“We can’t innovate without being diverse and inclusive,” (1), explained Denise Young Smith, Apple’s Worldwide Human Resources president, when the company announced it was to invest $50 million in not-for-profit organisations that promote the integration of women, minorities and older people into the technology sector. The news came out the same week Apple unveiled its smart watch, and is just one of many such initiatives some Silicon Valley companies are undertaking to increase diversity, particularly in terms of hiring more women.
Using data on the number of women and minorities employed by tech companies at all levels, in early 2015 Fortune magazine (2) compiled a list ranking LinkedIn, Apple, and EBay in the first three positions respectively, followed by Cisco, Hewlett Packard, and Microsoft at the bottom in 12th, 13th, and 14th places. As was reported widely when the survey was published, the majority of people working in the tech sector are still white American and Asian males.
The same picture emerges in many other sectors where innovation is also a key factor in generating value. For example: women make up the majority in education overall, but in the tertiary sector, and particularly the upper echelons of universities, diversity falls off rapidly. (3)
Talking to CEOs, CLOs, and my fellow deans of business schools, one of their main concerns when recruiting new staff is how to promote diversity in their organisations, particularly in key leadership positions. A 2014 Forbes survey on diversity notes: “When it comes to the strategy and implementation of a diversity program, responsibility for the success of company’s diversity/inclusion efforts lies with senior management.” (4) In the same report, 69 percent of multinationals surveyed had committees or boards whose job was to supervise diversity strategies and initiatives. The CEO was a member of these diversity committees in 61 percent of cases, while in 72 percent of them, so was the head of human resources. In the opinion of all those questioned, responsibility for promoting diversity in companies is the responsibility of the CEO or the head of human resources.
But a concurrent survey carried out by Deloitte (5) reached very different conclusions, suggesting that diversity was not considered a priority by human resource departments compared to say, attracting and retaining talent, or leadership. It is possible that the methodology used did not see diversity as a cross-cutting issue related to managing talent or recruitment and promotion.
It must be said that while diversity has become something of a buzzword, difficulties in understanding the cross-cutting nature of its impact on businesses has to do with its very definition. This difficulty is further highlighted by the assorted meanings attached to it by different cultures, for example what the management considers a minority, or how ideological and religious differences are interpreted.
To provide a better understanding of the concept of diversity, perhaps we could apply an academic definition of corporate diversity: “A management philosophy of recognising and valuing heterogeneity in organizations with a view to improving organisational performance.” (6)
In which case, what kinds of diversity should companies be looking to manage? Any number of proposals have been put forward, but we can get a general idea by dividing them into two broad categories:
Demographic diversity. This would include race, ethnicity, gender, sexual orientation, age, physical ability or disability, and other related factors that can be assessed on a yes or no basis: you are or you aren’t.
Demographic diversity is perhaps best understood in the context of organisational justice. For example, it is unjust that women be paid less for doing the same work as men, or that somebody is passed over for promotion because they are Hispanic. Similarly, inclusion policies directed at minorities or the disabled are the result of integration and non-discrimination principles, originating in an ideal of social and organizational justice.
In a bid to create greater demographic diversity, some countries at different times have implemented positive discrimination policies and quota initiatives, usually supported by public institutions. In the United States, a large number of universities have positive discrimination policies for applicants from minorities that are helping provide access to higher education for growing numbers of people who otherwise would have found it difficult to do so.
The Scandinavian countries have had quota policies to increase the presence of women in all kinds of organizations for decades, and so it comes as no surprise to learn that Norway, Sweden, Iceland, Finland, and Denmark occupy the top five positions in Forbes’ composite gender diversity index. (8) This ranking assesses a range of factors related to female employment, among them the number of women in positions of authority, sitting on boards, or in parliament. As might be expected, countries like Turkey, the United Arab Emirates, and Pakistan are at the bottom of the list.
Positive discrimination and quota policies have been criticised, with some analysts arguing they can have a negative impact in the short term. That said, over time, they lead to greater social and organizational justice, which translate into a more healthy economy.
