Diversity FAQ’s 21: Where should diversity as a strategic function ‘sit’ in the organisation?


This is an important question. One that really began for me whilst pursuing my post graduate studies in Human Resource Management in 2004. I had actually never really heard of ‘diversity’ despite already having had some experience working in the HR recruitment function. There were a number of compulsory modules we had to take as part of the HR course – diversity was not one of them – it was an optional module which I choose purely out of curiosity. One of the first questions I remember asking the tutor during the course, more so upon realising its strategic interconnectedness to the HR function, was why ‘diversity’ was put forward as an optional module, and not as a compulsory one?? Was this reflective of the organisational mindset as to where diversity as a strategic function should actually sit? Indeed, little did I know at the time that this question would be one that would occupy not just my thoughts, but the thoughts of the HR and business community for a while to come…So, what’s my view? Where should diversity as a strategic function sit? Should it sit within HR, within business operations, at corporate level or indeed as a function by itself? The vivid picture that keeps coming to mind is the inner workings of the wheels of a watch: Each wheel is complexly arranged such that as one wheel turns, it interlinks with the turning of the wheels of  the other, each independent but yet totally dependent on the other for their movement. As a strategic function, diversity is like one of the intricate and necessary functional wheels such as HR, Marketing, Finance, Payroll, etc – that keeps the whole organisation ticking…purposively…

But that having been said, isn’t there a greater strategic complexity here? I think so. For going back to our watch analogy, what is it that provides the ‘energy’ in the first place that fuels the movement of the wheels of the clock?? What supplies the energy for the watch’s operations? Put another way, what strategic components should an organisation have that ensures the wheels of its operational processes are continuously ticking??

The answer lies in the phrase ’organisational culture’ – a much spoken about ‘theory’ in HR, OD and business and which represents the ‘softer‘ side, or what I often refer to as the ‘heartbeat‘ of an organisation. ‘Culture’ refers to the ‘personality’ of an organisation – its ethos, values, and behaviours out of which its strategic ‘mission’ and ‘vision’ are formed. A fellow colleague put it better: “Culture to an organisation, is what personality is to an individual”. Diversity is the ‘source-code’ or the ’DNA’ of organisational culture and represents the ‘behaviours’ that it deploys as an organisation which ensures it a competitive advantage through its services, customers, and indeed its people. Viewed from this perspective, diversity is the ‘energy’ that drives the organisational operations, positively impacting the performance of HR, Marketing, Finance, Payroll, etc. It contributes fundamentally to setting the strategy of the organisation at Board level, and at the same time intricately works with and alongside the various organisational functions to operationally deliver the businesses objectives. There are some good examples we can look to for inspiration in this regard:

David Thomas, in a Harvard Business Review article entitled “Diversity as Strategy” suggests that IBM, in 1993, under the able leadership of CEO Lou Gerstner, turned the organisation around through proactively engaging the workforce diversity of its people – operational managers particularly – as well as all staff, and through them, their customers, using the initiative as an area of strategic focus leading to the well-documented growth in IBM’s business operations. Indeed, in 2001, the organisation’s activities accounted for more than $300 million in revenue compared to just $10 million in 1998. When asked what had driven the success, Lou Gerstner responded: “We made Diversity a market-based issue, its about understanding our markets which are diverse and multicultural…and deliberately seeking new ways to broaden our range of customers…”.

The point being made here is not to wave financial figures or balance sheet profitability in the face – as though to suggest that this is the ‘be all and end all‘ of an effective diversity strategy. Not at all. Rather, it is to highlight that IBM’s approach of strategically leveraging the diversity imperative at CEO level, whilst actively working in tandem with the operational business functions, was what lead to its much publicised success story. From a personal viewpoint, Lou Gerstner’s approach not only vividly demonstrates the strategic business imperative of diversity, but importantly, in terms of a direct response to our topic of discussion, lays out a blueprint or map  of where it ought to ’sit’ strategically within organisations. And it appears that there are examples of good practices from a number of organisations that appear to have ‘borrowed‘ a leaf from Gerstner:

Whilst doing some research this week for example, I stumbled into MasterCard’s diversity strategy entitled; “Advancing Diversity and the Culture of Inclusion” An interesting read I must say. In the document, it suggests that “in order to achieve (its) vision of advancing commerce globally, (it) recognised that (it) had to understand the evolving payment needs of customers, consumer, and merchants, and develop innnovative solutions to meet those need”. But what was also impressive was the fact that it had appointed a Chief Diversity Officer (CDO) onto the Board tasked with the global mandate of driving this strategy from the very top-tier of the organisations through its various operational locations. Now, “the proof of the pudding is in the eating” they say, and the MasterCard brand is a strong one and a testimony to its strategic success. But the point being made is that recognising the strategic imperative of diversity is the necessary first step to understanding where it should ‘sit’ in the organisation, as it sends out a positive message and provides the inspiration and drive needed for making a lasting difference, creatively and competitively for an organisation’s workforce.

