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In this Executive Update feature article, Lynn Martin and Geraldine Ferraro, two well-known women in politics, explain why associations that ignore diversity could be pushed out of business.  They also discuss how to deal with diversity, and how to use training and leadership to ensure organizational success within a changing labor environment.

At some point during the last two decades, you might have heard our names mentioned - Lynn Martin, a former Republican member of Congress who served as President George Bush's secretary of labor, and Geraldine Ferraro, her colleague on the other side of the aisle who left Congress to run for vice president with Walter Mondale in 1984. You also might know that for years we have worked on issues that were important to improving the lives of women and minorities.

What you may not know is that last year, we formed a new business called G&L Strategies to help corporations and organizations maximize the opportunities presented by changes in the workplace.

At first we focused on the fact that corporations were being sued for sexual harassment and discrimination in record numbers and for record bucks. We knew that their main problem was that they didn't understand that a diverse work force, a work force with increasing numbers of women and minorities, had different needs and demands. Also, being sensitive to those needs and demands was not just politically correct; it was good business.

Ordinarily when we speak of diversity, women and people of color immediately come to mind. But the true definition of diversity is much broader: the variety of characteristics comprising our identity that includes not only race and gender, but also ethnicity, age, religious affiliation, sexual orientation, and physical and mental capacity. Thus, while we are talking about accommodating the workplace to women and people of color, we also include accommodating people with disabilities and recognizing cultural differences.

Undoubtedly, the first question is, "Why should I care?" If a policy is in place that recognizes diversity, and the policy is strictly enforced, then lawsuits complaining about harassment or discrimination decline. But there are other quantifiable benefits.

In 1995 the Federal Glass Ceiling Commission, a bipartisan body convened to identify the barriers blocking progress of women and minorities in the workplace, found that "organizations which excel at leveraging diversity - including the hiring and advancement of women and nonwhite men into senior management jobs, and providing a climate conducive to contributions from people of diverse backgrounds - will experience better financial performance in the long run than organizations which are not effective in managing diversity."

Sensitivity to diversity is not just a feel-good proposition but a competitive weapon, especially in an increasingly global economy where differences are the norm. According to Working Mother magazine, one-quarter of all companies conduct diversity training in order to remain competitive.

Larry Fuller, CEO of Amoco Corporation, puts it bluntly: "Diversity isn't just another initiative. Nor is it an option. We'll stop at nothing short of work force and business partner relationships in which we enable and receive 100 percent contribution from 100 percent of our people."

But there are other benefits beyond saving money in lawsuits and remaining competitive. Other issues reflected in the bottom line are recruitment and retention of employees, increased productivity, good public relations, and enhanced market share of an increasingly diversified customer base.

Recruitment
In today's booming economy, strategic recruitment is necessary to draw the best workers from a diverse applicant pool. To reap the full rewards of today's work force, each department, from boardrooms to mailrooms, must recognize that active participation of diverse employees in the tailoring of programs and services ensures improved employee morale, continued innovation, and competitive advantage.

Associations can recruit a work force that reflects their members at all levels:

• Establishing networks with minority colleges
• Offering internships and scholarships
• Developing partnerships with minority organizations
• Developing community outreach programs
• Using Web sites that post resumes of diverse job seekers

Once job candidates are interested, associations can make a credible impact on potential recruits by having role models in positions of responsibility and a mentoring program in place so applicants can foresee a productive future with the association.

Retention
Once a dynamic and diverse work force is established, the next challenge is to encourage employees to consider their jobs as careers. As any association executive can attest, keeping an experienced work force from going someplace else is imperative. It costs approximately 150 percent of a person's annual salary to replace that employee. It also can cost in other ways when an individual with unique expertise about the association and a familiarity with an association's members walks out the door.

To keep a diverse employee base satisfied, retention efforts must be more targeted than ever and must appeal to a variety of workers' needs. Pay raises are not necessarily the best way to satisfy employees any more. Rather, associations may want to offer a menu of alternative workplace benefits to prove it supports workers with various lifestyles. Since more employees report a desire to better balance work with life's other responsibilities, a workplace that helps them do that will be better able to retain employees.

Successful organizations are offering many family-friendly incentives, including flex-time and job sharing. Flex-time, once considered a workplace solution best suited for women who were primary caretakers of children, is now in demand by men as well. By offering relatively inexpensive workplace benefits, an organization can retain employees and keep morale high, and in turn, enhance productivity. Companies offering work-life balance initiatives also increase their bottom lines through reduced stress and absenteeism.

