Memo of no more than 1,050 words

1. Are there business reasons I should pay attention to “managing diversity”?

2. What are leading companies doing in this area?

3. What can I do to reverse the perception among many managers that the growing diversity of the workforce is a problem?

4. How can I maximize the potential of a racially and ethnically diverse workforce?

5. What can I do to accommodate women and older workers?

Sources: Chen, C. Y., & Hickman, J., “America's 50 Best Companies for Minorities.” Fortune, June 28, 2004, pp. 140-146; Society for Human Resource Management. (2004, August 5). What is the business case for diversity? Alexandria, VA: Author; Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Joshi, A., Jehn, K., Leonard, J., Levine, D., & Thomas, D. (2003). The effects of diversity of business performance: Report of the diversity research network. Human Resource Management, 42 (1), 3-21; “The Diversity Factor.” Fortune, October 13, 2003, pp. S1-S12.

Diversity is more than just a passing blip on the corporate conscience. Over the past few years it has become a major competitive factor for many companies, and even something they are proud of. Yet others remain to be convinced. They want the business justification for diversity to be sound and demonstrable. To do that, it's necessary to address five major issues. Here's how some companies responded:

1. How does diversity help an organization expand into global markets? “Our customers, suppliers, and strategic partners are increasingly global and multicultural. We must be positioned to relate to them” (Hewlett-Packard). “Our major growth opportunities will occur outside of our North American business. Our objectives for business growth for the next decade indicate that our international business will be as large as our domestic business. Diversity is a business imperative. There is no way to achieve our business strategy unless we develop and utilize diversity in the marketplace to achieve competitive advantage around the world. Just five years ago all of our operations were located at U.S. headquarters. Now four of our seven businesses are located outside of the United States in different regions of the globe” (Procter & Gamble).

2. How can diversity help build brand equity, increase consumer purchasing, and grow the business? As a result of hiring a multicultural staff, including Hispanics, for its previously homogeneous marketing department, Amtrak learned that a large percentage of the Latino population in the West relies not only on Spanish language radio and newspapers for travel information but also on Latino Catholic publications. At least partly as a result of advertising in those publications as well, ridership on Amtrak's West Coast routes has increased by 47 percent. Corporate America also purchases supplies from minority-owned suppliers. How much? In 2000, it was $55 billion. In 2004, it was almost $90 billion.

4. How does diversity build our corporate image among our consumers? Qualified and interested people are often attracted to employers who are able to show that they are committed to developing and promoting a wide array of people. One way to demonstrate this is to make one of the published lists that highlight best companies for talented minorities and women (e.g., Working Mother magazine's Best Companies for Working Mothers, or Fortune's annual list of Best Companies for Minorities). In Fortune's 2004 list, for example, fast-food king McDonald's retained its No. 1 ranking, by having the highest minority-employee retention rate of any company on the list and by making a concerted effort to purchase from minorities, who now comprise half of its vendors. Three of its 16-person board of directors are minorities, and its workforce is 53 percent minority.

5. How does diversity enhance operational efficiency? Employees from all groups now expect more from organizations—from nondiscriminatory, hostile-free workplaces to flexible schedules and benefits that include child care assistance and work-life policies. A company's ROI is reduced when commitment and productivity are lost because employees do not feel valued, time is wasted with conflicts and misunderstandings, and money is spent on legal fees and settlements. Conversely, an environment where employees feel valued and included yields greater commitment and motivation to succeed. It also means fewer resources spent on grievances, turnover, and replacement costs.

Of necessity, building the business case for diversity in any given company will vary, but in general it can be stated in two compelling arguments: (1) For both large and small companies these days, the neighborhood in which they sell is the entire world, so it is essential that their workforces look and think like the world, in all of its ethnic, racial, and behavioral variety. (2) The demographics of the United States are changing so dramatically that over the coming decades it will be impossible for employers to fill their ranks with members of the traditional workforce, white males. By 2040 an estimated 70 percent of American workers will be either women or members of what are now racial minorities.

While we can make a persuasive business case for diversity, a five-year research project in four large firms found few direct positive or negative effects of diversity on business performance. The researchers suggested that a more “nuanced” view of the business case for diversity may be more appropriate. In the concluding section of this case, we examine more closely that nuanced view and its implications for managers.

Challenges

1. What is the objective of building and managing a diverse workforce?

2. Is there additional information beyond these five issues that you feel is necessary to make the business case for diversity?

3. What steps can you take as a manager to become more effective in a work environment that is more diverse than ever?

· More than half the U.S. workforce now consists of racial (i.e., nonwhite) and ethnic (i.e., people classified according to common traits and customs) minorities, immigrants, and women.

· Women's share of the labor force was 46.5 percent in 2002; it will be 47.5 percent by 2012. Men's share is projected to decline slightly over the same time period, from 53.5 to 52.5 percent.

· White non-Hispanics accounted for 74 percent of the labor force in 1998. Their share of the labor force in 2008 will decrease modestly to 71 percent.

· The Asian, American Indian, Alaska Native, and Pacific Islanders' share of the labor force will increase from 5 to 6 percent, the Hispanic share will increase from 10 to 13 percent, and the African-American share will hold steady at about 12 percent between 1998 and 2008.

· The labor force age 45 to 64 will grow faster than the labor force of any other age group as the baby-boom generation (born 1946 and 1964) continues to age. At the same time, the labor force age 25 to 34 is projected to decline by 2.7 million, reflecting the decrease in births in the late 1960s and early 1970s.

These demographic facts do not indicate that a diverse workforce is something a company ought to have. Rather, they tell us that all companies already do have or soon will have diverse workforces.

Unfortunately, the attitudes and beliefs about the groups contributing to the diversity change only slowly. To some, workers and managers alike, workforce diversity is simply a problem that won't go away. Nothing can be gained with this perspective. To others, diversity represents an opportunity, an advantage that can be used to compete and win in the global marketplace, as we shall now see.

To celebrate diversity is to appreciate and value individual differences. Managing diversity means establishing a heterogeneous workforce (including white men) to perform to its potential in an equitable work environment where no member or group of members has an advantage or a disadvantage.2 This is a pragmatic business strategy that focuses on maximizing the productivity, creativity, and commitment of the workforce while meeting the needs of diverse consumer groups. Managing diversity is not the same thing as managing affirmative action. Affirmative action refers to actions taken to overcome the effects of past or present practices, policies, or other barriers to equal employment opportunity.3 It is a first step that gives managers the opportunity to correct imbalances, injustices, and past mistakes. Over the long term, however, the challenge is to create a work setting in which each person can perform to his or her full potential and therefore compete for promotions and other rewards on merit alone. Table 4-1 highlights some key differences between equal employment opportunity/affirmative action and diversity.

