QuickTime™ and a
Photo - JPEG decompressor
are needed to see this picture.
ADC Associates
The Human Side of Business
CORPORATE AND MANAGEMENT TRAINING:
DIVERSITY -- BEYOND CULTURE
by Duncan Smith
Address given for the Centre for Ethnicity
and Health Diversity Conference,
Melbourne, November 1995.
International Best Practice
I've been asked to give an overview of international best practice in diversity training for management,
so let's start with some definitions. I'll be speaking about diversity in its broadest sense, which is
about the uniqueness of the individual. When we hear the word culture, we often assume that national
culture is meant. In the context of this seminar, we will also be speaking about organisational and
personal culture. So when I speak about diversity, I mean the quality of being different and unique at
an individual or group level. From this definition come the two main thrusts of corporate diversity
activities: valuing diversity and managing diversity. Valuing Diversity is recognising and respecting
the value of human differences. Managing Diversity is creating and sustaining an environment where
everyone can achieve his or her full potential.
Corporate diversity programs tend to focus on these two areas. As Roosevelt Thomas says in his book
Beyond Race and Gender, valuing diversity programs focus on the individual and interpersonal levels - to enhance interpersonal relationships and minimize blatant expressions of racism and sexism.
Valuing diversity objectives are about fostering awareness and acceptance of those who are different;
reaching a greater understanding of the dynamics of differences, including assumptions,
discrimination, and stereotyping; exploring the challenges and assets of diversity; and enhancing
work relations between people who are different.
Managing diversity looks at systemic organisational issues of working with a diverse workforce. For
example, how does the culture of the organisation support or challenge the optimal functioning of all
of its members? Such issues also include the composition or demographics of the workforce, policies
and practices, organisational culture, and the specific business issues that are affected by diversity
(which, I would suggest, is all business issues).
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
I would argue that you can't effectively manage diversity unless you value diversity; that in fact,
management awareness of its own attitudes and behaviours -- and the consequences of those
behaviours --is the most critical factor in successfully managing diversity. If in fact we want everyone
in our organisations to work at their full potential we must take into account the significant issues of
gender, ethnicity, culture, language, religion, disability, lifestyle preference etc. All of these issues are
aspects of difference, or more commonly, diversity.
One useful way of looking at organisational issues has been developed by Ann Morrison in her book
The New Leaders. Based on extensive research of 16 organizations and 196 managers in public and
private sector organisations, Morrison separates diversity practices in to 3 areas: Recruitment,
Development and Accountability. The top five practices used in these organisations to develop more
diverse leadership were: 1) top management's personal intervention; 2) targeted recruitment of
nonmanagers; 3) internal advocacy groups; 4) emphasis on EEO statistics, profiles; and 5) inclusion
of diversity in performance evaluations, goals, and ratings. The entire list of 52 practices is given in
the book and makes for very interesting reading. Today, managing diversity approaches are many and
varied, not only in the U.S., but throughout Canada, Great Britain, Europe, New Zealand, and I am
happy to say, increasingly in Australia.
The Historical Perspective
In the United States, the field of Managing Diversity has existed for about 20 years, but in the last 5
years or so has there been a marked increase in recognition of its importance, with articles in major
business publications and significant growth in investment in diversity programs by companies large
and small. In a front page story, the influential newspaper The New York Times suggested that
diversity may well be a billion dollar business before the turn of the century.
What sparked this trend? In the U.S., the publication in 1987 by the Hudson Institute of a document
called "Workforce 2000" showed a number of interesting statistics about the composition of the U.S.
workforce at the turn of the century.. Perhaps most significant was the figure that in the year 2000,
white males would make up only 15% of the net new workforce, effectively confirming white males as
a significant minority. Given that much of organisational power is concentrated in the hands of white
males, this finding caused some concern in senior management circles. One result was the emergence
of diversity programs. Three years after the publication of Workforce 2000, a followup survey showed
this response: 74 % of companies surveyed were concerned about cultural diversity, and of these, 65%
saw cultural diversity as affecting their strategic and management decisions. Let's look now at a few
examples of diversity programs in some of the world's best known companies.
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
2
Diversity Programs that Work: Business Examples
So 'Workforce 2000' was a powerful catalyst for the acceleration of diversity programs in the U.S. But
the beginnings were really back in the 1970s. One pioneer in this was Digital Equipment Corporation,
at that time the world's number 2 computer company behind IBM. Digital's story is this: a
manufacturing plant was having productivity problems. This plant had a primarily black workforce
and white management. The concern was that the low productivity was due to discrimination. This
was in fact true, but not in the way that the company thought. In fact, the managers wanted so much to
avoid being discriminatory that they hadn't set stringent production targets, as they would have for a
white workforce. The low productivity resulted from a lack of direction and accountability, which in
turn stemmed from white management fears of being seen as too hard on their black employees.
Digital brought in a black consulting firm to help sort through the situation. This led to the realisation
that management attitudes towards diversity -- race in this instance -- had profound impact in the
workplace, and affected the bottom line. This was the beginning of Digital's diversity programs, which
saw the hiring of Barbara Walker as probably the country's -- and possibly the world's -- first "diversity
manager", and the development of the company's leading "Valuing Differences" program. Today,
Digital continues this work, focusing on the integration of diversity initiatives with core business
issues.
