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Diversity incorporated: Managing people for success in a diverse world

by Ron Johnson and David Redmond, Financial Times Prentice Hall, 2000.

(Reviewed by Kevin Barham in February 2002)

(These book reviews offer a commentary on some aspects of the contribution the authors are making to management thinking. Neither Ashridge nor the reviewers necessarily agree with the authors’ views and the authors of the books are not responsible for any errors that may have crept in.

We aim to give enough information to enable readers to decide whether a book fits their particular concerns and, if so, to buy it. There is no substitute for reading the whole book and our reviews are no replacement for this. They can give only a broad indication of the value of a book and inevitably miss much of its richness and depth of argument. Nevertheless, we aim to open a window on to some of the benefits awaiting readers of management literature.)

As Ron Johnson and David Redmond remind us, we all live in a very diverse world. Whoever you are and whatever you do, you will encounter people who are different from you. You will employ and work with people who are different and your business will have to sell and buy from people who are different. This is not just a fact of life, say consultants Johnson and Redmond, but an opportunity for smart businesses to enhance their competitive advantage. Not all the people in the talent pool are white, male, straight, young and able-bodied. If your managers and staff all look and sound the same you are missing out on an ocean of talent. And, of course, your customers don’t all look and think the same. Treating people equally and fairly, regardless of difference, is no longer political correctness, it is a business imperative.

Johnson and Redmond provide many examples of how firms are trying to manage diversity for business success. Take B&Q, the DIY retailer. In the late 1980s, B&Q recognised that its workforce in its stores was predominantly young and that staff turnover was highest among the younger staff. In 1989, it opened two stores staffed entirely by people over 50 years of age. It was thought that older people were more likely to be home-owners and to have done DIY themselves. They would probably have an interest in and some knowledge of DIY. Both stores were highly successful, and the company began to encourage applications from older workers in all its stores. B&Q claims that its stores, which now have a workforce with a mix of age, experience and background, offer a level of excellent service that customers value, as verified by independent studies. According to the firm, ‘it’s a win-win situation’.

The company is now trying to ensure that management teams become more age diverse. In 1998, the company removed the top age of 25 for graduate recruits so that it could select from a wider pool of applicants. Beyond the normal retirement of 60, both new and existing employees can be given opportunities to continue on fixed-term contracts. Each B&Q store aims to reflect its local community in its workforce. B&Q considers that the benefits of its diversity policies are a larger pool of talent from which to recruit, a mixed-age workforce whose balance of skill, style and ideas reflects its customer base, increased customer satisfaction, reduced staff turnover resulting in reduced recruitment costs, and a wide range of experience and expertise among its employees. It also believes that diverse perspectives among employees encourage more innovation in problem solving.

Centrica plc, the energy services firm, has developed a policy for carers - employees who have long-term or permanent caring responsibilities for seriously sick, elderly or disabled relatives, partners and family. The company recognises that from time to time this can make it difficult for an individual to combine paid work with caring. The aim of the policy is to ensure that the firm can recruit and retain employees who have assumed caring responsibilities. Local managers have final discretion concerning leave and other matters, but they are expected to give sympathetic consideration to employees’ requests for support. The intention is that this support is based on a shared understanding of the difficulties the employee is facing. Employees are actively encouraged to inform their manager if they are caring for someone and are assured that this information will be dealt with in a confidential manner. The policy deals with the four key areas of support that carers need: leave; access to a telephone; working arrangements, including the possibility of career breaks and home working; and access to counselling. For each of these areas of concern, ‘sensible and reasonable’ guidelines and arrangements are outlined. Within these guidelines, arrangements for each employee concerned can be made in the light of their home and work circumstances.

Another organisation with a large number of black employees found that relatively few black people gained promotion to middle management jobs, although they were on average no less capable than their white colleagues. The organisation introduced a system whereby a number of senior white people were asked to act as mentors to promising black employees. Over a period of time, as these mentors and black employees started to communicate and the black employees started to recognise that the way was open and to learn how to prepare for progression, the number of black promotions increased.

The successful business of the future will be ‘Diversity Incorporated’, say the two authors of this book. Their aim is to provide for the ‘thoughtful senior executive’ the tools he or she needs to make strategic decisions about the management of diversity and to monitor the work of others engaged in the detailed tasks of implementation. The authors emphasise that managing diversity is not an option but a necessity. In Europe and America the need arises largely from changes in the marketplace and in the workforce. These include: more women at work; more national, racial and cultural diversity in the workforce; an increase in the average age of the workforce, more companies that trade across national boundaries; more multinational companies; and more use of digital technology in communications and trade. Society expects organisations to treat people with respect and fairness. In many countries, these expectations have led to legislation. It is therefore essential, as a minimum, for organisations to be aware of the relevant law in every country, and to ensure that all employees adhere to it.

Initial attempts to manage diversity will encounter two basic problems. The first is the potential conflict between your organisation’s goals and the cost of implementing change. The second is your prejudice and that of your senior colleagues. If you are not prepared to face these two problems honestly, progress will be uncertain and setbacks likely. You must also face up to the fact that, if you propose to make any significant culture change, this will involve cost in terms of senior management time and frustration, as well as money.