1. The shift from a manufacturing to a service economy.

2. Globalization of markets.

3. New business strategies that require more teamwork.

4. Mergers and alliances that require different corporate cultures to work together.

5. The changing labor market.4

Roughly 87 percent of U.S. employees work in service-based industries (see Table 4-2).5 Manufacturing will maintain its share of total output, while productivity in this sector increases and the need for additional labor decreases. Virtually all of the growth in new jobs will come from service-producing industries. Service-industry jobs, such as in banking, financial services, health services, tourism, and retailing, imply lots of interaction with customers. Service employees need to be able to “read” their customers—to understand them, to anticipate and monitor their needs and expectations, and to respond sensitively and appropriately to those needs and expectations. In the service game, “customer literacy” is an essential skill. Considering that Hispanics, African Americans, Asians, people with disabilities, and gays/lesbians/bisexuals/ transsexuals have a combined $1.5 trillion in buying power (equivalent to the GDP of France), why would any business want to ignore them?6

(Sources: U.S. Bureau of Labor Statistics, Employment projections, 1998-2008.)

Diversity characterizes many work teams.

As organizations around the world compete for customers, they offer customers choices unavailable to them domestically. With more options to choose from, customers have more power to insist that their needs and preferences be satisfied. To satisfy them, firms have to get closer and closer to their customers. Some firms have established a strong local presence (e.g., advertisements for Japanese-made cars that showcase local dealerships and satisfied American owners); others have forged strategic international alliances (e.g., Apple Computer and Sony). Either way, diversity must be managed—by working through domestic diversity (local presence) or by merging national as well as corporate cultures (international alliances). Successful global leaders measure success in this area of cultural learning as they measure other business factors.

For example, the CEO of Switzerland-based Novo Nordisk requires his managers to “buy” and “sell” three best practices to managers in other parts of the world each year on their corporate intranet. Doing so underscores three valuable lessons: (1) We must use technology to move information around the company. (2) We must learn from our colleagues around the globe and share information with them. (3) We must measure these “soft” skills as we measure “hard” business returns, and hold people accountable for them. In short, culture matters.8

Firms have found that only through work teams can they execute newly adopted strategies stressing better quality, innovation, cost control, or speed. Indeed, virtual teams, domestic or global, promise new kinds of management challenges. In a virtual team, members are dispersed geographically or organizationally. Their primary interaction is through some combination of electronic communication systems. They may never “meet” in the traditional sense. Further, team membership is often fluid, evolving according to changing task requirements. This has created a rich training agenda, as members from diverse backgrounds must learn to work productively together.9

Diversity is an inevitable byproduct of teamwork, especially when teams are drawn from a diverse base of employees. Young and old, male and female, American-born and non-American-born, better and less well educated—these are just some of the dimensions along which team members may differ. Coordinating team talents to develop new products, better customer service, or ways of working more efficiently is a difficult, yet essential, aspect of business strategy. As Ted Childs, vice president, IBM Global Workforce Diversity, has noted: “When a company's vision includes the growing mix of the talent pool and the customer base, then the real argument for diversity is the business case.”10

The managers who have worked out the results of all the mergers, acquisitions, and strategic international alliances occurring over the past 20 years know how important it is to knit together the new partners' financial, technological, production, and marketing resources.11 However, the resources of the new enterprise also include people, and this means creating a partnership that spans different corporate cultures.

A key source of problems in mergers, acquisitions, and strategic international alliances is differences in corporate cultures.12 According to a recent Hewitt Associates survey, integrating culture was the top challenge in mergers and acquisitions.13 Corporate cultures may differ in many ways, such as the customs of conducting business, how people are expected to behave, and the kinds of behaviors that get rewarded.

When two foreign businesses attempt a long-distance marriage, the obstacles are national cultures as well as corporate cultures. Fifty percent of U.S. managers either resign or are fired within 18 months of a foreign takeover.14 Many of the managers report a kind of “culture shock.” As one manager put it, “You don't quite know their values, where they're coming from, or what they really have in mind for you.”15 Both workers and managers need to understand and capitalize on diversity as companies combine their efforts to offer products and services to customers in far-flung markets.

In recent years, few topics have sparked as much debate as “politically correct” language. Choosing the right words may take a bit more thought and effort, but it is imperative to do so in business communication. After all, it makes no sense to alienate employees and customers by using words that show a lack of respect or sensitivity.

Consider just two examples. Instead of referring to dark-skinned people as blacks (whose ethnic origins may be Hispanic or African), it is more appropriate to refer to them as Hispanic Americans or African Americans. Instead of referring to people with physical or mental impairments as “the disabled” or “the handicapped” (terms that emphasize what a person cannot do rather than what he or she can do), it is more appropriate to refer to them as “people with disabilities.” Showing respect and sensitivity to differences by means of the language we use in business is the first step toward building up the capabilities of a diverse workforce.

You can be sure of this: Over the next 25 years the U.S. workforce will comprise more women, more immigrants, more people of color, and more older workers.16 Our workplaces will be characterized by more diversity in every respect. The first step to attaining the advantages of diversity is to teach all employees to understand and value different races, ethnic groups, cultures, languages, religions, sexual orientations, levels of physical ability, and family structures. Skeptical managers, supervisors, and policymakers need to understand that different does not mean deficient.17 Only when employees at every level truly believe this will the corporation they work for be able to build the trust that is essential among the members of high-performance work teams. Such teams incorporate practices that provide their members with the information, skills, incentives, and responsibility to make decisions that are essential to innovate, to improve quality, and to respond rapidly to change.18

Recent studies of the U.S. workforce indicate widespread perceptions of racial and sexual discrimination in the workplace—perceptions that take a heavy toll on job performance. Thus, in a recent study, nearly 60 percent of minority executives reported that they have observed a double standard in the delegation of job assignments. Forty-five percent said they personally had been targets of racial or cultural jokes, and 44 percent reported holding back anger for fear of being seen as having a chip on their shoulders.19 Reports of discrimination correlate with a tendency to feel “burned out,” a reduced willingness to take initiative on the job, and a greater likelihood of planning to change jobs. Not surprisingly, therefore, minorities and women quit companies up to 2.5 times as often as white males, costing employers millions of dollars in lost training and productivity.20 This is hardly the way to build a productive workforce.