So, to ensure diversity ‘sits’ the very top of your organisation, as well as within and alongside all areas of the business function providing the ‘energy‘ that keeps the ‘wheels‘ of the organisation moving, a few  suggested steps may be worthwhile noting:

  • Consider appointing a Chief Diversity Officer (CDO) to the Board – specifically tasked with driving diversity as a core strategic function and tangible competitive advantage source. This sends a clear message of the strategic intent and mindset of your organisation to your people and customers.
  • Ensure line management, instead of HR own the diversity strategy – visible and on-going involvement by senior operational business managers is critical for embedding diversity as a ‘normal’ way of doing drawn directly from the passion shown by the CEO, the CDO and other top executives
  • Diversity is a source of competitive advantage only when it represents a deep commitment to your people and is linked to the inherent values, ethos and behavioural norms of your organisation. Therefore, re-trace your steps, re-discover that ‘vision’ and ‘mission’ and re-map back into the business accordingly.
  • Demonstrate how diversity ties in directly with the your organisation’s business strategy and link diversity initiatives to organisational success stories across the range of functions
  • Sell the business case for diversity ensuring employees understand and embrace it on a day to day basis. A key way of doing this is by developing working practices that promote inter-dependency and thereby encourage creativity
  • Don’t just talk, set clear targets, translate into specific actions, align responsibilities and evaluate effectiveness of plans – this will ensure diversity becomes a regular agenda at business meetings
  • Treat your human capital as your greatest asset and investment – seek to actively recruit, and importantly, retain your best talent in a fair, inclusive and transparent manner. Remember: expanding markets and further product and service development requires a diverse talent pool in today’s global marketplace, so begin the ‘search process’ early and tap into previously untapped areas for securing people reflective of the organisational vision and your diverse customer base
  • Ensure to incorporate an ingrained culture of team working at all levels of the organisation. Team working is one of the indirect ways of facilitating a culture of diversity and the ‘installation’ of the values of inclusion in the workforce leading to greater performance driven outputs
  • Reach out to diverse markets – research shows that the most profitable companies are those that tap into the increasing buying power of ‘niche’ groups and communities
  • Prepare for conflict! – diversity is about positively managing differences toward creative and productive ends. Ensure to advise that conflict will be a ‘natural by-product’ of embracing difference during the early stages of the process of change

A journey of a million miles, they say, begins with just one positive step: Taking action to implement, at least, some of the suggested steps above, will assist begin the process of ensuring that diversity as strategy ‘sits’ in the very DNA of your organisation, influencing its strategy as it steadily makes it way to the very top – its rightful place.

Jude-Martin is Director of Diversity is…a consultancy focused on providing a fresh and innovative approach to diversity through the provision of services covering Strategy, Assessment, and Development for ensuring effective people management in the 21st century global business context.

For more information contact: www.diversity-is.com judemartin1st@yahoo.co.uk or call 07738427180

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8 Comments

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8 responses to “Diversity FAQ’s 21: Where should diversity as a strategic function ‘sit’ in the organisation?

  1. Mark Berthelemy

    You could replace the word “diversity” in this article with “learning” and it would still work. They are two parts of organisational culture that are missed, at a strategic level by many companies.

    • Hi Mark,

      Thanks for your comment and I couldnt agree more – Diversity and Learning share similar ‘issues’ in terms of ‘liberating’ the terms from from existing preconceptions which prevent it from being engaged proactively by businesses.

      But is that to say that we should actually consider a name change? What would be the implication?

      Kindest

      Jude-Martin

  2. I have worked for IBM UK for 3 years and there were no doubt in my mind that diversity was a huge part of the success my department at the time (Global Financing), “DIVERSITY” as a way of daily work was present everywhere and for someone like me (coming from a small African country) this was quite awesome to feel part of something as big as IBM an not been treated as an outsider (or being different).
    But unfortunately this isn’t something you could say for all business or companies in Europe, mainly.
    As @Mark Berthelemy said it is all about “learning”.

    Regards,
    Patrice

    • Hi Patrice,

      Thanks for your response.

      It is always good when a person from an organisation confirms our content. IBM has long been a standing model of the business case and I think other organisations should take note of the lessons learnt.

      I had a look at your blog – very interesting.

      Do ensure to stay in touch.

      Jude-Martin

  3. Ron

    Diversity is certainly a fine goal, as long as it doesn’t get twisted into affirmative action. The number one priority should remain hiring the best employee whoever they might be. Too often HR seems to turn it into “we need 10 of A, 10 of B, and 10 of C”. This leads to disgruntled employees and an inefficient company.

    • A very pertinent point about affirmative action – and one which I think sits at the heart of some of the issueswhy the fundamental strategic element of diversity is missed in some organisations.

      Many thanks for your comment.

      Jude-Martin

  4. The challenge with Diversity being in HR is the focus is on Diversity and not Inclusion. The result is that companies spend thousands of dollars on recruiting diverse employees who leave within less than 5 years because there is no inclusion. Placing inclusion at the CEO level helps drive inclusion through the business. For example, while your HR leader can drive inclusion in recruiting and succession planning, they have a harder time integrating inclusive practices and behaviors in such things as team selection or project assignments. HR leaders have less impact on connecting ERG/Affinity groups to marketing initiatives and innovation efforts. You do not have the full range of motion required for real change when you place your D&I leader under the HR umbrella.

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