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Winter 2002
When
times get tough, do diversity initiatives keep going?
The robust economic climate of the 90’s helped make diversity
management a key imperative for corporate, private, and non-profit
America. But, as the economy struggles to regain its footing and
the country resumes a new sense of normalcy after September 11th,
will corporate attention to diversity fade? And perhaps, more
importantly, how should organizations protect the advances they’ve
made and maintain their diversity commitment?
Diversity Management: An Important Thread
in the Corporate Fabric
According to R. Roosevelt Thomas, Jr., founder of the American
Institute for Managing Diversity, diversity management is a comprehensive
managerial process that is about more than color and gender. "It’s
about all the differences that make us unique in terms of lifestyles
and challenges, skills and contributions." Ten years after
making this statement in his book, Beyond Race and Gender, the
practice of diversity management is just as relevant, especially
during these tough economic times: to create a workforce that
mirrors the populations and customers an organization serves and
to improve organizational performance.
More than 75% of Fortune 1000 companies have formal diversity
initiatives or employee training programs, with most focusing
on race, gender, and ethnicity. A recent survey conducted by the
Society for Human Resource Management and Fortune Magazine revealed
that the majority of organizations believe their diversity initiatives
improve the corporate culture and their abilities to recruit talent
and stay competitive, all factors critical to bottom line success.
Chicago-based ABN AMRO North America Inc., for example, has numerous
diversity initiatives in place, including awareness workshops
for managers and supervisors, and internal resource groups consisting
of African-American, Hispanic, women, and gay and lesbian, and
other employees who assist management in understanding specific
issues and marketing opportunities. Employees can access a diversity
resource calendar on the company’s Intranet, while articles
on diversity appear periodically in the company’s employee
newsletter.
Carolyn Pemberton, Senior Vice President and Director of Diversity,
oversees these initiatives and presents demographic reports to
the company’s Executive Committee revealing where there may
be room for improving representation of women and minority groups.
These reports give Ms. Pemberton the opportunity to reinforce
the executive buy-in to initiatives she considers essential to
the company’s profitability and growth. Yet with only three
people, including herself, to manage diversity initiatives company-wide,
Ms. Pemberton stresses that everyone in the company must embrace
them. "Our philosophy is to make diversity part of the fabric
of our company. Line managers and employees have to make it happen."
Like Ms. Pemberton, May Snowden, Eastman Kodak’s Chief Diversity
Officer, views herself as a catalyst to help the company with
the "how" of diversity management. Under her leadership,
the Rochester, New York-based company has developed and implemented
a comprehensive strategy designed to create an inclusive environment
that values diversity. "Our commitment to diversity means
shaping our culture so that all stakeholders contribute fully
to our success as a global leader in imaging," she said.
Among the more visible manifestations of the company’s diversity
commitment is a workforce in which 37% of employees are women
and 21% represent people of color, achieved largely through aggressive
recruiting at colleges, universities, local, regional and national
conferences, and career fairs. Diversity awards are presented
annually to managers who demonstrate excellence in advancing the
company’s diversity initiatives. Kodak also actively supports
and promotes efforts to strengthen education, economic development
of minority communities, and equal employment opportunity, and
is working to expand its supplier partnerships with more minority-owned
and women-owned enterprises.
To ensure that it has the right people involved in the ownership
and development of its diversity strategy, Kodak formed a Global
Diversity Leadership Team. Representing Kodak businesses inside
and outside the U.S., this group of 34 senior leaders is also
held accountable for the execution of the strategy in their work
groups. In fact, accountability is considered so important, diversity
is one of the four key measurements used in Kodak’s performance
appraisal process for all managers.
In addition, Kodak has established an external diversity advisory
panel consisting of notable members representing the fields of
law, civil rights, business and industry, and academia. This group
is responsible for reviewing and offering their advice about the
company’s diversity plan, management policies, and practices.
At Williams, a major energy company based in Tulsa, Oklahoma,
the diversity focus for 2002 encompasses skills education for
front-line managers, a heightened emphasis on internal talent
development, and shoring up the energy company’s compliance
foundation. According to Eric Watson, Executive Director of Diversity
and Workforce Capability, the company’s diversity strategy
has evolved over the past few years, beginning with the creation
of business cases for diversity in each business unit and awareness
training for the CEO and senior executives. Among its many diversity
programs are observances of Heritage Month and Take Your Daughter
to Work Day and special training for participants in its Arctic
Project in Alaska to maximize productivity among employees working
alongside people from different countries.
Dealing With the Downturn
But when economic times become more turbulent and dark clouds
build over the bottom line, have diversity programs been able
to weather the storm? In the past, they were often viewed as luxuries
and quickly eliminated when the going got tough. When layoffs
were conducted according to seniority, minority employees were
usually the first fired since they were often the last hired.
This time around, the slowdown appears to be affecting all minority
groups equally as companies make a concerted effort to cut back
yet maintain their diversity gains. Fortune Magazine cites the
example of Silicon Graphics, a computer workstation manufacturer
that was forced to close several businesses and eliminate ten
percent of its workforce, an estimated 1,000 workers. The company
monitored layoffs to ensure that no one employee group was disproportionately
affected and to maintain the overall ethnic, gender, and age makeup
of its workforce. The Wall Street Journal reports that some companies
are conducting statistical analyses to determine the across-the-board
effect of planned layoffs on various employee groups.
V. Robert Hayles, PhD, an effectiveness/diversity consultant
based in St. Paul, MN, agrees that companies appear to be avoiding
adverse impact in their recent workforce reductions. And while
his client companies are no less committed to their diversity
initiatives, they are seeking to improve their cost-effectiveness.