Culture refers to the characteristic behavior of people in a country or region. Culture helps people make sense of their part of the world. It provides them with an identity—one they retain even when they emigrate and is retained by their children and grandchildren as well.21

When we talk about culture, we include, for example, family patterns, customs, social classes, religions, political systems, clothing, music, food, literature, and laws.22 Understanding the things that make up a person's culture helps diverse peoples to deal more constructively with one another. Conversely, misunderstandings among people of goodwill often cause unnecessary interpersonal problems and have undone countless business deals. We will examine the concept of culture more fully in our final chapter.

“Valuing diversity” means more than feeling comfortable with employees whose race, ethnicity, or gender differ from your own.23 It means more than accepting their accents or language, their dress or food. It means learning to value and respect styles and ways of behaving that differ from yours. To manage diversity, there is no room for inflexibility and intolerance—displace them with adaptability and acceptance.

African Americans will make up about 12.4 percent of the U.S. civilian work-force by the year 2008.24 Consider these facts:

· According to the U.S. Bureau of the Census, African Americans own 823,500 businesses in the United States (38 percent of the owners are women), employ more than 718,000 people, and generate $71.2 billion in revenue.25

· Buying power of African-American consumers is up 189 percent since 1990, to an estimated $921 billion in 200826 (see Figure 4-2).

· Fannie Mae, Merrill Lynch, and American Express all have African-American chief executive officers.

· The top five companies for African Americans to work for are Fannie Mae, United States Postal Service, Pepco Holdings (a D.C.-based, energy services holding company), Denny's, and DTE (a Detroit-based electricity provider).27

Among companies that are committed to making diversity a competitive advantage, here are some other practices to consider:30

· Hire only those search firms with a solid track record for providing diverse slates of candidates for positions at all levels.

· Start formal mentoring and succession programs to ensure that minorities are in the leadership pipeline.

· Include progress on diversity issues in management performance reviews and compensation.

· Set specific goals in critical areas, such as the percentages of minorities and women hired, promoted, and in the overall workforce. Also set goals for the amount of business conducted with outside vendors owned by minorities and women.

· Provide all employees with confidential outlets to air and settle grievances, for example, telephone and e-mail hot lines.

COMPANY EXAMPLE: COMMITMENT TO DIVERSITY AT THE U.S. POSTAL SERVICE31

At the U.S. Postal Service (USPS), a self-supporting federal entity, diversity development is designed to ensure that the cultural makeup of local communities is represented in the workforce. Its Diversity Development Organization has 80 diversity development specialists, one in each USPS district, throughout the country. In districts with large Hispanic populations, such as California, Florida, and Texas, USPS has Hispanic program specialists. Diversity development and Hispanic program specialists undergo 120 hours of career-development coaching skills. They report directly to district managers, not to HR, although they do have dotted line (informal) reporting relationships to HR and are tied into HR operations. As a former vice president of global workforce diversity at Lehman Brothers in New York noted, “Where diversity resides in an organization is significant because it sends a strong message about how that organization regards diversity.”

USPS makes diversity a part of daily business operations. For example, USPS incorporates diversity into all performance management and succession-planning activities, making sure that women and minorities are considered for advancement. Succession-planning activities are inclusive, as reflected in the fact that USPS has implemented a Web-based corporate succession-planning tool that enables managers at a certain level to nominate themselves for senior-or executive-level jobs. Managers are responding, as USPS recently considered 1,750 nominations for 750 executive jobs. By giving everyone an opportunity to be considered, each person's talents, accomplishments, and potential are discussed. Even if not selected, each nominee receives a critical assessment of his or her developmental needs. Tracking progress and measuring success, down to the district level, has paid off. More than 36 percent of USPS's 729,000 employees are minorities, as are nearly 25 percent of the agency's top-paid executives and 32 percent of officials and managers. These efforts have not gone unnoticed. In 2004, for the fifth consecutive year, Fortune magazine named USPS one of the “50 Best Companies for Minorities.”32

Mexicans, Puerto Ricans, and Cubans constitute the three largest groups classified as Hispanic.34 They are concentrated in four geographic areas: Mexican Americans reside mostly in California and Texas, Puerto Ricans mostly in New York, and a majority of Cuban Americans in Florida. These four states account for 73 percent of the firms owned by Hispanics. Hispanics own a total of 1.2 million businesses in the United States (6 percent of all nonfarm businesses), employing more than 1.3 million people and generating $186.3 billion in revenue.35 Labor force participation rates for Hispanics (as a group) are growing rapidly, as Figure 4-3 shows.

(Source: U.S. Census Bureau, Statistical abstract of the United States, 2003, Table No. 88.

To encourage greater representation of Hispanics throughout the corporate structure, companies such as Pacific Bell have initiated aggressive recruitment and retention programs.

COMPANY EXAMPLE: MANAGEMENT DIVERSITY AT SBC COMMUNICATIONS (FORMERLY PACIFIC BELL)38

This example begins with historical information about Pacific Bell, operating in California, and continues with more recent information about SBC, which subsequently acquired Pacific Bell. SBC operates in California as well as in 12 other states.

Pacific Bell realized for two basic reasons that it had to change the way it traditionally recruited employees and managers. For one, the population of Hispanics, African Americans, and Asian Americans was increasing rapidly in California, but only a small percentage of these minorities attended college. If Pacific Bell continued to hire only through college and university campuses, its minority employees as a percentage of its total employees would most likely shrink. This would be especially true for Hispanics, because their population was growing at the fastest rate. Hence, while the percentage of Hispanics in California was growing, the percentage of Hispanics on the payroll of Pacific Bell was decreasing.

The other reason Pacific Bell decided to change its recruitment was based on forecasts by the company's planners that its largest growth in management jobs would be in the high-technology areas of engineering, marketing, and data systems. The work in these management jobs requires advanced technical skills and formal education, and they had traditionally been filled via promotion from lower levels. But the company recognized that promotions could not produce the number of skilled managers needed in the near future. So Pacific Bell developed a new, four-component recruitment strategy:

1. Internal networking, by a group called the Management Recruitment District, designed to generate employee referrals, establish networks of employees who had contacts in the minority communities, identify employees who could serve as guest speakers for external presentations, and make presentations at regularly scheduled departmental staff meetings.

3. Establishment of contact with small institutions in the California State University system, which tended to enroll a higher proportion of minority students, as well as with Arizona State University and the University of New Mexico, both of which have large Hispanic enrollments. The company established relationships with minority student organizations and faculty (particularly those identified with business or technical fields) to identify issues and to offer support. For example, Pacific Bell developed a video, “Engineering Your Management Future,” to tell engineering majors about career paths in management.

