How C-Suite Cultural Diversity Executive Expertise Drive Profits & a Competitive Edge
Diversity executives offer expertise that makes an organization more competitive and profitable in a climate of national and global changes. This article examines the characteristics that make up the expertise and make recommendations for grooming executive level diversity professionals.
Globalization, technological advancements, and demographic changes have changed the economic landscape in which organizations do business. Increased reliance on new technologies means that what one knows is replacing working with one’s hands in the workplace. The Knowledge Based economy also demands an ability to share what we know as proficiently as possible (Vaughn, 2004).[i] This is one reason high intelligence test scores has loss predictability for workplace success today (Goleman, 2006)[ii]. It is old news that western society is quickly becoming more culturally diverse and younger. Once the baby boomer generation starts to take retirement seriously, their experience or knowledge will retire with them.
Managing demographic changes requires competence in communicating across cultural, ethnic, and geographical boundaries. Women and other historically excluded groups (HEGs) are in the workplace in higher numbers than ever before in western society due to taking advantage of their relatively recent access to higher education. In addition, the rising global marketplace means that people from different countries and languages will need to communicate to work productively. Anyone who manages a culturally or globally diverse team will quickly tell you that it can be a daunting task. While the team may work effectively under project time constraints, their differences tend to rub each other the wrong way during down time. If the issues go unresolved, turnover and individual performance issues can wreak havoc on even the most productive teams.
A communication challenge for diversity executives is getting the leadership team to realize that things have changed and harnessing cultural diversity in the service of productivity must be a major part of modern game plans. This is no easy task. Leaders tend to be conservative about cultural diversity. The best way to handle cultural diversity from their point of view is to make certain that there is a compliance office managed by someone—preferably a person or color—with a law degree. One reason they fail to see the larger cultural diversity picture is that they espouse a “no one is more tolerant and believes more in equal opportunity than me” attitude. All too often HEGs that come into contact with these leader take issue with their liberal-minded stance. I was in a meeting with a potential client recently when one of the male interviewers stated that there weren’t any problems with diversity among the leadership team. A female interviewer contested his assertion by stating that not everyone agrees with it.
Fortunately organizational leaders are beginning to realize that taking a laissez faire attitude towards demographic changes is a mistake. While they do not fully understand the need for training in order to help people get along better or the merits of a full fledge diversity initiative, they understand that the gap that baby boomer retirement will cause and the importance of doing things differently for the sake of succession planning. In fact, for the first time an economic downturn like the one we are presently experiencing does not appear to have significantly curtailed diversity and inclusion resources directed at talent acquisition and management.
Cultural Diversity Leadership Drives Profit
Cultural diversity in the workplace drives profit and increases innovation, which are key factors in gaining a competitive edge in the marketplace. One of several research studies supporting the profitability of cultural diversity is the publication Does Diversity Pay?: Racial Composition of Firms and the Business Case for Diversity (Herrings, 2005)[iii]. Herrings systematically pulled apart 1996-1997 National Organizations Survey data from 251 for-profit United States business organizations. The companies provided information about the racial composition of their full-time workforces, their sales revenue, their number of customers, their market share, and their profitability.
Results indicated that there is a close relationship between sales revenue, market share, and cultural diversity in the workplace. As cultural diversity increases sales revenue increased at the same rate. In addition, profitable organizations had a significantly larger proportion of the marketplace compared to competitors with less cultural diversity. Cultural diversity alone is unlikely to create value (Page, 2007). It needs to be harnessed in the service of productivity.
A National Urban League study of American workers in diversity best practice (DBP) organizations in comparison to other organizations shows that best diversity practices enhance productivity, especially when the leadership voices a commitment, diversity training is offered, and a long term diversity and inclusion strategy is set into motion.[iv] Professor Scott Page (2007) of the University of Michigan acknowledges that cultural diversity in and of itself is likely insufficient to drive profitability.[v] He used sophisticated mathematical modeling in his research to show that a culturally diverse team tends to consistently outperform a monocultural one and individuals considered to be experts at the task at hand. Experiments in his controlled laboratory environment have a major drawback in that the realities of different management styles, best practices, and other factors are controlled for in a research laboratory. In the everyday life of diversity executives, these forces are unavoidable.
Enjoying the benefits of cultural diversity requires the best managing diversity practices and the competence to orchestrate them. Diversity leadership is needed to take an organization to a place it could not have gone otherwise. Effective diversity leadership gives people in the organization a sense of optimism and confidence towards change. This is very difficult to do, but not impossible, when the change is associated with contentious issues such as affirmative action, equal opportunity programs, and diversity training.
