Real Leaders

Why Diversity Programs Suck

I use the word ‘Suck’ in the title for two reasons. First, there’s overwhelming evidence corporate diversity programs don’t work to achieve either the social or business goals of diversity. Second, diversity and inclusion programs suck the attention and energy away from what will solve the problem.

Lately I’ve been talking to many corporate diversity and inclusion leaders. They are frequently charged with increasing the number of women advanced into leadership.  They also want to ensure that minorities and disabled people are well represented in their employee population.  These are praiseworthy social goals.  And it makes a lot of sense because the war for talent is now on and our growing pool of well equipped non-white-male talent is growing fast.

This war for talent problem has dramatically escalated as the economy has improved.  The large consulting firm, PWC, recently reported that the percentage of CEOs that consider female retention as a major concern has risen from 12% to 64% in just the last four years!

Their research also confirms that business leaders have accepted the business case for women in leadership.  Over 80% of responding CEOs strongly agree that more women in leadership enhance business performance, strengthen innovation, and creates more customer focus.

Nevertheless failure continues.  After 30 years of formal corporate diversity recruitment and retention programs, Deloitte research reveals that 94% of Fortune 500 CEOs are white males. Senior executives are 85% white males and corporate boards are 82% white males. That’s not diverse . . .  and that’s the problem.

Promoters of diverse work forces have tried to change things.  But formal quotas and audits have proven to create perceptions of special treatment of women and ethnic minorities that cause male resentment and cantankerous corporate cultures.

Women continue to leave science and technology companies in a river of exits after they spend 7 to 10 years being frustrated

by ‘Boys Club’ cultures.  According to Deloitte’s research the main reason women leave their present employer is lack of opportunity. After 10 years, 61% of female employees do not believe they will get a fair chance for promotion. This lack of opportunity is the single greatest cause of female employee disengagement.

And the word is out.  A smaller percentage of women are studying science and engineering in college than they did 15 years ago.

Perhaps the worst thing about corporate diversity and inclusion programs is that they give corporate leaders an illusion that they are doing all they can to attract and engage a broad range of talent.  In fact, when I talk to such leaders they often whine and complain that their HR team needs to do a better job.

But they are blaming the wrong people.

The problem is that corporate recruiters do a good job of presenting their companies as collaborative hives of diverse men and women working together to improve the world. But that’s not what employees experience.  According to Deloitte, while 86% of new hires say that a collaborative, inclusive culture is very important in choosing an employer . . . within three years 71% of those new employees are cynical, reporting that their workplaces relentlessly drive for conformity to the dominant white male culture.

What executives are missing is that they are defining the diversity problem with civil rights era, affirmative action thinking. That is not the solution. And never has been.

Gaining the business benefits of diversity in leadership will only come through understanding that we need a whole new paradigm of human diversity.  Traditional thinking has put the focus on externals such as gender and race.  Thus, strategies have focused on pay equality and quotas driven by analytics.

But genuine diversity is not about externals. Rather it’s about the synergy that comes from recognizing the “internals.”  There are 7½ billion of us on our planet.  As far as I know, no two of us are identical.  The value that we bring to the world comes through three primary sources:

  • Our individual identity-our values, ideas and personalities
  • Our individual experiences which give us judgment
  • Our individual capabilities-knowledge, talent and skills.

This “internal” definition of diversity isn’t just my idea.  Deloitte’s survey of millennials reveal that the new work force generation thinks this is the authentic kind of diversity that matters.

The breakthrough that organizations are seeking comes through understanding that the value of diversity doesn’t come from our gender or color.  Rather, it comes from within each person. But the advantages of individual diversity are mostly lost in big companies.

This has to change and it will.

It will because the millennial generation is the first color and gender-blind cohort of humanity in history.  They value tolerance and inclusion more than any generation that has been studied. Baby boomers agree that it is morally wrong to be sexist or racist but they still must fight their internal bias.  Children born since 1980 went to school and made friends with a ‘human salad’ of races and backgrounds, so gender and race bias is much lower. For instance, McKinsey research reveals that while men in their 40s don’t want to work for a women, men in their 20s expect to.

Our problem is that virtually all large organizations are authoritarian, which makes them slow to change. Authoritarian organizations create a gravitational field of conformity to the dominant cultural beliefs and behaviors of its senior leaders. This sociological fact is the biggest threat to organizational success in our modern era because it produces “group-think.”

Group-think occurs when a leader or cultural norms create psychologically choking pressure to agree with the prevailing assumptions about what drives success.  In a highly competitive world economy the problem of “what got us here won’t take us there” occurs daily.  Yet group-think creates an illusion of invulnerability and superficial agreement.  The pressure to conform leads people to avoid smart, new risks while reinvesting in slow but continual failure.

So what’s the solution?

It’s developing genuine cultures of diversity combined with processes that drive strategic alignment. It’s in these cultures of cognitive diversity where game changing innovation flourishes.

I’ve been most successful in breaking the chains of group-think in organizations that are suffering from massive failure.  There is nothing like humility and realistic fear to open people’s minds to good ideas coming from diverse sources.

One of the most amazing experiences I had was watching a woman executive who was given the responsibility to take a half a billion dollar company out of the death spiral.  She listened to the company’s board, several teams of outside consultants, and then decided to do something radical.

The company had about 1,800 employees. She wanted to hear all of their best ideas.  So everyone was asked to join a team to create a well thought out business case that would either help the company grow revenue or save money.  Then she traveled across the country to the various worksites holding “Shark Tank” sessions in which teams pitched their ideas. Perhaps the wildest thing she did was to put her tattooed chief of maintenance in charge of the whole project. She did this to engage everyone’s commitment.  It sent a strong message that she would listen to every idea as long as it was submitted as a business case.

At least 30% of the ideas were strategies, tactics and processes that no executive or consultant had thought of. Those ideas ended up being the true gems . . . the ones that were the easiest to implement, and made the biggest difference.

It took 18 months for the company to turn around and start growing again.  It was so successful that it soon went public.

I share this experience because I believe the ultimate solution to creating business cultures that truly value diversity will only happen when more women are in senior leadership.

The reason is simple and scientific.  In general, women have a much higher level of social intelligence than most men.  Both neurologically and sociologically, women are more likely to create cultures of inclusion and individual value.  And according to MIT research, women are more likely to value and consider new ideas regardless of their source.

The bottom line:

Most diversity and inclusion initiatives have not, and will not, create business cultures that attract or retain top talent. By 2025 75% of America’s workforce will be millennials who want to express individuality and work in organizations of diverse teams where merit matters more than conformity.
Women are uniquely suited to play the major role in transforming corporate cultures to be competitive in the 21st century.

What you can do right now is change the discussion about diversity and inclusion in your organization.  Focus on transforming culture to one that values “internal” diversity by training collaborative leadership skills and promoting more women who lead like women.


Most Recent Articles