Originally published in the March 2006 Issue of Link & Learn. 

Whether your business is global or domestic, maintaining a competitive advantage requires a focus on the future. In the field of diversity, developing the ability to identify trends and recent advances strengthens your role as a partner in the strategic planning process. For example, the companies that paid attention to the demographic and economic trends 15 years ago first saw the potential of diversity as a competitive edge. Many of these organizations have made major investments in diversity programs and can now report the difference these efforts are making.

In the field of diversity, what were once new frontiers may have faded and many questions remain unanswered. For example, diversity professionals worked hard in the 1990s to develop the business case for diversity and then to inform the business world. Has the business case been accepted? Is there a next iteration we need to now promote? Companies have successfully formed diversity councils and employee resource groups. Is there a new focus for these resources? From an issues perspective, some say the focus on race and gender is too limiting and we should expand the focus to include other critical issues and foci.

To address these questions, we asked four chief diversity officers to share their views about new frontiers in diversity. In this article, we hear from Deborah Dagit at Merck, Ted Childs at IBM, Amy George at PepsiCo and Emmanuel Bailey at Fannie Mae. Their insights focus on future trends, emerging markets and integrating diversity into daily work life.

Deborah Dagit
Executive Director, Diversity and Work Environment
Merck & Co. Inc.

I see a convergence of two trends. In Human Resources (HR) there's a strong push to tie employee engagement and other metrics to the bottom line in terms of business results. HR professionals are working harder than in years past to demonstrate the connection between HR programs/practices/measurements and specific business results, such as earnings per share, revenue outcomes and brand equity. Diversity professionals are farther along this path. For a number of years we have been charged with tying our work to specific business outcomes in order to demonstrate the "business case" for diversity. As a result we have made greater strides in linking our work to customer satisfaction, investor confidence, market share with various populations, innovation, safety and participation in product testing. I see these two paths crossing and the divide between HR and Diversity becoming less contentious.

The business case for diversity has mostly occurred in the U.S. From a global perspective, I think we are still experimenting. We have more to learn about how to identify the needs of different markets and cultures. We will not be able to simply export what we've learned in the U.S. as "the way" to do things. Instead, we need to learn from other countries and cultures. Western materialism, for example, is not valued in other parts of the world, and relationships are much more important than legal contracts. We don't even have the right language to talk about diversity outside the U.S. yet. We've been so nationalistic for so long that we don't recognize how we interact in the rest of the world.

I predict that within ten years instead of having the business case for diversity for the whole company it will be broken down by division/business unit and be much more specific. These units will still aggregate some overall messages, but will focus in on what's most relevant to the manufacturing, research or marketing teams. It will then be easier to engage employees around diversity efforts as it will relate more directly to their work and they will experience more coherent line-of-sight to the connections between their unique contributions and business outcomes.

Another possible new frontier may be multicultural employee groups from different parts of the business serving as advisory councils that assist in achieving business goals. This will be a mix of grassroots employees and executive sponsor business leaders collaborating to enhance outcomes by bringing their unique perspectives together to achieve what Frans Johannson calls "The Medici Effect" - innovations that are achieved by consciously leveraging differences.

An example of this approach for the pharmaceutical industry might be enhancing inclusion of diverse populations in research and clinical trials. Instead of being tentative about outreach efforts for these trials, companies could develop a council that represents the different communities in need of the medications. These groups would advise researchers with respect to testing and population-specific protocols for products.

IBM has successfully adopted this type of collaboration model by engaging constituency groups that advise the company through their executive sponsors on many different types of business opportunities. Instead of single/focused demographic groups (e.g., African Americans) I predict that future groups of this nature will be multicultural and their focus will be on a particular aspect of the business. An example would be a cross-cultural group looking at ways to enhance customer satisfaction within the sales force.

In terms of future workforce challenges, I think the primary focus will be based on the influx of Generation X and Y, and the outgoing baby boomers. The baby boomers are beginning to retire while the younger workers - who are specific about what they are and aren't willing to do - are arriving in greater numbers with very different expectations about the nature of the work they will do, how long they will stay, career advancement opportunities and work/life balance needs. We need an approach to phased retirement that helps us retain our older workers for longer and proactively manage the knowledge transfer from older workers to new entrants.

Boys are failing in school at an increased rate and we still are not sufficiently attracting women and people of color into the sciences. We're falling way behind other countries in terms of science and math skills in the labor market. We need greater involvement in the broader societal issues, as well as increased knowledge and strategic planning with respect to the generational issues we face.

