Why Diversity Matters Now

crl_mastheadDiversity and inclusion may be the most poorly understood issues in business today. While many of us have come to believe that investments in diversity and inclusion are primarily about compliance, political correctness, sensitivity or special treatment, the truth is something different.

Diversity means difference. Difference can show up a lot of different ways, but within the context of work we can probably focus primarily on identity diversity (age, race, gender, geography, etc.), cognitive diversity (different thinking styles, mental orientations, and mental tools), and behavioral and communicative diversity. Diversity and inclusion work at its core is about sustainable and profitable practices — especially the effective and efficient identification, support, and deployment of talent to achieve business objectives.

Not only is there still need for clarity on what diversity and inclusion are, we should also get clear on this business case stuff. Do not be confused by what you have heard or read claiming that there is no business case for diversity, or that the business case is somehow fuzzy. Hogwash. Again, organizational diversity and inclusion work are largely about successfully finding, keeping, and using talent, which is increasingly business critical. The business case for diversity and inclusion is alive and well.

A specific business case is dependent upon the organization and the nature of the actual investment, but a few of the sources of value (explored in more depth in the December 2009 Journal of Corporate Recruiting Leadership) a case can be built on include:

Competitive Advantage

For more and more organizations in more and more industries, innovation is the new opportunity for competitive advantage. This is no secret, as there has been a great deal of discussion and analysis regarding the evolving role of innovation. Innovation is about more than just bringing new products or services to market. It also includes other aspects of business, such as approaches to collaboration, talent management, and engaging new markets.

Despite our affection for the myth of the lone genius, innovation does not take place in isolation. It happens at intersections. It happens when different experiences, perspectives, professions, organizations, and cultures rub up against each other. Without an understanding of, and some appreciation for, the value of difference (in opinion, identity, culture, profession, perspective, etc.) organizations will be hard-pressed to drive sustained innovation. Frans Johansson examines several great examples of this in The Medici Effect, including the story of the great Bletchely Park collaboration, where an incredibly diverse group of characters gathered to break the German coding system during WWII.

Demographic Changes

We are approaching a point where racial and ethnic minorities and women will represent 70% or more of new entrants into the workforce. Organizations that are not good at attracting, engaging, and retaining women and people of color need to fix that quickly, or they are going to be competing for a shrinking percentage of the available talent. Companies that only fix part of this will find themselves with costly retention and engagement problems. Real commitment to workforce diversity is no longer optional.

Talent

Regardless of our intentions, diversity is one of the social variables that can drastically diminish our ability to actually identify talent. In Blink, Malcolm Gladwell shows us an example of this from the world of art. In the not-too-distant past, classical music was largely the domain of white men. “Women, it was believed, simply could not play like men. They didn’t have the strength, the attitude, or the resilience for certain kinds of pieces. Their lips were different. Their lungs were less powerful. Their hands were smaller. None of this seemed like prejudice at the time. It seemed like fact, because when conductors and music directors held auditions, the men always seemed to sound better than the women.”

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As part of the push for legal protection, benefits, and fairness in hiring, musicians wanted the audition process to be formalized. This included erecting screens between the auditioner and those evaluating them. “In the past 30 years, since screens became commonplace, the number of women in the top U.S. orchestras has increased fivefold.”

Some of the women who stood out the most in these new auditions were the same women that had auditioned numerous times before the screens were added without making the cut.

I am not talking here about hateful people intentionally discriminating against others. That is another topic altogether. I am talking about human nature getting in the way of our identification of talent. If we want to improve our ability to really identify talent, we have to be aware of the influence of human nature and work to offset it as individuals and organizations.

People, teams, and organizations that are indeed serious about talent must also be serious about diversity and inclusion. Once, again, I am not talking about being tolerant or being sensitive. I am talking about understanding the value of difference and understanding what can easily and quietly get in the way, regardless of our intentions or our character.

The future of your organization may very well depend on it.

Joe Gerstandt is a co-founder of Talent Anarchy and serves as Chief Rock Thrower. Joe has worked with Fortune 500 corporations, small non-profits, and everything in between. He also speaks at numerous conferences and summits. He is a contributor to the Workforce Diversity Network Expert Forum and his insights have been published in Diversity Executive, HR Executive, The Diversity Factor, The American Diversity Report, the Corporate Recruiting Leadership Journal, Associations Now and other print and on-line journals. He is co-author of Social Gravity: Harnessing the Natural Laws of Relationships and also serves on the board of directors for the Global Diversity and Inclusion Foundation.