You will need to take a fresh look at the whole question of managing people. Managing diversity is much more than equality of opportunities for women and race relations, although it includes these. Managing diversity today means considering individual people, and working out how to ensure that they are treated fairly, valued and provided with opportunities for development and progression. This involves seeking out and removing the obstacles that individuals face when they look for advancement, whether this relates to gender, race, creed, background, personality, sexual orientation, lifestyle, age or disability.

Senior people must move beyond the point of thinking of people as mere members of this or that group - men, women, Asians, disabled or old. The new paradigm is to consider every person in the organisation as an important individual, worthy of respect, fair treatment and the opportunity to develop and to contribute. Business gains arise from developing and using the potential of all employees and ensuring that the workforce is recruited from the widest possible population of appropriate job seekers.

The authors describe a number of key policies and procedures that an organisation must address if the management of diversity is to make a full and positive impact on business success. These include: recruitment; disability; induction and initial training; selection; appraisals; reward systems discrimination; harassment and bullying; discipline and grievance; language and culture; and information systems (each of which are looked at in some detail in the book). The fundamental aim is to integrate diversity policies and procedures into the way the organisation operates, not to impose a set of ‘extra’ demands.

Managing diversity is not just an internal affair. It also applies to the way people in the organisation treat the people outside with whom they come into contact, such as customers or suppliers. The organisation should not only treat such people with respect, it should expect external people to treat its employees with respect as well. This should be written into the operating policies. Don’t hesitate to take action if someone who is a customer or supplier, or who works for them, deals disrespectfully with a member of your staff.

An action plan for managing diversity strategically consists of the following steps:

1. Secure top management commitment. Take the most senior group of managers away on a weekend workshop, perhaps with a facilitator. If any member of the top team is not behind the approach you propose to take, this will cause problems. In the first instance, you may simply agree to explore the issues and conduct a survey.
2. Collect information. Conducting any survey will raise expectations and you will need to be prepared to respond. The information that you collect must include people’s perceptions. The results will need to be considered by the top management team and should influence further action. Be prepared to make the results of any survey public.
3. Recruitment and selection. A comprehensive diversity policy is founded on the notion of respect for every individual so review recruitment and selection policies and practices to ensure that they are in line with your new aims and objectives. For example, ensure that when you seek to fill posts your advertising will reach people in ethnic minorities, or older workers, or people with disabilities, and that it will be attractive to them.
4. Terms and conditions. Ensure that your employment terms do not (for example) discriminate against single-sex couples in respect of pensions or leave entitlement. Include specific reference to the avoidance of harassment or indirect discrimination in initial training.
5. Induction and initial training. Prepare a general induction checklist and adapt it for the needs of each individual recruit. Remember that an individual’s learning is often influenced by their cultural background and that a group of people including mixed ethnic backgrounds, gender, age and disability will not learn at the same rate or in the same way.
6. Review communication channels. If you don’t take special steps to make it easy for people to report acts of discrimination, bullying or harassment, you will not find out about them until the incident has caused someone to resign or to appeal to an external body for compensation or redress.
7. Performance appraisal. People need to be clear about the basis on which promotion is granted so that they can work methodically towards achieving this goal. When considering internal candidates, it is helpful if you can use appraisals from more than one manager. Individuals who perform poorly with one manager can shine under the guidance of another.
8. Training and development. Organise some ‘respecting diversity’ workshops, starting from the top and cascading down. Ensure that every manager is aware of the new diversity policy and is trained to put it into practice in the everyday work of the organisation. Management training should include discussions of real issues and incidents and how they should be managed. The aim is to sensitise managers to the issues and provide insights into the kinds of behaviour that will be expected. Issues that need to be highlighted include: the positive nature of the management of diversity; the benefit to the business from a highly motivated diverse workforce; and the importance of valuing difference, not merely coping with it. Senior executives should set an example at all times and be prepared to be involved in training programmes to convince people that the organisation is serious about diversity. Behaviour cannot be changed overnight and follow-up in the form of coaching or counselling may be required.
9. Reorganisation and redeployment. Reorganising responsibilities is always stressful for staff and many organisations are poor at handling communications here. Looked at positively, the changes provide opportunities for distributing responsibilities in a way that utilises the talents of every member of staff. But be careful to avoid unfair discrimination, particularly against older workers when redundancies are involved.
10. Maintain momentum. How do you keep the thing going? One approach is to appoint someone as a diversity manager to co-ordinate activities and to promote improved diversity management. The top management team will, at least, need to appoint someone to monitor progress and report back at intervals. Monitor what is going on through periodic surveys and organise exit interviews, as these can be a means of alerting management to issues that employees may be reluctant to raise in other circumstances. Evaluate each initiative, relating achievements to the aims and objectives specified at the outset. Identify criteria against which to measure progress, including hard and soft criteria. Hard criteria are concerned with numbers: for example, the ratio of women in management positions, or the ratio of black people promoted to managerial positions. Alongside this are soft measures such as people’s perceptions about fairness, equality of opportunity, etc.

Ultimately, you will need to ensure that the positive gains of your diversity action are clearly identified and communicated to top management to maintain their motivation. Diversity initiatives will fizzle out unless the value of the programme is recognised at the highest levels and throughout the organisation.

Opening up the organisation to a wider group of people seems to be wholly laudable. But does it need to be tempered with just a little caution? The book Information warfare suggests that firms in future may be vulnerable to information attacks facilitated by disaffected employees working within the organisation. If this is true, it may, unfortunately, be possible for organisations to be too open.

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