The Diversity Executive in the C-Suite
There is enormous potential for organizations to improve their bottom lines by developing leaders with cultural diversity expertise or hiring successful ones. Starbucks, American Express, W.W. Grainger, McDonalds, and other Fortune 500 companies have created chief diversity executive positions. Good leadership in general is a catalyst for organizational growth. A study of Fortune 500 commercial banks showed that effective leadership drives employee satisfaction, retention, pay satisfaction, and profit. According to Jack Zenger et al. (2009), leaders drive profit by focusing on results, leading change, displaying high integrity, possessing high impact interpersonal skills, and being capable.[vi]
Many cultural diversity executives were not leaders before taking on the role and responsibilities. Cultural diversity executives, like other HEGs, cannot turn to colleagues on the leadership team for adequate mentoring and coaching. According to Knouse et al. (2008), HEGs experience lack of access to mentors, misunderstandings, and visible and invisible relationship building barriers.[vii] This paints quite a picture. On the one hand the organization values the diversity executive. This is recognized with the title, C-suite role, salary in many cases, and leadership responsibilities. Yet, too often they are given insufficient staff, little or no budget to get the job done, and very little authority to command change. They often do receive funding for training to develop their expertise. What this means is that the diversity executive has more responsibility than the resources and authority needed to impact the organization’s bottom line.[viii] Fortunately a good professional educational program can give them the foundation needed to both develop expertise and get access to vital resources.
Developing Culturally Competent Diversity Executives
The diversity executive certainly needs leadership skills, but she must have organizational development and effectiveness competence, particularly in designing, developing, and effectively implementing a diversity initiative. Leadership skills augment technical expertise when accompanied by an ability to capture the hearts and minds of the audience—a necessary ingredient in onboarding an organization under turbulent conditions. It is not the purpose of this article to go into details about how diversity professionals can navigate the roughed terrain of diversity politics. The reader can turn to an article written with Martha Geraghty to learn more about that.[ix] Here we concentrate on what it takes to develop leaders with cultural competence.
Diversity executives can inspire people to come aboard the diversity initiative by increasing buy in. But, only if the audience views the leader as an honest person with integrity, technically capable, and interpersonally skilled. Being an expert diversity professional means learning how to diagnose an organization’s cultural competence gaps, design intervention strategies to close those gaps, and implement the strategies in ways that each individual feels that there is something in it for her or him. In order to realize substantial impact on the organization and personal success as a leader, the diversity executive needs to develop the four components of cultural competence: Awareness, Attitude, Knowledge, & Skills.
All too often the diversity leader is unaware of what he brings to cultural diversity work. The individual has seldom worked through personal biases in values and beliefs about cultural diversity. The result is that his otherwise excellent technical skills are overshadowed by the audience’s sense that the leader has a limited view of diversity or believes that certain groups need to change more than others. These are trouble makers that undermine the leader’s best efforts to create change.
One exercise that helps professionals look closely at personal biases requires describing their cultural diversity philosophy and considering the extent to which it creates barriers for inclusion. Religious objections to same gender partners is a common barrier many diversity professions share, but a subtle one is not being open to marrying outside of one’s racial group. While it does not seem on the surface to be a big deal to prefer marrying someone of your own race, the diversity professional must understand how this value may impact her views of people in mixed race marriages. In particular, she must also take extra care in sharing her views on the matter. The slightest misstep can decrease the perception of her integrity, interpersonal skills, and capabilities. Awareness of one’s cultural diversity attitude and how it impacts personal values and beliefs is the foundation for cultural competence. The more the leader wrestles with this part of the expertise, the more she or he will be viewed as high in integrity and honesty.
Everyone knows that knowledge of different cultures is important for diversity management. However, the relationship between cultural competence, organizational inclusion diagnosis, and developing an intervention strategy are just as crucial in leadership training. Yet, this is the crucial link between being results driven and championing change. Diversity leaders who help members of the organization readily see how collecting data from them connects to meaningful real world organizational goals inspire change.
Research, organizational change, and interpersonal skills drive diversity leadership innovation. The high performing diversity executive can think on her feet in coming up with new ideas based on an integration of the data, the organization’s existing culture, and knowledge of diversity best practices. She can rely on cultural and emotional intelligence to win the hearts and minds of a resistant leadership, get people to let go of old ways of doing things in order to venture into new territories, and model inclusion to the fullest so that no one feels their leader is taking sides or willing to unfairly sacrifice groups of people.
