Leveraging Diversity in Todays Global Economy - Essay Example

Running head: Leveraging Diversity Leveraging Diversity Leveraging Diversity Introduction Steve Forbes (1999) said, "The real source of wealth and capital in this new era is not material thingsit is the human mind, the human spirit, the human imagination, and our faith in the future." Cox (2001) similarly said that these things are optimized when people of different backgrounds and genders come together for a common, compelling, purpose. He tells us that the empirical evidence confirms that diverse teams promote more creativity and unique problem-solving. Teams of various perspectives produce different and original insights. This paper will support the need to leverage diversity in an attempt to move forward in today's global economy. Diversity Organizations need diversity in ideas and therefore they need leaders who can encourage and manage under diverse situations (Kirton, 2007). But sometimes it is not the employee but the corporation that wins. The quality of any work or any team is improved when it is diverse. Leaders who understand that diverse companies have different needs from their leaders will do well. This diversity will improve the companies product line (Carter, 2007). At least this is the theory. Some are successful in implementing and some are not. Harley Davidson is the manufacturer of a high end motorcycle company. They were in bankruptcy not to long ago. Harley Davidson instituted a diversity management program and tools to help make the job easier. Their goal was to improve market share by increasing the innovation in the team. This meant that their management, including their senior management had to be trained in diversity and how to leverage that for the company's improvement. Harley Davidson has seen steady increases in market share since instituting this change (Harley Davidson, 2007). The company's employees have voted it as one of the best companies to work for so in this case diversity is a win-win situation. However, there is also Wal-Mart. The Wal-Mart story s quite different. According to Kirton (2007), Wal-Mart has won many awards for their diversity management. They proclaim that they have hired many minority people and that their management staff includes many minorities. It is clear that Wal-Mart has profited from these claims. However, there have been many complaints from Wal-Mart employees. Women employed at Wal-Mart say that they are promoted less than men and the company has been accused of taking advantage of undocumented aliens. This is an example of a company that has leveraged diversity for the good of the company alone Cox (2001), accurately describes the reasons so many organizations are struggling with a rapidly changing environment. It is clear that the advent of diversity management has forced business leaders to radically look at the way they do business. Organizational leaders recognize the importance of leveraging diversity on the bottom line but often they struggle with how to make that happen strategically. In a computerized, web-driven world companies have had to become a part of globalization essentially overnight. According to Global Lead (1998), diversity is a key business strategy and the expectation is that it contributes to an organization both in business growth and successful results. Global lead is a management company that has developed a strategic initiative that incorporates the use of what is called the five key drivers of business (Global Lead, 1998). The business drivers according to Global Lead (1998) are focus on the market, talent, innovation, values, and goodwill. Leadership will determine how well or how poorly diversity does in any given work setting. To assure that this is true, leadership must be well trained in diversity and the need for a diverse workforce. They must understand that a diverse workforce can create a work force that improves the bottom line (Clark, 2007). "Diversity is about empowering people and promoting the human spirit."(Clark, 2007). Diversity is about understanding, valuing, and making the most of the individual differences found in each and every person. To allow an organization to be its best the differences in all of these individuals must be used. This must include their ability to learn, how fast they learn, whether they are introverted, extroverted, controlling, submissive, conservative, strategizers, analyzers, organizers, or team builders. Each and every one of these types are necessary to run a great business. Organizations need diversity in its ideas and therefore they need leaders that are not only diverse themselves but encourage diversity in the employees (Carter, 2007). Leadership that understands diversity and the needs of their companies will leverage groups that they manage toward improvement in their company product lines (Carter, 2007). An example of a company that is managing to do this is Merck. Merck believes that diversity and innovation is needed for their company to remain competitive (Merck, 2007). They believe that in the global marketplace they must stay ahead. They also believe that their well trained leadership teams will be able to promote and develop these skills in their employees. Merck believes that first they must train their leadership team in diversity and what it means as well as how to manage it. The Merck leadership focuses on developing employee competence and creating a productive environment based on the skills and differences of those employees (Merck, 2007). They have four leadership principles which are, treating all employees at every level with dignity and respect, integrating ideas and collaborating with others, exhibiting behaviors that reflect a high degree of integrity and ethics, and building working relationships (Merck, 2007). It is quite obvious that people go to work for different reasons. Most of those reasons are basic needs. Once those basic needs are satisfied though, there should be other reasons for them to stay. One of those reasons that is know to improve employee retention is diversity in the workforce. Much of this comes down to how important they feel and whether they are able to advance in the work force or not (Campbell, 2007). Today's employees come in all shapes, sizes, colors, cultures, ages and genders and building an organization diversity program can be difficult and rewarding at the same time. The organization that is not taking advantage of the skill of every one of their employees is not operating at the best efficiency level (Campbell, 2007).Many companies have realized this and have begun to put together diversity programs but have not put enough time into them to make them work. For it to work well it must be fully incorporated throughout the business. Dr. Herbert Wong (2005) suggests that there are best practices that are inclusive of management and are great diversity programs. He believes a diversity program is about maximizing all of the talent in the organization. The following is a statement that talks about his operating values as they apply to diversity. "Diversity leadership is about maximizing the inclusion of everyone in the organization. It seeks to increase the value of opportunities and resources that develop from a diverse culture. It facilitates the creation of a positive working environment for individuals who want to contribute. The diversity process unifies the organization and results in the synergism of the energy and resources of the organization" (Wong, 2005). There is a notion that a company's diversity efforts can create great returns for the company. This is proven to be true in scholarly literature in a growing body of literature showing that individuals and customers across many stakeholder groups reward companies with good diversity evidence (Bhattacharya, Korchun, Sen, 2009). An example