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Diversity from the Inside Out

A recent article in the Washington Post stated that most diversity trainings don’t work and in fact, can be counterproductive to achieving diversity in management positions.

When read without context, such a broad statement is fodder for narrow minds, and unenlightened employers. However, the article, based on a comprehensive study by the University of Arizona, explains that this fact tends to be true in situations where diversity training is done as part of a public relations endeavor or simply to comply with regulatory requirements. Indeed, if the ultimate goal and main purpose of diversity training is merely to check a box or to mitigate pending litigation rather than to create an environment where diversity is valued and maintained, then diversity training will not have lasting impact and can, as articulated in the article, have an adverse affect.

The Post article confirms that diversity does not work from the outside in. It is not enough for an organization to state on its website or glossy brochure that it values diversity or to force its employees to attend a diversity training once every couple of years. This is merely window dressing. True diversity begins with the attitudes and culture of the organization. The key to making diversity training and objectives effective is for the organization to live the values it espouses.

Employers serious about diversity know this. Those that do well in the arena of diversity embody diversity from the inside out, that is, they are able to foster an environment of inclusion and respect through sincere and concentrated efforts that go beyond the surface. In these organizations, diversity training is more than just an effort to look good on the outside or to avoid regulatory consequences. It is merely one part of a larger effort; a well thought out, comprehensive diversity program designed to accept, respect and value differences.

Reasons to Embrace Diversity

This nation’s relentless history of discrimination and hostility toward minorities and women makes necessary Title VII and the other related statutes that prohibit discrimination and exclusion based on protected categories. The increased number of discrimination complaints filed by the EEOC over the last few years indicates that we have yet to completely dismantle the barriers to a fair and inclusive workplace. Thus, a focus on creating a non-discriminatory working environment where people are not ostracized or otherwise disadvantaged because of their differences is still socially relevant.

Social relevance aside, the pursuit of diversity would not drive so many Fortune 500 companies if it did not directly implicate business imperatives. These companies understand that diversity makes sense from a strategic business perspective. That is, diversity of thought and experience drives revenues. At the end of the day, companies that regard diversity as a business imperative or as a basis for gaining a competitive edge will do better than those that do not. In fact, if the business case for diversity cannot be made, it is highly unlikely that any diversity efforts will succeed.

A Business Case for Diversity

Embracing diversity and incorporating it into the business strategy can lead directly and indirectly to increased market share, revenues and profitability. A few of the business related benefits of pursuing diversity as more than just a regulatory obligation include the ability to 1) attract and retain the best employees, 2) compete in a diverse and global marketplace, 3) increase creativity and innovation, and 4) reduce the risk and cost of litigation.

1. Attract and Retain the Best Employees

According to the U.S. Census, the baby boomer generation makes up 50 percent of our current workforce or 76 million people. While the oldest members of this generation are just now entering retiring age, the trailing edge will hit retiring age in about 20 years. The following generation is expected to be about 47 million reflecting a major labor shortage. The overall projection for the future is that there will be more jobs than people to fill them.

In addition, the minority population, currently at 30 percent, will reach 50 percent by the year 2050 while women will remain at roughly 50 percent. As soon as 2012, four short years from now, it is expected that 75 percentof new hires will be minorities and women. The labor force will also see an increase of mature workers as many in retiring age will, for financial reasons, remain engaged in the workforce. There will also be an increase in the utilization of persons with disabilities. Thus, many of the best and brightest employees in the future will be found in those demographics. This, in conjunction with the expected short supply of workers, will put employers in fierce competition to attract and retain these diverse employees. An organization that already reflects the diversity it seeks to acquire will have a better chance of attracting these coveted employees.

2. Competitive Edge in the Marketplace

In order to truly take advantage of the opportunities available in the marketplace, an employer’s workforce needs to reflect the community it serves or wishes to serve, and that community is increasingly diverse and increasingly global.

Employers able to fully appreciate the differences and similarities within their workforce have the distinct ability to capitalize on those same differences and similarities in their customers and in the markets they serve. This was considered the most important reason for diversity efforts in the 2007 survey report on diversity management by the Society for Human Resource Management (SRHM Report), ranking higher than eliminating prejudice or achieving appropriate representation.