I am quite puzzled about why we do not see more of a focus on the disability community. Why is it that businesses aren't tapping into the vast potential of this group as employees, customers and vendors? Disabilities affect more people than most of us realize and the potential of this market is not recognized (see the article "The Disability Twist in Diversity" in this issue of The Diversity Factor). For the health care industry it is particularly puzzling. People with disabilities should be viewed as informed and passionate consumers.

We are in the midst of a renaissance of humankind. It is thrilling, challenging, and never dull. So much is possible, but only if we are willing to let go of the familiar and try new things.

Ted Childs
Vice President of Global Workforce Diversity
IBM Corporation

As we move into the new millennium, diversity is becoming an even more important topic for businesses and employees around the world. For IBM, the issues surrounding diversity mandate that this subject be addressed on a global scale - from the workplace to the marketplace. That is why IBM has created an innovative global strategic framework for this new era of diversity, which will help it address the emerging issues taking shape in the 174 countries where we do business.

I think the next evolution of the business case for diversity will span opportunities in the marketplace and constituencies around the world. Let me give you some examples at IBM that we're doing to reflect that:

• expanding our presence in Aboriginal communities in Canada, increasing business opportunities and ensuring greater participation
• leading global accessibility projects to make information technology more accessible to disabled clients around the world
• piloting a program in the U.K. to challenge homophobic bullying in schools
• launching new and expanded programs in constituencies around the world to help narrow the Digital Divide
• addressing the issue of the diversity of our future technology pipeline through creating interest at an early age. This year, for example, we are sponsoring 48 one-week technology camps in 30 countries for middle-school girls; five camps for disabled students in five countries; and five camps for disadvantaged students in the U.S. and Canada
• in partnership with the Egyptian National Council for Women, IBM is working to help women develop skills vital for success in the workplace and in another partnership in Japan with 50 other companies, we launched a women's network to promote strong and long-lasting relationships among women leaders in Asia.

When you think about history, the League of Nations, the United Nations, the World Court or World Bank - think about what they were attempting to do. They were trying to bring together people from diverse backgrounds to come together and solve common problems, trade or adjudicate global issues. As diversity becomes more sophisticated, and people come together to work together, we will see these peoples create, innovate and offer solutions on such a scale we never thought possible. We're talking about business, science and social issues. I think that's what the horizon holds as we enable people to come together.

The issues of the 21st century are complex. Today, IBM's definition of diversity includes global cultures. For example, in Europe/Middle East/Africa, IBM is mindful of gender, people with disabilities and the growing number of ethnic minorities. In Asia Pacific, we need to focus on gender, disability and respecting and valuing the differences between countries and regions. When it comes to business, the once formal global boundaries of the marketplace are evaporating - increasingly we work and compete in a borderless world.

This work is not for spectators, but for those who thrive on change. Change that is a catalyst for improvement and creating fairness when it doesn't exist, moving organizations from separate but equal points of view to inclusiveness, and migrating people from conflict to collaboration. Diversity and the concept of workforce inclusion are becoming key factors in helping define how we do business in today's marketplace and will help us compete for and retain talent while enhancing our ability to create new revenue streams, win clients and maintain our marketplace leadership.

Amy George
Vice President, Global Diversity and Inclusion
PepsiCo

I see diversity practitioners shifting from planning discrete activities that promote and sustain diversity to more integrated approaches where diversity and inclusion can be firmly embedded in the fabric of an organization's day-to-day activities. The new frontier is incorporating a broader definition of diversity that reaches beyond race, gender and sexual orientation, and finds a way to balance the unique needs of individual groups with the desire to provide shared experiences for everyone.

With the acceleration of demographic change clear, it becomes more a question of how fast and with what intensity change will occur. The business case for diversity is no longer needed to introduce or project the need for change - it's happening now. This will become even more apparent as we see graduation rates, for example, and this will directly impact new workforce entrants. Companies cannot put their heads in the sand and avoid these changes, which will only become more dramatic in the future. In addition, I believe people are becoming more comfortable with the notion that diverse teams foster better problem-solving and innovation - if they operate in an inclusive environment. This piece of the business case was challenged earlier on, but seems to have been more widely accepted.

At the group level, I would like to see stronger linkage among our employee networks. At PepsiCo, we use the phrase "Power of One" to refer to the synergies within our brand portfolio, and I believe this same concept applies to our employee networks as we leverage their collective power. We'd also like to see increased integration between the networks and the business. We've had great success with our employee networks providing us with powerful ideas for business growth - and we want to continue to build on that.

