatives.

4. Giving Everyone a Voice

The best organizations recognize that beyond race, gender, ethnicity, and sexual orientation, diversity also applies to thought, skill, and passions. Differences are appreciated, but the corporate culture provides space for challenging differences in search of the best business solutions. In this environment, people are able to advocate their point of view passionately, even if it differs from the status quo. Ultimately, diversity includes everyone, regardless of background.

5. Diversity Is a Core Operating Principle

With the realization that diversity can bring about competitive advantage, partnering occurs among diverse groups across all functional areas and is anchored by common goals. This reduces silo mentality and allows for increased creativity and innovation. Beyond being a moral imperative, diversity in top companies is a key plank in the platform for business success.

Consider for example, Turner Broadcasting (TWX), whose businesses include CNN, TNT, Cartoon Network, and seven other networks. According to Michele Golden, vice-president for talent management and diversity, the company defined diversity as a core operating principle in 2005, which has influenced the programming Turner has developed. This commitment to giving viewers a wider variety of perspectives has allowed Turner to attract an array of new advertisers through sponsorship for such programs as the highly acclaimed documentaries Black in America and Latino in America.

To partner with the business around strategic issues, Turner utilizes nine ERGs, which they call Business Resource Groups. The BRGs influence programming, support Turner's activities within the community, focus on culture and hiring, and offer input on their culture and the viewing habits of individuals from their specific affinity group.

Each BRG operates with a well-defined mission and value proposition that includes how they will contribute to Turner's business, and each is supported by a senior executive who offers guidance and acts as a champion. Throughout 2009, one such group, Turner Parents, served as an internal focus group and generated new ideas for broadband products for mothers in support of Turner Entertainment Network and its new products group.

More Original Programs

Turner Parents also provided feedback to Cartoon Network about an online game for children and worked to develop new programming ideas on family and children's health issues for CNN FitNation. "We could not have had the programming success without the Business Resource Groups," Golden asserts.

IBM (IBM) is leveraging diversity through affinity channels as a mechanism to encourage innovation at every level. When Systems Management Specialist Pam Nesbitt filed her first patent in 2003, she became acutely aware of how few women at IBM were patenting their work. "The company has Invention Development Teams [composed] of volunteers who help individual inventors navigate the patent disclosure process," Nesbitt explains. "I noticed that there were almost no women on these teams and none submitting patents."

Sure that she could change this trend, Nesbitt contacted 20 female co-workers who were in technical roles and founded IBM's Women Inventor's Community. The group, which was formed in late 2006, now has more than 1,000 women worldwide. Collectively, these women have submitted nearly 900 patent disclosures internally and have been granted almost 300 patents.

Not all large companies are as advanced in their strategic application of diversity, but some are recognizing the advantage that a shift in focus might provide.

Tapping the Resources of Colleagues

Eighteen months ago, pharmaceutical company Pfizer (PFE) began to intensify its diversity program. Says Karen Boykin-Towns, chief diversity officer: "We asked ourselves, is it really all that it could be and are we capitalizing on diversity? We said, 'We can do more.'"

The company has now established 53 ERGs worldwide called Colleague Resource Groups, whose focus is creating an inclusive culture and contributing value to the business. These groups are open to everyone and are supported by senior executives who act as sponsors, including those who are ethnically or racially different from the groups they counsel. Some CRGs act as focus panels for corporate advertisements. Others serve on the Business Maximization Subcommittee, providing input on business issues that might affect diverse customers.

Moreover, Pfizer conducts an annual pay-equity analysis to ensure that women and people of color are not discriminated against in compensation—which is often a thorny issue in the battle for true inclusion.

The company is now expanding its diversity focus to relationship building with customers. Recently, in a pioneering effort to support the development and retention of women in India, Pfizer India conducted focus groups of leading women in sales and high-profile female physicians to discuss career goals, challenges, and opportunities. This provided a platform for both strengthening customer relationships and building a community of accomplished women who could develop an ongoing support network.

As organizations embrace the power of diversity to drive business results, it clearly positions them for growth in a flatter world economy, where the composition and complexion of the workforce and customer base is increasingly shifting. Changing the lens through which diversity is viewed moves leadership perspectives on the issue from tacit compliance with government mandates to true recognition that diversity is a partner in business success. Organizations that are not making the most of their diverse talent will find themselves in the unenviable position of watching competitors take the lead.

Alaina Love, President of Purpose Linked Consulting (www.thepurposelink.com) is a nationally recognized leadership expert and speaker. She is co-author of The Purpose Linked Organization: How Passionate Leaders Inspire Winning Teams and Great Results (McGraw-Hill, 2009).

Kevin L. Brown
www.kbsinsight.blogspot.com