Another leader in the diversity area is Xerox corporation. Xerox has focused its efforts on achieving a
demographically balanced workforce to reflect the population not only of the country as a whole, but in
terms of regional variations as well. Xerox works to manage diversity in four key areas :
Organisational Culture; Training & Development ; the Evaluation of Individuals; and Organisational
Development and Change. These initiatives are described in more detail in Susan Jackson's book
Diversity in the Workplace: HR Initiatives. (A complete list of references used in the seminar is
included at the end of this paper.)
Another major corporation heavily involved in diversity efforts is the multinational
telecommunications company AT&T. AT&T's approach is to use a seven step process, starting with
raising awareness of diversity among organisational leaders. This is followed by forming a diversity
council, conducting an internal environmental scan, analysing the resulting data, employing
interventions such as training and culture fixes, checking progress, and finally continuing with ongoing
maintenance and measurements. They have identified 24 "Dimensions of Diversity", of which 8 are
seen as having a key impact on the company. Their identification of ten key drivers of diversity policy
and practice is perhaps best summed up by these statements from AT&T's CEO, Bob Allen:
"Diversity is a powerful business asset; ...the issue of diversity relates to every major AT&T thrust -including globalization, operating style, and quality; To me, diversity is not only about social
objectives. It's about business imperatives; I think diversity brings something else to business as well.
It brings fresh thinking and adds quality to the decision-making process."
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
3
Other companies, including Dupont, Hewlett Packard, 3M, Bank of Montreal, Grand Metropolitan
PLC, and many more, have some form of diversity program; many have a diversity focus at the
executive level. For example, Robert Hayles, a former role model for me at Digital Equipment
Corporation, is now Vice President of Cultural Diversity at Grand Metropolitan a large multinational
in the food and beverage industry..
Australia, with its richly diverse population and workforce, will benefit greatly by understanding and
adapting Managing Diversity to its unique context. Let's look at what is being done here.
Telstra has done some effective work in this area at both senior management and supervisory levels.
One focus is gender, where they are looking beyond EEO to see gender as an issue for women and men
together, and are exploring those dynamics. Anne Diamond, Telstra's National Manager for EEO,
offers these rationales: 1) you can spend money without benefits, through focusing on compliance
with legislation and dealing with harassment and other complaints as they arise, or 2) you can spend
money with benefits, by pro-actively valuing diversity. Anne says that Telstra is looking for the
greatest variety of individuals they can find, because they offer new and creative ways of making
business decisions. She also cites international best practice regarding the greater integration of
intangibles, such as public image, staff loyalty and ethical position into the quality environment, as
being a key business driver for diversity. Saying that managing diversity is a prerequisite to providing
the kinds of service Telstra needs to provide to the customer, she notes that Discrimination and Best
Practice are opposite poles -- you can't have them both.
The Victorian Government, through the Office of the Public Service Commissioner has developed a
long term strategy for integrating Managing Diversity into management practice in the public service.
A facilitator's guide for the training of internal practitioners has been developed, as well as guidelines
for best practice in people management which include managing diversity.
At the local government level, The City of Greater Dandenong, has recently included diversity training
for all senior managers as a part of the process of creating its new post-amalgamation culture.
In the private sector, Esso is developing diversity priorities, which,as in many organisations, have
grown out of the limitations of traditional EEO programs; in Esso's case, they were good at recruiting
female engineers, but not good at keeping them. At this point, let me be clear that I consider that EEO
and Affirmative Action are important, necessary, and should be continued. We need to ensure that
people who have traditionally faced barriers to full inclusion at all levels of organisations -- women,
People with a Disability, Aboriginal and Islander people, and multi-lingual/multicultural Australians
(which until this conference I might have called NESB) -- have better access to satisfying positions.
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
4
Getting people in the door, which is what EEO and Affirmative Action accomplish, is not enough -we need to create environments and organisational cultures that will nurture and sustain all people -not just white males of a particular thinking style.
The Business rationale for diversity
We need to look at this work in terms of the culture of the organization, and in turn the macro-culture
in which the organization resides. By macro-culture, I mean the local and national culture -- which in
Australia's case is diverse. So it's not a question of whether diversity is a good thing or not sometimes it is and sometimes it isn't; the fact is that diversity existsin the workplace, and it can either
be an obstacle or an asset, depending on how it's managed. Nancy Adler has looked at this very clearly
in terms of groups, demonstrating that diverse groups can outperform homogeneous groups, or they
can underperform homogeneous groups -- the critical factor is how well that diversity is managed. The
other macroculture to be considered is the emerging global culture. One of the biggest issues -perhaps the biggest issue over the next few decades will be the North-South, First World-Third World,
Rich-Poor disparity. Basically we're talking about the relationship between Western, European
culturally based countries and those countries based on non-western cultures that have been heavily
influenced, if not exploited by the west. With the cold war seemingly over, the minds of the American
and Soviet peoples that have been so dominated by that polarization must now turn increasingly to
domestic problems. This puts the rest of the countries of the world, which have been going along all
this time trying to work out how to deal with each other, in a more important position. Can we learn
how to get along? Can we provide models for cooperation that the U.S. and Soviet Union failed to
give us? The key in all of this is communication, understanding, and coexistence -- not a melting pot,
but the ability to share space and resources while maintaining our integrity. Australia is a microcosm
for this -- a proving ground, if you will. What does this have to do with business? If you believe, as I
do, that business influences a vast percentage of the assets -- human, natural and financial -- in the
world, then business has a vital role to play in shaping our collective future. Multicultural, multiracial
workplaces, changing demographics, changing awareness and power of women -- how do we deal with
all of this at an organizational level, in the places where many people spend most of their time?
