Trends and strategies for diversity breakthroughs

by Bettina Schmidt

Summary in German - Zusammenfassung in Deutsch

Herausforderungen erfolgreicher Diversity-Strategien
Unter dem Einfluss globaler Trends erhöht sich die Komplexität und Vielfalt in der Gesellschaft und Arbeitswelt. Entwicklungen wie die europäische Integration, Mobilität und Migration, demographischer Wandel, die Internationalisierung der Märkte und der Unternehmen tragen zur wachsenden Bedeutung von kultureller Vielfalt bei. Nach aktuellen Zahlen des Statistischen Bundesamtes ist der Anteil an Menschen mit Migrationshintergrund in der Bundesrepublik auch 2008 erneut gestiegen und liegt aktuell bei 15,4 Millionen Personen. Das entspricht 18,8 Prozent der Gesamtbevölkerung; etwa jeder fünfte Einwohner. Es liegt an uns, Kompetenzen zu erwerben, die uns befähigen mit diesen komplexen Gegebenheiten zurecht zu kommen. Das heißt konkret: Potenziale kultureller Vielfalt in der Gesellschaft und im Arbeitsalltag zu entdecken und sie systematisch zu nutzen. Da der Umgang mit kultureller Vielfalt erlernbar ist, wird kulturelle Kompetenz zu einem ’Wert-vollen’ Potenzial für Unternehmen und unsere Gesellschaft insgesamt. Noch ist dies eine weitgehend ungenutzte Ressource. Hierin, so wird in dem Artikel argumentiert, liegt die größte Herausforderung zukünftiger Diversity-Strategien.

In the past years it has become common practice for large corporations to formulate their own diversity policy. In Germany, between January 2007 and December 2008 five hundred organisations have signed the “Charter for Diversity” – Charta der Vielfalt. Increasingly, German DAX-companies and public institutions are establishing positions for Diversity Managers and the representative bodies of employers and employees agree on diversity policies (Betriebsvereinbarung) for their organisations or sector. The most recent example in Germany is the social-partnership agreement on diversity management in the chemical industry between the Bundesarbeitgeberverband Chemie e.V. (BAVC, Wiesbaden, Germany) and the trade union consortium Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE, Hannover) signed on November 24, 2008.

We are looking back on a decade of implementing various diversity activitites. Google “diversity in business” and you get more than 41 million hits. We can now evaluate and benchmark diversity activities, identify best practices, study and debate quality criteria and standards at conferences and in publications in order to establish a more effective business case for diversity. This is good news.

Also the study by Hewitt Associates titled “Beyond Best Practice: New Strategies for Diversity Breakthroughs” (2006) highlights positive achievements. But assessing current best practices in managing diversity, they come to the conclusion that “few organizations are directly applying the implications of diversity to their business strategies. This is central, because without this connection, diversity as solely an HR thing wither on the vine.” They argue that new integrated business strategies for a diversity breakthrough are needed.

The challenge of inclusion
The Hewitt study focuses on one crucial shortfall in diversity practice: the prevailing approach to diversity and inclusion. At conferences and in CEO statements it has become common practice to quote demographic statistics as a push-factor for diversity. What they yet have to reveal is how to make it work. Pro-inclusion campaigns with “let’s-all-get-along” connotations of inclusion and voicing political correctness are not enough in bringing about inclusion. Inclusion is hard, harder than raising awareness or sensitising staff for diversity. It is even harder than diversity itself. Why is it so difficult to achieve?

Firstly, inclusion is about making sure that individuals of various demographic groups feel included in the organisations’ overall community. Secondly, inclusion is about how to make the mix work. Reference to demographic statistics is by far not enough. The way forward is more complex:

“Before embarking on their diversity quest, corporations will need to answer a vital question: ‘Why is diversity important to us, specifically, given the industry we’re in and the kind of company we are?’ … Only those who can answer by making hard-wired links to their core business will be able to make those investments necessary to set the foundation for achieving sustainable diversity and inclusion.” (Hewitt 2006)

Such a business approach is necessary in order to deescalate many of the contentious issues around diversity. Employees - regardless of whether they’re part of the majority or minority - need to see the relevance to their day-to-day work and responsibilities. This is key to creating an inclusive environment. It shifts diversity from being about various constituencies – for example migrants - to being about the organisation. CEOs, managers and employees need to believe that diversity is key to their organisational and business success.