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34 Comments on “Why Diversity Matters Now

  1. Just finished reading “The Wisdom of Crowds” by James Surowiecki, which makes similar points in terms of competitive advantage. Excellent examples and a quick read. Thanks for recommending it, Joe.

  2. So Malcolm Gladwell determined that inserting a screen between auditioner and singer increased selection of women by 500%? Really? I wonder what two screens would have done? Figaro in soprano – now that would be interesting!

    Gerstandt sermonizes on diversity, but if there is an effective C-level exec out there today that wouldn’t find this patronizing, anachronistic and uninformative, I haven’t met her.

  3. Great Article Joe! it hits the nail right on the head. it baffles me at times why some HR decision-makers do not see a great need for a company-wide committment to diversity in all its specifics.

  4. Here’s a crazy idea… how about we just hire the most qualified applicant for the job, irrespective of their race, gender, etc? Don’t discriminate, period (that goes BOTH ways). If you really are looking only at the talent of the person, the diversity will portion will take care of itself purely through probability of numbers.

  5. I agree with you, David (in fact, I hope 100% of people agree that the most qualified applicant should be hired). But what about in cases where there’s a systemic/built-in bias toward one or more groups?

    I’ll give you an example. Let’s say a university has a legacy program. Because you attended, your kids have an advantage when they apply. Now say the alumni makeup of the college was highly skewed toward one group or another. Therefore, there’s a systemic disadvantage for minorities, and the university may need a special outreach program at the very least to appeal to and attract minorities — though not to let them in if they’re not qualified. Similarly – say you have a corporation and have an employee-referral program wherein referrals have a big advantage. Depending on the makeup of your company, minorities could be at a disadvantage, since people tend to know people like them. So, again, you may need to advertise in publications, conferences, sites, etc. that are commonly viewed by certain minorities. I’m not suggesting, however, that people should be hired if they’re not the most qualified. I’m suggesting that it’s not true that “diversity will take of itself” if the pool of applicants you’re looking at is not diverse because of programs you’ve instituted.

  6. Good catch Todd, but what you are not saying is that govt programs [essay on 700 page OFCCP manual omitted] that intend to enforce this obviously sensible casting of a wider net actually end up hurting the very people they are trying to protect.

  7. Joe,
    Great article as a certified Diversity consultant, I see a major part of this issue is, that a large number of HR decision maker’s staff members and hiring managers really do not understand what Diversity really is? It’s not just about hiring as one person states. With all due respect it must be a part of the overall organizations plan. Look beyond the color of one skin. The bottom line is companies need to invest in people, recognizing that diversity is in everything and everyone. Diversity is about accountability and it starts at the top. Invest in people!

  8. David.

    Shame on you!!!

    Using the old fashioned common sense business model that builds great organizations by hiring the best employees regardless of any factor other then qualifications is just wrong. What kind of a person are you?

    We are all equal and need a rainbow of shapes, sizes, colors, weights, heights, widths and heaven knows what else if we are to continue our inexorable slide into mediocrity and sub par deliverables.

    I warn you David. Don’t make me report you to OFCCP because if I do, the punishment is having to listen to Al Gore speeches on global warming and you don’t want that!

  9. Good points, Todd. Although I would argue that universities have no business having a legacy program. What bearing does who my mom or dad was have on my qualifications to attend that university? I say get rid of that program and you won’t have to give minorities an unfair advantage on the other side to compensate. As far as the employee referral issue, there are several legitimate reasons why hiring referrals is smart business (specifcs are perhaps for another article), given, of course, that they are the most qualified candidates. In the end, often times programs that are intended to “level the playing field” wind up doing the opposite. In my opinion, discrimination of any kind, against any group (even against the “majority”) is equally wrong.

  10. I agree about the legacy programs. I also agree with your comment that discrimination is wrong, period, whether against a minority member or a majority member.

    However, I just think it’s more complicated than saying, “I’m going to pick the most qualified applicant. In fact, I’ll choose between these 40 resumes, not even see the people, not even interview them, and not even know their names.”

