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Capitalizing on global diversity – diverse workforce management

Capitalizing on global diversity – diverse workforce management – Cover Story

Cresencio Torres

TODAY’S WORKFORCE ISSUES CALL FOR A COMPREHENSIVE, AGGRESSIVE STRATEGY THAT CHANGES NOT ONLY NUMBERS AND ATTITUDES, BUT THE WAY BUSINESS IS CONDUCTED.

Organizational experts and experienced managers agree that managing diversity and working with people who are different is more complex than working with people who share the same attitudes, values and work behaviors.

Traditional models of organizational behavior that have characteristically assumed a white-male workforce must be re-evaluated and updated because homogeneity has been replaced by diversity–people of different ages, races, ethnic and national backgrounds, physical abilities and lifestyles.

Managing diversity means enabling a heterogeneous workforce, which includes white men, to perform to its potential in an equitable work environment where no one group has an advantage or disadvantage.

The challenges facing American business as a result of the dramatic changes in the composition of the workforce are

* How to ensure profits and growth?

* How to maintain a skilled workforce?

* How to adequately train managers to manage diversity in a more equitable manner?

These issues hardly seem new, but after 25 years of legislation and government intervention and corporate policies and programs, issues associated with managing diversity have grown more acute.

As human resource professionals, we must thoroughly understand the strategies that have brought us to this point in time, and seek out answers to the following questions: Where are we now? Where should we be going? How should we proceed? And, what are the implications for HR professionals?

Where are we now?

In the 1960s, minority employment rights became the subject of national debate, and action leading to equal employment opportunity (EEO) followed as the law of the land. Subsequently, affirmative action (AA) measures were initiated to move beyond mere compliance with the law to ensure equitable representation of minorities and women in business.

While the doors of opportunity were opened to many who were previously excluded, new hurdles were created by the unnatural focus on special target groups in organizations, the perception by white managers that standards were being lowered to accommodate minorities and women, and the perception that EEO and AA programs were artificial methods forced upon organizations and their managers to pay for the historical sins of U.S. society.

Today, with the legacy of EEO and affirmative action still with us, a cycle of disillusionment has been created and perpetuated by catch-up programs often initiated in haste and by hiring policies that were designed to increase numbers, in the short term, with little concern for long-term minority support and development.

The cycle

The cycle of disillusionment begins when an organization is forced to move away from the status quo because it is confronted with a problem related to its workforce composition. For example, an organization recognizes that it should increase its number of women and/or minorities to comply with legal requirements, to meet a perceived moral obligation, or to respond to pressure from within the organization.

Action is taken via recruitment, and greater numbers of women and minorities are brought into the organization at the entry level. Once the problem is identified and action taken, pressure decreases and managers relax in their satisfaction that the issue is remedied.

However, as time passes, the nontraditional recruits, women and minorities, become frustrated with the lack of support from the organization. They receive little coaching or performance feedback from their supervisors; their peers are often resentful of their perceived “special” treatment; they have no access to visible assignments; and expected rewards and promotions fail to materialize.

As the frustration level increases, disillusionment takes over in a variety of ways. Management becomes both cautious and cynical, reluctant to spend additional time and money on remedies that appear to deteriorate morale rather than improve the work climate. Management becomes entrenched in the belief that “there just isn’t” an adequate pool of qualified minorities or women to draw on.

Women and minorities become disillusioned with the organization’s lack of sensitivity to their needs. They either leave in search of companies with more opportunity or remain in place, using only a fraction of their potential.

This self-defeating cycle continues as the organization’s basic values, policies and procedures remain unchallenged and unchanged.

Many companies have repeatedly met their EEO requirements but cycle through disillusionment when employees experience incongruence between what the organization’s leadership says and what they deliver.

Breaking the cycle

To break the cycle of disillusionment, human resource professionals must re-evaluate traditional strategies used in organizations to manage diversity. The disillusionment cycle is a reactive-linear strategy that matches short-term remedial action to a specified problem or deficiency.

The cycle presented an excellent game plan 25 years ago when there was little knowledge and experience in dealing with diversity issues. However, earlier concerns were not defined in terms of managing diversity, but rather in terms of including members of disadvantaged groups that were subject to discrimination.

While the inclusion of these groups was perceived as a threat to the white-male workforce, the numbers that represented many organizational EEO targets were small percentages of the overall workforce. In contrast, according to the U.S. Department of Labor, about 75 percent of today’s new entrants to the labor market are women and minorities.

Thus, diversity issues are now much more pervasive. Corporate success, profit and growth depend more on the effective management of a diverse workforce.

How should we proceed?

A model for understanding organizational variables that build corporate capability and pinpoint the causes of organizational malaise is the McKinsey 7-S framework (The Opportunity Model). Originally developed for business problem solving, it can be effectively applied to managing diversity.

The McKinsey model references seven variables that can be leveraged to make organizational change easier: strategies, structures, systems, style, skills, staffing and shared values. To effectively manage diversity, all of the variables within the model must be examined to ensure their complete alignment with the organization’s diversity goals and to understand the options for increasing each variable’s effectiveness.

Strategies. An organization’s marketing, financial and operations strategies have direct linkages to human resource functions. According to management expert Alvin Toffler in Power Shift, the labor market for qualified minorities and women and the changing nature of work from manual to “mind work” require a human capital plan that is every bit as strategic as the allocation of business capital.

