The Benefits and Challenges of Promoting Workplace Diversity

Women of different ethnicities collaborating at work.

The modern workplace values diversity. That's evident from the increasing number of diversity officers among C-level executives and from the company value statements identifying diversification and inclusivity as primary corporate objectives. Even investors understand that diversity matters; they've started demanding diversity disclosure as part of regular reporting.

Companies seek to broaden representation because they recognize the many benefits that diversity brings. For one, workplace diversity boosts creativity and innovation by increasing the range of viewpoints and proposed solutions to the decision-making process. Team members with similar backgrounds and attitudes tend to approach issues similarly. A diverse workforce fosters different perspectives that promote novel and better solutions.

Employers also want to contribute to the advancement of a more equitable society, and why not? Promoting equal opportunity is good for public relations, good for business — spreading the wealth means more potential consumers, after all — and, most importantly, it’s the right thing to do.

How do we determine what constitutes a diverse, inclusive workplace? The question is not as simple as it may sound. Too many assume that once you increase the number of employees from an underrepresented demographic, you're done: you have addressed the diversity question.

It turns out diversity is not quite so simple. Yes, attracting diverse talent involves expanding representation and typically requires changing an employer's hiring process, but that's hardly where it ends. Diversity issues present complex and nuanced challenges requiring a multi-pronged approach. Questions to address include:

  • What concrete benefits derive from diversity?
  • What challenges accompany increased diversity?
  • What strategies work best in recruiting job seekers from diverse backgrounds?
  • How do you promote an inclusive culture in increasingly diverse environments?
  • Can you impose diversity from the top down by hiring diverse leadership?
  • For which groups should you seek diversity?

    • Racial and gender groups?
    • Social class?
    • Sexual orientation?
    • Personality type?

Modupe Akinola has studied organizational behavior, focusing on stress management and diversity issues, for the last 20 years. Her research uncovers some surprising facets of diversity promotion in the workplace, insights that shed light on the questions posed above. We've summarized some of her observations in this article.

Akinola has been with Columbia Business School for 12 years; she is one of the many experts leading sessions in Columbia Business School Executive Education’s Advanced Management Program for senior executives.

How to Formulate Effective Diversity Plans

A company may look to diversify its workforce, but it will likely struggle to succeed without a well-developed diversity plan. An effective diversity plan not only attracts new hires from broader backgrounds but also brings in top talent and drives improved performance.

In Defining the Attributes and Processes that Enhance the Effectiveness of Workplace Diversity Initiatives in Knowledge-Intensive Firms, Akinola studied diversity initiatives at information companies. Her goal was to develop a conceptual model for successful diversity initiatives. She found that success requires:

  • Sustained commitment from leadership, including frequent messaging of objectives and strategies to achieve them; leaders must be change agents
  • Firm-wide integration and coordination of diversity strategies
  • Accountability and monitoring
  • Promotion of intergroup partnerships at both the leadership level and below

All of these elements were determined essential to success. Where companies fail, Akinola concluded, is in taking a piecemeal approach or in failing to coordinate efforts across all functions.

How Diversity Affects Workplace Performance

Diversified work environments push employees out of their comfort zones, requiring adjustments to reap their full benefits. "Diversity can be stressful," Akinola explained in a recent interview, because it "creates uncertainty. You might feel a little bit threatened because you've never spent time with people who look a particular way or you're stressed by unfamiliar differences."

To lower this barrier, employers must create opportunities for people from different backgrounds to interact and get to know one another better. Configuring teams to promote diversity is one approach; organizing extracurricular events to encourage employees to socialize across groups is another.

The payoffs make the effort worthwhile; as Akinola notes, "There's a ton of research saying that diverse groups can outperform other non-diverse/homogenous groups. That doesn't happen in and of itself, though. Leaders need to create an overarching goal and promote egalitarianism. That's when you get the most out of diversity."

