Diversity: A Contribution To Commercial Success – Expert interview with Michael Stuber
Mr. Stuber, when ‘Diversity’ is mentioned, many people primarily think about having more women in management positions. But that's not really the right way to see it, is it?
Whether rightly or wrongly, the perception is understandable. We have, over the years, regularly analyzed the Annual Reports of large corporations. The results show that the focus on gender has remained practically unchanged over the past twenty years. However, the breadth of topics covered has indeed developed, as has dealing with all aspects of diversity.
Initially, gender was an obvious priority, partially because the concept of equal opportunity already existed. Diversity became a broad-platform approach in the 1990s. The aim was to work on multiple aspects of diversity at the same time, in a synergistic way. The thought behind it was simple and ingenious: The challenges in handling differences in gender, age, culture or religion are similar, so they can be dealt with in a consistent way. I call this approach the ‘propelling performance principle’.
The great thing about it is that people rediscover themselves in this concept, because it is all about recognizing individuality. Everyone has a gender, an – ever changing – age, a cultural background, etc. Our work-related diversity, such as collaboration skills, or language skills, mobility or creativity can be more directly linked with business objectives such as productivity or customer focus. That’s important for at the end of the day, in a corporate environment everything has to be aligned with the business.
This coherent and holistic approach to Diversity fell apart when political decisions led to a single-sided focus on women in management a few years ago. Since then, it has been more difficult to convey diversity in a comprehensive, and hence credible way, and to get support for it. Many companies actually exceed the legal requirements when it comes to gender employment ratios. Actually, half of Europe’s top 50 companies cover five or more aspects of diversity, saying clearly: diversity is more than gender.
Does that mean that companies don't only involve themselves with diversity because of political regulations? What are the commercial reasons, then?
Our analyses show that there are three distinct business reasons: Firstly, it makes strategic sense. That's because, in an age of globalized business models and rapid change, companies need concepts that promote collaboration and innovation amongst diverse groups of people. Secondly, there is the operational necessity. That's because customers and candidates expect companies to welcome diversity and offer an open, flexible work environment.
Thirdly and finally, there is commercial viability: Companies are increasingly finding, that they cannot afford not to fully utilize existing diversity. Amazingly, that still used to be the case. Our marketing analyses, for example, reveal a clear waste of potential sales due to one-sided advertising. There are also many examples of failures caused by a lack of diverse perspectives in decision-making processes. Diversity also increases individual productivity. That's because we work better, engage more, and work harder, if we feel valued and respected.
That sounds like some kind of magical means of production – in fact, a panacea for the economy: is diversity really as simple as that?
Yes and no. Our evidence-based ‘propelling performance principle’ describes the value creation process of diversity and inclusion: according to that model, it takes more than simply deliberately recognizing differences, it is also necessary to be consciously open-minded and to acknowledge the potential of different talent and perspectives. As in so many situations, goodwill alone is not enough. Creating value from diversity also requires involvement. That is true both for processes, which must be equally fair, and work equally effectively, for everyone involved, as well as for people’s behavior. What is involved here is collaboration and leveraging individual strengths for joint success.
To sum up, we have to say: Diversity is neither an end in itself nor a silver bullet for success. Since everyone finds it easier to work with people like us and ignore others, we must overcome our lazy human attitude and break the mold.
Which objectives can a company like ours set, to justify this effort?
First and foremost, companies must be clear about the contributions diversity can make to their business – for the company as a whole, and also for its parts. These commercial considerations should then lead to the setting of objectives for diversity. Having more women in management positions can be an indicator that the HR processes and the corporate culture take better account of the available talent pool than before. But having them as an end in itself makes little commercial sense.
Objectives should also be defined for the corporate culture or the company's image, for example, how its customers perceive it. Striving to win awards or prizes can be also be meaningful objectives, as has been shown in other contexts.
Can one of the aims of diversity be to create understanding of difference and break down stereotypes? And how would one work to achieve such an objective?
Understanding difference and breaking down stereotypes are core issues when it comes to diversity. They are used to strengthen employee motivation and engagement, increase team performance, and improve the utilization of talent.
In practical terms, this is a Herculean, or Sisyphean, task. It's Herculean because many of our most strongly-held views and opinions were formed many years ago, and companies find it difficult – even if it's only workplace related – to question some of their established values and assumptions that also formed and fostered in the family and social environment. Hence, everyone brings their perceptions of gender roles and cultural dynamics perspectives to the workplace, where they can act as a barrier.
Diversity is also a Sisyphean task, because progress made with great effort can be undone in a moment by unexpected and mostly unwanted events. We can see that happening currently with regard to the integration of minorities in society. Society's view of migrants had improved over the years. Studies showed that migration improved the prosperity of the indigenous population and was a necessity for industrial nations. And yet: since the subject of migrants has been taken up for political purposes, doubt, prejudice and even attacks have increased drastically. Against other minorities too, by the way.
And what progress are we making with gender equality? Is this also under threat?
The majority of indicators show that gender equality is on the right track. However, we are far from fully utilizing the huge potential of well-educated young women. Even if they generally do not realize this while they are young. But then, in the rush-hour of life they encounter the same effects as their mothers did: when they become parents, they agree with the father that HE will continue in full-time employment, particularly as companies are much less willing to support the careers of employees who work part time. And here, we can observe a rarely noticed phenomenon in the allegedly hip, Generation Y: it includes several sub-groups some of which have traditional views, which do not promote gender equality.
What can Prettl do to promote diversity?
As already said, it is smart for every company to identify the contribution that diversity makes to its commercial success and recognize that first of all. This usually creates the basis for a range of strategies, which should be implemented in a well-coordinated framework, and not as a series of stand-alone initiatives:
- Increase awareness of difference in many everyday situations, for example, through regular communication and interactions
- Make adjustments in Human Resources, marketing and sales
- Form business relations with external partners that expands the current talent pool
- Continuously work with senior management, who promote diversity awareness through their behavior, give a sense of direction, define expectations and are default role models.
All of this must be carried out on the basis of high standards for openness, meritocratic performance management and fair, transparent processes. In this respect, moments of truth – situations in which you have to practice what you preach– are particularly important: How does the company or a manager react if a customer or employee does something that goes against diversity? If the company gives in, because that person is ‘an important customer’ or ‘a valued employee’, then the diversity house of cards collapses. It is necessary to demonstrate the right attitude, take a stand, adopt an attitude and lead by example. To that end, Diversity is no different from other leadership missions.
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Michael Stuber is known as a pioneer regarding the topic "diversity" in Germany and at European level. Learn more about him and his work under http://de.diversitymine.eu/