Di­ver­sity

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Mak­ing the most of dif­fer­ences

PRO­MOT­ING AND SUP­PORT­ING DI­VER­SITY IN THE WORK­PLACE MAKES BUSI­NESS SENSE

Bis vor nicht langer Zeit beschränkt­e sich Diver­sität in vie­len Un­ternehmen auf ein aus­ge­wo­genes Ver­hält­nis zwis­chen den Geschlecht­ern. Doch das hat sich in­zwis­chen geän­dert. ROBERT GIB­SON führt aus, was heute Vielfalt aus­macht und welche bere­ich­ernde Wirkung sie hat.

What do you think of when you hear the word “di­ver­sity”? Gen­der equal­ity? Quo­tas? Po­lit­i­cal cor­rect­ness? Yet an­other trendy buzz­word from the US? The United Col­ors of Benet­ton? Pro­mot­ing di­ver­sity is in­creas­ingly be­ing seen by busi­ness peo­ple not just as some­thing you should do, but as some­thing you must do if you want to sur­vive. It is be­ing taken more se­ri­ously than ever be­fore by more and more com­pa­nies. Di­ver­sity department­s are be­ing es­tab­lished and they are ap­point­ing chief di­ver­sity of­fi­cers (CDOS), with in­flu­ence beyond HR, to play a strate­gic role in busi­ness de­vel­op­ment. Am­bi­tious di­ver­sity tar­gets are be­ing set, key per­for­mance in­di­ca­tors (KPIS) im­ple­mented and ini­tia­tives launched.

What lies be­hind all this ac­tiv­ity? Is there a real busi­ness case for di­ver­sity?

Mono­cul­tures and ba­nanas

As a farmer, you may be tempted to grow just one crop. This can be highly lu­cra­tive, as you can ben­e­fit from economies of scale. If the crop fails, how­ever, it can be dis­as­trous, as you will lose every­thing. A cur­rent ex­am­ple is the ba­nana. We are heav­ily de­pen­dent on one type of ba­nana, the seed­less Cavendish, which is un­der threat from the fusar­ium wilt fun­gus. If it spreads, ba­nanas will be in ex­tremely short sup­ply or even be­come ex­tinct.

The dan­ger of mono­cul­tures is also ev­i­dent in the world of fi­nance. As an in­vestor, you may be tempted to in­vest every­thing in an ex­cit­ing start­up com­pany that seems to have great po­ten­tial in the mar­ket. The trou­ble is: if it fails, you lose every­thing.

The same prin­ci­ple ap­plies to busi­ness. If you em­ploy only one type of per­son, fo­cus on one type of cus­tomer and rely on one type of sup­plier with a lim­ited range of ser­vices or prod­ucts, you may be suc­cess­ful in the short term. But your com­pany will prob­a­bly not sur­vive in the long run in a fast­chang­ing busi­ness en­vi­ron­ment.

What is di­ver­sity and why pro­mote it?

Ac­cord­ing to the Cam­bridge Dic­tio­nary, “di­ver­sity” is “the fact of many dif­fer­ent types of things or peo­ple be­ing in­cluded in some­thing; a range of dif­fer­ent things or peo­ple”.

Pro­mot­ing and sup­port­ing di­ver­sity in the work­place is about valu­ing ev­ery­one in the or­ga­ni­za­tion, so that ev­ery­one feels able to par­tic­i­pate fully and achieve their po­ten­tial. This is not only a moral obli­ga­tion; it also makes busi­ness sense.

Beyond gen­der

In many com­pa­nies in Western Europe and the US, the fo­cus of di­ver­sity ini­tia­tives is on gen­der. Get­ting a bal­ance of male and fe­male em­ploy­ees at all lev­els of an or­ga­ni­za­tion is ob­vi­ously im­por­tant, but so are other di­ver­sity di­men­sions. Which di­men­sions are par­tic­u­larly rel­e­vant will vary widely across the globe. For in­stance, in China, you may find a rel­a­tively high pro­por­tion of women in man­age­ment po­si­tions, but the lack of rep­re­sen­ta­tives of par­tic­u­lar re­gional groups is more likely to be a key is­sue.

