Businesses started caring a lot more about diversity after a series of high-profile lawsuits rocked the financial industry in the late 1990s and early 2000s. These lawsuits cost companies hundreds of millions in settlements. Nothing provokes action on Wall Street like money, so these companies and many others launched Diversity programs in their organizations basically on the premise that it would limit their exposure to liability. 

Programs such as Mandatory Diversity Training, Mandatory Bias Training, Mandatory Job Testing, Grievance Systems, and other “Command and Control” type approaches were adapted. 

The problem is that nearly 25 years later, most organizations have largely failed to adopt a learning orientation toward diversity and are no closer to reaping its benefits. Instead, business leaders and diversity advocates alike are advancing a simplistic and empirically unsubstantiated version of the business case. They misconstrue or ignore what abundant research has now made clear: Increasing the numbers of traditionally underrepresented people in your workforce does not automagically produce benefits. Taking an “add diversity and stir” approach, while business continues as usual, will not spur leaps in a company’s effectiveness or financial performance. 

Leaders may mean well when they tout the economic payoffs of hiring more women and people of color, but there is no research support for the notion that diversifying the workforce automatically improves a company’s performance.  

What actually often happens in companies where Diversity, Equity, and Inclusion is dictated from the top is that managers rebel against rules to assert their autonomy. Try to coerce me to do X, Y, or Z, and I’ll do the opposite just to prove that I’m my own person. I remember how I felt when my mother told me to make my bed? Even if I was inclined to or had fully intended to make my bed, being told to do it caused a rebellion and the last thing I wanted to do was to make my bed. 

The reality is that the positive effects of things like mandatory diversity training rarely last more than a few days, and some studies have shown that it can actually activate biases or spark the kind of backlash that I mention above, job testing is not applied consistently or at all, and grievance systems often create more problems than they solve because managers – rather than change their behaviour or address discrimination by others – try to “get even” with or marginalize employees who complain. 

It’s far more effective to engage people in improving workplace diversity, increase on-the-job contact with female and minority workers, and promote social accountability—the desire to look fair-minded. We will not get people on board by blaming and shaming them with strict rules and re-education programs. Managers do not like being told that they can’t choose to hire and work with whomever they please. 

Four actions are key for leaders: building trust and creating a workplace where people feel free to express themselves; actively combating bias and systems of oppression; embracing a variety of styles and voices inside the organization; and using employees’ identity-related knowledge and experiences to learn how best to accomplish the firm’s core work. 

Organizations must nurture a learning culture in which there is an understanding that we are all in this together, and that leaders do not have all the answers when it comes to knowing how to benefit from increased gender and racial diversity within their teams and across the larger landscape. Leaders need to send the message that varied points of view are valued and do not need to be suppressed for the sake of group cohesion. 

Companies should make available opportunities for voluntary training around unconscious bias, diversity, and inclusion. Making training voluntary is better because it evokes a positive mindset. “I chose to sign up and show up for this training, so I must be pro-diversity” as opposed to “the company is making me do this training, so I guess I will just go along for the ride”. Cross-training is another great way to get people engaged in diversity. Allow people to try their hand at different jobs to deepen their understanding of how each function is dependant on another. This also has a positive impact on diversity because it exposes people to a wider variety of co-workers. 

An idea that works well in addition to cross training is to put people from different roles and functions and from diverse backgrounds and gender identity in self managed teams to solve problems or attack issues. Working together side by side with a common goal promotes greater understanding and acceptance, driving diversity. 

Another huge area organizations can look to is recruitment that targets women and minorities. Research shows that managers who are invited to participate in college and high school recruitment programs do so willingly and positively because the message is “Help us find a greater variety of promising employees from a larger pool of candidates”. When managers actively get involved in boosting diversity in their organizations something happens. They begin to think of themselves as diversity champions. 

Mentorship and Sponsorship programs are one of the most effective ways to increase diversity. It is important to understand that women and minorities more often need help from formal mentorship and sponsorship programs than white men who are more likely to seek out mentors on their own. And managers, although often reluctant to seek out mentorship candidates on their own, are usually quite willing and eager to mentor protégés when they are assigned to them. Women and minorities tend to be more likely to sign up for a mentor in a more formalized program, but are less likely to seek out mentors on their own. 

In conclusion, just making the simplistic business case that companies will perform better, have happier employees, and more satisfied customers is not persuasive  enough to drive real change. A credible and powerful case can be made, however, with three critical modifications. First, platitudes must give way to sound, empirically based conclusions. Second, business leaders must reject the notion that maximizing financial returns is paramount; instead they must embrace a broader vision of success that encompasses learning, innovation, creativity, flexibility, equity, and human dignity. Finally, leaders must acknowledge that increasing demographic diversity does not, by itself, increase effectiveness; what matters is how an organization harnesses diversity, and whether it’s willing to reshape its power structure. 

Sincerely,
Doug Dougherty
CEO

Sources: 

1. Harvard Business Review Article – Why Diversity Programs Fail by Frank Dobbin and Alexandra Kalev 

1. Harvard Business Review Article – Getting Serious About Diversity – Enough with the Business Case by Robin Ely and David Thomas