    Advertising (among other things) makes it more complicated. What if those resumes came in because I posted the job only at the Whole Foods over here on Ventura Boulevard, which I’ve been to many times and which does not have a demographic of customers that’s anywhere close to representative of the general population? If all my 40 resumes came from the Whole Foods bulletin board ad, that doesn’t seem level to me.

  11. Sure, but why would you only advertise at a place like that? Most of the advertising that I do (I can only speak for me) is on much broader venues that are open and accessable, as well as accessed, by a very diverse population. I don’t do that because I am trying deliberately to be “diverse” in the way that people normally define “diversity” these days. I do it because I want the best chance at seeing the best people and that only happens when you cast a wide net. I think anyone else who has the same goal would go about finding people in a similar fashion. Ultimately, you can always point out how a particular method or system is not perfect. We live in an imperfect world. However, in my experience, every time you try to put measures in place to correct these perceived injustices you only wind up making things worse.

  12. A good article and kudos to Joe for summarizing the case for diversity now. I particularly like the “screen” example which demonstrate unconscious or unintentional discrimination. Metaphorically, we need to be developing screens to eliminate generational bias, mask physical attributes which are not job related and overcome favoritism in the selection process.

    I would, however, like to see more on the on the competitive advantage dialog. As a proponent of diversity, I lust for more conversation on the value added that I can use convincingly in discussions with decision makers. Can someone point me to a case study or other evidence of a positive ROI on the investment in diversity? Money matters and commitment requires more than a nod of the head followed by lip service. Otherwise it sounds like success is defined by starting with the conclusion that it is a good thing and then weakly justifying it because it is a good thing.

  13. Very interesting comments.

    1) People tend to hire folks like themselves- not an inherently bad thing, but something which needs to be watched. An implicit definition of who is “best” or “most qualified” often includes: “is someone like me.” I worked for a company (often held up as an exemplar of good hiring practices here on ERE) where there was a diversity program which basically meant: “We hire all types of (mainly white) upper-middle class people, just like us!”

    2) It’s funny how few people who are arguing that we now have a discrimination-free society primed for meritocracy come from historically discriminated groups. Do you believe (as some apparently do) that:
    “Well, we ended slavery and “allowed” women to vote: now the playing field is equal….”?

    3) David George: “In my experience, every time you try to put measures in place to correct these perceived injustices you only wind up making things worse.” I find it interesting how in one brief sentence, David argued against the Civil Rights,- Women’s Rights-, GLBT Rights-, Disability Rights-, and Elder Rights movements. David, do you feel that the abolition of slavery was morally justified, or do you feel that intruded on the sacred property rights of the slave owners?

    Happy Turkey Day, Folks!

    Keith “Jive Turkey” Halperin

  14. Hey thanks for reading and commenting, sorry I have been AWOL today. On a bit of a Griswold family holiday trip and have been “off-line” most of the day.

    Glad you liked Wisdom of Crowds Elyse, you might also enjoy Crowdsourcing by Howe, makes some similar points and provides some good research and examples of companies really tapping into the value of diversity in their workforce and beyond.

    Thanks for your sermonizing on my sermonizing Gregg, my experience with c-suite execs regarding diversity and inclusion has actually been quite different.

    I think the response of “let’s just hire the best person” is interesting for a couple of reasons.
    1- We talk about “hiring the best person” like it is a science…like we can measure “best person” like we can measure a pound of flour. We can’t. Despite all of our wonderful intentions, fancy metrics and shiny technology, we still do not always hire the “best person.” There is a lot of research that shows that we are better at hiring people that are like us than we are at hiring the “best person for the job.” I think that we start form an inaccurate place when we talk about it like it is an accurate and perfect science. Regardless of our intentions there are a whole lot of things that influence our evaluations of others and many of them have absolutely nothing to do with talent or ability.
    2- If we care at all about actually building teams that can learn together and innovate together, then diversity is actually one of the indicators of talent. Especially when we look at cognitive diversity, there is a considerable amount of evidence that diverse teams can outperform teams with less diversity.

    I actually just wrote a post about this last week: http://www.ourtimetoact.com/our-time-to-act/2009/11/19/talent-or-diversity.html

    One other point I will throw in real quickly is that my post was not about compliance. I have my own issues with the how and why of compliance related to these issues. Beyond compliance I believe that there is some real business value here…diversity can be valuable to an organization.

