Diversity is good for business - but does everyone get it?

Profile picture for user gonzodaddy By Den Howlett March 29, 2017
Summary:
Get ready for a long read that talks to topics of unconscious bias and the economic advantage of diverse and inclusive workplaces. It's not a comfortable read.

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At times, the topic of diversity baffles me. A report in The Guardian makes an argument with which any manager can get on board:

The business minister Margot James said all FTSE-350 companies should take up key recommendations from a recent government-backed review into race in the workplace by the businesswoman Ruby McGregor-Smith.

It concluded that helping black and minority ethnic people to progress in their careers at the same rate as their white counterparts could add £24bn a year to the British economy.

Adding to the economy translates into better outcomes for everyone in and around those companies that choose diversity and inclusion over a laissez faire approach. Back in 2014, the Huffington Post reported:

An analysis from Fortune showed that Fortune 1000 companies with female CEOs record better stock market returns than those with male CEOs. Only 51 of the Fortune 1000 companies are run by women.

“Fortune 1000 companies with female chiefs outperformed the S&P 500 index over their respective tenures,” Fortune’s Caroline Fairchild wrote. This means that, in general, female CEOs’ overall performances are higher than their male counterparts’ when it comes to stock market returns.

Better performance usually translates into better pay and better working conditions. So why do so many businesses apparently struggle with diversity and its flip side, inequality? Try this for size.

The unconscious problem

A wee history lesson. I remember my first university seminar in sociology like it was yesterday. Our professor opened the course with a seemingly simple question: 'Who among you would say you're not racist?' Confident in my reply, my hand shot up. Why confident? I've lived in a multi-mixed race family for many years and I consider that I only see people, not color.

'Wrong!' she roared. 'You're a white guy who has had a pretty privileged life. You can't possibly know what it's like to be born as a black person with all the inherent disadvantages that go with color and in not knowing, you are always at risk of exhibiting racist behaviors.'

While the reasoning behind her answer knocked me flat on my intellectual back, it gave me enough pause for thought to realize that we all carry prejudices and biases, whether conscious or not. A combination of family environment, location, education, economic circumstances and peer situations all feed into the way in which we form a world view of 'others.' Acknowledging that is a good first step.

The unconscious element of this complex topic intrigues me as much today as it did when I got my butt kicked in class. And yet it is often something that has impact in plain sight. Do you recall when Marc Benioff, CEO Salesforce discovered that the women in his company were consistently under rewarded and the action he took as a result? Let's be very clear.

Benioff is one of the most vocally active and supportive of those who are disadvantaged and yet he didn't know that his own company was acting in a prejudicial manner.

Returning to my university experience, in those days, racism was defined on that sociology course as something that specifically affected black people. Today the scope has widened to the sometimes contentious Black and Minority Ethnic (BME.) Back then, issues of sexuality were bucketed as 'gay and lesbian.' Today that is considered too narrow and we include transgender and bi-sexual in the acronym LGBT. In short, the many ways in which inequality plays out means that inequality in all its forms is a matter of difference and its economic impact.

So when I see the recent attention given to women wanting to get on equal terms with men, and particularly as it plays out in the technology industry, I am conflicted.

On the one hand it is encouraging that the rights of women to be treated on an equal footing with men are actively discussed in many places and with nuance. It is a good place to start because it is easy to see and understand. But in focusing attention on women, I worry that we ignore the many other ways in which inequality plays out.

Benioff acknowledges this. In discussing the problem at last year's Dreamforce Women’s Leadership Summit, Stuart Lauchlan noted:

But mention of the Indiana [LGBT] incident does surface some tricky questions about priorities. There’s a women’s summit this year. Will there be an LGBT leadership summit? An African-American leadership summit? A ‘pick-a-diversity-issue’ summit?

This is something that [co-founder] Harris alluded to when he admitted that employees representing other types of diversity groups do come to him and ask about what can be done to assist them.

But with a philosophy that “everything’s important and nothing’s important”, there is a need to change the world one thing at a time and pick your battles.