4. At the local or national level of professional minority organizations, such as the National Hispanic Council for High Technology Careers, Pacific Bell sought advisors to help develop management candidates. The company even hosted a three-day conference to address the alarming underrepresentation of Hispanics in the teaching and practice of sciences and engineering.

Pacific Bell also established an internship program (the Summer Management Program) for third-year college students, making them student ambassadors representing Pacific Bell's career opportunities. For managers from minority groups who were already employed, Pacific Bell offered six-day, offsite training programs conducted by external consultants and designed to help further develop their skills. The programs also provided a safe place for participants to talk about sensitive issues such as covert racism and prejudice, topics not likely to be discussed in the work setting.

Results

Over the program's first 10 years (1980-1990), minority managers increased from 17.5 to 28.2 percent at Pacific Bell. SBC, based in San Antonio, Texas, has 167,000 employees. Fully 38 percent of them are minorities (4.9 percent Asian, 19.7 percent African American, 12.8 percent Hispanic, and 0.6 percent Native American), as are 46.1 percent of all new hires and 28.1 percent of all officials and managers. Further, all manager performance reviews at SBC consider explicitly each manager's success in fostering diversity.39 As this example shows, Pacific Bell, now SBC, has a long-term commitment to improving education and enhancing the diversity of its workforce, and to equal employment opportunity.

Another company on Fortune's 2004 list is United Parcel Service (UPS). Its diversity efforts have paid off handsomely. For example, Jennifer Kannar, a Hong Kong—raised product manager, proposed a bilingual support center to win the business of Korean-American entrepreneurs in Southern California. The company took several months to evaluate the proposal—to Kannar's frustration—but ultimately approved the center. Kannar is now expanding to include Vietnamese, Chinese, and Japanese businesses. Had UPS not consciously striven for a diverse workforce, it may well have missed the opportunity Kannar saw.42

Over the past 30 years, women have raised their expectations and levels of aspiration sharply higher, largely because of the women's movement, coupled with landmark civil rights legislation and well-publicized judgments against large companies for gender discrimination in hiring, promotion, and pay. In 1972, women questioned the possibility of having a family and holding a job at the same time. By the mid-1980s, they took it for granted that they could manage both, and by the mid-1990s, 89 percent of young women said they expected to have both a family and a job.43 Today, many expect even more. Thus, a 2004 survey by Catalyst found that 55 percent of female executives and 57 percent of male executives aspire to be CEOs of their companies—thereby dispelling the myth that women don't hold high-level business jobs because they supposedly don't aim high enough.44 Five key forces account for these changes:

1. Changes in the family. Legalized abortion, contraception, divorce, and a declining birthrate have all contributed to a decrease in the number of years of their lives most women devote to rearing children. Of all women, 85 percent have babies,45 but 55 percent of mothers with children under one year old now work, as do 72 percent of those whose youngest child is under 18.46 Fully 70 percent of mothers return to the same jobs after childbirth.47 Women are also significant providers of family income, with more than 55 percent of employed women bringing in half or more of it.48

The proportion of single-parent family groups with children under age 18 has increased dramatically, and today, single mothers are more likely than married mothers to be employed.49 This is not surprising, since women head most single-parent families, and most working women have little choice except to work.

3. Changes in self-perception. Many women juggle work and family roles. This often causes personal conflict, and the higher they rise in an organization, the more that work demands of them in terms of time and commitment.51 Many women executives pay a high personal price for their organizational status in the form of broken marriages or never marrying at all.52 For example, one study of successful women with MBAs who have risen to within the top three levels of the CEO position in their companies found that only 67 percent were married, compared with 84 percent of men with the same level of success. The gap is even greater when it comes to children. Nearly three-quarters of the men have children, while only 49 percent of the women do.53 Thus a major goal of EEO for women is to raise the awareness of these issues among both women and men so that women can be given a fair chance to think about their interests and potential, to investigate other possibilities, to make an intelligent choice, and then to be considered for openings or promotions on an equal basis with men.54

4. Changes in technology. Advances in technology, both in the home (e.g., frozen foods, microwave ovens) and in the workplace (e.g., robotics), have reduced the physical effort and time required to accomplish tasks. Through technology more women can now qualify for formerly all-male jobs, and, for some women and for some types of jobs, technology makes virtual work arrangements possible, thus helping the women to balance their work and personal lives.55

5. Changes in the economy. Although there has been an increasing shift away from goods production and toward service-related industries, there are increasing numbers of female employees in all types of industries. Here are some statistics characterizing these changes:56

· Today, women make up 38 percent of U.S. business owners, double the number 12 years ago.57

· Women-owned businesses include the same types of industries as are in the Fortune 500.

· The number of jobs in businesses owned by women now surpasses the number of jobs in the businesses represented on the Fortune 500 list.

· Women held 50 percent of managerial and professional jobs in 2002.

· Only 7 percent of working women now drop out of the workforce in any given year, down from 12 percent in the mid-1970s.

· Among families having annual incomes that reach $45,000 to $55,000, 70 percent have working wives.

The statistics presented thus far imply that women have made considerable economic gains over the past three decades. However, there are also some disturbing facts that moderate any broad conclusions about women's social and economic progress:

· Today, U.S. women who work full-time make 77 cents for every dollar earned by men. At the current rate of increase, women will not reach wage parity with men until 2017. Asian-American women make the most, relative to men, while Hispanic women make the least.58

· Women in paid jobs still bear most of the responsibility for family care and housework.

The clearest picture we need to see from the data reflecting all these changes is this: If all the United States' working women were to quit their jobs tomorrow and stay at home to cook and clean, businesses would disintegrate. There is no going back to the way things were before women entered the workforce. What many people tend to think of as “women's issues” really are business issues, competitiveness issues. Examples: Companies that routinely don't offer child care and flexibility in work scheduling will suffer along with their deprived workers.60 Women are not less committed employees; working mothers especially are not less committed to their work. Three-quarters of professional women who quit large companies did so because of lack of career progress; only 7 percent left to stay at home with their children.61 Businesses should react to the kinds of issues reflected in these examples based not on what is the right or wrong thing to do, but on what makes economic sense to do—which usually also is the right thing to do.