that Bhattachary and Sen, (2009) shows through their research that purchases increase from companies that have good diversity programs and the public can see when they are evaluating a product for purchase. There is also research that shows that investors are more likely to invest in a company that can represent themselves with a good diversity program. Gifts are more likely to be given to companies that are start ups who include diversity programs in their business plans. These studies encourage us to believe the answer to our question is yes. There is however, the fact that many of the studies do not consider the length of time that is involved in this process. An example would be the fact that there is little evidence that the customer remains with the new products for a long period of time. So though diversity may bring the customer in on the initial stage of sales, there may not be a long term increase in the sale of that project. It appears that a consistent effort to prove to the customer that successful diversity is occurring is important (Bhattacharya, 2009). Hiring Most companies now realized that diversity is important; however changing workforce demographics is more difficult than it appears. This has to become a business imperative and part of the strategic plan (Douglas, 2002). How does a company attract diversity candidates and how do the retain those candidates once they have signed on. Much of the answer relates to specialized training for the rest of the company. A diversity training curriculum must be set up to be used throughout the company and that must be incorporated into the corporate agenda. Once there is assurance that managers and supervisors understand the training and initiatives they become more sensitive to the important things that will help retain these employees and it will not be easy because many companies are looking for these employees and the incentives are great. These educated managers and supervisors are more likely to cultivate a workplace in which all employees are interested in working (Douglas, 2002). It has become an important practice to align bonuses and performance evaluations with diversity progress in workforce populations. Most Fortune 500 companies at this point are doing exactly that. Accountability standards in some organizations are being applied at the highest level. This includes the American Cancer Society that applies them at the level of the CEO and the National Director of Development (Douglas, 2002). Many perspective employees today often look at a company's workforce to see if they are represented in that workforce. When he sees that there is representation of himself throughout all parts of the organization, he is more likely to sign on. This is important in today's corporate world as hiring the most talented becomes very important. The presence of minorities and women at the highest ranks in the company send a solid message (Douglas, 2002). Mentoring programs are necessary to facilitate these circumstances, including fostering networking skills, and providing career counseling to assure that employees with diversity are well integrated into the program for the company. Along with these mentoring skills it helps the company to have strong community relations in which the company is able to reach those in the community that may be looking for a strongly diverse company. Watson (2005) would tell us that there is a competitive advantage to hiring a black woman. That advantage is to the company who assures that the community understands that she is there. Diverse Individuals It's becoming more and more clear that there is a competitive advantage in being of diverse background at this time. The companies are looking for the unusual, not only in the color of your skin but in your abilities and skills. There is the thought that if you are a black woman, with a great education, and can deliver the goods, you will get the job and beat out the other folks that are there. Is that good or bad It is according to point of view but it has to be remembered that corporations have and will hire to their advantage alone. That only makes sense and if this employee can do the job and is the most advantageous to the corporation at this point then that is how it should happen. Diversity and Profit How does diversity improve the bottom line According to Notebaert (1998), there are four ways. The first is that diversity initiatives improve the vastness of the pool of brainpower available to the company. In companies where every competitor has access to the same technology, it is important to find an advantage and this is the way to do it. The successful company depends on attracting and retaining those with the greatest talent, work ethic, and diversity of experience. Finally, there is the understanding that age, race, and gender has a corner on those qualities (Notebaert, 1998). Of course the second one is identification with ones customers. This is where all revenue generation comes from. This again improves purchases and affects the bottom line. There has to be a great degree of sensitivity to the wants and needs of all of the population for this to happen though and that is improved greatly by having a diverse work force that the company LISTENS to. That sensitivity has to be included in advertising, marketing, sales channels, billing, product innovation and a host of other business issues. The third of these four is that fact that if we do well with diversity at home, we are better prepared to be global leaders and this is an absolute necessity to be successful in business today. There are very few companies left that do not do business in other parts of the world and there is a great need to understand the peoples and the diversity in those companies. How can that happen there if it does not happen here. It is one of the very reasons that Wal-Mart failed in Germany (Notebaert, 1998). The fourth is patience. Americans are not the most patient of corporate sponsors. We want our profit today. However, if the company is not willing to work with other countries and with diverse populations with respect and deliberate patience, they will fail. Their bottom line could depend on the use of a trainer that is able to train the company in German beliefs before entering the German market. The real goal, however, would be to improve the diversity of the company by hiring Germans to help lead the way. Conclusion Diversity was just a word for a long time. Now it holds a great deal of interest by many. Diversity is more than just the color of skin or an identifiable race. It includes work background, age, experience, gender, and education. There is now the realization that it takes all of those things to realistically provide a product that is tempting to large groups of the population both home and abroad. Leveraging diversity is extremely in today's global marketplace and this writer would recommend that diversity program needs to be well devised and functioning in every organization that expects to have a profitable bottom line. We have given several examples of companies that presently have good diversity programs in place. Each of these has an excellent bottom line. We have also talked about the research that is out there that gives some statistical proof as to the fact that the bottom line is in fact affected. The only issue that remains is the fact that no one really knows at this time, how long this phenomena will last. Will diversity always be the answer or will there be a new answer tomorrow References Campbell, S. 2007. Organization's Lose Out By Not Implementing Effective Diversity Initiatives. Available at http://human-resources-mgt.bestmanagementarticles.com Carter, K. 2007. Addressing the Hidden Dimension In Nursing Education; Promoting Cultural Competence. 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