Corporate America’s Diversity Gap

By: Marc H. Morial
President and CEO
National Urban League

For four decades now businesses across the America have invested enormous resources in making their workforces more diverse, and trying to make sure not only their own workers but also the general public knows it.
One dramatic manifestation of corporate America's commitment to diversity came early last year amid the debate about which way the U.S. Supreme Court ought to rule in the affirmative action case involving the University of Michigan.

Then, as the Court prepared to hear oral arguments and accept friend-of-the-court briefs, scores of prominent American companies, including 64 Fortune 500 corporations (and 30 of America's top former military and civilian defense officials), joined civil rights groups, labor unions, and institutions of higher learning in supporting Michigan's pro-affirmative action position.

Kenneth Frazier, senior vice president and general counsel for Merck, the giant pharmaceutical company, succinctly expressed the "bottom line"case for business when he said, "Diversity creates stronger companies. The work we do directly impacts patients of all types around the globe. Understanding people is essential to our success."
And yet, in broad terms, it's hard to tell with precision what the business community's effort on diversity has produced because it's never developed a meaningful measure of the effectiveness of diversity programs.

That's one reason the National Urban League, with generous support from Enterprise Rent-A-Car, the nation's largest rental car company, undertook a study of perceptions about diversity in corporate America. The recently released report, "Diversity Practices that Work: The American Worker Speaks"(available online at www.nul.org), surveyed more than 5,500 American workers on the topic of diversity. It was conducted by the management consulting firm of Global Lead.

The results are a wake-up call for American business in several ways.
Employees, who in substantial majorities support diversity, have more favorable perceptions of diversity initiatives at companies where leaders show a personal commitment to diversity and hold themselves and others accountable; where training programs are established to foster greater awareness of diversity issues and the positive impact diversity can have on overall company performance; where an established track record exists of recruiting people of diverse backgrounds; and where employees earn rewards for their contributions in diversity.

But the "Diversity Practices"study found that while most workers consider diversity good for business, many believe their current employers don't have an effective diversity initiative.

Even more worrisome is that one in eight employees believes their company is still at risk for a diversity-related lawsuit.

Business executives should find these results troubling because the survey determined that companies participating in the study which had diversity practices employees considered effective boasted a productivity rate 18-percent better than that of the overall American economy.

Further, three-quarters of these companies have generated productivity results equal to or better than their major competitors.

In other words, by making use of good leadership and management practices, advancing diversity actually enhances overall business performance: a fully diverse workplace can make the bottom-line difference between an average company and a world-class company.

But business leaders have significant work to do, because while 80 percent of employees surveyed said they were comfortable working in diverse teams, and a significant majority, 65 percent, agree that diversity improves creativity and innovation, only 45 percent believe that diversity is part of their company's corporate culture, and only 32 percent believe their company has an effective diversity initiative.

By contrast, more than two-thirds of the corporate executives surveyed hold more favorable views of the success of their company's current diversity programs than their employees do.

That gap in perception suggests that, at the least, companies need to review their diversity initiatives in order to ensure they're doing what they're supposed to—and revamp programs that aren't achieving their goals and enhance those that are.

An inclusive workplace and a successful work environment is everyone's business.

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