It is important that executives see that creative responses to work/family dilemmas are in the best interests of both employers and employees. Adjustments to work schedules (flextime), extended maternity and paternity leaves, and quality day care based near the job come a little closer to workable solutions. Chapter 10 will consider this issue in greater detail, but for now let's consider some practical steps that IBM is taking.

COMPANY EXAMPLE: IBM—CHAMPION OF GLOBAL DIVERSITY AND FAMILY-FRIENDLY POLICIES 62

IBM has made the 10 Best list for working mothers for 16 consecutive years. It continues to set lofty standards by researching new programs and policies, expanding and improving old ones, and extending such efforts worldwide. In keeping with its mission of becoming “the premier global employer for working mothers,” IBM is assessing dependent care in 11 countries, initiating diversity training in Asia, and launching the Global Partnership for Workforce Flexibility to kick off pilot projects on alternative work arrangements and to examine cultural barriers.

IBM's efforts to advance women through networking groups and leadership training initiatives continue to win many awards. For example, every year from 1998 through 2004 the National Association for Female Executives has named IBM a top company for women executives.

At present, the U.S. workforce is populated by five different generations of workers, each with different, often conflicting values and attitudes.63 Here is a brief sketch of each.

· The swing generation (born roughly 1910-1929) struggled through the Great Depression, fought the good war (World War II), and, following that war, rebuilt the American economy, which would dominate the world for more than 30 years. Most, but not all, members of the swing generation have retired.

· The silent generation (born 1930-1945) is demographically smaller. Born in the middle of the Great Depression, too young to have fought in World War II, they were influenced by the swing generation. Because its members were in relatively short supply, they were more heavily in demand. Many went to the best colleges, were courted by corporations, rose rapidly, and were paid more than any other group in history. In return they embraced their elders' values and became good “organization men” (i.e., they gave their hearts and souls to their employers and made whatever sacrifices were necessary to get ahead; in return, employers gave them increasing job responsibility, pay, and benefits). Many members of the silent generation currently hold positions of power (e.g., corporate leaders, members of Congress).

· The baby-boom generation (born 1946-1964) currently accounts for 78 million people and 55 percent of the workforce. The boomers believe in rights to privacy, due process, and freedom of speech in the workplace; that employees should not be fired without just cause; and that the best should be rewarded without regard to age, gender, race, position, or seniority. Down-sizing (the planned elimination of positions or jobs) has shocked and frustrated many boomers over shrinking advancement opportunities for themselves and has created a sense of betrayal as many of their parents were fired or rushed into early retirement. Boomers represent a huge base of knowledge and talent in organizations. They bring years of management and leadership expertise that cannot be replaced easily. Fortunately, few leave voluntarily. Only 3 percent of employees 50 or over change jobs in any given year, compared with 10 percent of the entire labor force and 12 percent of workers ages 25 to 34.64 Median years of tenure on the job is only 2.7 for workers ages 25 to 34, but 9.9 for those aged 55 to 64.65

· Generation Y (born after 1980) includes offspring of the baby boomers as well as an influx of immigrants throughout the 1990s (one-fourth of whom were under the age of 19). With more than 80 million members, it will have a huge impact on future products, marketing, and management practices. Generation Y has grown up amid more sophisticated technologies and has been exposed to them earlier than members of Generation X ever were. This is a group that grew up with e-mail, not U.S. mail. Multitasking is easy for them. As an example, consider the typical teenager doing homework on his or her computer: simultaneously using a word processor, surfing the Internet, chatting with friends via instant messaging programs, downloading music, listening to a CD, and talking on the telephone, all while the television is turned on in the background! This implies both good news and bad news for employers. The good news is that Generation Y will be good at engaging in multiple tasks, filtering out distractions, and juggling numerous projects. The bad news? Short attention spans, the constant need for stimulation/entertainment, and a blurring of the lines between work and leisure time while on the job.

A 2004 survey found the incidence of intergenerational conflict to be low.67 When it does occur, such conflict seems to stem from three primary causes: work ethic (different generations have different perceptions of what makes an employee dedicated), organizational hierarchy (some members of younger generations bypassing the chain of command; some members of older generations believing that seniority trumps qualifications), and managing change (some members of older generations perceived as reluctant to change, while members of younger generations seem eager to try new ideas constantly).

In terms of solutions to intergenerational conflict, it appears that separating workers from different generations does not work. What does work is communicating information in multiple ways (oral and written, formal and informal) thereby addressing different adult learning styles. Two other solutions are collaborative decision making and training managers to handle generational differences.68

To derive maximum value from a diverse workforce, not merely to tolerate it, corporations now realize that it's not enough just to start a mentoring program or put a woman on the board of directors. Rather, they have to undertake a host of programs—and not just inside the company. ChevronTexaco and Dow Chemical are building ties with minorities as early as high school. More specifically, to attract and retain racial and ethnic minorities, consider taking the following steps:69

· Focus on bringing in the best talent, not on meeting numerical goals.

· Establish mentoring programs among employees of same and different races.

· Hold managers accountable for meeting diversity goals.

· Develop career plans for employees as part of performance reviews.

· Promote minorities to decision-making positions, not just to staff jobs.

· Diversify the company's board of directors.

Diversity should be linked to every business strategy—for example, recruiting, selection, placement (after identifying high-visibility jobs that lead to other opportunities within the firm), succession planning, performance appraisal, and reward systems. Companies such as PepsiCo, Fannie Mae, Hilton Hotels, and Verizon Communications do that extremely well.70 Here are several other examples.

COMPANY EXAMPLE: NORDSTROM'S, BANK OF AMERICA, AND ABBOTT LABORATORIES

At high-end department store chain Nordstrom's, minority retention rates are a key factor in the performance reviews of managers. Moreover, in 2004 it saw a sevenfold increase in the number of minorities enrolled in an expanded succession program. It also has an outreach program to involve minority-owned firms in new-store construction.

Diverse by Design71

A 25-member executive diversity advisory committee oversees Bank of America's 40 diversity councils across its national operations. That committee also ensures that top management, whose pay and incentives are tied to progress, sets targets to increase diversity in hiring. At Abbott Laboratories, the drugmaker has gone all out in its diversity efforts. Minorities now constitute 33 percent of new hires, 23 percent of the board of directors, and 20 percent of employees in career-tracking efforts as well as 11 of the 50 top paid executives. New-employee affinity groups include separate ones for Chinese, Ibero Americans, and African Americans, among others.

What do these firms have in common? All are sending strong signals that they value workforce diversity, inclusion, and equal opportunities for people to succeed and to prosper.