What is needed in order to move beyond present best practice and implement new strategies for a diversity breakthrough?

Diversity management oriented organisational development
We need to ensure that structures are in place, which support diversity and inclusion. How can it work? Structural organisational change supportive to individual learning processes need to be matched. This also implies that change processes need to take place at all levels, in order to avoid individuals – diversity competent staff or migrants – being burdened, frustrated, giving up in defeat or in the worst case, being blamed as solely responsible for tensions and conflicts. In order to avoid such negative effects of diversity Taylor Cox (2008) emphasises the need to relate workforce diversity to organisational issues such as organisational culture and managing change (organisational development).

Up to now few studies are able to assess the impact of cultural diversity in economic terms. Also what is meant by diversity competence, cross-cultural, cultural or intercultural competence is still vague. Quality criteria and quality standards on intercultural training, diversity and cultural mainstreaming, i.e. diversity management oriented human resource development and diversity management oriented organisational development, are yet to be formulated.

The Hewitt study argues that the paradigm of diversity sensitivity and tolerance - which was part of the past generation of diversity work – had its limits in the ability to foster a sustainable inclusive environment. Why? Although the tolerance approach resulted in zero tolerance policies based on anti-discrimination legislation and affirmative action strategies, it also undermined inclusion because of its implied audiences: specifically targeting groups of people based on one attribute such as white homosexuals, women, disabled, migrants (Ausländer, Personen mit Migrationshintergrund). Reality is far to complex to adequately ‘box’ people into groups due to one attribute. Individual identities cross-cut various group categories. Furthermore, individuals often feel stigmatised once categorised according to one characteristic. It gives second place and often does not do justice to the person’s individual identity by which he or she is different or similar to others in multiple ways.

Such oversimplified group categorisations immediately put an important part of the members of an organisation or community on the defensive, i.e. men versus women, migrants versus majority population, Moslems versus Christians, etc. New strategies need to move toward greater inclusion.

A paradigm shift needs to focus on individual and organisational diversity competence and cultural competence more specifically.

Managing diverse work teams
In their research on ‘creating value with diverse work teams’ Joseph DiStefano and Martha Maznevski (2000) came to the conclusion that diverse teams outperform homogenous teams if diversity is not only a lip-service, but managers have the competence to manage diversity. They identified three types of multicultural teams:

1. The “Destroyers” are characterised by mistrust and prejudices. Team energy is diverted to conflicts in connection with processes of negative stereotyping. These teams are dysfunctional because the formal leaders make decisions without genuine discussing among members. Results lag behind those of homogenous teams.
2. The “Equalizers” ignore and override cultural differences. Teams do not move beyond medocracy since potentials of diverse ideas, perspectives and values are not utilised. Cultural diversity is not viewed as resource and innovative potential.
3. The “Creators” recognise and value cultural diversity, they even promote it in regard to set objectives. DiStefano and Maznevski compare such teams with a top-performing jazz ensemble.

DiStefano and Maznevski argue that top performance through synergy of individual differences cannot be taken for granted but is a process accompanied by human resource development interventions based on their MBI-Model of managing cultural diversity. The MBI-Model consists of three stages for dealing with diversity: 1) Mapping, 2) Bridging and 3) Integrating. In essence it is a three phase process of acquiring (cultural) diversity competence: awareness, developing competence, and developing strategies.

