Why today’s Best Companies Don’t F.A.I.L. at Diversity

Over a couple month spurt this year -  by way of a flurry of business travel, conference-going and reckless adventuring – I had the humbling opportunity to meet many smart people around the world all trying to wrap their heads around the dizzying demographical changes that impact today’s workforce.

From Austria to India, Moldova to the Dubai I’ve found that corporations and their leaders don’t have this “diversity” thing quite figured out. Particularly in how they leverage the most of the most diverse labor force in human history.

While 80% of Fortune 500 companies have a formal diversity program, the truly great companies seem to go beyond simply having a structured program and find ways to continually buck the negative trends we’re seeing around the rise of age-discrimination, attrition of Gen Y and low numbers of women in tech, while simultaneously creating better products than their competitors.

In the past, policy, technologies and process we’re aimed at simply “accepting” narrowly defined forms of diversity. Now is the time for companies to not simply be okay with diversity (that should be a given), but challenge themselves to leverage each ounce of diversity in their organizations as a competitive advantage.

As Boston College, Professor, Anderson J. Franklin asserts, "We should be just as challenged at managing a diverse workforce as we are challenged by developing, marketing and promoting our products."

Traditionally the approach to diversity follows the below maturity process:

Most companies go through all of the above stages before getting to the last, wasting many cycles in this drawn out journey. Others stay stuck in the “fight” or “accept” phases.

Great companies skip the first two stages.

1. Fight – “That type of diversity doesn’t really exist does it?”, “come on, are people really that different than each other?”
   Outcome: No leadership action
2. Accept – “Okay, I see that type of diversity exists, and I’m certainly okay with it”
   Outcome: Leadership acknowledges its diverse workforce and encourages acceptance.
3. Integrate - “Okay I see that this type of diversity exists, and here is how I’m going to programmatically integrate it into what we’re doing here”
   Outcome: Leadership builds programs to integrate diverse groups seamlessly into the company.
4. Leverage – “I’m going to get ahead of this. I don’t know all the types of diversities out there, but I’m going to ensure our company uses each of them as a competitive advantage.”
   Outcome: Leadership has a platform in place, coupled with specific programs that leverage diversity.

So how do great companies go straight to Integrate and leverage, and then achieve success there?

I’ve found it really boils down these behaviors:

1.       Acceptance” is a Given

It is burned into the culture and hard wired into the nucleotides of every employee – this starts with pre-hire and recruiting, is echoed throughout the employment lifecycle and is emboldened via brand and external presence.

2.       Run Diversity like a Business

As noted in a BusinessWeek article on the topic “the important thing is ensuring that an organization has addressed systemic actions for ensuring an inclusive environment that leverages its talent of all kinds at all levels. Fannie Mae's CEO Jim Johnson concludes: "Run diversity like any solid business function. Establish hard goals, maintain hard responsibility and accountability, measure progress, fix problems, and you will succeed."

3.       Create Platforms

 Great companies know that a) they don’t know what they don’t know and b) sometimes trying to “know” everything can be counterproductive. The lesson is that versus simply trying to know about every type of diversity and attack each individually – instead leadership must admit they will never know at a given time exactly how each employee identifies to each form of potential diversity.

So instead, successful companies, put some of the onus on the employee and create platforms to allow for the unknown to assimilate and thrive. This can be done through formal programs or informal and could include things like an open mentor program, open distribution list creation and cross-functional exchanges.

The IBM story provides a great example. In 1995 when Lou Gerstner took over as CEO of IBM he didn’t feel the make-up of this executive team matched the diverse make-up of his customers and employees.

So what did he do? He created a platform – a diversity taskforce initiative.

One of the several wings that thrived under this diversity taskforce initiative was the women's task force, which developed the idea of providing specialized support to small and medium-sized businesses, which were more likely to be owned by women and minorities. This strategy increased the service revenue by $290 million in just three years.

4.       Get People Talking

"Walk together, talk together all ye peoples of the earth. Then, and only then, shall ye have peace." This motto of AFS International teaches us about more than achieving peace. Great companies get their employees talking to each other. A lot. They have distribution lists, forums, wikis or Yammer installation bustling with conversation. They have conversations between peers and between leadership and individual contributors – unafraid to break organizational boundaries as often as possible.

5.       Encourage Thoughtful Movement

Great companies encourage employees to not limit themselves to a skillset or even discipline throughout their career. They recognize that this can’t be done with training alone and are open to making movement possible to get the most out of each employee. As anyone who has ever tried to learn a new language knows, the best way to do so is to live in a native speaking country – great companies get that.

All-in-all, the best strategy for leveraging diversity depends on the specific organization. There is no one-size-fits-all diversity plan though we can learn from the successes we’ve seen. If companies take a planned approach to utilizing their diversity, create platforms for organic results to breed, and encourage movement they put themselves a step ahead in having a successful model now and in the future. 

Thanks for reading!