1. Alternative career paths. This is especially popular in law and accounting firms that have sanctioned part-time work for professionals. Pricewater-houseCoopers is a champion of this approach.

2. Extended leave. IBM, as we have seen, grants up to three years off with benefits and the guarantee of a comparable job on return. However, leave takers must be on call for part-time work during two of the three years. At Russell Investment Group (Tacoma, Washington), associates receive eight weeks of paid time off after 10 years of service. It can be taken in one 8-week block or two 4-week blocks.

3. Flexible scheduling. At NCNB, a bank based in North Carolina, employees create their own schedules and work at home. After six months' maternity leave, new mothers can increase their hours at work gradually. Most who choose to cut their hours work two-thirds time and receive two-thirds pay.

4. Flextime. Through its Women's Interests Network, an 825-member task force with chapters in five states, American Express now has a universal framework for employees and their managers to implement flexible work arrangements at all of the company's 1,675 locations. Among U.S. employers, fully 57 percent offer flexible scheduling, but unlike the system at American Express, most are informal arrangements.73

5. Job sharing. This is not for everyone, but it may work especially well with clerical positions where the need for coordination of the overall workload is minimal; that is, activities such as filing, word processing, and photocopying are relatively independent tasks that workers can share. In contrast, development of a new product or a new marketing campaign often requires a continuity of thought and coordinated action that cannot easily be assigned to different workers or managers. At Steelcase, the office equipment manufacturer, for example, two employees can share title, workload, salary, health benefits, and vacation.

6. Teleworking is work carried out in a location that is remote from central offices or production facilities, where the worker has no personal contact with coworkers but is able to communicate with them using electronic means. It is a popular and rapidly growing alternative to the traditional, office-bound work style. Two of every three Fortune 500 companies now employ teleworkers. Currently 40 million employees telework on a global basis, a number that is expected to reach 50 million by 2005. Survey results indicate that employees want more opportunities for telework and that their top priority is to gain the flexibility to control their own time.74

Here are 11 suggestions for integrating Generations X and Y into the workforce:75

· Explain to them how their work contributes to the bottom line.

· Create customized career paths.

· Allow them to have input into decisions.

· Provide public praise.

· Treat them as sophisticated consumers.

· Encourage the use of mentors.

· Provide access to innovative technology.

· Consider new benefits and compensation strategies.

· Offer opportunities for community involvement.

· Emphasize “You can do it your way—in a collegial work environment.”

In terms of compensation, these generations are used to having and spending money. Cash compensation is a powerful tool, so consider signing bonuses, lucrative merit-increase plans, variable pay, at-risk compensation, retention bonuses or contracts, and frequent recognition. With respect to community involvement, these generations have high rates of volunteerism. They will look for opportunities to continue this in the context of the workplace.

Today, more than half of all workers in the United States are 40 or older.76 By 2015, more than a third of all workers will be 50 and over, and fully two-thirds of them expect to work, at least part-time, during “retirement.”77 To be sure, their experience, wisdom, and institutional memories (memories of traditions, of how and why things are done as they are in an organization) represent important assets to firms. As important elements of the diversity “mix,” progressive organizations will continue to develop and use these assets effectively. Here are six priorities to consider to maximize the use of older workers:78

1. Age/experience profile. Executives should look at the age distribution across jobs, as compared with performance measures, to see what career paths for older workers might open in the future and what past performance measures have indicated about the kinds of knowledge, skills, abilities, and other characteristics necessary to hold these positions. Why do this? Because it's important to identify types of jobs where older workers can use their experience and talents most effectively.

2. Job performance requirements. Companies should then define more precisely the types of abilities and skills needed for various posts. While physical abilities decline with age, especially for heavy lifting, running, or sustained physical exertion (needed in jobs such as fire fighting and law enforcement), mental abilities generally remain stable well into a person's eighties. Clear job specifications must serve as the basis for improved personnel selection, job design, and performance management systems. For example, jobs may be designed for self-pacing, may require periodic updating, or may require staffing by people with certain physical abilities.

4. Workforce interest surveys. Once management understands the abilities its older workers have, it must determine what they want. The idea is to survey workers to determine their career goals so that the ones who are capable of achieving their goals won't stall. Not only must management decide that it wants to encourage selectively some older workers to continue with the organization, it must also consider encouraging turnover of workers it doesn't want to continue. And, of course, management must evaluate what effects different incentives will have on the workers it wants to continue and on the ones it doesn't.

5. Training and counseling. To meet the needs of the workforce remaining on the job, firms need to develop training programs to avoid mid-career plateaus (i.e., performance at an acceptable but not outstanding level, coupled with little or no effort to improve one's current performance) as well as training programs to reduce obsolescence (the tendency for knowledge or skills to become out of date). These programs must reflect the special needs of older workers, who can learn but need to be taught differently (e.g., by using self-paced programs instead of lectures).

6. The structure of jobs. To whatever degree management may consider changing older workers' work conditions, such as work pace or the length or timing of the workday, it should explore the proposed changes jointly with the workforce. After all, multiple generations are likely to be affected by the changes, and whether boomers, Gen Xers, or Generation Y's, all are more likely to support what they helped to create.

A 30-year-old war veteran with a disability called a radio talk show recently to complain that prospective employers wouldn't consider him for jobs despite his outstanding credentials. “How many interviews have you had?” asked the talk show host, who heads a nonprofit organization dedicated to placing people with disabilities in jobs. “Not one” he admitted. “As soon as I tell them I can't walk, type, and other things I can't do, they get off the telephone as quickly as possible.”

“I'm not surprised,” said the host. “Prospective employers want to know what job applicants can do for them, not what their limitations are. If you can show a prospective employer that you will bring in customers, design a new product, or do something else that makes a contribution, employers will hire you. Your disability won't matter if you can prove that you will contribute to the employer's bottom line.”79

Perhaps the biggest barrier is employers' lack of knowledge. For example, many are concerned about financial hardship because they assume it will be costly to make architectural changes to accommodate wheelchairs and add equipment to aid workers who are blind or deaf. In fact, statistics show that most accommodations cost less than $1,000 per employee, 22 percent cost more than $1,000, and 15 percent cost nothing.82 Consider several possible modifications:83

· Placing a desk on blocks, lowering shelves, and using a carousel for files are inexpensive accommodations that enable people in wheelchairs to be employed.