"Some companies are asking if we can put more people through
training in a shorter period of time or if it is possible to extend
the timeframe in which the training takes place."
Because of the tight economy, ABN AMRO’s Pemberton recently
experienced fewer department requests to provide funding for the
company’s minority summer internship program. All areas of
the company are looking in detail at where dollars are being spent
which, she admits, makes her task a little more difficult, particularly
in the area of employee training. "Senior management has
mandated continued support of diversity and anti-sexual harassment
training for managers but we may have to spread the training of
other employees over a longer timeframe until the economy improves,"
she concedes.
Mr. Watson has been able to avoid program reductions at Williams
by making sure that diversity focus areas are delivering financial
results and are well aligned with the company’s business
objectives. "We aren’t doing things that aren’t
meaningful to our business. You have to manage by showing that
changing is not necessarily pulling back. This is how our leaders
maintain a commitment to diversity that is both authentic and
courageous."
Although Ms. Snowden’s budget has been reduced along with
everyone else’s at Kodak, she has used this as an opportunity
to do things differently and be innovative. "Since we’re
not using consultants, we looked at how to get people engaged
in learning and training by doing a lot ourselves." One initiative
that has taken root, called 52 Weeks of Dialog, is keeping diversity
alive through weekly communications, including sessions in which
executives and members of employee network groups serve as speakers.
And Then … September 11
As if the struggling economy weren’t enough, the impact
of September 11 placed added pressure on companies’ diversity
initiatives. Dr. Hayles notes that the issue of religious diversity
has received greater emphasis since 9/11. "It’s on the
agenda as an explicit issue because of the implications related
to employee recruitment and morale. Companies are providing opportunities
for employees to learn about different religions and, in some
cases, about the Islamic religion in particular."
At ABN AMRO, Ms. Pemberton indicates there was greater sensitivity
to religious diversity throughout the bank and its offices located
around the country post-9/11. In early 2001, her office conducted
a series of mini-workshops, led by a local Muslim leader, to educate
the company’s human resources employees about Islam since
the bank serves a growing Muslim population in both the Chicago
and Detroit, Michigan areas. "I think that this training
helped our human resources employees handle situations after 9/11
with an enhanced level of understanding."
For Mr. Watson, the aftermath of 9/11 provided an opportunity
for his organization to reaffirm its commitment to diversity,
and for him to experience significant personal growth. "Our
senior leadership made clear that backlash would not be tolerated
and encouraged employees to reach out to those affected and let
them know how important they are to us," he said. "I
also was able to better grasp the concept of diversity from a
multinational perspective and learned the importance of taking
time to understand who we are helping through our diversity initiatives."
In addition to distributing a memo from the CEO, Kodak conducted
a series of sessions for employees to talk about the impact of
9/11 on their lives which was especially helpful for the company’s
newer, younger employees. To Ms. Snowden, the required response
pertaining to future training and policies was clear. "We
need to expand our examples."
Keeping Progress on Track
Given current corporate turmoil, how should organizations proceed
to ensure that diversity remains a priority? A first and important
step is to make sure that the right people are in place to lead
the organization’s diversity initiatives, in addition to
bringing other managers into the organization who reflect its
commitment to diversity and are willing to provide support. According
to Donald A. Heneghan, Partner, Allerton Heneghan & O’Neill,
"It has always been our policy to present a diversified slate
of candidates to our clients when conducting an executive search.
They have come to expect this from us, even during an economic
slowdown."
Dr. Hayles encourages organizations to develop internal talent
and resources to ensure the continuation of diversity work even
when times are tough. "I recommend to my clients that they
incorporate ‘train the trainer’ sessions into their
overall diversity training programs to maximize cost-effectiveness."
"You have to start with getting everyone to agree on diversity
philosophy, that it’s not just flavor of the month but something
you do all the time because it’s part of the business function
and an important part of business success," advises May Snowden.
"You need to effectively address the demographics and market
realities we have today to keep your diversity strategy on the
radar screen."
Eric Watson emphasizes the strategy has to be anchored with both
the company’s CEO and senior leadership as both the right
thing – and the smart thing – to do. "The diversity
strategy has to have value and you have to stay within the reality
of who you are and what business you are in."
Echoing her colleagues, Carolyn Pemberton underscores you have
to put the point forward that diversity management is not just
the right thing to do; it’s critical to the organization’s
success. "From an internal standpoint, there’s a cost
of turnover due to not being fair and equitable. That applies
to everyone, not just minority or ethnic groups. You also have
to emphasize the importance of employees accepting personal and
individual differences. You won’t get the best productivity
or most creativity from employees who aren’t happy."
Ms. Pemberton also points out that the success of a company’s
external activities are highly dependent on its approach to diversity,
from its reputation in the community and its marketing programs
to ethnic groups to its effectiveness in opening up new markets.
If an organization’s diversity initiatives are at risk due
to tough economic conditions and it cannot spend hard dollars
now, she advises you look at where you can cut without abandoning
everything accomplished to date. "You need to focus on what
can be done," she says. "Diversity initiatives are part
and parcel of doing business. If you don’t address the need
to deal with diversity, you may look up one day and find you’ve
lost the race."
About Allerton Heneghan & O’Neill
Allerton Heneghan & O’Neill is a retained executive
search firm that recruits senior executives for businesses ranging
from new ventures to major corporations. The firm’s diversity
search practice continues to be a growth area, serving clients
in virtually all industries and a wide range of functional areas.
Allerton Heneghan & O'Neill Two Mid America Plaza
Suite 800 | Oakbrook Terrace Illinois 60181
630.954.2244 | info@ahosearch.com
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