A very different question is the speed that diversity measures can really be implemented. For example, one of the problems facing the technology companies mentioned above is the low numbers of women who are graduates in STEM (Science, Technology, Engineering, and Mathematics) subjects, qualifications that Silicon Valley businesses require. The Irish Times recently commented: “Many suggest it is a mystery why this gross imbalance exists, why men so outnumber women when it comes to Stem, particularly maths and engineering, but it seems perfectly clear to me. It is the system. It is the way the odds of the game are stacked. It is like the Las Vegas casinos who know they are going to win no matter how many nickels you feed into the slot machines.” (9)
To change the system we need to implement structural measures with medium-term impact to promote greater diversity on the most sought-after degree programs, backed by other measures to support women and ethnic minorities while they are studying; which is what Apple, Microsoft, and Google are helping to fund, reflecting a collective awareness of diversity in the tech sector.
Diversity reflected through values and personality. This second category of diversity applies to issues such as religion, beliefs, personal values, education, aptitude and abilities, cognitive faculties, etc. Conceptually, this is more challenging, and is also harder to identify in individual cases.
I would say that this type of diversity is directly related to a group or organisation’s capacity for innovation. Real diversity is about bringing together people who think differently, who have different views about the world and what the good life means. Diverse values can spark culture clashes, debate and controversy, all of which feed innovation. Dialectic and discussion are a good way to generate new ideas. This is certainly what has traditionally taken place in the academic world, as well as in many companies.
The only limit that should be put on ideological, religious, or cultural diversity is respect for human rights. Within this framework, as UNESCO notes, cultural diversity becomes “the capacity to maintain the dynamic of change in all of us, whether individuals or groups.” (10)
In short, what conclusions can we draw about diversity in organisations?
– Diversity is a concept with many meanings, depending on the country and the typologies governments and businesses establish. But it falls into two main categories: demographic on the one hand, and value- and personality-based on the other. Both types of diversity have the potential to drive innovation in all kinds of organizations.
-The ultimate responsibility for driving and managing diversity in businesses falls in the majority of cases to the CEO and the head of human resources. That said, given the cross-cutting nature of diversity, middle managers will also need to be empowered to drive diversity in their respective teams. The most frequently cited barriers to implementing diversity programs are that middle management fails to execute them adequately, followed by budgetary constraints. (11)
– Implementing real diversity takes time, and cannot necessarily be imposed from above. As with any business policy, it needs to be accompanied by measures related to recruitment, development, promotion, and education in the workforce.
– Adopting diversity means respecting many different values and perspectives, as long as they are compatible with human rights.
“Diversity is the art of thinking independently together,” said Michael Forbes once. Diversity strengthens companies, not the opposite.
Photo: Participants of IE Business School MBA Program at the Winter Games, 2014.
(1)Michael Lev-Ram, Apple commits more than $50 million to diversity efforts,Fortune March 10, 2015
(2) JP Mangalindan, How tech companies compare in employee diversity, Fortune August 29, 2014
(4) Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce; Forbes Insights, July 2011. Based on interviews with 321 top executives from multinational companies.
(5) Deloitte University Press, Capital Trends 2014: Engaging the 21st-century workforce
(6) Ozbilgin, M. F. and Tatli, A. (2011), “Mapping out the field of equality and diversity: rise of individualism and voluntarism”, Human Relations, Vol. 64, No. 9; pp 1229-1253.
(7) Mannix, E. and Neale, M.A. (2005), “What Differences Make a Difference?”,Psychological Science in the Public Interest, Vol. 6(2); pp.31-55. These authors propose an interesting and large typology of Diversity.
(8) Diversity & Inclusion: Unlocking Global Potential Global Diversity Rankings by Country, Sector and Occupation; Forbes Insights, 2012.
(9) Dick Ahlstrom: “Innovation talk: What’s behind the lack of women in science and tech? UCD report states that ‘the key issue appears to be motivation”; The Irish Times, March 31, 2015.
(10) Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce; Forbes Insights, op. cit. p. 18.