Draft Paper for Equal Conference

The Business Case for Diversity

- by Frank Brennan, Chartered Institute of Personnel and Development

A Paper Delivered to the ‘Access and Diversity: A New Vision of Work’ Conference hosted by the Equal at Work Project and the Dublin Employment Pact on September 25, 2003 at Croke Park Conference Centre.

I would first of all like to thank the organisers for inviting me, on behalf of the Chartered Institute of Personnel and Development, to address this conference. We are particularly pleased to do so by addressing what we believe is an aspect of the Equality and Diversity debate that is not sufficiently examined, the Business Case for Diversity. Just to put the Institute and its work in some context for those who might not know us, I would like to say a few words about our work and activities and their relevance to to-day’s conference.

The Chartered Institute of Personnel and Development is the professional body for those specialising in advancing the management and development of people at work. It has almost 120,000 members in the United Kingdom and Ireland – 5,000 of these members are in the Republic of Ireland. The Institute organises arguably the largest professional training programme for Human Resource professionals anywhere in the world and its Graduate membership examinations are set at postgraduate level. Part of the Institute’s Mission Statement reads as follows:

“To lead in the development and promotion of good practice in the field of the management and development of people, for application both by professional members and their organisational colleagues.”

In pursuit of this aspect of its Mission Statement the Institute engages in a substantial research programme aimed at providing members and their organisational colleagues with well-validated recommendations of best practice in all aspects of people management. Part of its research agenda has for many years covered the subject of equality and diversity but it has approached this subject from a number of different perspectives. The Business Case is one of them.

WHAT IS THE BUSINESS CASE ?

Well-managed organisations are those which constantly seek to find ways of dealing effectively with both challenges and opportunities that the market place or social change presents to them. There is a constant need for new or innovative management strategies that can deal with change in a positive way. Before adopting a new strategy, well managed organisations will test its justification and relevance to the ongoing development of the organisation. They will seek to establish how valuable, appropriate and helpful the strategy is to achieving the organisational objectives. The pros and cons of doing or not doing things differently will be looked at and they will be costed. The effect on clients, customers, employees and all other stakeholders will be evaluated and considered. In a word, such well-run organisations will be seeking to establish what I am calling the “Business Case” that will justify changes in strategy or management processes.

There may be a number of different facets to the Business Case analysis. Social factors may arise from an organisation’s desire to be a good corporate citizen. Much of the “good citizenship” agenda is now enshrined in legislation and so may increasingly be part of a legal compliance facet. There will also be an economic facet, driven by considerations of cost effectiveness, market strategy or customer satisfaction. In the case of equality and diversity management the arguments for social and legal compliance are well-known and often articulated.

The economic facet of the equality and diversity business case is not so well-known and not so frequently articulated. This economic aspect of the Business Case is very central to all of the published views of the CIPD on equal opportunity issues. The Institute has for a very long time held and promulgated the view that the promotion of equal opportunity makes good business sense. We believe that equal opportunity management is a key component of good management practice not just because it is morally right, socially desirable or legally required but because there is a hard economic case to be made for it. But we also believe that the real gains in an economic sense come from going beyond the equality agenda and practising proactive diversity management.

The Institute’s position is that the active management of diversity develops and complements established approaches to equal opportunities. Diversity management is a proactive and business driven priority whereas equal opportunity management has been more reactive and has traditionally been driven by legal and social imperatives. There is something of a parallel here with out-dated “Personnel Management” and strategically driven “Human Resource Management”. Managing Diversity builds on the understanding of the need for equal opportunity policies by adopting a more radical approach that matches the diversity of market places with employment practices.

It is a systematic and analytical approach that harnesses equal opportunity policies and transforms them into a business dynamic.

THE CHARACTERISTICS OF A GOOD DIVERSITY PROGRAMME.

A comprehensive diversity management programme should have many of the basic characteristics of a good quality management programme. Quality management is now practised by virtually all successful organisations. Bringing this quality mindset to bear on diversity would, for example, require an organisation to do the following things:

Identify and eliminate hidden organisational barriers. These are the barriers that make it more difficult for some “different” people to succeed and develop their careers;
Effect change by creating an environment in which “difference” is valued, not just tolerated. Difference can bring innovation and freshness to an organisation’s thinking. The rejection of difference at the thinking levels of an organisation will make change management very difficult;
Combat prejudice, stereotyping and harassment. These are negative and disruptive, unproductive and unprofitable activities. Their elimination can release the energies wasted to the organisation by being diverted into them.

Hidden Barriers.

Workplaces are essentially organisations of human beings brought together for a common purpose. Most of us are inherently conservative in our social dealings. In the workplace, as in the rest of our lives, we are often more comfortable with “our own type” and so, in an often unconscious way we construct invisible barriers against the unfamiliar. These hidden barriers may relate to gender, age, race, religion, disability, or any other identifiable difference. The danger is that these barriers can become institutionalised as an everyday part of the workplace. They become, in an informal and structured way, part of the processes of the organisation .If this is allowed to happen, it narrows the pool of talent from which people are selected or developed and deprives the organisation of access to important and necessary skills.