Opportunities await those organizations that make explicit, concrete connections between the goals of the organization and the effective management of diversity. The connections provide vision, direction and an integrating mechanism for business objectives, plans and programs related to valuing and managing cultural differences.

Structures. This variable refers to the boxes on the organizational chart–one of the most powerful forces in organizational life. Changes in this area send loud messages about who and what is important.

Do new structures such as task forces or advisory committees need to be established to address diversity issues? Do existing structures need to be supported with additional resources? Do new structural arrangements, such as reporting relationships, need to be created to provide adequate attention to the issues?

In some companies, the EEO/AA manager reports directly to the CEO. In other companies, the HR function is placed within the line operation. These types of arrangements convey a sense of urgency, accountability and importance that did not previously exist.

Systems. Systems are represented by the policies, practices and procedures that employees follow to perform their job-related duties. They are the software for conducting business as well as the potent drivers of behavior. The array of HR systems–recruitment and hiring practices, training and development programs, promotion and succession policies, appraisal and compensation plans–must be examined to determine their congruency with the organization’s diversity imperatives.

Style. Human resource professionals have traditionally placed a strong emphasis on day-to-day management behavior, which is often viewed as a prime indicator of the corporate culture and major determinant of the work climate. The style variable represents the area where leadership spends its energy and places its priorities. It can be affected by training, which may increase awareness and change behaviors.

However, experience shows that some training interventions, even when they have the endorsement of upper management, are marginally effective when unaccompanied by supporting changes in other variables. This does not suggest that attitudinal programs should be discontinued; it simply suggests that they should be viewed as part of a larger plan, rather than an end in themselves.

Skills. The skills variable represents the talents and abilities of the workforce that can give an organization its distinct competitive advantage. Recruitment, training, staffing, appraisal, promotion and succession plans affect this resource. The relationship between the skills an organization possesses in managing diversity and the bottom line has been alluded to for some time. Yet, few organizational strategists consider human capital as important as the allocation of business capital. Organizations must view their employees as appreciating assets and treat them just as they would treat other important assets within the company.

Staffing. This dimension represents the profile of the employee body or the numbers of what types of people reside where in the organization. Information about the racial and gender profile of the organization is generally given only to the HR staff because of the sensitivity of the information.

As a result, a typical misperception is that many more women and minorities reside in the organization across functions and at higher levels. Everyone thinks that the “other person” has a bigger piece of the organizational pie.

By taking the opportunity to inform operations managers and employees about the organization’s workforce statistics, as well as current and future labor needs, HR will assist in making a case for change. Managers respond to changes in a positive way if they are included in the process. Often, it is the lack of information that creates managerial conflict.

Shared values. Many companies, in the process of transforming themselves to quality organizations, are re-examining their corporate values and culture because they understand how values subtly guide employee action.

Opportunities exist to help business leaders interpret their values in a multicultural context and to identify and bridge the gaps between espoused organizational values and behavior.

Once again, experience shows this variable to be a powerful lever for creating change. Yet, clarifying organizational values requires the investment of time and resources. In addition, top management must make a commitment to ensure that values related to diversity are clearly understood by all employees. Some companies have laudable espoused values that are clearly understood by a few top level managers. The goal is to have everyone, including employees, agree with the leadership so that there is alignment.

The opportunity model

By using McKinsey’s Opportunity Model as a tool for analysis, the need for an integrated, proactive approach for using human resource systems to break the cycle of disillusionment is illustrated.

If organizations are to remain competitive, they must move beyond short-term intervention strategies and aggressively remove the barriers that prevent organizations from developing fully equitable systems that allow employees to achieve their potential.

Implications for HR professionals

In applying 20/20 hindsight, the focus of the diversity issue has changed from equal employment opportunity to effectively managing diversity as an organizational imperative. With this in mind, the direction of our energy can be aimed at creating change in organizations that will eventually break the cycle of disillusionment.

We must draw heavily upon new knowledge, skills and resources that extend beyond our standard facilitation, communication, organization and behavior modeling abilities. We must be able to tie issues of managing diversity to the needs of the business, and be well-versed in the industry issues, goals and outcomes.

We must be able to draw more heavily than ever on ties to other businesses, the public sector and the communities we serve. A strong network provides information and new ideas that are motivating to our client groups.

The more difficult to acquire are three internal resources that must be managed:

* The development of unquestioned credibility within all levels of the organization. This is cultivated through self-awareness, flexibility and the willingness to go beyond the limitations of traditional boundaries.

* The necessity for developing self-renewal mechanisms to ward off the burnout syndrome that often accompanies this type of work. This must be developed out of a pure selfishness for staying healthy.

* The ability to distinguish the sensible risks from the foolish ones.

We are at a fascinating and critical point in time with a constantly changing geo-political situation, an economic downturn, a more diverse workforce and changing values concerning work and family. While these can be perceived as negative forces by some people, we recognize that it’s usually these types of forces that cause us to change.

Yesterday’s projected trends have quickly become today’s work realities. As HR professionals, we have an opportunity to recapture the excitement, energy and opportunity that managing diversity presents to us.

Cresencio Torres, Ph.D., is president of Consultants for Change Inc. in San Diego. He is co-author of Self-directed Work Teams: A Primer and a program associate with the Center for Creative Leadership in La Jolla, Calif.

Mary Bruxelles, M.Ed., is an associate of Consultants for Change Inc. She was formerly the director of Training and Organization Development for New England Telephone.

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