At the core, there are in­ter­nal di­men­sions to an in­di­vid­ual that are hard or im­pos­si­ble to change. Th­ese in­clude gen­der, sex­ual ori­en­ta­tion, world view, phys­i­cal and men­tal abil­ity, eth­nic ori­gin, na­tion­al­ity and age.

Ex­ter­nal di­men­sions are eas­ier or pos­si­ble to de­ter­mine or change. Th­ese in­clude fam­ily sta­tus, par­ent­hood, phys­i­cal ap ­ pear­ance, ed­u­ca­tional back­ground and so­cio­eco­nomic sta­tus.

Or­ga­ni­za­tional di­men­sions are eas­i­est to in­flu­ence and in­clude func­tion (such as sales, pro­cure­ment, HR, fi­nance), job

grade, field of work, length of ser­vice, place of work and mem­ber­ship of or­ga­ni­za­tions (for ex­am­ple, trade unions).

Th­ese di­men­sions can be vi­su­al­ized as a di­ver­sity wheel, which can be used as a ba­sis for the di­ver­sity pol­icy in your or­ga­ni­za­tion.

Le­gal re­quire­ments

In many coun­tries, there are laws about di­ver­sity and dis­crim­i­na­tion that busi­nesses have to fol­low. In some cases, a busi­ness will have to prove that it has im­ple­mented a di­ver­sity pol­icy in or­der to be con­sid­ered as a bid­der for a gov­ern­ment con­tract.

A fa­mous case was the Lon­don Olympics. The Lon­don Or­ga­niz­ing Com­mit­tee of the Olympic Games and Par­a­lympic Games (LOCOG) had a clear pol­icy of us­ing a di­verse pool of sup­pli­ers. This seems to have been suc­cess­ful, with the heads of 18 per cent of UK com­pa­nies in­volved com­ing from eth­nic mi­nor­ity groups, while 20 per cent were run by women, two per cent by LGBT peo­ple and 1.7 per cent by peo­ple with a dis­abil­ity.

Fi­nan­cial per­for­mance

More and more re­search is link­ing di­ver­sity with fi­nan­cial per­for­mance. The non­profit or­ga­ni­za­tion Cat­a­lyst sum­ma­rizes the re­search in an in­fo­graphic ti­tled “39 Rea­sons Why Di­ver­sity Mat­ters” (see “For more in­for­ma­tion”, p. 25). Har­vard Busi­ness School re­searchers ex­am­in­ing ven­ture cap­i­tal have con­cluded that “di­ver­sity sig­nif­i­cantly im­proves fi­nan­cial per­for­mance on mea­sures such as prof­itable in­vest­ments at the in­di­vid­ual port­fo­lio­com­pany level and over­all fund re­turns”.

In­no­va­tion

Al­though mono­cul­tural teams may be able to per­form more ef­fi­ciently than mul­ti­cul­tural ones, they are less likely to be in­no­va­tive. Re­search car­ried out by the Tech­ni­cal Univer­sity of Mu­nich and the Bos­ton Con­sult­ing Group into 171 Ger­man, Swiss and Aus­trian com­pa­nies showed a clear re­la­tion­ship be­tween the di­ver­sity of com­pa­nies’ man­age­ment teams and the rev­enues they re­ceive from in­no­va­tive prod­ucts and ser­vices.

Frans Jo­hans­son, in his best­seller The Medici Ef­fect, shows why in­no­va­tion hap­pens at the “in­ter­sec­tion” where ideas and con­cepts from di­verse in­dus­tries, cul­tures and dis­ci­plines meet.

Cus­tomers

If you want to un­der­stand how di­verse cus­tomer groups think, and mar­ket your prod­ucts and ser­vices suc­cess­fully, then you need to in­volve peo­ple from the tar­get group. If you don’t do this, mis­takes can be ex­pen­sive. Dolce & Gab­bana’s re­cent ad­ver­tis­ing cam­paign in China, fea­tur­ing ads show­ing a Chi­nese woman strug­gling to eat Ital­ian food with chop­sticks, is an ex­am­ple of how a brand can be se­ri­ously dam­aged overnight. No doubt more in­volve­ment of the tar­get group in the mar­ket­ing team could have saved the day.