    Thomas- I think there are some good examples out there of ROI, but it kind of depends on what kind of investment you are talking about, because the actual efforts can be focused on a number of things (recruitment, retention, engagement, innovation, market share, etc.). Allstate is a great example (with huge numbers)of an organization that has capitalized on the shifts in demographics and buying power in consumers, I have worked with some organizations that have eliminated their disparities in retention (and increased retention across the board, inclusion benefits everyone)…and retention and engagement also lead to pretty big numbers. Dr. Edward Hubbard is a D&I ROI guru, he has some books that are full of business cases and case studies with detailed numbers. Diversity Inc magazine and Diversity Executive magazines also provide some of that info.

    For what its worth.

    Have a Happy Thanksgiving.

  15. Joe,
    Talent and diversity do symbiotically thrive on each other, and it’s certainly human to let egos and petty prejudices artificially constrain out better options.

    What business person does not get that? I’ll tell you. Bad ones. The kind that go out of business. Free markets kill off the diversity-starved.

    The compliance industry emerges then as the elephant in the parlor that David George persuasively points to in his comments. Essays like yours that give scant attention to it mitigate their effectiveness by arousing a suspicion fair or not of “what does this guy want to sell me?”

    A black (whoops) irony of the diversity industry is that it perversely and systematically excludes all of humanity outside of national borders. You in your section on demographics and Keith Halperin in his humorous litany of marginalized groups make no effort for example to point out workforces in places like Kenya or the Philippines.

    Real champions of diversity are profit-maximizers that cast the candidate net out far beyond the false boundaries set by the compliance industry.

  16. Keith,

    Let me address your comment about my statement… If you read carefully, I said “perceived” injustices, which is entirely different than actual injustice, i.e. slavery. I think it is unfortunate that you choose to take the whole sliding scale and boil it down to the extreme of something like slavery, or women’s voting rights, which are wrongs that were rightfully corrected. It is that kind of thought process that keeps people divided, and, as far as I understand it, the whole idea of diversity is the antethesis of that.

  17. Thank you, David. You bring up an interesting point: ALL injustices are “perceived” by someone- there is to my knowledge no objective standard for injustice. What you may regard as an inevitable, natural consequence, I/we may regard as injustice. Numbers act as a guide, but do not dictate:
    if a million people complain of an injustice, it MAY be more likely than if a single person complains about a particular incident (claiming it to be unjust), but that isn’t certain.

    Also (if I understand you properly), I disagree with your definition of diversity, as it seems you are equating diversity with unity or assimilation. IMHO, diversity is not designed to make sure everybody goes into the Anglo-American “melting pot”, but rather that we all “get a seat at the dining table and a fair share of the meal.”

    Hope Everybody had a Great Thanksgiving,

    Keith “Makes a Decent Pumpkin Pie” Halperin

  18. I completely agree with you, Keith, and that is my whole point. The way it should be, in my opinion, is that everyone gets an equal opportunity for success (aka “seat at the table”) in their chosen pursuit, irrespective of superficial and irrelevant (when I say irrelevant, I mean in the sense that these things are not relevant to whether or not you are qualified to be an Accountant, Engineer, Doctor, etc) considerations like skin color, national origin, gender, etc.

    Once you have your seat, I believe you have to earn your share of the meal.

  19. Thanks, David. We do agree here.
    I think where we disagree is how close to that goal of equal opportunity for all (not equal results for all) we are, what needs to be done to further this along (and not reverse progress).

    Cheers,
    KH

  20. If you can figure out a way to create a system with equal opportunity for all groups, without doing it at the expense of one group or the other, let me know. I would like to think that it is possible, but I am afraid there are too many entrenched interests in this country who would cease to benefit from the status quo to let that happen.

    Thanks for the thoughtful diologue.

    All the best,

    Dave

  21. Perfection is impossible- there are inevitable tradeoffs involved. What we CAN do is work toward the improvement of those who have the least. I think we still have a long way to go:
    This index measures the degree of inequality in the distribution of family income in a country. We are similar in structure to countries like Mexico, Venezuela, Argentina, China, and Malaysia. The only prosperous Western countries that approach our degree of inequality (two categories higher) are Portugal and New Zealand. Even France (which IMHO is much worse at treating its disadvantaged groups than we are) has a better overall income distribution.
    http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009.png

  22. Considering the buying power and labor force increases amongst Latin American’s and African American’s, business planners from any industry would be foolish to dismiss the impact these emerging markets can and/or will play on their future.