· Installing telephone amplifiers for hearing-impaired individuals or magnifying glasses for sight-impaired individuals. Much to their delight, employers have found that these systems helped them gain new customers with hearing or sight impairments.84

· Flextime, job sharing, and other modifications to the work schedule that enable mothers with young children to continue to work are being used to help employees with AIDS, cancer, and other life-threatening diseases to continue to work.85

Actions like these enable persons with disabilities to work, gain self-esteem, and reach their full potential. That is a key objective of diversity at work.

Throughout this chapter we have emphasized that workforce diversity is a business issue—either you attract, retain, and motivate the best talent or you lose business. Gay/lesbian/bisexual/transsexual (GLBT) employees, as a group, are highly educated; they comprise, by some estimates, 6 percent of the population (about 17 million people); and they have a buying power of $450 billion. This is one reason more than 75 percent of Fortune 1,000 firms have elected to add the words “sexual orientation” to their nondiscrimination policies and why 70 percent of the nation's top 500 companies now offer health benefits to same-sex couples—up from 25 percent in 2000.86 Well-known companies such as Apple Computer, Prudential, Nike, IBM, Intel, American Airlines, and J. P. Morgan Chase are just a few examples of companies that offer such benefits.87

IBM's gay employee support groups have 30 chapters worldwide and more than 1,100 members. American Airlines' “Rainbow Team” of gay employees brought in $192 million in revenue in one year by targeting the gay community. American Express Financial Advisors goes one step further. It has established 17 diversity learning labs in its field locations. The labs receive concentrated funding, resource, and training support from the region and corporate offices. They focus on diverse segments in the African-American, GLBT, Hispanic, and women's markets. Not only are the labs helping to acquire a more diverse base of clients for the company, but they also are surfacing some key lessons:

· Targeting diverse clients drives the need for a similarly diverse workforce.

· Leaders of the efforts to acquire diverse clients must not only have client-acquisition expertise in that specific market segment, but also have strong project-management experience.

To be sure, the internal expertise and competence fostered by the learning labs is helping American Express to prosper in its business on a global scale.88 As we have seen, the workforce is now and will continue to be more and more diverse. A list of actions that managers can take to deal with these changes is presented in Figure 4-4.

ETHICAL DILEMMA Does Diversity Management Conflict with Maximizing Shareholder Value?

The main objective of profit-making businesses is to maximize overall returns to shareholders (increases in stock prices plus dividends). Because earnings affect this objective, management needs to determine the extent to which any new program—including any new workforce program—will affect the bottom line. There are sound business reasons why having a diverse workforce and managing it properly can increase shareholder value. However, companies generally tend to measure success in these programs by looking at indicators other than the bottom line. Affirmative action programs and some “diversity awareness” programs have been criticized strongly for adding costs to firms but little or no financial benefits.89 Given the costs involved, can diversity programs be justified over time purely on philosophical and moral grounds (i.e., it's the right thing to do)?

All employees, no matter who, no matter at what level, want to be treated with respect. They want to know that their employer values the work they do. That's the most basic thing you must do in managing diversity. And when diversity is managed well—as at Du Pont, Procter & Gamble, Monsanto, and Merck—productivity and the quality of work life improve. So do stock prices. Researchers examined the effect on stock prices of announcements of U.S. Department of Labor awards for exemplary diversity programs and announcements of damage awards from the settlement of discrimination lawsuits. Announcements of awards were associated with significant, positive excess returns that represent the capitalization of positive information concerning improved business prospects. Conversely, damage awards were associated with significant negative stock price changes, which represent the capitalization of negative economic implications associated with discriminatory corporate practices.90 In addition to the negative impact on stock prices, the direct costs of investigation and litigation of a 75-person class-action lawsuit alleging unfair discrimination exceed $460,000—assuming you win.91 In terms of specific payoffs, a multicultural team at Du Pont gained about $45 million in new business worldwide by changing the way Du Pont develops and markets decorating materials such as its Corian countertops. Among other things, the team recommended an array of new colors that appealed to overseas customers.92 As we noted earlier, diversity has evolved from being the correct thing to do to being the essential thing to do. The remaining step is for a company to address diversity in the same businesslike manner as it would in an expansion, a merger, a restructuring, or anything else.93

IMPLICATIONS FOR MANAGEMENT PRACTICE

1. Workforce diversity is here to stay. There is no going back to the demographic makeup of organizations 20 years ago. To be successful in this new environment, learn to value and respect cultural styles and ways of behaving that differ from your own.

2. Recognize that there are tangible business reasons why managing workforce diversity effectively should be a high priority: (a) it is an opportunity to deepen understanding of the marketplace, the needs of various customers, and to penetrate new markets and (b) demographic changes are coming so rapidly that employers will have to meet their hiring needs with a diverse labor force.

3. To maximize the potential of all members of the workforce, link concerns for diversity to every business strategy: recruitment, selection, placement, succession planning, performance management, and rewards.

4. To retain talented women and minorities, follow the lead of Procter & Gamble in developing long-term career plans that include multiple assignments—and don't be afraid to share the plan with the employees in question. As former CEO John Pepper noted: “So often, people don't know how you feel about them until it's too late.”94

In the course of their five-year research project on the effects of diversity on business performance, the researchers studied four large firms (two in information processing, one in financial services, and one in retail).95 Further, in an effort to develop a valid picture of the current state of practice in managing diversity in large organizations, they discussed the state of practice with more than 20 large, well-known firms. With appropriate caution, they offered the following implications for practice:

1. Modify the business case. Start by recognizing that there is virtually no evidence to support the simple assertion that diversity is inevitably good or bad for business. Rather, focus on the conditions that can leverage the benefits from diversity, or at the very least, lessen its negative effects. Recognize that while diversity is a reality in labor markets and customer markets today, success in working with and gaining value from that diversity requires a sustained, systemic approach and long-term commitment. Organizations that invest their resources in taking advantage of the opportunities that diversity offers should outperform those that fail to make such investments.

2. Look beyond the business case. While there is no reason to believe that diversity will translate naturally into better or worse business results, it is both a labor market imperative and a societal expectation and value. Managers should therefore focus on building an organizational culture, HR practices, and the managerial and group process skills needed to translate diversity into positive results at the level of the organization, the work group, and the individual.

3. Adopt a more analytical approach. If firms are unable to link HR practices to business performance, then their ability to learn how to manage diversity effectively will be limited, as will their claims for diversity as a strategic imperative that justifies financial investments. More sophisticated data collection and analyses are necessary to understand diversity's consequences and to monitor the effects of diversity on attitudes and performance. Questions such as the following will be most useful: Under what conditions do work units that are diverse (e.g., with respect to gender, ethnicity, and other characteristics) outperform or underperform work units that are more homogeneous? What conditions moderate the potential negative or positive effects of diversity?