In the ‘Mapping phase’ the team is made aware of relevant differences. It includes various aspects such as cultural origin, gender, education, work experience etc., issues which may cause conflicts. The aim is to equip the team to reflect one own cultural identity, i.e. being aware and gaining an understanding for differences. In the ‘Bridging phase’ competencies are acquired to recognise and deal with problems adequately and be equipped to act preventatively. In the Integration phase strategies are in place to manage differences, i.e. to value and utilise the differences to achieve high performance. It includes monitoring participation patterns, solving disagreements and creating new perspectives.

Activities and programmes in human resource development (HRD) not only accompany this process, but take a lead and an active role in ensuring the outcome and impact of diverse teams. As outlined below, such activities reach the best results once they are an integral part of cultural mainstreaming.

Intercultural and diversity training
Almost all diversity strategies have an intercultural and diversity training component. What we do know is that diversity teams performed worse on problem-solving tasks when they were untrained to deal with differences. With training, however, they outperformed the homogenous teams significantly. Cox (2008) argues that there is a need to study in more detail how performance links to diversity, i.e. measuring outcome at the individual or group-level and considering organisational outcomes like Return on Investment (RoI).

Yet there are still a lot of unanswered questions. For example: Diversity trainings and intercultural trainings are so diverse that they are hardly comparable, quality criteria and standards are missing, indicators for measuring results, i.e. transfer from training to the workplace, are too vague and transparency is a problem (Schmidt 2008). Often training just touches the tip of the iceberg and seldom tackles the deep-seated problems of cultural diversity in organisations.

Successfully managing a diverse workforce is difficult to accomplish. It goes beyond sensitivity and intercultural trainings or promoting specific previously disadvantaged groups such as women, gay or migrants. There is an increasing realisation that a more diverse workforce is much more difficult to manage. A diverse workforce also means more diverse desires, beliefs, work styles and behaviours posing increasing challenges to human resource management, leadership, communication, etc.

The issue that needs to be addressed is: What do we mean when we talk about (cross)cultural and diversity competence and how can we best formulate a diversity strategy that ensures the required breakthrough?

A paradigm for cultural competence: don’t leave anyone out!
Without dwelling on the history of the term ‘competence’, a few notes on the meaning of the word are nevertheless helpful. Competence stems from the Latin verb competere to strive together, to coincide, and be suitable. Competence can be defined as a cluster of complex, self-organized professional, methodical, social and personal abilities and commitments created in a life-long biographic development that enable a person (or an organisation) to act and interact effectively in a job or situation, act creatively and handle uncertainties successfully.

Competence, performance and communication are interlinked. In other words, we observe competence through performance. Competence means: individuals manage to meet professional and personal demands for purposeful action. Hence we can distinguish between qualification and competence: Qualification can be defined as positions of measurable knowledge and skills, centred on specific subjects and measurable in tests (Heyse et al. 2002). In order to perform well professionals require both, qualifications and competence.

Since communication and performance take place in constant reference to reality models of society that we construct through the help of culture programmes, we experience great difficulty to interact with people of other cultures without prejudice and clandestine devaluation. Yet we all know that our future depends on the fact that we need to succeed in overcoming fundamentalist thinking and deep-seated prejudices. Hence we can already predict today: in future, culture competence (diversity competence) will be one of the most important core competencies. In order to achieve such competence we need to accept the cognitive autonomy of each person, just as we learn to respect the right to existence of every culture and the competition between cultures. What we do and say, feelings as well as moral orientations and views play an important role. Based on a constructivist approach Siegfried J. Schmidt (2005) argues that we need not only acknowledge the importance of culture, but also seek empirical evidence in our daily interactions. If we fail to do so, we operate with an unacceptable and unrealistic concept of human beings. Hence we will not be in a position to act successfully in the long term.

