Georgia Coffey

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THE BUSINESS CASE FOR DIVERSITY INCLUSION
CAPITALIZING ON DIVERSITY
MAXIMIZING PERFORMANCE

• Presented by
• Georgia Coffey
• Deputy Assistant Secretary for Diversity and
  Inclusion
• U.S. Department of Veterans Affairs

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HISTORICAL PERSPECTIVE
1960s Civil Rights Enforcement 1970s
Affirmative Action 1980s Respecting
Diversity 1990s Diversity Management 2000
The Business Case for Diversity
Inclusion Diversity of Thought
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DEFINITIONS
Equal Employment Opportunity (EEO) The set of
laws, regulations, and policies that guarantee
every individuals right to EEO in the workplace,
irrespective of race, color, religion, national
origin, sex, sexual orientation, age, or
disability (reactive, legally driven). Affirmativ
e Action The requirement under Executive Orders
11246 and 11478 to measure the representation of
certain demographic groups in the workforce in
comparison with the available labor market, in
order to identify potential barriers to equal
opportunity and take affirmative steps to correct
manifest imbalances through expanded outreach
(assimilation).
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DEFINITIONS
Diversity Management A proactive effort that
responds to the changing demographic profile of
the workforce through the implementation of
programs and services that support and empower a
diverse workforce through multicultural
approaches (program-oriented). Business Case for
Diversity Inclusion The return on investment
(ROI) in terms of performance and economic
outcomes that results from leveraging the variant
knowledge, skills, abilities, talents,
intellectual capital, perspectives, working
styles, etc. of a diverse workforce
(process-oriented).
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WORKING DEFINITIONS
EEO COMPLIANCE is about ensuring that we comply
with all the laws, regulations, and policies
prohibiting discrimination and requiring
affirmative employment in the Federal workplace.
DIVERSITY is about valuing and promoting
differences, similarities and unique
characteristics of groups and individuals in the
workforce.
INCLUSION is about empowering and leveraging
diversity in the workforce by enabling
individuals to contribute to their fullest
potential through individual development,
retention, and pluralistic work processes.
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WHY DIVERSITY INCLUSION?We know there is a
legal imperative, but is there a
Business Imperative Does workforce diversity
have a quantifiable effect on business/performance
outcomes? Economic Imperative Is there a
financial/economic benefit to workforce
diversity? Human Imperative What is the human
cost? How does organizational culture impact
ones contributions to the mission? What does
the research show?
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THE BUSINESS IMPERATIVEWhat does the research
show?

• Diversity Research Network
• Workforce diversity is positively associated with
  higher business performance outcome measures.
• Racial diversity is positively associated with
  higher performance in organizations that
  integrate and leverage diverse perspectives as
  resources for product delivery.
• Gender diversity is positively associated with
  more effective group processes and performance in
  organizations with people-oriented performance
  cultures.
• The Effects of Diversity on Business
  Performance Report of the Diversity Research
  Network, October 2002.

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THE BUSINESS IMPERATIVEWhat does the research
show?

• Center for Creative Leadership
• Diverse teams are more creative and perform
  better in problem solving than homogeneous teams.
• Diversity in workforce and processes results in
  better decision-making.
• The effects of diversity are highly dependent on
  the presence of facilitating or inhibiting
  conditions in the organization absent
  facilitating conditions, the aforementioned
  outcomes are reversed.
• Marian N. Ruderman et al. (eds.). Selected
  Research on Work Team Diversity. 1994.

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THE BUSINESS IMPERATIVEWhat does the research
show?

• UCLA Study
• Medical students who attend racially and
  ethnically diverse medical schools indicate they
  are better equipped to provide care for diverse
  patient populations.
• Conclusion
• Diversity enhances performance but requires
  attention.
• Somnath Saha et al. Student Body Racial and
  Ethnic Composition and Diversity-Related Outcomes
  in US Medical Schools, Journal of the American
  Medical Association, September 10, 2008.

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THE ECONOMIC IMPERATIVEWhat does the research
show?

• The Conference Board
• Racial and gender diversity are positively
  associated with higher establishment
  productivity, product quality, and economic
  benefits.
• U.S. Banker
• Most highly diverse executive management teams
  generate far greater revenues and profits than
  those organizations with the lowest percentage of
  women on their executive teams.
• Linda Barrington and Kenneth R. Troske.
  Workforce Diversity and Productivity An Analysis
  of Employer-Employee Matched Data. April 18,
  2001.
• Rebecca Sausner et al. "Diversity and Profit
  Working the Fundamentals, U.S. Banker, October
  2008.

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THE ECONOMIC IMPERATIVEWhat does the research
show?

• National Urban League
• Diverse companies generated 18 higher
  productivity than the U.S. economy overall.
• Wall Street Journal
• Workforce diversity reflecting consumer/market
  diversity results in
• New product development
• Consumer confidence
• Increased product/service marketability
• Significant revenue growth (e.g., McDonalds,
  Pepsi-Cola, IBM 3,000 growth from 1998-2001
  attributed to diversity market)
• National Urban League. Diversity Practices That
  Work The American Worker Speaks, 2004.
• Carol Hymowitz. The New Diversity, Wall
  Street Journal, November 14, 2005.

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THE ECONOMIC IMPERATIVEWhat does the research
show?

• American Sociological Association
• Companies reporting the highest levels of racial
  diversity brought in nearly 15x more sales on
  average than those with the lowest levels of
  racial diversity.
• Companies with a more diverse workforce
  consistently reported higher customer numbers
  than those with less diversity.
• Racial diversity was among the most important
  predictors of a companys competitive positioning
  relative to other firms in the industry.
• Cedric Herring. "Does Diversity Pay? Race,
  Gender, and the Business Case for Diversity,"
  American Sociological Review, April 2009.