Developing Extraordinary Diversity Leaders
A common way to fill the new diversity position is to hire someone in-house to take the helm. Hiring a person on the inside appears to be more out of the top-level leadership’s concern for maintaining a “winning” culture than seeking someone with the credentials and competence to challenge the organization in getting to the next level. A white American woman who has championed diversity in the organization for a long time or a successful person of color is typically identified and recruited from within. In either case, the number one criterion is whether or not the person is a “team player”. The first thing the new diversity executive realizes is how under-prepared she or he is for the enormity of the task. In addition, the individual quickly understands that the position is filled with diversity politics landmines. What many don’t notice for quite some time are the signs that the top leadership is not as serious about promoting diversity and inclusion as they appeared during the hiring interview. It is when the diversity executive seeks funding or asks for the authority needed to move the initiative along that the top leadership’s true diversity values come to bear.
Determining what the diversity executive needs to succeed so that the organization can fully profit from investment in the position is the top level leadership’s. To capitalize on the newly created diversity executive position, it is best to start with a clear idea about what makes cultural diversity professional an expert and use it to hire the best talent in the marketplace. Since the best and brightest can cost well into the six figure range, the salary level may be more than many organizations are willing to pay. That’s an additional reason an in-house person is sought after. If an in-house hire is preferable, make certain that the individual is given adequate time and resources to develop the expertise before fully rolling out the position. More importantly, make certain the person has the foundation needed to take advantage of the education.
Components of Cultural Diversity Executive Cultural Competence
· Seeks self awareness
· Awareness of cultural diversity philosophy
· Awareness of self in relationship to others
· Awareness of cultural diversity leadership challenges
· Informed about personal cultural diversity beliefs and value
· Values equality and inclusion
· Values continuous learning about cultural diversity
· Values modeling inclusion
· Knowledge of general cultural differences
· Knowledge of organizational assessment
· Organizational development and effectiveness knowledge
· Diversity initiative design, development and implementation knowledge
· Managing diversity knowledge
· Leadership knowledge
· Cultural Intelligence
· Cultural Emotional Intelligence
· Models self awareness
· Individual and organizational assessment
· Diversity initiative design, development and implementation skills
· Intercultural conflict management
· Managing diversity
· Diversity Leadership
· Group facilitation and training
· Modeling diversity & inclusion
· Navigating cultural diversity politics
Consider the list of characteristics of a cultural diversity expert categorized by cultural competence component in the above table. Using the table as a checklist requires expertise in and of itself and it is unlikely the typical organizational leader or even human resource officer will know how to effectively utilize it. There is a checklist called the Human Capital Inventory that is suitable for this purpose.[x] It is best used in a 360º feedback format. It is also advisable to hire a diversity consultant to help devise a recruitment plan and to assist in hiring inside talent. This will increase the likelihood of finding the best match.
The world of the diversity executive is filled with facing the hard realities of doing business in a relatively hostile atmosphere towards cultural diversity programs. Many lose sleep trying to figure out answers to questions like: How can I show value in what I do for the organization? How do I receive the same kind of respect and support as the human resource officer and chief financial officer? What can I do to decrease resistance to my work? One of the scarcest resources is competent diversity executives who know how to address these issues head on and get the results they want.
Like other business leaders, cultural diversity executives are strategists and people movers. Avoid relying on the diversity executive to be the affirmative action officer and diversity recruiter. If you must put these functions together, the diversity executive should have direct reports with the expertise to carry out those functions. Treat them like experts that add value to the organization and you will get the results that lead to profit and competitiveness. Treat them like a second class citizen in the C-Suite and you will undermine their best efforts to contribute to the organization’s success.
Becoming a Cultural Diversity Expert
Finding a good educational program for diversity executives is not that easy, but there is at least one helpful resource. In a review of diversity professional credentialing program, Lars Lejonhuvud (2009) uses several criteria, including strategy, assessment, facilitation skills, and leadership, to categorize the most prominent programs.[xi]
Cultural diversity expertise requires new rules of engagement in organizations. One’s biases and beliefs must be sharpened to fully embrace cultural diversity and a liberal-minded stance towards human differences. You cannot afford to favor one group over another. The needs of people with different gender orientations (aka GLBTs) must be championed no less than any other groups in the organization—regardless of your personal views about their orientation. This and other aspects of the work require embracing the discomfort one feels in entering unknown territories that abound in cultural diversity work. Use the opportunities to check out personal assumptions and work towards creating an egalitarian mindset.
The diversity professional learns to be calm and problem focused in the midst of emotional discharge. Talking honestly about cultural diversity promises to awaken anxiety, frustration, anger, and other emotions due to longstanding unresolved issues about differences that are inherent in western culture. On top of it all, the diversity professional is leading a change initiative, which is always source of chaos and discomfort. Expert leadership requires balancing the emotional discharge with a sense of calm contentment with the progress that is being made. Listening to the different voices in the organization allows the professional to embrace differences and deliver balanced leadership.