Diversity makes perfect financial sense considering that the buying power of minorities in the United States has increased dramatically over the past few years and will continue to increase into the near future. In 2007, minorities had 2.3 trillion dollars in buying power. By 2012 that buying power will increase to 3.2 trillion dollars. That’s a lot of money on the table that companies simply cannot afford to disregard. In order to capture this market, companies need to have products and services that appeal to this demographic. What better way to tap into that demographic than to have people from the same demographic within your own organization?

A global marketplace is one that not only crosses borders, but cultures, language, communication styles, customs and values. It will take a great deal of creativity and insight to make sense of this varied and unfamiliar territory. The best way to do that is with people intimately familiar with it. Therefore, those who understand and share the same culture, language, customs and values of the market will be an invaluable resource to the companies savvy enough to recruit and retain them.

3. Increase Creativity and Innovation

The problems an organization faces while interacting in a diverse and global marketplace are necessarily more complicated than those of a homogenous population or single marketplace. Diversity is a resource of divergent strengths and talent with which an employer can gain access to innovative solutions to more complex and varied business processes, and customer, market and product problems.

As the saying goes, "two heads are better than one." A problem is much easier to handle if it can be attacked from many sides rather than one. One head or one person can only come from his own perspective; that perspective based on his own personal experience and observations. A multidirectional approach, that is, one based on different backgrounds and experiences, gives an organization better leverage for devising solutions. Employers able to accomplish and maintain diversity will see increased creativity and innovation not only with regard to problem solving but in product development and customer care.

4. Reduce the Risks and Costs of Discrimination Claims

Discrimination allegations arise in part because the workplace is becoming more diverse. Costly discrimination settlements such as Texaco ($176 million), Coca-cola ($192 million) and Sodexho ($80 million) are a constant reminder of the challenges that companies face in securing and managing a diverse workforce. In addition to these significant settlement amounts are the collateral costs of litigation which include negative publicity, decreased sales, depressed stock prices, diminished employee morale and productivity, and increased turnover.

An organization does not, however, have to be involved in actual litigation to suffer these adverse affects. Employees who find themselves in an environment that is even perceived to be unfair or unwelcoming will under-perform, spread ill-will and otherwise negatively impact the employer’s forward motion. Therefore, organizations must focus not only on accomplishing a diverse workforce, but on maintaining a fair and inclusive workplace. This means more than just establishing and maintaining equal opportunity for advancement and fair compensation (although this is obviously important); it means respecting differences and valuing individual contributions. It also means helping employees from different backgrounds and cultures find a way to work with each other.

Accomplishing diversity is not easy nor does it happen overnight. If an employer is willing to make the commitment and follow through with hard work and sustained effort, it can not only gain a marketplace advantage but create an atmosphere of fairness and inclusion for all employees.

Keys to Effective Diversity Programs

Obviously, a single obligatory diversity or "sensitivity" training once every two years will do very little to change or enhance corporate culture. In order for an organization to capture the benefits discussed above, it must engage in a comprehensive diversity program in which training is merely one part.

A few of the keys to an effective diversity program include 1) comprehensive diversity policies and practices, 2) strong commitment from organizational leaders, 3) honest assessment and reasonable goals, 4) management accountability and education, and 5) complete integration into business and marketing strategy.

1. Comprehensive Diversity Policies and Practices

"The gap between the workplace and the marketplace cannot be bridged with a single, one-size-fits-all policy or practice." In order to be truly effective, a diversity program needs to be tailored according to the needs and objectives of the particular organization, taking into consideration its history, culture and business needs.

An effective diversity program should also be comprehensive in scope. While enhancing the representation of minorities is important, it is not nearly enough. A truly comprehensive approach needs to focus on more than race and gender. Human Resource professionals interviewed for the SHRM Report cited that an emphasis on ethnicity and/or gender alone provided too narrow a focus. In order to obtain the greatest value, a diversity program must also pay attention to age, religion and physical disabilities, as well as reach out to different cultures, experience levels and socio-economic backgrounds.