The sociologist Ulrich Beck (2008) speaks of a cosmopolitical realism which combines respect of the dignity of the cultural other with the interest of survival of each individual. Hence we move beyond nationalism, socialism, communism and neo-liberalism giving way to a new mindset and a new worldview based on the recognition of differences. It includes the ability to interact across borders and boundaries and to have a multi-local existence, thus creating a complex web of divided loyalties without giving up one’s original identity. It is a new world of having wings and roots at the same time, having the rights to roots and the rights to options, being localised and provincial paired with the experience of a world citizen. In line with this thinking Martin Hilb at the Management School of the University of St. Gallen developed the Model of Glocalpreneuring: the art of being local worldwide (Hilb 2000).

Refering to the transformation context in South Africa in the 1990s, Robert Thornton described it as follows: There is not one fundamental identity that all nationals of one country cling to and that is hence common to all. Each individual has multiple identities in multiple contexts, depending on the factors of expedience, recruitment and mobilisation, and the company one keeps. Individuals may have multiple identities in common contexts, and common identities in multiple contexts (Thornton 1994).

Guided by the Hewitt study, let’s list issues cultural competence needs to address and achieve in order to minimise some of the pitfalls of present diversity management practice and maximise the benefits of a diverse workforce.

• Do not leave anyone out. It is inclusive and not one group is left out of the diversity discussion.
• It does not target a specific group, and not one group is in need of more cultural competence than others.
• It’s a competency rather than an attitude or stance.
• It specifies competencies and they can be broken down into discrete, observable, and trainable behaviours and skills.
• It needs to be pragmatic and applicable to resolving daily (work related) diversity issues.
• It reflects the way “we think in our organisation” and “what we take for granted”.
• It moves beyond tolerance and sensitivity where your own upbringing tells you what is right and wrong and you’re facing colleagues whose cultural upbringing is very different.
• It addresses unspoken taboos of diversity undercurrents.
• It moves beyond political correctness where all know what is appropriate to say.
• It includes languages and concepts for addressing differences skilfully with an awareness of cultural preferences, prejudices and stereotypes that are part of the community or a group on the defensive.
• It challenges old ways of exclusion and patterns of thinking in ‘either-or’ categories in favour of an inclusive approach (‘as-well-as’).
• It provides tools to minimise potential problems of diversity and views conflicts and problems as part of learning processes.
• It allows a global diversity approach transcending the american diversity paradigm and transcending across countries.
• It combines organisational issues and corporate culture with individual aspects of diversity.
• Executive leaders will not overlook women and minorities for top-level positions because they do not fit into a white male influenced view of strong leadership.
• It creates inclusion of the dominant group (for example white male) as full diversity partners and thus avoids the trap to ignore potential contributions of the dominant group in the organisation.
• The same skill set is required for successfully combining corporate cultures in mergers and acquisitions.

In sum, cultural competence refers to an ability to interact and communicate effectively with people of different cultures. It is the ability to solve culturally determined problems by recognising one’s own cultural programme (model of reality, worldview) and perspectives in relation to that of others. It is the ability to proactively value and utilise cultural diversity as a resource and as a precondition for solutions to conflicts and problems. By doing so, decisions are taken, and conflicts resolved in ways that optimise cultural differences and similarities in regard to better, longer lasting (sustainable) and more creative solutions.

Cultural diversity as a resource
How then can we fully utilise the potential of cultural diversity in organisations? Before stating how we can achieve it, it may be helpful to answer the question “What impact do we want to achieve?” This includes:

1. Rigid and unproductive work related structures and organisational cultures are overcome by replacing a monoculture (one dominant culture) through the representation of cultural diversity at the various levels and in various sectors. The result is a multicultural organisation whereby differences and similarities are valued and managed (valuing diversity, diversity management).
2. Avoid discriminiatory practices. Hence costs to counter discriminatory practices are reduced and employee motivation and productivity increased.
3. (Innovative)Potentials of all employees are recognised and activated. This leads to the availability of a larger pool of qualified staff.
4. Employees are more satisfied and higher motivated, making the organisation the employer of choice.
5. Improving the quality of services and products for example through cultural specific adaptation of products and targeting specific groups of people (target marketing / Zielgruppenmarketing). Successful examples have been targeting specifically the Turkish community by the Deutsche Bank or guy marketing for various consumer products (Stuber 2002).
6. Improving the image of the organisation (business, public administration, non-profit organisation etc.) and society in general.