I think critical emerging issues revolve around style and culture. We want to ensure that "diverse" isn't code for women and people of color - but also embraces all aspects of diversity. It is only with an expanded definition that the term will really feel inclusive to all. The most critical imperative is the creation of a truly inclusive culture, where it is clear how individuals can demonstrate inclusive behaviors and the organization supports and embraces the perspectives of all its associates.

I think another frontier is the global arena. For many companies, including ours, the original diversity and inclusion agenda was primarily focused on the United States. I think the next frontier involves the creation of a global diversity strategy that is customized to address local issues and challenges. What I'd expect to be consistent is the value of creating environments that drive greater innovation through diversity of thought and inclusive behavior.

Emmanuel Bailey
Vice President and Chief Diversity Officer
Fannie Mae

The new frontiers for diversity emerge when we look at how to evolve diversity as a business, a necessity that enhances organizational capability. If a company questions the business case for diversity then it's a company that is not clear about the state of the world today. The demographics alone indicate the future. The unique opportunity today is that everything is much more transparent.

It's more than the business case for diversity - it's a company's overall business case and its ability to understand the new diversity of markets. When you think about competition, for example, we need a broader understanding and reach into new markets that are not homogeneous. If an organization isn't structured to achieve this broader reach then it's not fully utilizing its human capital. The simplicity of our grandparent's era is gone. People today are more educated, the internet continues to expand, there's more competition and more choices to consider. All this is spread across a wider spectrum of diverse people who are motivated by diverse things.

Strategically, it is incumbent on us as diversity executives to help business executives and human resources find ways to enhance capability that are actual and not rhetorical. This touches upon the importance of effective management. Gone are the days of inexperienced managers hoping to get by. Today it's about accountability and expectations - managers are now evaluated in terms of results produced by fully leveraging all the human capital at their disposal. Senior management can talk forever, but where the rubber meets the road is where the manager meets the employee - the inclusion at that level. It's the day-to-day application of strong management and diversity practices.

As far as new frontiers for groups, the opportunity is to find more effective ways to leverage these entities to help key decision makers understand things they might not otherwise understand. My concern is the huge opportunity cost of network/affinity groups. Many of these groups are missing top performers who don't participate because it's seen only as a social activity. When this is transformed to a participatory group that contributes to the business, we'll see more top performers participating. You have to obtain the unvarnished truth that will inform senior management about the real driving and underlying issues, so we have to think in terms of advisory councils not just social networks. These groups and the companies in which they operate must have a joint accountability to be clear about what their missions and goals are. At Fannie Mae I also would like to see more cross communication that integrates instead of separates these populations.

In my mind, the critical issues for the future are culture related. If you look at the regulatory reports in most industries you now see a focus on the culture that allowed recent crises to happen, e.g., from Martha Stewart to Enron. In essence, Congress is now passing legislation to effect control of the business culture. In the lending industry, this is reflected in changes to the fair housing and lending laws. What we used to see as the "soft stuff" we're now seeing how hard it really is.

Holding managers accountable to an appropriate (and legal) culture is critical. It's the old saying, "what gets measured gets managed" - if people aren't focused on it they won't pay attention to it. This also means accountability for evaluating the competencies and addressing issues when managers aren't delivering. It means being consistent about performance expectations, e.g., you're not included because of something very concrete. People need to know that reasons for decisions are not arbitrary.

About the Author: Wendy Conklin's career spans 25 years of corporate, institutional and humanitarian accomplishments. Before joining The Diversity Factor in 2000, she was an independent communications consultant working with corporations in the pharmaceutical, financial services, energy and computer industries. She has conceptualized and managed a wide variety of communications targeted to physicians, patients, shareholders, employees, customers and other specialty audiences, and has worked with a broad spectrum of communications media, including print, audio, electronic, video, meetings and special events.

Conklin has served as editor of numerous publications and been honored with several awards for editorial excellence, including the International Association of Business Communication's Silver Quill and IRIS Awards, two Apex Awards for publication excellence and an American Heart Association Award of Excellence for cardiovascular reporting. A graduate of the University of Connecticut, Conklin is listed in Who's Who of American Women. Wendy A. Conklin can be reached at wconklinva@aol.com

Article originally published by Elsie Y. Cross & Associates, Inc. Elsie Y. Cross & Associates pioneered the field of diversity. For 30 years they have worked with companies to address their current business and diversity needs while supporting their intentions for the future. They publish The Diversity Factor.

Elsie Y. Cross & Associates is a sponsor of Linkage's Summit on Leading Diversity on April 10-12 in Atlanta, GA.

This issue of Link&Learn was published in March 2006, by Linkage, Inc. (http://www.linkageinc.com). Please direct copyright and additional questions and comments to LinkandLearn@LinkageInc.com