The Business Case For Diversity: The Need, Application and Training (NAT) Triangle by Anita Nahal, Ph.D.
The chicken came first or the egg? Is it because a company’s products or services are geared towards a diverse buyer demographic or global diverse missions, thus the need for the business case for diversity OR because today’s world is increasingly becoming diverse, therefore, the need for the business case for diversity? Either way it becomes pertinent for diversity officers to make a direct case between diversity and business profit or benefit, without which the business case for diversity is going to be a hard sell. Thus, the NAT diversity triangle (Need-Application-Training) approach to pitching and securing the business case for diversity.
It goes without saying that diversity is an intrinsic value component in any organization, the benefits of which are culturally measurable, such as greater knowledge and awareness of those different than self; motivation for improved personal and professional relationship with those different than self; and an elevated cohesive work environment bringing the set goals to profitable fruition. Yes, indeed diversity has its own “…social expectation and value” (Kochan & et all).[i] The more diverse individuals in an organization, the more diverse ideas might emerge. And when diverse ideas are combined and managed well, creativity soars, leading to benefits for both the individuals involved and the organization. (Johansson).[ii] As a bottom line of societal-cultural value, it’s a win-win situation primarily because the world today is becoming more and more multi-cultural, with more individuals who are willing to acknowledge their multi-layered identities (such as American, gay, liberal, Protestant and so forth to give one example). Therefore, it preempts the necessity for diversity comprehension and tolerance and therefore organizations make a case for diversity training.
Without digressing from the topic at hand, many research studies have shown that while companies spend millions of dollars each year, training itself will not improve the diversity culture of an organization (Dobbin & et all).[iii] And even though we are in the 21st century “world is flat” mode as Thomas Freidman[iv] said, without a direct connection between the goal of diversity and end result of profit, the word “diversity” might remain a catch phrase or a mode to simply increase the number of diverse employees to create an acceptable image. In today’s world of shrinking resources, jobs and socio-economic opportunities, diversity as a societal & cultural value is a declining commodity. Many organizations today have diverse individuals. But what are those companies doing with the diversity among its ranks? Are they utilizing their ideas and suggestions in product or services development? Are they utilizing their cultural skills in reaching out to larger or different market demographics? Thus the interconnectivity between diversity and profit. As Hubbard says, “Measuring the results of diversity initiatives will become a key strategic requirement to demonstrate its contribution to organization performance.”[v]
For the NAT to be successful as a pitch for the business case for diversity, two key elements have to be stressed at the onset: leadership buy in and employee, supplier diversity/student, faculty or staff (also referred to as stakeholders) buy in. Leadership buy-in is the main key to successful acceptance of diversity because as Andy Brantley, President & Chief Executive Officer of the College & University Professional Association for Human Resources says, “leaders…set the tone…their positions on diversity, equity and inclusion are reflected every single day through their actions, through their words, through the things they chose to do or chose not to do…”[vi] And second, along with leadership buy in, all the stakeholders in the industry/organization/university, including external contractors and diversity suppliers is also indispensable. This leads to a sense of, “shared responsibility” by all the stakeholders.[vii]
Three charts follow delineating each element of the NAT diversity triangle. First, a chart showing the need for diversity and the quantifiable end results that can be compelling reasons for organizations to say yes to diversity. The second chart shows the areas in which diversity can be applied. And the third chart shows the likely stages of diversity training and follow up measures to ensure the business case for diversity is not left hanging after the training stage. Without the follow up, comprehensive benefit and profits (essential end result) might slip through the fingers.
Chart 1—NEED: Why the Business Case for Diversity? The chart below shows the link between the need for diversity and the various quantifiable and profitable end results that are likely to bring leadership and employee/student, faculty or staff buy in. The chart uses slashes to indicates private, non-profit, government OR educational institution scenarios. Throughout the article the slashes carries the same meaning.