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THE ECONOMIC IMPERATIVEThe flip side

• UNC Business School
• Workplace conflict results in 22-53 lost
  productivity.
• EEOC
• Average EEO complaint costs approximately 60,000
  (administrative process) up to 250,000
  (including settlement/damages).
• 25-40 of workforce attrition rate and 5-20 in
  lost productivity can be attributed to poor
  diversity management turnover costs 75-150 of
  the replaced employees salary.
• Conclusion Diversity requires investment, but
  the ROI
• outweighs the cost.

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THE HUMAN IMPERATIVE

• Observations
• By 2042, there will be no single majority
  demographic people of color will comprise more
  than 50 of the U.S. population the majority of
  new entrants into the labor market will globally
  diverse. Our labor market, like our economy is
  irreversibly global.
• 46 of employees who experienced
  intolerance/discrimination indicated they would
  remain with the organization vs. 71 of employees
  who had not.
• Defining diversity solely as race and gender can
  have a detrimental effect inclusion and
  multidimensionality are essential in defining
  diversity in order to gain acceptance.
• The Gallup Organization. Employee
  Discrimination in the Workplace, Public Opinion
  Poll. December 8, 2005.
• Stella M. Nkomo. Identities and the
  Complexities of Diversity, in Susan Jackson and
  Marian Ruderman (eds.), Diversity in Work Teams
  Research Paradigms for a Changing Workplace, 1999.

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THE HUMAN IMPERATIVE
Gallup Survey Employee engagement is a
validated predictor of organizational
performance diverse workplaces with culturally
competent workforces have the highest employee
engagement. Sirota Survey Key motivators for
employees are equity, achievement, and
camaraderie. Conclusion Empirical data show
a quantifiable link between diversity and
employee engagement and performance outcomes.
Gallup Organization. Q12 Employee Engagement
Survey, performed in the Food and Drug
Administration, February 2005. David Sirota
et al. The Enthusiastic Employee How Companies
Profit by Giving Employees What They Want, 2005.
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LESSONS LEARNED

• INTELLIGENCE COMMUNITY
• Obstacles leading to intelligence failures
  included
• Hardened attitudes against change
• Insular organizations
• Resistance to external recommendations
• Insistence on preserving the status quo
• Recommendations for improvements in performance
  culture include
• Agencies should encourage dissent, not smother it
• Move away from tradition of searching for
  consensus in favor of open debate and more
  diverse spectrum of views
• Walter Pincus and Peter Baker. Dissent on
  Intelligence is Critical, Report Says,
  Washington Post, March 30, 2005.
• The Commission on the Intelligence
  Capabilities of the United States Regarding
  Weapons of Mass Destruction, March 31, 2005.

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LESSONS LEARNED

• NASA
• Causes that contributed to the Columbia accident
  included
• An organizational culture that squelched dissent
• A performance culture that stifled differences of
  opinion
• Resistance to external criticism and doubt
• Imposition of the party line vision(which) led
  to flawed decision-making, self-deception,
  introversion, and diminished curiosity
• Organizational barriers that prevented open,
  effective communication
• NASA has since implemented one of the strongest
  diversity management programs in Federal
  government
• Columbia Accident Investigation Board Report,
  2003.

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TAKE-AWAYSWhat does this mean for the Federal
workforce?

• Diversity Inclusion in the workplace enhance
  performance and productivity they are business,
  economic, and social imperatives.
• Diversity should be broadly defined, including
  but not limited to legally protected groups.
• When defining diversity in multidimensional
  terms, including diversity of thought
  perspective, it brings in aspects grounded in
  race, gender, and ethnicity.
• Diversity Inclusion strategies must be
  strategically aligned with business goals
  diversity strategies must be complemented with
  inclusion strategies in order to be effective.
• Intolerance and insensitivity to diversity breeds
  disastrous and costly results agencies must
  first guarantee equity (EEO compliance) in the
  workplace.

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ATTRIBUTES OF INCLUSIVE ORGANIZATIONS

• Leadership commitment
• Equity in employment, advancement, recognition,
  and reward
• Diversity and Inclusion principles incorporated
  in strategic planning
• Accommodation for diverse physical, cognitive,
  and developmental abilities
• Powerful communication and information sharing
  (transparency)
• Shared accountability and responsibility (Shared
  Leadership)

• Continuous learning
• Competency-based diversity training (starting
  with managers and supervisors)
• Participatory work processes
• Interdisciplinary, pluralistic teams
• Inclusive organizational culture
• Culturally competent retention and rewards
  strategies (empowerment, not just )
• Collaborative, constructive conflict management

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HOW DO WE MEASURE SUCCESS?

• Organizational composition
• Workforce demographics vs. RCLF/CLF
• Analysis of promotions, separations, hiring
• Organizational culture
• Climate/employee surveys
• EEO complaints, grievances, disciplinary actions
• Organizational performance
• Line of business objectives
• Outcome metrics quality, service level,
  efficiency
• Correlate Establish baseline in year 1, then
  correlate annually thereafter to gauge progress.

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SYNERGY FOR AHIGH-PERFORMING ORGANIZATION
Equity
Performance
Organizational Inclusion
Workforce Diversity
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CONTACT INFORMATION
U.S. Department of Veterans Affairs Office of
Diversity and Inclusion Web site www.diversity.hr
.va.gov E-mail odi_at_va.gov