Em­ploy­ees

As a re­sult of de­mo­graphic trends, there is a se­ri­ous short­age world­wide of skilled work­ers, par­tic­u­larly those with a back­ground in STEM (sci­ence, tech­nol­ogy, en­gi­neer­ing and math­e­mat­ics) sub­jects. Em­ploy­ers can­not af­ford to ex­clude po­ten­tial can­di­dates on the ba­sis of their gen­der, phys­i­cal abil­ity, sex­ual ori­en­ta­tion, eth­nic back­ground or any other di­ver­sity di­men­sion.

And it is not just about re­cruit­ing. If you are to re­tain em­ploy­ees from di­verse back­grounds in your com­pany, there needs to be an in­clu­sive en­vi­ron­ment and de­vel­op­ment op­por­tu­ni­ties. If em­ploy­ees be­lieve that this is not the case, they will leave and your in­vest­ment in them will be lost.

Di­ver­sity man­age­ment

To be suc­cess­ful, di­ver­sity in a com­pany has to be man­aged in a sys­tem­atic way. The Ger­man as­so­ci­a­tion Charta der Vielfalt rec­om­mends a five­step ap­proach to in­creas­ing di­ver­sity in or­ga­ni­za­tions, whether they are small and medium­sized en­ter­prises (SMES), large cor­po­ra­tions or pub­lic­sec­tor bodies:

1. De­fine ob­jec­tives

2. De­ter­mine cur­rent sit­u­a­tion

3. Plan im­ple­men­ta­tion

4. Carry out im­ple­men­ta­tion

5. Mea­sure suc­cess

They ⋅ sug­gest ask­ing a num­ber of im­por­tant ques­tions:

How and where can di­ver­sity man­age­ment be help­ful for your busi­ness as re­gards, for in­stance, cus­tomers and ⋅ clients, sup­pli­ers or busi­ness part­ner­ships?

What is the com­po­si­tion of the work­force, the cus­tomers and the sup­plier com­pa­nies? What di­ver­sity mea­sures al­ready ex­ist with­out or­ga­ni­za­tions be­ing aware of them?

“DI­VER­SITY IS BE­ING IN­VITED TO THE PARTY, IN­CLU­SION IS BE­ING ASKED TO DANCE”

⋅ How can di­ver­sity be in­tro­duced or strength­ened in the ⋅ or­ga­ni­za­tion?

What steps lead to the goal? In what time pe­riod does one in­tend to im­ple­ment spe­cific mea­sures? How are they ⋅ com­mu­ni­cated in the com­pany?

What ef­fect have the mea­sures had? How can each of them be op­ti­mized, stopped or ex­panded to other ar­eas?

From di­ver­sity to in­clu­sion

“Di­ver­sity is a fact, in­clu­sion is a choice.” “Di­ver­sity is be­ing in­vited to the party, in­clu­sion is be­ing asked to dance.” Th­ese are pop­u­lar say­ings that stress the need not only to fo­cus on rec­og­niz­ing di­ver­sity but to look beyond that by cre­at­ing an in­clu­sive en­vi­ron­ment. As the world be­comes more and more in­ter­con­nected, this is in­creas­ingly needed at all lev­els in teams, or­ga­ni­za­tions and so­ci­ety as a whole.

Com­pa­nies launch­ing in­ter­na­tional di­ver­sity ini­tia­tives are, of course, faced with the chal­lenge of bal­anc­ing in­ter­na­tional stan­dards and re­spect­ing widely dif­fer­ing lo­cal at­ti­tudes to di­ver­sity. To be suc­cess­ful, we need to be am­bi­tious and not just aim for ev­ery­one to be in­vited to the party and asked to dance, but also for ev­ery­one to have the chance to choose the mu­sic.

Fit­ting to­gether: the right mix is es­sen­tial

Can we over­come our dif­fer­ences? The modern work­place is com­pli­cated

ROBERT GIB­SON has over 25 years’ ex­pe­ri­ence of in­ter­cul­tural com­pe­tence de­vel­op­ment in ed­u­ca­tion and busi­ness. He was re­spon­si­ble for in­ter­cul­tural train­ing at Siemens AG from 2000 to 2018 and is cur­rently ad­junct pro­fes­sor of cross-cul­tural man­age­ment at Bologna Busi­ness School. You can con­tact him and join the dis­cus­sion on di­ver­sity on Linkedin (www. linkedin.com/in/ robert-gib­son6a36a31­5/?orig­i­nal Sub­do­main=de).

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