    Here’s some data to back that up:
    • From 1990 to 2013 Hispanics as a % of U.S. Consumer Market share will have doubled
    • Hispanic buying power from 1990 through 2008 grew 349%, African American buying power in the same time frame grew 187%
    • Median Age: Caucasian 40.6, African American 31.4, Hispanic 26.9

    A lot of discussions on corporate diversity programs revolve around the most difficult to quantify benefits, and quickly turn into the “hire the best candidate” debate we see on almost every diversity discussion board.

    Reality is the best candidate’s gravitate toward companies who position themselves to capitalize on these emerging markets without neglecting their existing markets.

    I’d encourage those looking for more data to read “The Multicultural Economy 2008” published by Jeffrey M. Humphreys from the Selig Center for Economic Growth, Terry College of Business, at The Univer¬sity of Georgia. http://www.terry.uga.edu/selig/docs/executive_summary_2008.pdf

    I’ve also posted a presentation that identifies why companies are challenged to hire top multi-cultural talent and creates a case for diversity hiring initiatives at the college/university level. Here’s the link if interested http://tinyurl.com/yj6cu6z

  23. It would seem that hiring the most qualified individual would be a no-brainer . . . until you start dissecting the thoughts that enter into decisionmaking and wasn’t realize the subtle and not so subtle biases that afflict us. For example, the most qualified candidate may be the 26 year old recently married women . . . oops, maybe she’ll become pregnant and that $30000 agency fee I just authorized will be “squandered” because she wasn’t with us for three years (even though few remain with a firm that long). How about the exceptional IT person whose oral communications skills at this stage in life were not perfect . . . even though they were not expected to interface with anyone other than their immediate (white, black, Latino) manager?

    We can go circumstance by circumstance and see how alleged core competencies keep non-majority individuals in lesser roles . . . and this is not a purely American issue.

    In any culture there are systemic biases that advantage those with “lucky genes” born to parents who live in a certain neighborhood and send their children to better skills affording them with access and ingrained social traits that advantage them as adults.

    And no one can possibly figure out a system to create a completely even hand.

  24. Hi Gregg, thanks for your response. I would push back on a few things.
    1- I think that biased/skewed decision making or evaluation is more complex than just being about ego and petty prejudices. I think one of the places that we really get bogged down on this set of issues is when we buy in to the idea that bad (or ignorant) people are biased and good (or smart) people are not. I am sure that there can be a great deal of difference in intentions, but regardless of our intentions we are all biased. We employ a lot of cognitive short cuts when making decisions and forming opinions about others and while we may feel very strongly one way or another about a persons talent, ability, or “fit”, those feelings are often informed by stereotypical ideas and images…and we have stereotypical ideas and images about everything; race, age, gender, profession, geography, height, eye-contact, dress, physical appearance, etc. We have learned a great deal about the brain in the past couple of decades, and regardless of how we feel about stereotypical ideas for different groups of people, the brain starts making decisions about people in fractions of a second, and these decisions are usually formed with very little actual data. So its not simply a good person/bad person thing, but a human nature thing. That is part of what organizations need to be aware of and push back on.
    2- I also do not think it is completely accurate to say that any decent executive gets this issue and if they do not they will be out of business. I do think that this set of issues are becoming increasingly business critical, but I think there are still many exceptions. I could make the same statement about customer service, and most CEOs would speak very strongly about the importance of customer service, but I can still go out and get treated poorly by a number of organizations today that are profitable. I could say the same thing about employee engagement and most CEOs would speak very strongly about the importance of engagement and work environment, etc., but some still run a churn and burn shop, do not understand human capital issues and are still able to be profitable. Issues of human ability and human interaction are complex and multi-dimensional and I think that they are for many industries more closely connected to the difference between surviving and thriving than they are to the difference between profitable or not profitable.
    3- I did not mention international / global diversity issues in my article, in fact I did not mention many aspects of diversity and I disagree that this is a perverse or systematic practice. The purpose of my article was to provide a little clarity around the value of diversity and inclusion today and to illuminate some of the dynamics involved. For the organizations that I work with that are global in nature we focus a great deal of attention on global/international cultural and linguistic diversity issues and there are a number of people within the field that focus almost specifically on that work, so again my experience is different than yours.