Let's assume the goal is the bottom line -- profits, value to shareholders. etc.. What happens if business
ignores issues of diversity? John Fernandez expressed it well in his book Managing a Diverse
Workforce: "The denial of these problems (popular misconceptions of the true nature of bureaucracies
and of human nature, along with prejudices of all kinds) creates an atmosphere that has led to the
inefficient utilisation of large numbers of employees, especially those who are different in terms of
race, gender, lifestyle and appearance, and therefore inefficient functioning of the corporation, with a
resulting negative impact on the bottom line." But what of the opportunities? There are many -including benefits in the areas of productivity, globalisation, attracting and retaining superior
employees. innovation and change management, service, and negotiation. Each organisation must
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
5
consider the most important benefits of diversity , and continually tie those benefits to its critical
business issues.
Let's now assume that the goal is equal opportunity or social justice. If, in fact, organisations manage
diversity with skill, the result is better opportunities, more opportunities, and improvements in the
overall social framework. Because of the influence of business just mentioned, business has an
opportunity -- and a responsibility -- to be a positive, transformative force in the world. I believe that
this is possible, and I believe that it makes good business sense. Valuing and Managing Diversity is
one way to assist this transformation, while at the same time looking after the bottom line.
Approaches to teaching diversity in tertiary business education
Finally, I've been asked to talk briefly about diversity in tertiary education. I'm very pleased to have
been involved in designing and teaching a course called "Dynamics of Diversity in the workplace" at
Swinburne University of Technology here in Melbourne. In this subject we look at diversity in terms of
awareness, skills, and applications, at the individual, group or interpersonal, and organisational levels.
Taught in a highly experiential style, the course provides students with opportunities to explore
themselves and to learn from others in powerful ways. The response has been extremely positive.
This past semester, 2/3 of my students for this subject were born overseas. The opportunities for
learning for students and teacher alike were remarkable. I don't know of another subject like it in
Australia, but if there are more, I'd like to know about them. Overseas, The American Assembly of
Collegiate Schools of Business has produced an excellent resource Guide on Teaching and Research in
Diversity, offering various perspectives on teaching diversity at the bachelor's, master's, and doctoral
levels.
Perhaps thinking about students is a fitting place to end this talk.
These students will be our future leaders. If we are to help them realise their full potential, and fulfill
the positive opportunities and overcome the challenges that exist for Australia and the world, I believe
that the philosophy and practice of Valuing and Managing diversity is a powerful tool.
I'd like to end with a story....a story told to me by a colleague. It comes from a multicultural, diverse
group of high school age, unemployed kids here in Victoria. Once upon a time, far, far away there
was a place called "the land of many nations." In this land were birds...many birds, of all sizes,
colours, and songs, flying free, and expressing their full potential. Then, to some of these nations, a
fierce monster came, imprisoning the birds in cages, so that they could not fly free. But some of those
birds had escaped the monster, and flew across the sea. And after many dangers and much hardship,
they reached a land called Australia.
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
6
Many things were new and different there, and much was unfamiliar. But what they found was that
there was room for them to fly. And they could keep their colours, their sizes, and their songs, and
once again fly, rejoicing in their diversity. So may it be that we can all fly free, expressing who we are,
and who we can be, celebrating, learning, and rejoicing in our diversity.. Thus may we allow our
society, our places of work, our corporations, our governments, our world --and ourselves -- to reach
our full potential.
Thanks very much for your time and attention today.
References:
Cox, Taylor, Cultural Diversity in Organisations, San Francisco, Berrett-Koehler, 1993
Fernandez, John, Managing a Diverse Workforce, Massachusetts, Lexington Books, 1991
Jackson, Susan, Diversity in the Workplace, New York, Guilford Press, 1992
Morrison, Ann, The New Leaders, California, Jossey-Bass 1992
Smith, Duncan and Carmody, Heather, "Managing Diversity" Business Council Bulletin No 78,
Melbourne, August 1991
The Hudson Institute, Workforce 2000, 1987
Thomas R. Roosevelt, Beyond Race and Gender, New York, AMACOM, 1992
ADC Associates
31 Ridge Road, Kallista, Vic, 3791 Australia
Tel: +61 3 9756 7366 Fax: +61 3 9756 7399 Mobile +61 419 329 539
Email: dsmith@adc-assoc.com www.adc-assoc.com
7