Is this the right approach? What about the practical realities? What about the profit incentive? I can well imagine the sense of shock among companies that hitherto believed they act equitably suddenly discovering that's not the case.

Inclusion for all?

For ourselves, in the early days of diginomica, I got regularly pinged because we had no women on the team. Today we have five regular female contributors. They produce some of our most compelling, engaging and popular content. Later, I got pinged because we had no people of color. That's been a hard one to crack. Looking back, I felt as though I was under pressure for a problem I couldn't readily solve.

Interestingly, we never got asked about our position on LBGT people although we have that covered. We were not asked about people with health issues. Neither were we asked about older people. One look at me tells you all you need to know on that score, but you get the point.

Right now, inequality and diversity are too narrowly focused on topics that are laudable in themselves but represent a skewed top of mind view of what needs to happen.

Follow the money

Business is never going to deal with these twins in a meaningful way unless there is a clear economic benefit. Business never does on topics that at first seem a diversion from the martialling of labor and materials into goods and services sold at a profit.

Business will always tend towards dealing with this as the equivalent of an afterthought, an add-on, a 'nice to put a tick in the box,' or, worse still, something we have to do because not doing so has become socially unacceptable. When viewed through that lens, addressing diversity is similar to addressing sustainability. It takes economic pain to change.

The most visible example is Uber. The ongoing flow of odious and borderline criminal reports of sexual harassment and rough business practices make it increasingly difficult for Uber to keep its best people. How does this jibe with reports that Uber's CEO, Travis Kalanick, only cares about getting the best people? If that's the case then why does tone at the top seem so abysmal?

In Uber's case, that desire to get the best is tempered by an apparently iron will to succeed at any cost. That's not a winning strategy for the long haul. While the public pronouncements coming out of Uber are encouraging, there is no evidence of real change. In extremis, an unchanged tone at the top will corrode Uber from the inside.

Uber's recent diversity disclosures don't make for encouraging reading:

Uber's workforce overall is comprised of 36 percent women, but that number falls to 15 percent when looking at employees with technical roles, the company said.

By comparison, Alphabet Inc's Google's staff is 31 percent women, Twitter Inc's is 37 percent women and messaging startup Slack's workforce is 43 percent women, according to the companies' websites.

 

Apart from reports we see in the media, pointing to the value of diversity in the workplace, I see occasional encouraging examples where technology vendors take the diversity issue seriously, acting in a comprehensive manner rather than merely pontificating or hand wringing on the topic.

Bright spots in diversity

Salesforce made a good start with its comprehensive overhaul of pay inequality but for me, SAP is the most visible example with programs that celebrate different aspects of diversity, looks to actively employ people on the autism spectrum, continues to work on gender balance and cultural inclusion. I particularly like that SAP talks about diversity AND inclusion as a single topic. Marrying the two together is a very good way of creating a bulwark against inequality and bias.

As far as I know, SAP is the only company among the pantheon of enterprise focused technology vendors that produces a detailed diversity report that lays out the various programs it operates. That''s a self imposed pressure point. Equally, I am aware that the genesis of at least some of those programs came from activism inside the company that caught the attention of the company's leaders. Is SAP a perfect example? Of course not. Companies can always do more. But then no-one would argue that SAP is anything other than a highly successful business when measured through the economic lens.

A final take

It is good that diversity and inequality regularly pop up as topics that will continue to embarrass those who are bad actors. The economic upside though is something to which business leaders need pay more attention. It is equally good that a very few vendors like IBM and Intel are going a step further and tackling the thorny topic of diversity among suppliers.

More important, the unconscious biases we apply in failing to adequately address the many faces of inequality will continue to make the problem appear sometimes intractable. To that extent, the opening up of non-judgmental conversations along with active training and mentoring of those who are 'different' should be seen as pathways to achieving a more diverse and inclusive workforce.

Whatever path this topic pursues, the one thing I sincerely hope that business doesn't do is fall into the trap of treating all topics with diversity as requiring the same solution. They don't. But that's a topic for another day.

Image credit - via free images

Disclosure - SAP and Salesforce are premier partners at time of writing.

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