Work Force Diversity Plus Inclusion Equals True Organizational Innovation

Chicago

Holding up a glass filled with white milk, Tyronne Stoudemire, global director of diversity and inclusion as well as talent acquisition for Hewitt Associates, poured in some chocolate syrup–which promptly settled to the bottom until it was vigorously stirred.

The demonstration illustrates how adding women and minority employees through a corporate diversity program is only a first step, and that true integration doesn't happen until a formal inclusion plan “stirs things up,” he said.

In a panel discussion here at the 2009 Professional Liability Underwriting Society's International Conference, four experts on employee inclusion discussed how accelerating changes to workplace demographics and the need for innovation are driving businesses to reexamine their diversity policies and ramp up inclusion programs.

As the most recent and first female recipient of the prestigious “PLUS 1″ award, panel moderator Corbette Doyle, lecturer of leadership and organizations at Vanderbilt University, provided recent examples of how a diverse workforce can lead to more innovative corporate thinking.

Using six years of research material, Catalyst Inc. (www.catalyst.org), a Canadian-based, gender-focused think tank, determined that companies with more diverse boards and senior management are 35 percent more profitable than their less progressive peers.

Recent best-seller “The Difference” by Scott Page mathematically suggests that more diversity equals greater innovation, while “The Wisdom of Crowds” by James Surowiecki concludes that “experts don't always have the right answers,” according to Ms. Doyle.

These findings echoed the observations of the PLUS conference's keynote speaker, author Malcolm Gladwell, who discussed how overconfidence brought down an expert like Major General Joseph Hooker during the Civil War–as well as Wall Street financial experts in last year's meltdown.

Although most corporations are well aware of the need for diversity from a compliance standpoint, too many view it as strictly an “HR issue,” missing the importance of diversity as a business opportunity that can yield leadership, talent and innovation, Ms. Doyle said.

Citing recent research on professional development, Ms. Doyle noted that 70 percent of corporate leadership comes not from professional development programs but through “developmental heat,” which consists of providing management trainees with five elements:

o Being given unfamiliar responsibilities.

o Being given the chance to create and manage change.

o A high level of responsibility.

o Working across boundaries.

o Managing a diverse group.

The initiative for true inclusion programs must come from the top down, as leaders must set the agenda for their organizations–which sounds simple but is actually rare, according to Michael Hyter, president and CEO of Novations Group Inc. (www.novations.com), a Boston-based global talent management firm.

Diversity doesn't simply refer to gender or race, but any dimension that differentiates people from each other, he said.

“Fifteen years ago, race and gender may have been all of it, but not today,” Mr. Hyter said. “They are still important, but now only third or fourth of five items, with generational differences being the biggest issue.”

Inclusion requires full development of diversity that is leveraged to a productive end, with the full engagement and development of all associates, he said. To achieve it, leaders must create an environment where people are advancing due to talent instead of a mere diversity headcount–otherwise known as “tokens,” Mr. Hyter added.

He recommended that leaders seeking true inclusion for a diverse employee pool follow five key steps:

o Take personal responsibility for the initiative.

o Assess needs and formulate a specific plan.

o Set clear expectations and create a system of accountability.

o Create measures to assess progress.

o Provide resources and appropriate infrastructure.

Claudia Wolf, partner and national leader for business insurance consulting and Midwest WIN leader at Deloitte Financial Advisory Services, described the success of the firm's women's initiative program, launched 16 years ago, after clients demanded that Deloitte talent teams match their own diversity.

Women in the work force are too big to be ignored, Ms. Wolf said. In 2007, they comprised 48 percent of the work force–a number that has grown in the current recession, where the most dramatic layoffs affected male-dominated industries such as finance and construction.

Women's workplace presence is estimated to be growing to 51 percent by 2014, she said, noting that 85 percent of Fortune-500 companies have women on their boards; 91 percent of Deloitte partners and senior management have “pitched” to women clients in the last two years; and more than 40 percent of the 10.4 million privately held U.S. companies are owned by women.

Recognizing this shift, Deloitte created the WIN program based on four threads of focus:

o Professional and leadership development through mentoring.

o Marketplace eminence (visibility for women through speaking opportunities, etc.).

o Vibrant pockets of community through diversity groups within the company.

o Innovation (viewing women as buyers, and developing mass career customization programs for female employees).

At Hewitt Associates, which specializes in human resources outsourcing, diversity and inclusion are especially sensitive issues, according to Mr. Stoudemire.

The firm met with 300 of its clients–most of whom were worried about the retention of women and minorities–and conducted a 12-month learning program focusing on the highest-ranking minority and majority employees. The result is two years of zero percent turnover of women and minorities, and the addition of three women to its executive board, Mr. Stoudemire said.

With four generations now in the work force, employers must find ways to attract and retain a wide range of employees, he said, predicting that in the next several years, many companies will go out of business because they will not be able to adapt to generational/demographic shifts.

Most companies haven't done succession planning, and they can't rely on advancing the upcoming group of leaders on the basis of personal likes and dislikes–too frequently the approach in the past, according to Mr. Stoudemire.

Businesses need cross-cultural competence–”the ability to discern and take into account one's own and others' world views to seize opportunities, make decisions and resolve conflicts in ways that optimize cultural differences for better, longer-lasting and more creative solutions,” he said.

This can only be achieved by moving beyond the current attitude of tolerance and sensitivity, he added.

The key is moving from an attitude of “all about me” to “all about them,” and finally to “all about us”–an approach that makes both the majority and the minority part of the solution, he concluded.

Laura Mazzuca Toops is Editor In Chief of American Agent & Broker, part of Summit Business Media's P&C Magazine Group, which includes National Underwriter.