The increased buying power of diverse demographics for companies and increased admission and graduation rates by committed students will be the bottom line in making the business case for diversity. Speaking specifically about the changing demographics of the buying market in the U.S., Marcus Robinson, Charles Pfeffer, and Joan Buccigrossi said that, “According to research done by the Selig Center for Economic Growth at the University of Georgia, the buying power of people of color has grown dramatically over the past decade. The combined buying power of people of color in the U.S. grew from a base of nearly $600 billion in 1990 to approximately $1.4 trillion in 2001.”[viii] Such a scenario, for example, can be a major contributing factor in calculating the ROI (Return On Investment) while making the business case for diversity. It is important to keep in mind that depending upon the business/services of the company, the measurable profit markers can vary. And of course a Cost/Benefits analysis would need to be conducted to sell any business case for diversity.
Chart 2—Venn Diagram on Application— shows the elements that would need to be addressed to achieve a diverse organization that in turn will ensure it achieves its diversity target of profit/other benefit markers ( as discussed later in Chart 3). Chart 2 provides these elements at companies/organizations and educational institutions. The analogy of the Venn Diagram is employed to stress that all elements in the application chain process are inter-connected and can lap, and overlap, lending to the success of each other and everyone in that chain. The bottom line here is that in the chain management process, everything is related to the central point: making a business case for diversity.
The final element in making the business case for diversity is to ensure that not only is the training provided but more importantly the follow up aspect of diversity training is formally in place and implemented. The diversity chain management process as it seems to exist now does not pay too much emphasis on stages 5 & 6 in Chart 3 (especially stage 6—the follow up stage) which are essential to the success of any diversity training program in an organization and in turn translate into quantifiable outcomes. Chart 3—Training-Trapezoid list, provides the likely stages in the diversity training process management.
The NAT—Need—Application—Training Diversity Triangle approach is a likely combination that individuals can pitch to their managers and leadership when recommending a business case for diversity. Research has raised some “…painful questions for companies that pour money into diversity programs and for the diversity industry that supplies them with a dazzling array of diversity products…. But despite the astonishing number of products and services–ranging from the worthy to the banal–one item is in very short supply: hard metrics for measuring performance results or the return on diversity spending.”[ix] In today’s world with increasing diversity challenges, it might not be sufficient to say we need diversity or that we need training in diversity for our employees/faculty, staff or students. It has to be directly connected to profit and other tangible business measurables.
One has to establish a connection between those aspects and profit or business success. I believe that depending on (1) where organizations are located; (2) what their goal and mission is; (3) what services or products they provide or produce; and (4) who their buyers are, will ultimately make for the level of diversity that organizations will have and support. Thus the more diverse the buyer demographic, the more global the organizational mission, in turn the more diverse an employer will be to ensure that the products and services reach the buyers and employees/students, faculty and staff, in the best way possible. Keeping all the stakeholders happy and the financial state in incline, is what makes for great business.
By Anita Nahal, Ph.D., a diversity practitioner, educationist, writer, poet, dancer and chairperson/founder of www.diversitydiscover.com
[i] Kochan, Thomas, & et all, (2002). Diversity in Business Performance: Report of the Diversity Research Network. Retrieved March 31, 2012 from http://www.shrm.org/about/foundation/research/Documents/kochan_fulltext.pdf .
[ii] Johansson, Frans, (2004). The Medici Effect. Boston, Massachusetts: Harvard Business School Press.
[iii] Cortazar, Ryan Z., (2006). Diversity Training Fails To Boost Minorities Into Management. Retrieved March 31, 2013 from http://www.news.harvard.edu/gazette/2006/09.14/25-dobbin.html .
[iv] Freeman, Thomas. (2007) The World Is Flat. New York, NY: Picador
[v] Hubbard, Edward E,. (1999). How To Calculate Diversity Return-On-Investment. Petaluma, CA: Global Insights Publishing, 3.
[vi] Gray, Katti (March 8, 2013). Interview with Andy Brantley. A Challenge to Leaders. Convergence, 33.
[vii] Dodson, Angela, (March 8, 2013). Interview with Kevin McDonald. Who’s in Charge: A dialogue about how the support systems for diversity, inclusion and equity efforts contribute to their success. Convergence, 9.
[viii] Robinson, Marcus, Pfeffer, Charles, & Buccigrossi, Joan,. (2003). Business Case for Inclusion and Engagement. Retrieved March 31, 2013 from http://www.workforcediversitynetwork.com/docs/Business_Case_3.pdf .
[ix] Kochan, endnote I.