Unconscious Bias Hampers Diversity Efforts

Overt prejudice will obviously impede diversity efforts, but even employers with the best intentions can be waylaid by their predispositions. Unconscious bias can creep into hiring processes, preventing qualified, interested candidates in underrepresented groups from hearing about opportunities.

Akinola demonstrated this with a study in which fictitious prospective students attempted to meet with professors to discuss research opportunities. Using names suggestive of gender and ethnic and racial backgrounds, experimenters contacted professors to schedule appointments. The study discovered that white male students received appointments with the professors 26 percent more often — and measurably more promptly — than women and minority candidates. Interestingly, this difference disappeared when candidates asked for an immediate interview; it was only when the requested appointment was for a future date that the discrepancy arose.

The study produced several disturbing insights, including the suggestion that this form of discrimination intensified in higher-paying academic disciplines, such as business. Greater diversity of the faculty had no apparent impact on this effect. The study demonstrates that ingrained biases are so powerful that even faculty in underrepresented groups adopt them. Thus, diversifying decision-makers by itself is not necessarily adequate to redress diversity challenges.

Diversity for Diversity's Sake

Does it matter why a company pursues diversity? It turns out that it does. Employers who hope to improve productivity and expand perspectives tend to be more successful in diversifying. Those that promote diversity in response to outside pressure, perhaps predictably, tend to be less successful.

In a study entitled Diversity Thresholds: How Social Norms, Visibility, and Scrutiny Relate to Group Composition, Akinola surveyed the makeup of 1,500 S&P boards. She discovered that an unusually high number of boards included exactly two women (a phenomenon Akinola and her coauthors dub "twokenism"). She also determined that higher-profile companies were more likely to seat exactly two female board members. Once these companies reached this milestone, they became measurably less likely to add more women to the board. Women weren't the only ones subject to twokenism; on the contrary, Akinola observed the same phenomenon for other underrepresented groups.

The study concluded that these companies were likely looking to one another, seeing how many women they were adding to their boards and adding exactly the same number. In these instances, diversity was increased, but boards remained lopsided and unrepresentative. The increase was visible but not especially consequential. When decision-makers increase diversity in response to scrutiny and negative publicity, their response results, paradoxically, in homogeneous diversity. Everyone is diverse in roughly the same way.

Diversity Can Be Defined Too Broadly

People can be disaggregated into many demographic groups, each arguably representing an opportunity to broaden diversity. One might assume that expanding the definition of diversity can only produce positive results. Diversity is good, therefore more and broader diversity is better. Right?

Indeed, there are benefits to broadening diversity definitions. Doing so focuses attention on marginalized groups that might otherwise remain unidentified and underrepresented. However, that attention can come at the expense of groups traditionally covered by diversity policies.

To examine this phenomenon, Akinola conducted a study of organizations that broadened their definition of diversity to include such traits as personality, cognitive styles, skill set, and education. The study concluded that, in such instances, efforts to increase traditional diversity (gender and race) diminished. Additionally, the broadened definition drew attention away from shortfalls in gender and racial minority diversification, impeding those efforts. Employers believed they were doing better at overall diversification, but their diversity efforts for minorities and women came up short.

Mastering the Complex Challenge of Building Diverse Teams

Akinola's research reveals the depth and complexity of issues surrounding diversity promotion. These are the issues leadership teams must understand and tackle to remain competitive and current. Her work offers invaluable insights and equally invaluable prescriptions to address diversity.

That's the sort of information and guidance you'll get from the experts and practitioners who lead Columbia Business School Executive Education’s Advanced Management Program. Over 22 weeks, you'll attend a blend of online and live sessions that include virtual workshops and lectures, in-person experiential learning modules, and independent assignments and reflections.

The Advanced Management Program is open to candidates with 10 years of substantial leadership experience and professional success. Participants receive individualized career support, access to Columbia Business School's global alumni network, and exclusive industry opportunities. The program offers two start dates: one in February, and one in September.

Visit the website if you'd like to learn more. Convinced this is the right choice for you? Then start your application today.

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