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Thursday, July 12, 2012

A New Paradigm for Managing Diversity

Many organisations have a diverse workforce but are not necessarily benefiting as much as they would expect from that diversity. On the one hand, there might be tensions which appear to hinder performance; and on the other hand there may be many opportunities lost. How to make the most of differences rather than just having diversity? One solution is to be found in an article by Thomas et al. “Making differences matter: a new paradigm for managing diversity”, HBR, 1996. The authors describe two main paradigms that organizations appear to pass through as they develop their diversity and propose a third which will help organizations to “reap the real and full benefits of a diverse workforce”.

The three paradigms are considered in turn followed by further implications (“et alors”).

A New Paradigm for Managing Diversity

Discrimination and Fairness

All about equal opportunity, fair treatment, recruitment and compliance with legislation, the main objective is to restructure the makeup of the organization to reflect that of society.

Progress in diversity is measured by how well the company achieves it recruitment and retention objectives; little or no attention is paid to leveraging diversity per se.

Fair treatment improves; however the company becomes “blind” to diversity and the diversification of the workforce does not influence the way of working.

Access and Legitimacy

All about accepting and celebrating differences, the underlying motivation is “legitimacy” for customers and other stakeholders: not just about being “fair”; it makes business sense.

Progress in diversity is measured by how well the company is capturing (or retaining) market share of “diverse” markets; however diversity can become “regionalized”.

Market motivation gives good focus; however internal tensions can increase since the company emphasizes cultural differences without being fully aware of the implications.

Learning and Effectiveness

All about incorporating all employees’ perspectives to improve the work processes, the main objective is to work together with differences, not despite them.

Progress in diversity is measured with reference to the consequences of learning and effectiveness e.g. innovation and overall performance compared to peer groups.

Whilst promoting equal opportunities and acknowledging cultural differences, the company grows and learns because of the differences which are integrated internally.

Et alors?

This last “new” paradigm appears to offer organizations the possibility of enhanced performance for free! Given this “free” option and that most organizations are already well advanced with the first “fairness” paradigm, why is it that so many of them have not yet moved to this third paradigm? There are a number of potential reasons. Firstly, an organization cannot advance through the paradigms without having built a solid foundation in the preceding paradigm. If for example, organizations have moved too quickly to the second paradigm of “legitimacy” without having fully addressed the challenge of “fairness” then it will be very difficult to advance even further to “learning”. This would be typical of a corporation where the “legitimacy” of diversity is already being sold externally but internally, glass ceilings are still very much in evidence hindering the promotion and decreasing the retention of any diversity. Even though it might appear that they are not far from the new paradigm, organizations might find it difficult to move to a “learning” paradigm from such a starting point.

Second, some corporate cultures might “freeze” the organization in the first paradigm. The “blind” notion that everyone is not only the same but aspires to be the same can lead to any behavioral or ideological diversity being overlooked, ignored or even argued away in an attempt to not only maintain but strengthen the sense of a unified corporate culture. Operating globally and seeing the business opportunities for “legitimate” diversity can propel organizations out of this first paradigm but then certain corporate cultures might still “trap” themselves in the second paradigm. For example, organizations which are very centralized with very strong hierarchies are unlikely to encourage differences of opinion between the ranks. No matter what the person at the top says about diversity and all its potential to improve creativity and innovation, that same person might not tolerate direct or open discourse during a meeting in their presence. The more formal and role-based the organization, the less likely it will be comfortable in moving to the third paradigm.

Finally, the challenge of moving to the third paradigm is, by the authors’ own account, not an easy challenge; however they also state that unless attempts are made to move to this new paradigm, “any diversity initiative will fall short of fulfilling its rich promise.” A further interpretation of this is that without striving for the new paradigm, the company will ultimately revert to the “fairness” paradigm. The shift requires “high-level commitment to learning more about the environment, structure and tasks of one’s organization, and giving improvement-generating change greater priority than the security of what is familiar.” This is indeed a big challenge for many large companies; however some of them have managed to achieve it and the authors’ theory has been proven by the recent McKinsey study – there is a correlation between greater diversity and enhanced corporate performance!

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