Many organisations with such hidden barriers will attempt to service a clientele or a market which is itself diverse in character. The mismatch between the clientele and those required to service it will result in reduced understanding of the clientele and customer service deficiencies. It will stifle innovation and damage the potential to develop new products and services that may be essential to the organisation’s future . The CIPD has reported and commented on some case studies of this nature in its “Managing Diversity” position paper, in its fortnightly magazine “People Management” and in many of its public policy statements. Its research provides a powerful argument for the elimination of these hidden barriers as being “good for Business” and can be accessed through its website

A change environment.

It is now almost a cliché to state that people are the single sustainable source of competitive advantage. All organisations must now cope with rapid change and increasing client expectations. Consequently the ability to adapt by devising and implementing successful change strategies is essential for client satisfaction. In the competitive private sector failure to adapt may result in extinction. In the public sector it can result in public dissatisfaction and social alienation. Adaptation and change are lead by ideas, by innovation. These ideas must be relevant and client focussed. It has been shown that in many areas of business such as marketing, product design and customer service the best ideas come from diverse project teams who can bring different perspectives to bear on problem solving. This is because many of our ideas for change and improvement are borne out of our own experience. The more diverse a problem-solving group is, the more diverse will be its experiences and ideas. In this context, when I refer to clients or customers I am referring to internal as well as external clients. Many internal change programmes fail because they do not take account of the diversity of needs of internal clients.

Combating prejudice.

Unhappy workplaces are not conducive to efficiency or high quality. Unhappy workplaces are created because all or part of the workforce becomes alienated. Alienation is created by perceived unfair or undignified treatment or where people are made to feel that they are less valued. It follows that it is incumbent on management to create a workplace that does not tolerate harassment.

People are harassed because they are perceived to be different. Leaving aside obvious sources of difference such as race and gender, age or disability it can be simple differences that give rise to harassment – a stammer, red hair, body shape, big ears. The human race has a limitless capacity to create sources of difference. In its worst extremes this capacity has lead to genocide.

It is management’s responsibility to ensure that an organisation is working to full capacity. Where harassment or prejudice reduces the capacity of an organisation there is a clear business case for rooting it out and releasing the unrealised potential. Proactive diversity management practices will move the mindset of the organisation away from harassment by breaking down the barriers of prejudice.

WHAT TO DO IN MANAGING DIVERSITY.

So how does an organisation move from simply complying with equality regulations to a more proactive management of diversity? How can it deal with the hidden barriers, harassment, stereotyping and prejudice? The CIPD has recommended a number of actions which can set an organisation on the right path.

Managing diversity is primarily a function of organisational management. It must have the same priority as any other business challenge. It requires diversity to be dealt with in a strategic, co-ordinated way. It must form part of the organisation’s strategic agenda, with careful examination of how it can contribute to better problem solving, better customer service, better employee relations and better achievement of organisational objectives .
Diversity management must identify the different skills and competencies that are needed to contribute to organisational development. The organisational culture must be managed so as to provide the open-ness and flexibility to allow these different competencies to be identified and to be properly harnessed. Competencies are not the product or preserve of any one gender, race or “classification” of people. They are to be found in diverse people, with diverse physical and other characteristics. Therefore selection procedures and training and development procedures must focus on the competency, not on readily recognised but irrelevant differences in individuals. The day of selecting staff on the basis that “I knew that one was not suitable the minute they walked in the door” is dead. Scientific and equality sensitive management systems and tools that will aid in selection, development and performance management are a sine qua non for a well run organisation which expects to optimise the efforts of employees.
Proactive diversity management accepts that satisfying the legal requirements is not enough. Management must aim to release and develop the potential of as many people as possible as quickly as possible.
It is good management practice to keep employees at all levels informed about developments in the equality field. Make it a “normal” business issue, neither over-hyped nor ignored. It must be part of “business as usual”.
Efficient organisations aim to create an empowering culture in which decisions are made at the most appropriate level. They encourage learning and development for all, setting people realistic but stretching objectives and they have clear training objectives and plans for every individual employee.
The Institute has found that linking the management of diversity to systematic, value-driven initiatives such as Excellence Through People and Quality Awards can provide a powerful vehicle for bringing diversity to the centre of the business case.
It has also been found that building diversity concepts and practices into management training programmes, team building programmes, induction programmes, job descriptions and appraisal systems is a powerful way of beginning to change mindsets. These training inputs should encourage an understanding of why valuing people as individuals is important to the future success of the organisation.

AND FINALLY…

We in the CIPD believe that managing diversity is based on the concept that people should be valued as individuals for reasons related to business interests as much as for moral, social or legal reasons. Managing diversity recognises that people from different backgrounds can bring fresh ideas and perspectives which can make work more efficient and improve products and services.

Managing diversity successfully will help organisations to nurture creativity and innovation and thereby tap hidden capacity for growth and improved competitiveness.

I hope that I have, through some of the ideas in this paper, given you an impetus for the development of successful diversity management in your organisation.

Thank you for your attention.

Frank Brennan.

September 2003.