Other increasingly common workplace benefits support career advancement such as tuition reimbursement, managerial training, and other professional development perks, including travel to professional seminars and meetings.

At Lucent Technologies, directors and deputies are offered career coaches, who work in tandem with the human resources department to customize a package of professional perks that can keep high performers from leaving. Those perks might include management classes, plum assignments, or international travel. As another example, a healthcare referral program at Prudential saved the company $7 million in reduced absenteeism and turnover. Insurance giant Cigna embarked on a lactation program that reduced new-mother absences by 27 percent, proving there is a significant return on investments for companies willing to be proactive.

Granted, what works for a Fortune 500 company may not be possible or necessary for an association, but knowing your employees' needs and seeking in some way to accommodate them goes a long way toward building morale and loyalty.

Improved morale and company loyalty also are natural by-products when managers recognize the work of their employees. According to a study co-sponsored by Columbia Business School and Korn/Ferry International, sideline employees, those who remain without bottom-line responsibilities or any real influence on organizational decisions, will soon go elsewhere if they have ambition and expertise. Research shows that more than half of minority executives in the United States say they are likely to leave their companies for a new position with greater challenges.

One way to identify qualified employees ready for the next step is to offer leadership and professional training classes that prepare a person for decision-making, team leadership, and personal development skills. People who perform well in these programs may be ready for that next promotion. Another effective tool for enhancing promotional opportunities is to solicit performance reviews and feedback from subordinates and supervisors to identify the best managers.

Now that we know what we should do to deal with the diverse work force, how do we go about doing it?

Diversity Training
Diversity training can help association personnel learn to appreciate the strengths of co-workers and members who may seem unlike themselves, laying the foundation for synergy, cooperation, and optimal input.

Managers must understand that different cultures have different rules, and what may be appropriate behavior for one person may be inappropriate for another. If a manager has not been exposed to a broad range of culturally based behavior, (s)he may not know how to interact respectfully and effectively with staff or colleagues. For instance, some employees may have been raised in a culture where a downward gaze is a sign of respect, while others consider eye contact crucial to doing business.

These varying ways of communicating, including differing body language, can be easily misread. A lack of awareness in cross-cultural competency means a workplace does not run as smoothly as it might, and contributions of many employees may not be used to full advantage.

Diversity training aims to raise awareness of biased behaviors that may be unintentional. Often, this type of unconscious discrimination can jeopardize the stability of an entire organization. According to a recent report produced by the nonprofit organization Catalyst, most women of color who were leaving their jobs cited the failure of the company to deal with biased behavior based on gender and race, a bias that is not always recognized or even understood by those perpetuating it. Promotions often go to people with similar backgrounds to those doing the promoting, while innovative, effective workers with different approaches or appearances are unfairly passed over. Diversity training can alert managers to unintentional discriminatory behavior.

Courses in diversity can be conducted in seminars or by desktop computer and usually contain cross-cultural communications in the areas of race and ethnicity, sexual orientation, gender, age, and disability. Managers' diversity training modules also include topics such as setting the workplace tone, performance management, and feedback.

A thorough training program should include anti-discrimination and anti-harassment discussions to make managers aware of laws that affect hiring, firing, and promotions, and that are designed to ensure fair treatment in the workplace. Instruction in this area views workplace harassment in context, identifies the problem, and teaches appropriate responses. Additional topics on how to protect the company from workplace harassment and the significant costs to the company associated with legal challenges arising from workplace harassment or discrimination problems also are usually covered.

Probably every organization and business should provide some kind of training as a preventative measure, but many small- to medium-sized companies often can't fit it into their budgets. An association interested in providing leadership in this area and offering affordable counsel to its membership may want to consider creating a program specifically tailored to the association for distribution to its members.

Top-Down Mandate
The best recruitment, retention, and promotion policies and procedures will not bear fruit if there is no mandate from the top that demonstrates the value of diversity and the programs that support it. For associations, the board and executive director need to show support. Otherwise, diversity efforts will become isolated and stagnate in human resources and public relations departments.

A simple, company-wide convocation or an all-staff memo, e-mail, or column in an internal newsletter - inexpensive ways to get the message out from the president that diversity goals matter - can manifest top-level support. The next step is providing association leaders with the tools, time, and resources they need to make diversity goals a reality. Connecting diversity goals to compensation and promotion of management is a sure way to implement diversity programs quickly and effectively.

