Raghav had a packed room in San Diego for a presentation on diversity — the overriding theme of which was how to make a business case for diversity. The need for a solid business case for a diversity program appears to be overlooked more often than not. Much of the literature on diversity suggests that the benefits are obvious, though this is contradicted by available evidence from multiple studies. Telling the faithful that they’ve been worshipping a false god never goes over well. As expected, many in the diversity community have attacked the motivations of the researchers or said that the evidence is illogical.
While the reactions are understandable, what’s not is why the advocates of diversity don’t do much to help their cause. Instead of making an effort to demonstrate where diversity can add value, the approach has been to keep insisting that diversity is beneficial for employers in general, without any proof to support the claim. It should be taken on faith that investing in diversity is a good idea and that questioning the value indicates opposition stemming from bigotry or ignorance.
A Solution in Search of a Problem
Diversity is EEO plus. Equal employment opportunity alone would ensure that there was diversity in the workforce for most employers. An employer would have to work very hard to reach a state of no diversity among its employees. With women making up 51% of the population, African Americans 13%, Hispanics 15%, and Asians 4%, the employer would need to be actively engaged in discrimination to avoid any diversity. Any employer that does so would not be around for long.
So what exactly is the problem that’s being solved by diversity? One person mentioned that companies should promote diversity because it’s the right thing to do. That reflects the mindset of many in the diversity community — do the right thing, suggesting that not doing so would be doing the wrong thing. That is why so many of these programs exist in a vacuum. They give no thought to the wider context in which organizations exist. All organizations exist for a purpose, and for companies the primary one is profit. For others it may be something else, but it’s not likely to be one to support a social program with highly questionable benefits.
Finding a Purpose
Organizations need a reason to invest in diversity. We know of one organization that has an aging workforce. With many employees planning to retire soon they are actively working to replace this talent with entry-level college graduates. Looking at the demographics of the better universities and disciplines shows that the student population is by definition diverse because the population reflects the best minds from around the world. To be successful in accomplishing its strategic objectives, this organization needs to be able to attract and assimilate this diverse population of students — otherwise it will fail. Second, its clients are diverse and demand not only world-class capability to fulfill their requirements, but they also want to work with an organization that promotes diversity. For them, doing this right means a competitive advantage when competing for revenue.
That’s a pretty clear-cut example of a reason why an organization will benefit from diversity. It’s focused on addressing a very specific need, which if not addressed will result in undesirable consequences, directly impacting the purpose of the organization. It also takes a comprehensive view — recognizing that the diversity effort would need to go beyond recruiting and also make an effort at assimilating diversity hires.
This is markedly different from the more typical situation where diversity programs are championed by HR with little or no input from line managers and no clear purpose or plan for execution. That produces some dramatic flourishes that have PR value but not much else. Recruiters are caught in the middle: forced to accept diversity-hiring goals that serve no purpose beyond making some metrics look better, but often failing in overall hiring because of unrealistic assumptions and no support outside HR. As many an HR generalist has discovered, many managers would prefer to be on the frontlines in Iraq than hear yet another diatribe on the subject.
Making the Business Case
A business case for anything starts with a problem definition. It includes a description of the proposed solution; an explanation of assumptions used as the basis for proposing the solution; an estimate of the likely costs; factors that may affect the outcome; measures of success; and a plan for execution. In the absence of these, it’s difficult to take the effort seriously.
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Problems that may be addressed by diversity can include goals such as creating a product that requires the skills of a diverse group of individuals, winning or keeping a government contract, or attracting a diverse pool of talent. These problems are not universal by any means, and just finding more candidates that are diverse in terms of race and gender is no guarantee that they will be solved. A recruiting effort to find diversity candidates would need to determine if these individuals have the right skills, are willing to share in the goals of the organization, and possess the values of the organization or are willing to adapt. The business case would include a description of why and how diversity hires would deliver the benefits required, how much time it would take to realize these benefits, and what would be done to support the diversity hires to help them succeed.
The last is an essential and often overlooked part of diversity programs. There must be an effort to help diversity hires integrate into the new community and organization. One of the attendees in San Diego reported that they had difficulty in attracting and retaining diverse candidates in Denver. Many of those hired left because they were unable to find friends or social networks in the area. Given that the population of Colorado is overwhelmingly Caucasian, this should be no surprise. In the absence of social networks of particular racial or ethnic background, it becomes incumbent on the employer to create an environment that diversity hires are comfortable in. So the business case would also need to address how diversity hires would be assimilated. This may well be outside the capabilities of most organizations to do, but that doesn’t change the fact that it’s necessary. If it’s not possible to do so, then the diversity program should recognize that success may be very limited.
Some organizations have done so — the Army, Deloitte, and Sodexo (the latter is written up in the July/August Journal). In each case, it has taken years or decades, a very focused effort, realistic goals, and clarity of purpose.
Diversity is not without value — in certain circumstances and for some employers. But there is no logic or evidence that supports diversity as a program that’s good in general, and none at all for limiting these programs to race and gender. If there was a real (or even imagined) social or economic problem that would be addressed by diversity, you can bet Congress would be all over it. The three presidential hopefuls have not said a word on the subject. Again, EEO alone would ensure that a workforce would be diverse, so mounting a special effort at improving diversity requires special circumstances. Those who have determined a need for diversity should make an effort to address all aspects of a program that can make a diversity initiative successful. Supporters of diversity would do well to take a businesslike approach to their cause.
An audience member in San Diego had asked what advice should be given to a newly hired Director of Diversity. The best advice would be to work with line managers in identifying problems that could be better solved by diversity and helping recruiters in getting aligned with those goals. That would include setting realistic hiring targets and developing a process to help diversity hires succeed. What not to do would be to preach the benefits of diversity without evidence to back up the claims and a strong rationale for investing in it. As many a missionary has discovered, getting converts is not easy, no matter how strong your own faith.