What kind of framework is needed in order to achieve sustainable impact? Before addressing the issue how cultural diversity can best be utilised as a resource, we can take note how it does not work well. For example:

• If there is no long term commitment by all members of an organisation, by top management (top-down approach) and employees (bottom-up approach), results will not be worthwhile. This includes for example a stronger involvement of German trade unions than we have experienced up to now.
• We also know that single well meant activities achieve little if they are not part of an overall integrated strategy and mainstreaming process.

Cultural Mainstreaming means that all activities of an organisation or the society in general from the outset and continuously recognise cultural diversity.
Mainstreaming can be defined as a specific approach to action, which has not been applied so far, and is made an integral part of all decisions, activities and processes.
Cultural Mainstreaming in organisations implies that at the top of an organisation, i.e. top management, as well as all employees proactively recognise the cultural diversity of life circumstances, perspectives and cultural background and origin

• in its structures,
• in its processes,
• in results and products,
• in communication (marketing and public relations),
• in all spheres of management and controlling (quality management),
• in order to achieve the objective of recognising and valuying cultural diversity in an effective manner.

Hence Cultural Mainstreaming is an instrument which enables us to incorporate explicitely the cultural background and origin of a person as a dimension (criteria) in organisations, in politics, public administration and business. There is no culturally neutral reality just as there is no gender neutral reality.

Literature

• Agreement 24.11.2008: The full version of the agreement is available on the website of “Sozialpartner-Netz“ as well as the website of BAVC, IG BCE and migration-online.
• Beck, Ulrich: Eine neue kosmopolitishe Realpolitik liegt in der Luft – Ausblick 2009. In: Frankfurter Rundschau, 28.12.2008. 
• Cox, Taylor Jr.: An Update on the Relationship between Workforce Diversity and Organizational Performance. Paper presented at the conference “Synergy by Diversity”, 10.02.2008 in Berlin. Gütersloh: Bertelsmann Stiftung. 2008.
• Cox, Taylor Jr.: Vielfalt im Gespräch. In: Synergie durch Vielfalt, pp.22-25. Gütersloh: Bertelsmann Stiftung. 2008.
• DiStefano, Joseph; Maznevski, Martha: Creating Value with Diverse Teams in Global Management. In: Organizational Dynamics, 1, pp.45-63. 2000.
• Hewitt Study: Beyond Best Practices: New Strategies for Diversity Breakthroughs. New York: Hewitt. September 2006.
• Heyse, Volker; Erpenbeck, John; Michel, Lutz: Kompetenzprofiling. Münster: Waxmann. 2002.
• Hilb, Martin: Transnationales Management der Human-Ressourcen. Das Modell des Glocalpreneuring. Neuwied: Luchterhand. 2000.
• Schmidt, Bettina: Ziele und Auftrag des Facharbeitskreises Interkulturelle Öffnung. In: Qualitätskriterien für die Interkulturelle Fort- und Weiterbildung. Dokumentation der Tagung, 16.10.2008, Düsseldorf. Hrsg. Von IQ-Consult. Düsseldorf. 2008.
• Schmidt, Siegfried J.: Lernen, Wissen, Kompetenz, Kultur: Vorschläge zur Bestimmung von vier Unbekannten. Heidelberg: Carl-Auer-Verlag. 2005.
• Stuber, Michael: Gay Marketing. Von der neuen Offenheit profitieren. Neuwied: Luchterhand. 2002.
• Thornton, Robert: Countries, Boundaries, Enemies and Friends in South Africa. Paper presented at the Centre for Contemporary Cultural Research in Manchester, UK, 13-16.5.1994.
   

Dr. Bettina Schmidt is project manager, consultant and lecturer, working since years on issues of Diversity, human resources and organisational development. She is member of the Executive Committee of the International Society for Diversity Management.