Cover Story: The Diversity Challenge

Employers Find Diversity
Programs Must be 'Lived'

By Pamela Schaeffer
American News Service

U.S. corporations have spent millions of dollars during the past decade on training programs to ease racial tensions in the workplace -- but some companies are finding it has had little effect.

Critics point to the diversity debacle at Texaco, Inc. last year as an example of how such programs can fail. After three years of diversity training, Texaco was forced to pay more than $100 million dollars and to modify its diversity programs to settle a race-related lawsuit when its executives were taped referring pejoratively to blacks.

The Society for Human Resource Management reports that 32 percent of American businesses have diversity training initiatives in place. However, Jeffrey Sonnenfeld, director of Emory University's Center for Leadership and Career Studies in Atlanta, says that only a few businesses are committed to walking their diversity talk. In his studies of diversity programs, Sonnenfeld has found the workshops can teach new stereotypes as they attempt to erase old ones.

Though better than nothing, Sonnenfeld said, such diversity programs are window dressing as often as not, rarely making a lasting difference in the corporate culture.

For a few enlightened executives, though, diversity management is to the 1990s what Total Quality Management was to 1980s: the next step in corporate viability and success. Driving the latest trend are rapidly changing demographics, rather than the affirmative action quotas or politically correct agendas of the past.

For example, recent studies show that by the year 2000, minorities could make up more than half of new entrants into the U.S. work force, and the nation's three largest ethnic minorities -- African Americans, Asian Americans and Hispanics -- will have an annual spending power of $785 billion.

Eager to tap this deepening pool of talent, some companies are seeking to create widely diverse workplaces. Companies are also finding ways to make it clear that top management is serious about change and diversity.

"In our culture, the way to get people's attention is to set goals and hold leaders accountable for meeting them," said Joan Crockett, senior vice president of human resources at Allstate Life Insurance Co.

In the view of Barry Lawrence, a diversity expert with the Society for Human Resource Management, "What many companies are trying to do is just sprinkle a little diversity into the mix -- and that's just not going to cut it."

According to analysts like Sonnenfeld, companies that do manage diversity well extend the definition beyond the usual gender, race and ethnic categories to include disabilities, age, sexual orientation, working and management styles or anything else that sets people apart.

A key component of the strategy at all three companies is an evaluation process that links success at managing diverse employees to promotions and compensation.

In turn, managers at those companies say their strategies give them a competitive advantage, attracting the best in hiring and the considerable spending power of minority groups who approve of the companies' practices.

When Xerox officials talk about diversity, they refer back to a 1968 letter from the company's founder, Joseph C. Wilson, directing all managers to recruit and train black employees. The company, he wrote, would not "condone the waste of a great national resource." In 1995, the company's commitment to ensuring success of minorities and women earned it the first national "Glass Ceiling Award," created under the federal Civil Rights Act of 1991.

Inspired by black employees, who formed regional caucus groups in the early 1970s, other groups at Xerox gradually followed suit. Caucus groups serving women, Hispanics, gays and lesbians, and disabled employees are among those that hold annual conferences, provide mentoring networks and coaching, and propose changes or new ideas to management. Brooks said caucuses are mostly self-supported, though the company provides some funding and allows groups to use company resources and meet on site during non-working hours.

A recent company innovation was to appoint senior executives to serve as liaisons with each group. They are called "champions" and ideally function as the "conscience" of senior management lobbying to see that concerns of all groups are addressed, Brooks said.

Paul A. Allaire, chairman and chief executive officer of Xerox, hosts regular roundtables with members of ethnic groups who are asked to give their unfiltered comments and perspectives, as well as suggest new "action items" for the company to aggressively pursue.

An important part of the diversity story at Allstate is evaluating leaders in terms of their skill in building a supportive work environment for all employees. Diversity skills are assessed through an extensive quarterly survey that asks employees for anonymous feedback on how the company fares with both its customers and its employees.

For example, respondents are asked whether Allstate gives quality service to customers regardless of ethnic background, whether managers "seek out and utilize the different backgrounds and perspectives" of all employees, and, more directly, "to what extent have you received the training you need to meet your customers' needs?"

Crockett said that up to 25 percent of an Allstate manager's bonus is linked to performance on a "diversity index," determined from survey results, and to achieving diversity goals in "succession planning" -- targeting and nurturing employees to fill key positions nationwide.

As a follow-up to diversity training workshops, Bank of America in 1995 began creating "diversity business councils" whose makeup is intended to be a microcosm of the company itself, mirroring the diversity of the bank's 93,000 employees. The councils are charged with devising practical ways to achieve the ultimate goal of an all-inclusive workplace.

The diversity councils have implemented a variety of approaches for their particular business areas, ranging from mentoring programs, to performance reviews for managers based on diversity objectives, to temporary work assignments designed specifically to allow employees to broaden their skills. The company also posts all open positions, including those for senior vice presidents, a sign that the "old boys' network" has lost its edge.

"This is not something we view as an expense," said vice president Steve Ghysels, who oversees corporate diversity development. "We view this as a long-term investment in the corporation. That's key. We are trying to unleash the emotional energy of workers."

Lower and others argue that diversity gives a competitive advantage to companies. Asked for proof, Allstate's Crockett referred to threats of a boycott against Texaco, Inc., after its race problems came to light last year, followed in December by a demonstration led by Jesse Jackson against R.R. Donnelly & Sons, a publishing company in Chicago, in support of minority workers who were fired when the company closed a printing operation.

"I know people who say they will never buy Texaco products again," Crockett said, adding: "And Jesse Jackson showing up at your board meeting has ramifications well beyond anything I want to think about."

Other stories in the Village Life News Cover Story:

  • New Efforts Help Citizens Get Along, Get Things Done
  • Community Cousins Builds New Ethnic Relationships
  • Employers Find Diversity Programs Must be 'Lived'
  • Diversity in Workforce Produces Bottom Line Benefits
  • Interfaith Ministry Brings Hope to Racial Discussions
  • Posted July 7, 1997
    Copyright ©1997 American News Service

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