Measuring Diversity
How does an organization know if its diversity initiatives are paying off? Just like any other business undertaking, diversity programs must be measured for effectiveness.

Setting targets for where your organization needs to be is one way to go about measuring diversity programs. Do you want to meet certain recruitment or promotional goals? Perhaps your group plans to increase women in management by 20 percent during the next five years. By keeping track, even breaking down department reports, organizations can quantify the success or failure of their efforts. Measuring across demographic areas is another useful tool for finding trouble spots.

While little specific research data exists regarding the financial benefits of diversity to associations, it has long been established that private companies with the highest rating on equal employment opportunities have performed better in the stock market than companies with poor performances in areas related to hiring and advancing women and nonwhites. According to research conducted by Covenant Investment Management, the earnings of these highly ranked companies were two and a half times higher on average.

Costs of Mismanaged Diversity
As we've said before, the costs of ignoring diversity can be devastating. We have all seen the rise in discrimination-based lawsuits, multi-million dollar settlements, and media exposes. According to the Texas Bar Journal, a company pays an average $6.7 million to investigate, defend, and either settle or pay judgments for sexual harassment claims. In 1998 U.S. News & World Report wrote that harassment complaints cost an average $150,000 in fees before a company even goes to court.

The past decade has seen up to a $50 million rise in annual monetary awards in federal harassment suits. Many think attorneys are contributing to the increase in discrimination-based class action suits, encouraged by the record $176-million Texaco settlement, which raised the bar in payouts due to discrimination challenges. Most of these examples involve large corporations, but smaller organizations can be put out of business should they have to meet the costs of such a challenge. Dollar figures do not capture the significant loss in productivity when management is pulled off of regular priorities to handle such a case, when morale plummets, and when an organization's hard-earned reputation is blighted overnight. Leadership The association willing to go the extra mile to develop exemplary diversity programs stands a good chance of winning awards from organizations such as the U.S. Department of Labor, Working Woman, and Fortune. In turn, the organization will profit from a reputation as fair and friendly, attracting new job applicants and retaining professionals already on the job. Some organizations sponsor awards programs that recognize diversity initiatives throughout the country. The annual Catalyst Award, for example, honors the business world's most effective initiatives for women's advancement. Earning this award shows that an organization is serious about supporting an inclusive work force.

Member Market Share
As your members doubtless know, the financial rewards of appealing to a more-diversified customer base are significant. Women today purchase 70 to 80 percent of all products; African-Americans spend nearly $500 billion each year on goods and services; and Hispanics comprise one of the fastest-growing consumer groups in the country. A reputation for fair treatment is one of the primary reasons women and minority consumers say they remain loyal to a company. Your members already may be appealing to a diverse customer base by investing in special-interest causes, identifying giving priorities that also will generate customer loyalty and increase sales. For example, sponsoring conventions organized by the Hispanic Chamber of Commerce or La Raza can identify you as an industry that cares about what those groups' Hispanic opinion makers and members care about. Contributing to economic development programs sponsored by the National Association for the Advancement of Colored People (NAACP) or the Urban League, underwriting scholarships offered by the Rainbow/PUSH Coalition, or investing assets with minority money managers through Jesse Jackson's Wall Street Project (launched to channel investments into the minority business community) are just a few more ways to reach out to targeted audiences.

We know we have listed more steps than you can possibly take at once, but we hope we have sparked your imagination. We also know that many of you and your members are probably well down the road in creating, maintaining, and prospering from a diverse work force. Whether you are already leading in the diversity arena or are just starting out, you may want to examine your organization to identify vulnerabilities and challenges. A program or initiative may already exist at your members' companies that can easily be replicated by you and others. Perhaps your members would benefit from sharing success stories that can inspire like efforts. Defining goals, developing a strategy and action plan, and implementing that plan will serve an association in the most effective, profitable way.

Any organization is only as successful as the people who work there. And any organization unprepared to meet the opportunities and challenges of a rapidly changing work force and marketplace will be left behind the competition, missing an excellent opportunity to provide leadership to its members. We hope associations and companies across America will increase their efforts to remove the barriers that stand in the way of professional advancement for women and minorities, and enhance their revenue and missions while they are at it.

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