Diversity was once primarily about equal opportunities giving people from different backgrounds access to jobs. That's still important, but in fact, greater diversity is better for business. In Hydro, we believe that a new philosophy of dealing with people's differences can bring strategic advantage, as well as benefiting individual careers and forming part of corporate responsibility.
Depending on where you are in the world, diversity has different emphasis. In Scandinavia, gender is a key issue. In the UK, it’s race and ethnicity. In France it’s about culture, while in the US it is affirmative action for minorities.
Everywhere, though, diversity is the word used to describe the individual characteristics of groups of people, whether visible like race, ethnicity and gender, or invisible such as sexual orientation or political affiliation. For businesses, diversity — grounded in the business case rather than the fairness case of equal opportunities — is a challenge as populations become more multicultural, multilingual and multiethnic.
The issues business needs to address reflect those in the wider world: driving intercultural communication and cooperation; national and regional stereotyping; racial and ethnic diversity; adjusting to new roles of women; addressing ageing populations and declining birth rates; and globalization.
Investigating corporate diversity
Dr. Val Singh, Reader in Corporate Diversity Management at the UK’s Cranfield School of Management, researched the web sites of 241 top companies across Europe, including Hydro’s, to see what they say about diversity.
A third promote diversity management as a new philosophy of dealing with people’s differences that can bring strategic advantage – as well as enhance individual careers – and as part of corporate responsibility. Hydro is one of two (along with Shell) which used the word “need,” indicating that it’s a “must do” rather than a “should do.” Singh’s research shows that what matters most is actually managing diversity – it doesn’t just “happen.”
“Take the public sector,” she says. “The Mayor of London announced that
he’ll drive diversity through procurement, giving contracts (for example, for the 2012 Olympic Games sites) only to companies that demonstrate good diversity practice. The same is happening in the US, where if you want a defense contract you have to show you have women at particular management levels.
Diversity drives performance
“US research found that teams with gender diversity tend to perform significantly better, as do those that are ethnically diverse. Conversely, where diversity wasn’t managed well, ethnic minority employees felt excluded and often ‘switched off,’ there was more conflict and it took longer to make decisions.”
Are all diversity issues equally important? Singh believes that an inclusive approach works better than tackling diversity issues piecemeal because it benefits more people and the wider business.
Managers should remember that people who are included feel happier and more engaged with their work. Interestingly, women are said to be better at this kind of transformational leadership than men!
“For example, look at individuals – rather than just one group – who don’t progress in an organization to see what things they have in common, what inhibits them and how to address the issues,” she says.
Empowering the individual
“Set global standards but don’t dictate the detail to each country. When I lived in Norway many years ago, people worked from 7 a.m. to 2 p.m. on Fridays so they could go to the mountains for the weekend. Many companies in the US would be appalled at what they would see as lack of commitment if people asked to do the same. Diversity is about giving people power over their work and family lives, and allowing them to make their unique contributions to the company.
“Ultimately, companies that embrace the diversity of their people send a powerful message that they value all talent.”