2. Strong Commitment from Organizational Leaders

The SHRM Report confirmed that most organizations have diversity policies and practices in place which indicates great progress compared to just a decade ago. Unfortunately, this is where many employers stop. It takes more than an eloquent mission statement and a few well-drafted policies and practices to achieve the many benefits of diversity. An effective diversity program begins with buy-in at the highest corporate levels and ends with an atmosphere where each employee feels respected knowing that they are an important part of the whole organization.

Successful organizations who have been able to take advantage of diversity understand that there must be a strong commitment from the leaders of the organization, including the CEO. Communication and participation are also imperative. It must be communicated to all levels that diversity is a priority; otherwise the officers, the mid-level managers and line employees will not take it seriously. It is also not enough to create policies and dictate their implementation. It is incumbent upon the leadership of any organization to actively participate in the process. This creates credibility for the initiative and sets the expectations for executives and managers.

3. Honest Assessment and Reasonable Goals

In order to know where you are going, it helps to know where you are. An effective diversity program will need to begin with an honest assessment of where the organization currently stands, not only in terms of race and gender and other categories of diversity, but also with regard to how current management practices and employee behaviors are impacting workplace culture. The best way to do this is with a thorough assessment that not only looks at representation at all levels within the organization, but corporate governance, pay equity, regulatory compliance and community relations.

A thorough assessment provides a starting point from which an employer can set reasonable goals and targets which can be tracked. Of course, goals and targets do not imply illegal quotas or set asides. However, it is very difficult to reach your destination without some idea of where you want to go. The ability to track progress also allows an organization to link the progress in diversity with business results.

Assessment also provides the opportunity to devise a program that is specifically designed to fit the individual company’s culture and promote that organization’s specific goals.

4. Management Accountability and Education

The real challenge of workplace diversity rests with middle management. As committed and involved as upper management may be with regards to increasing diversity, at times that message becomes distorted and diluted in the minds of those who make the day to day decisions relating to hiring, assignments, training and advancement.

If middle management does not get it; does not understand the value of diversity from the business perspective and buy into the process, the employer will not reach its desired results. What it will get is a lot of talk, no action and a loss of credibility.

In order to drive the message home, there must be accountability for success in the achievement of diversity goals; that is, link performance evaluations to the achievement of those goals. Rewards and incentives for meeting and exceeding goals are the most effective means of communicating the importance of achieving goals in diversity.

At the same time, educate and train supervisors and managers on the proper means of accomplishing the employer’s goals. If the process is not clear, well-meaning but ill-advised or untrained managers might, for example, interpret a directive to increase diversity as a mandate to hire minorities regardless of qualifications. This is not what diversity is driving toward and can, in fact, lead to allegations of discrimination by non-minorities. It is critical to train managers in the art of recruiting, hiring, training and advancing a diverse workforce.

Managers also need to be trained in how to implement and maintain workplace fairness and how to recognize and address seemingly superficial incidents that could lead to the appearance of inequity, and subsequently, claims of bias and discrimination.

5. Complete Integration into Business and Marketing Strategy

Time and time again, organizations devote substantial energy and resources to recruiting diverse employees only to put them into a work environment that is not conducive to maintaining that diversity. Diversity applied cosmetically by an employer for the sake of compliance or publicity, is easily disregarded when deemed inconvenient or no longer relevant. This kind of behavior will almost certainly sabotage all previous diversity accomplishments.

If diversity is to have a real and lasting impact, the employer must fully integrate it into the organization’s business and marketing strategy. It must be incorporated into every area of the organizations, across all departments and at all levels. Programs that enhance and drive key business objectives will get more buy-in from all over the organization putting it in a position to capitalize on the strategic value of diversity. When diversity is undertaken with an eye toward advancing varied business goals, the organization is more likely to experience increased diversity, to maintain that diversity and reap the accompanying benefits.


Diversity is about accepting, respecting and valuing differences. As the Post article indicates, organizations that view diversity training simply as a means to avoid litigation or to put on a good face for the public will never accomplish diversity, and will likely experience a reduction in whatever diversity they had previously accomplished.

Real diversity and inclusion can only come with a change in behavior. A change in behavior will only come with a change in attitude and mindset, i.e., a change from the inside out. While there is a role for "sensitivity training" in almost all organizations, that training will only be effective to the extent that the organization is genuinely interested in cultural and structural change and commits to that change from the inside out.