MARY C. MATTIS
Senior Research Fellow
My comments are intended to provide a brief overview of corporate best practices in managing diversity and establish a framework for exploring diversity initiatives represented by our panel today. Catalyst, a nonprofit organization that works with corporations and professional firms to retain and advance women, has been in business for almost 40 years. In the beginning, we worked with individual women, but we now work almost exclusively with corporations or professional firms to help them retain and advance women. We think women have done all of the right things—they have the right educational credentials, and they are getting the right experience. Now we need to fix companies.
One of our activities is the Catalyst Award, an annual process during which we ask companies to nominate a specific, cutting-edge, replicable initiative that can be proven to have been successful in retaining, developing, and advancing women. We spend about a year evaluating the nominations; we visit the companies and talk to many people, including the CEO, women, human resources professionals, and so on. At the end of this very demanding process, we select two or three companies that we hold up to the public as companies whose initiatives are working. Most diversity initiatives are not targeted only on women. In most cases, these initiatives not only help the company retain and advance talented women, but also retain and advance members of other minority groups. All of the best practices we have reviewed recently are multifaceted because there is a growing recognition in the corporate community that diversity is multifaceted. There is no single solution, no one-size-fits-all approach that addresses the needs and interests in our diverse workforce.
I had nothing to do with the selection of today’s panelists, but two of the companies represented on this panel have won the Catalyst Award—Con Edison,
for a very interesting program that ensures that new people hired in engineering, as well as in business, rotate from headquarters to field locations to ensure that they receive both line and staff experience, and Motorola, for a very interesting succession planning process that ensures that women and people of color are represented in succession planning.
Companies use a variety of business-based arguments as a basis for developing, implementing, and driving diversity initiatives through their organizations. One example of the basic business case for diversity is demographics. The talent pool, both today and in the future, will become increasingly diverse in terms of gender, race, ethnicity, and global representation. The real competitive advantage for a company out to get the best and brightest talent, especially technical talent, which includes a very limited number of people from diverse domestic groups, is to be regarded by prospective employees as the employer of choice.
Another business case for diversity that many employers now recognize is the cost of not acting, the cost of turnover if the environment is not welcoming for people from diverse backgrounds. Some of the costs are obvious, and some are not. They include replacement costs, opportunity costs, which Dr. Wulf talked about, the impact on work units, customers, and clients, and the discontinuity of service. Clients and customers dislike having to work continually with new people, a company with a revolving door. If you can’t retain talented people, the word gets out, and eventually you can’t recruit them to your organization. If a company has to respond to litigation, we all know there are significant costs associated with that, not just in terms of real dollars, but also in terms of image, opportunity costs, and the impact on recruitment. As Dr. Wulf so eloquently explained, one of the strongest business cases for diversity is that diversity equals innovation—in terms of new products, new services, new markets—and, of course, the bottom line—increased profitability, increased market share, more elegant solutions.
Based on our research on corporate best practices for retaining and advancing women, and also other minorities, we have identified the following characteristics of successful corporate initiatives. First and foremost is top-level commitment. Diversity initiatives cannot be driven through an organization by human resources people alone. There must be a commitment from the CEO and senior line managers throughout the organization.
Second, the rationale for diversity initiatives must be linked to business strategies. People have to understand the company-specific business case for them to support the initiative all down the line. Communication of the business case for diversity, as a CEO said to me once, takes a million messages. Companies must use every possible vehicle to remind people why diversity is important and then follow up with training to teach people how to behave appropriately.
Third, the company must use internal and external benchmarking to develop metrics—for early wins as well as long-term goals. Ongoing monitoring must be
a long-term process. One of the metrics must be accountability, so that people understand they are just as accountable for diversity results as they are for other business results. Finally there must be ongoing evaluation to determine what works and what should be changed.
We have also identified some trends in corporate diversity initiatives. First, companies are increasingly benchmarking what other companies are doing with diversity initiatives just as they have traditionally benchmarked other kinds of “hard” business results. Companies are trying to learn from the experiences of others, as opposed to reinventing the wheel. Second, companies are adopting formal, rather than ad hoc, approaches. In other words, they formally inform people of the policies and programs to make sure the word gets out that the company values diversity, the company does the kinds of things that attract and retain a diverse workforce, the company is a multicultural company as opposed to a one-size-fits-all company. Third, companies are pursuing diverse workers for business reasons, rather than for regulatory compliance. Companies communicate to their employees, and to their potential employees, that they are acting in response to a business imperative and not because someone out there is counting the numbers.
Fourth, companies are working through partnerships, rather than alone. Companies are beginning to work together, even with competitors, to accomplish things they couldn’t afford to do alone. A good example is IBM’s American Business Collaboration for Quality Dependent Care, which initially collected a pool of $25 million from a number of companies to improve dependent care facilities in the communities where they operate. Partnerships focused on diversity are also increasing. Finally, companies are adopting a truly diverse model, rather than an assimilation model. In essense, they tell new employees that they want them to bring their whole selves to work. They are looking for whole individuals, not cookie-cutter copies.