Published by MBA Skool Team, Published on December 19, 2012
"Diversity and inclusion in the workplace are essential business tools today." Andy Wright, Vice President of Advertising, The New York Times
Diversity and inclusion policies in the workplace have become de rigueur for most companies. Companies realize that diversity brings with it various benefits that can help it perform much better especially at a global level. They have recognized the importance of diversity in their work force that is not just important but essential for their survival in today’s globalized and fast changing world. A diverse work force brings with it new ideas, perspectives, out of box thinking and framework for rational decision making. With the help of an effective strategy companies have increased team productivity, engaged senior executives in diversity, increased workforce diversity, generated new levels of innovation and creativity, and redefined their approach to product development, marketing and sales.
For most of the biggest organizations developing products that cater to the needs of people located in different parts of the globe is very important. The case of Intel is interesting in this regard. Intel had to develop a low cost processor to remain competitive in Indian and other sub continent markets. Keeping this is view it developed a R&D centre at Bangalore, India which focused research primarily on such evolving markets that were crucial for Intel’s growth. People from all over the globe collaborated with the researchers from India to develop the Intel Atom processor that we find in most of the net books today. The success of most of the innovative companies in the world like Intel, Google, Facebook, 3M, DuPont, AT&T can be largely attributed to this factor.
So what are the priorities of companies when it comes to diversity and inclusion? A recent Forbes study on companies found that “43% cited retention and development of talent followed by ensuring diversity in the workplace (35%), developing a robust pipeline of diverse talent (29%) and managing cross generational issues (28%)”. However we still find that many companies find it difficult to adapt to this new phenomenon of globalization of the work force or how to use it to their advantage. In India and most other developing economies the idea of diversity largely revolves around the concept of gender diversity. But these initiatives have a problem of their own as a recent article in Economic Times indicates that most of the time these policies lead to forced hiring at the cost of merit. Diversity should not just be a statistic as Kalpana Morparia says CEO, JPMorgan India: "There should be absolutely no reservation or tokenism in the name of diversity. Meritocracy has to be gender-neutral."
How do organizations develop effective diversity management systems without compromising on merit? With more companies going global an effective diversity and inclusion strategy will be vital for their success. This fact is being realized by companies and some of them are doing a remarkable job in emulating the models practiced by companies in the west and restructuring it to their advantage. Let’s take for example Huawei Technologies Co., a $28 billion Chinese networking and telecommunications equipment supplier is extending its global reach. At the same time, it is looking to create a talent infrastructure attuned to different markets while building a global culture of shared values and a human resources capability that can support the company’s business operations worldwide.
With a large part of population in the developed west reaching the age of superannuation the coming decades we will see significant shift in employment trends with a major chunk of the work force coming from Asian and African countries. Also the rise of emerging economies as crucial markets for multinationals will lead to an increase in the requirement of people with varied skills and understanding suited to these markets. So recruiting and managing a diverse workforce will be a key challenge and HR will play a central role in designing effective diversity management systems that can be leveraged for successful business. Some points in this regard are enumerated below:
Companies need to first diagnose the current state of organization by analyzing workforce metrics at all levels of organization. This will help them in understanding the present demographic mix in the organization and identifying gaps present. Once this is done it will be easier to design an action plan that can be integrated with the main HR activities like recruitment, performance management, leadership development, etc.
To be successful diversity and inclusion should be deeply embedded in all HR practices and linked to key business objectives. For example innovation is a very integral part of company strategy today. World’s largest toy maker Mattel has created a system of Employee Resource Groups (ERG) to drive innovation. The launch of toys targeting the population of a particular geography is first assessed by the ERG of that region. This helps Mattel to understand the cultural trends and consumer behavior patterns of that region which helps it to develop toys and market them effectively.
More companies need to develop the scope of Chief Diversity officers(CDO).Although the successful implementation of any diversity strategy requires concerted effort of the entire management the role of CDO’s has become very relevant for companies. Chief diversity officers have responsibility for guiding efforts to conceptualize, define, assess, nurture, and cultivate diversity as an institutional resource. Although duties may include affirmative action for equal employment opportunity, or the constituent needs of minorities, women, etc, CDO’s define their mission as providing leadership for diversity issues throughout the organization.
A recent research by MIT’s Sloan School Of Management show that on almost every measure workplace teams that are comprised of members from a variety of different backgrounds function more effectively than work groups that are homogenous, or comprised mostly of members with similar backgrounds. So it is important for managers to devise new ways to help organizations tap into the performance-boosting strengths of their diverse work groups. They need to emphasize the importance of building team effectiveness, using interpersonal skills and decision making to drive inclusion. By building on everyone's ideas through creative problem solving diverse teams can generate more effective business results.
Many workplace diversity researches show that great new ideas are often borne out of the clash of different perspectives. On the surface level, this collision of different worldviews and attitudes can often result in conflicts between employees. It's best to take a proactive approach to address the unique challenge of conflict in a diverse workplace. For example, it may be beneficial to train employees in the basics of effective cross-cultural communication. Also, agree on an organization-wide game plan for resolving workplace conflicts in a civil, compassionate manner.
It is important to appreciate that cultural differences exist and do matter. Various companies follow the approach of celebrating diversity by means of conducting round the year events to commemorate festivities and making the entire workforce appreciate the uniqueness which such diversity brings along with. Companies like P&G have successfully implemented this method of employee engagement in appreciating cultural diversity and found that these efforts also increase the motivation levels of the employees thereby increasing their performance.
According to a report in Business News Daily “Sixty per cent of employers said that they had problems attracting high potential employees while 59 per cent said they had problems attracting top-performing employees”. A recent article in Economic Times also reported that 72 per cent global companies find it hard to attract talent. This war for talent is only likely to increase in the coming years with more companies finding it difficult to get the right talent. Diversity and inclusion policies can be specifically designed as recruiting and retention tools by building an employment brand that is truly inclusive and broadening the pool of talent from which the company can recruit. Companies like Intel, Credit Suisse build long standing relationships with universities and rely on other outsourcing channels to reach a wide range of candidates.
Adopting a genuinely neutral global perspective, without presumptions about whose role is dominant is very important for any successful diversity and inclusion policy. The case of the failed merger of Daimler and Chrysler is very interesting in this regard. With the number of mergers and acquisitions increasing at a very fast rate globally handling a diverse workforce and ensuring compliance with laws of land will be crucial.
Understanding issues specific to countries and making tailor made policies for diversity and inclusion can be an innovative and successful method. Deutsche Bank India for example is working with NGO’s to train people with disabilities to work with the bank.
A holistic approach towards diversity management will surely help companies to achieve key business priorities. Organizations need to integrate the various facets of diversity management into their organization culture in such a way that it becomes a habit.
This article has been authored by Arindam Bhattacharjee & Bishal Hetampuria from XIMB.
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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