5. Help managers and team members develop skills in conflict resolution and effective communications. Training to develop group process and leadership skills like these is essential. Managers who attempt to make diversity a resource for learning, change, and renewal will inevitably confront challenges in these areas. Training alone, however, is not likely to be sufficient. Organizations also need to implement management practices and HR policies that promote cultures of mutual learning and cooperation.

More than half the U.S. workforce now consists of racial and ethnic minorities, immigrants, and women. White, native-born males, as a group, are still dominant in numbers over any other group, but today women comprise nearly half the entire workforce. From 1998 to 2008 the Asian, American Indian, Alaska Native, and Pacific Islanders' share of the labor force will increase from 5 to 6 percent, the Hispanic share from 10 to 13 percent, and the African-American share will hold steady at about 12 percent.

Managing diversity means encouraging a heterogeneous workforce, which includes white men, to perform to its potential in an equitable work environment in which no one group enjoys an advantage or suffers a disadvantage. At least five factors account for the increasing attention companies are paying to diversity: (1) the shift from a manufacturing to a service economy, (2) the globalization of markets, (3) new business strategies that require more teamwork, (4) mergers and alliances that require different corporate cultures to work together, and (5) the changing labor market. Each of these factors can represent opportunities for firms whose managers and employees understand what culture is and who appreciate cultural differences among other employees and managers, and especially the firm's market.

To attract and retain women, as well as persons with disabilities, companies are making available to them alternative career paths, extended leaves, flexible scheduling, flextime, job sharing, and opportunities to telework. In addition, many companies now offer the same benefits to same-sex couples as to heterosexual couples. A different aspect of diversity is generational diversity—important differences in values, aspirations, and beliefs that characterize the swing generation, the silent generation, the baby boomers, Generation X, and Generation Y. To manage older workers effectively, managers should develop an age profile of the workforce, monitor job performance requirements for the kinds of characteristics people need to do their jobs well, develop safeguards against age bias in performance management, conduct workforce interest surveys, provide education and counseling, and consider modifying the structure of jobs.

Finally, to manage diversity effectively, do the following things well: focus on bringing in the best talent, not on meeting numerical goals; establish mentoring programs among employees of same and different races; hold managers accountable for meeting diversity goals; develop career plans for employees as part of performance reviews; promote women and minorities to decision-making positions, not just to staff jobs; and diversify the company's board of directors.

· managing diversity

· affirmative action

· culture

· EEO for women

· swing generation

· silent generation

· baby-boom generation

· Generation X

· Generation Y

· alternative career paths

· extended leave

· flexible scheduling

· flextime

· job sharing

· teleworking

· age grading

· mid-career plateaus

· obsolescence

Source: Diversity management: Beyond awareness. Employee Relations Bulletin. Aug. 7, 1994, pp. 1-7; R. Mitchell & M. Oneal, Managing by values. BusinessWeek, Aug. 1, 1994, pp. 46-52; F. Rice, How to make diversity pay. Fortune, Aug. 8, 1994, pp. 78-86.

Talk, talk, talk. As Ken Hartman, an African-American midlevel manager at Blahna Inc. recalls, that's all he got from the white men above him in top management—despite the fact that Blahna had long enjoyed a reputation as a socially responsible company. But that reputation didn't mean much to Hartman as he watched other African-American managers he thought were highly qualified get passed over for plum jobs and as his own career seemed stalled on a lonely plateau. Top management always mouthed diversity, Hartman said, “but in the end, they chose people they were comfortable with for key positions.”

The way a company deals with a crisis is often what marks it as a leader. AT&T, lavishly praised for its management of diversity for more than a decade, was hit hard by an ugly, headline-making incident several years ago. The company's employee magazine featured a cartoon of customers on various continents making phone calls. The caller in Africa was depicted as an animal. Immediately upon dissemination of the newsletter, the company's switchboard lit up with calls from irate employees, customers, civil rights groups, and legislators.

Tackling the problem head on, AT&T's chairman apologized to all for the “racist” illustration and noted that it was drawn by a freelancer. He vowed to turn the ugly incident into an opportunity to accelerate the pace of workforce diversity at AT&T and immediately went to work developing an action plan to make it happen. The plan appeared in less than two months, with a mission “to create a work environment that sets the world-class standard for valuing diversity.” Among the steps listed in the six-page plan, all 13 top officers at AT&T will increase their direct interactions with minority employee caucus groups.

Ken Hartman's firm, Blahna Inc., has finally gotten the message. The company is now using diversity management strategies to head off conflict and reduce turnover among employees it can ill afford to lose.

Several years ago, Blahna formed a 20-member Committee for Workplace Diversity, chaired by a vice president. The committee was chartered to consider why women and minorities weren't better represented at all levels of the organization. Although the company had a good record of hiring women and minorities, the committee discovered that turnover was two to three times higher for these groups than it was for white males.

Sample exit interviews revealed that women and minorities left for culture-related reasons—for instance, because they didn't feel valued in their day-to-day work, didn't have effective working relationships, or didn't sense that the work they were being given to do would lead to the fulfillment of their career goals. White males, on the other hand, left for business-related reasons, such as limited opportunities for future advancement.

As a result of this initial investigation, Blahna formed a 25-person diversity advisory committee. The committee determined to take a two-step approach to dealing with diversity issues. The first step was to increase awareness; the second was to build skills for dealing with diversity-related challenges. Both steps involved training conducted by diversity consultants, Hope & Associates.

To date, 60 percent of Blahna's 11,000 employees have gone through a two-day diversity seminar; 40 percent have gone through a more extensive six-day training program as well. “The premise of the training is that the more different you are, the more barriers there can be to working well together,” explains Blahna's diversity development director. Training sessions do not offer advice on how to get along with Asian Americans, women, or other specific groups. Rather, the emphasis is on learning skills that will make it easier to relate to and communicate with others.

The result? Ken Hartman is a happier guy these days. As president of one of Blahna's divisions, the 48-year-old executive is a step away from joining the ranks of senior management. Life has changed for him since Blahna “stopped talking about values like diversity and began behaving that way.”

Questions

1. Why do many companies find increasing and managing diversity to be difficult challenges?

2. What were the key elements in Blahna's successful diversity strategy?

3. Under what circumstances might the consulting pairs approach be most useful?

4. What steps should management take to ensure that the consulting pairs approach is working?