There are many layers of cultural differences and it is not possible to learn them all in a life time, but one can learn general patterns across cultures to use in understanding the people that cross her or his path. Some cultures are sensitive to the situation in which they communicate with others when trying to make sense of cultural differences, while others tend to use rules based on presumed universal human characteristics that transcend situations. Just know this can make the difference between deciding whether a person of Asian descent is really angry with you or merely expressing strong values and beliefs.
Just because you are open to cultural diversity does not mean you know how to communicate adequately across cultures. Never rest on your laurels even if you have some knowledge about a different culture. Continuous learning is the hallmark of a diversity expert. Even the most seasoned professionals learn something new about themselves and others each time they enter a good cultural diversity seminar. Check out your expertise by requesting a 360º feedback evaluation to improve performance.
Discover sophisticated ways to measure your initiative’s success. Learn how to use the diversity scorecard method to link cultural competence to the organization’s bottom line. Develop interventions to close cultural competence gaps that undermine productivity. Measure the extent that the training successfully closes the gaps and increase productivity. Then link increases in productivity to organizational profit and competitiveness. This is one of the most underutilized areas of cultural diversity work, but it is the most imperative in terms of increasing credibility in the expertise.
The cultural diversity expert must lead by example to capture the hearts and minds of people at all levels of the organization. Yet, few professionals have the adequate training, innate qualities, and personal insights to more than adequately meet the demands of their work. The result is that they remain marginalized in the C-Suite, underutilized, and fall short of contributing to the bottom line. Business leaders tend to overly focus on using diversity executives for diversity recruitment and retention in an increasingly competitive talent acquisition marketplace. They need to be educated about the strategic role diversity professionals play in order to understand the profitability and competitive edge benefits that research indicates comes with a culturally diverse workplace. Understanding the characteristics of a diversity expert is a start, but it must be augmented with providing the professional with the resources needed to do the work effectively. Fortunately business leaders tend to understand the need for diversity expertise training, which is the foundation for building cultural competence. In the end, it is still up to the diversity professional to identify a high impact program and do the necessary work. The ultimate goal is to acquire expertise to lead with compassion, while earning respect as a competent, value-added leader in the organization.
Billy Vaughn PhD CDP is the founder and faculty member of the Diversity Training University International certified diversity professional program, which was founded in 1998. He can be reached at admin at diversityofficermagazine.com.
[i] Vaughn, B.E. (2004). High Impact Diversity Consulting. Diversity Training University International Publications Division: San Francisco, CA.
[ii] Goleman, D. (2006). Social intelligence. Random House: New York.
[iii] Herrings, Cedric (2005) Does Diversity Pay?: Racial Composition of Firms and the Business Case for Diversity. Dept of Sociology, University of Illinois at Chicago, http://www.allacademic.com//meta/p_mla_apa_research_citation/1/0/1/7/9/pages101792/p101792-1.php
[iv] National Urban League (2004). Diversity Best Practices that Work: American Workers Speak. http://www.nul.org/Publications/PDF/ERAC-NUL.pdf
[v] Page, Scott (2007). The difference: How the power of diversity creates better groups, firms, schools, and societies. Princeton University Press: Princeton, NJ.
[vi] Zenger, J., Folkman, J. & Edinger, S. (2009). How extraordinary leaders double profits. (pp. 30-35).In Chief Learning Officer Magazine, Norm Kamikov (Ed.), CLOmedia.com: Skokie, ILL.
[vii] Knouse, S.(2008). Issues in Diversity Management. Defense Equal Opportunity Management Institute Directorate of Research Internal Report (No. 05-08). http://www.deomi.org/DiversityMgmt/documents/Issues_in_Div_Mgmt_Knouse.pdf
[viii] Vaughn, B.E. (2007). The history of diversity trainers and its pioneers. In Strategic Diversity & Inclusion Magazine, (PP. 11-16). DTUI.com Publications Division: San Francisco, CA.
[ix] Geraghty-Anderson CDP, M, & Vaughn, PhD CDP, Billy (2009). Selling Your Diversity Initiative Ideas to the Leadership. Diversity Officer Magazine Online, Billy Vaughn PhD CDP (Ed.), June, http://diversityofficermagazine.com/magazine/?page_id=485
[x] Diversity Training University International (2009). Human Capital Inventory. Diversity Training University International Publications Division: San Francisco, CA. http://www.dtui.com/toolkit.html.
[xi] Lejonhuvud, Lars (2009). Selecting a Diversity Professional Credentialing Program. Diversity Officer Magazine Online, Billy Vaughn PhD CDP (Ed.), http://diversityofficermagazine.com/magazine/?page_id=475