  25. As long as we live in a culture where our fear of loss is greater than our desire for gain we will continue to dialogue about the merits and detriments of any inclusive programs. If we were truly operating from a mindset that was aimed at creating a global culture of awareness and equal opportunity, we would be simultaneously looking forward to the day when all of these programs would cease to be necessary.

    Perhaps the way of working toward that will come if we depersonalize “diversity” and just accept it as a fact of life. How can we argue for or against something that simply is. That’s insane. It is like arguing for or against Earth’s gravitational pull. We experience gravity. Period. The Wright brothers never disputed this fact. What they did was learn how to work with it and other existing forces in order to fly. Eventually we will have to do the same thing if we want evolve to a higher order of experiencing and creating through innovation.

    I wrote a post on my company’s blog that paints an image of D&I as an inevitable part of business evolution. http://jcsicareerassist.wordpress.com/2009/11/20/ending-the-confusion-about-inclusion-diversity-2071/ . While I don’t really expect that people will willingly release their personal attachments to being right in order to allow for a more inclusive business world to emerge, I do believe that we are all heading this way even if we go kicking and screaming.

  26. Pedro, I agree with you and at the end of the day people just want fair opportunities.

    While one may argue against existing laws, rules and regulations that suggest Affirmative Action or Diversity measures limit access to some while granting access to others, the underlying point in my opinion is to judge people on an individual basis relative to fair and consistent requirements instead of irrelevant/inconsistent requirements.

    Ultimately our personal prejudice and bias hinder us from true growth and prosperity by creating walls of limitation based upon unsubstantiated mistruths and lies. It’s only when we have the courage to take the blinders off that we can see the truth.

    Over the weekend one of my HR Groups shared a linked to a short film called The Butterfly Circus. It personally hit home for me when thinking about the limitations that our society places upon people (this happens at the indivdual level as well).

    http://bit.ly/5mYptG

  27. Hi Pedro-

    Love the statement that diversity just “is” and great post on The Confusion about Inclusion. I think there is still a great deal of opportunity for organizations and communities to improve their approach to diversity and inclusion though and part of that is integrating a better understanding of human nature and social and relational dynamics.

    Many of the “categories” that we use tend to mean nothing in the long run, but they can still influence our thinking and feeling in a lot of different ways.

  28. Pedro, I suspect you know this but a majority culture thinks everyone sees the world through their eyes and experiences. Thus, it was shocking for many non-blacks to hear about something that was a very common experience to many blacks– being pulled over for what is nicknamed “driving while black” that a white male would never experience. This is not a criticism of police. It is an example of a “blindness” that a member of a dominant culture might have. For people who are US born, they will often explain some of the reasons that decisions are made in hiring in ways that seem completely rational . . . until they are de-constructed and have bias smack dab throughout it.

  29. I think Jeff and Pedro hit it right on the head- we all are inherently biased, and while we can’t avoid these biases, using Behavioral Recruiting, the application of Behavioral Economics to recruiting (https://staging.ere.net/2009/09/09/two-unsexy-but-valuable-products/https://staging.ere.net/2009/08/24/countercyclical-hiring-%E2%80%93-the-greatest-recruiting-opportunity-in-the-last-25-years/) will allow us to effective recognize and our utilize our inherent biases (http://en.wikipedia.org/wiki/Cognitive_biases). One of these is that we ARE more loss-aversive than gain-acquistive.

    Cheers,
    -kh

  30. I think Jeff and Pedro hit it right on the head- we all are inherently biased, and while we can’t avoid these biases, using Behavioral Recruiting, the application of Behavioral Economics to recruiting (https://staging.ere.net/2009/09/09/two-unsexy-but-valuable-products/https://staging.ere.net/2009/08/24/countercyclical-hiring-%E2%80%93-the-greatest-recruiting-opportunity-in-the-last-25-years/) will allow us to effective recognize and our utilize our inherent biases (http://en.wikipedia.org/wiki/Cognitive_biases). One of these is that we ARE more loss-aversive than gain-acquisitive.

    Cheers,
    -kh

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