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The Return on Investment on Hiring White Guys - Conference Board Diversity Conference, + + + +
By Al Berrios (contact Al Berrios)

I heard the most disturbing thing the other day at a diversity conference organized by the Conference Board - unless it relates to the bottom line, diversity isn't an important matter to senior executives. In fact, when a whole two days is dedicated to discussing programs and departments dedicated solely to addressing diversity at companies, then it's clear corporate America-at-large has no idea what diversity truly means.

Diversity as a Special Effort is Wrong

They say that the difference between affirmative action and diversity is that affirmative action is filling a quota, while diversity is leveraging demographics for value. Diversity supposedly recognizes that just because someone isn't of the same religious, sexual orientation, economic, and of course, ethnic background as you, that doesn't mean they aren't capable of delivering as much value as you.

Although powerful arguments and tools exist to measure and manage diversity at your firm, notably from Craig B. Clayton Sr., Founder and Chairman of diversity consulting firm the Spartacus Group (and a truly "gifted professional speaker"), the disturbing thing is that all these programs and departments horribly distort the point of the diversity cause - meritocracy.

As a separate department, it's accountable to contribute to the profitability of the firm, like marketing or business development. As such, not only can senior management that don't understand or care to manage it avoid it, but if incentives to meet goals (quotas) aren't committed to the department, there's little reason to get diverse.

Advocates don't help by insisting diversity departments be stand-alone, apart from HR, because it might get lost in bureaucracy. But the worse part is that advocates spend so much time intelligently preaching to firms that they aren't doing enough, (instead of pursuing a less antagonizing discussion about HR learning initiatives that won't require additional expenditures by the firm to set up diversity) they've missed one of the crucial double standards of their argument: hasn't it occurred to anyone that individuals considered non-diverse don't get held to these same standards? And, more interesting, because the argument has shifted to measuring a return on investment on diversity, does that mean we should have a similar return on those that aren't diverse?

Discriminating on Fred

To illustrate our argument, let's drop in on Fred's job search. Fred has a B.S. in Finance from an Ivy League school, has done internships at big financial firms, but when Fred decides to make a career change, and applies to a media company, he is rejected. Fred thinks it's because he doesn't have the education or experience, so he takes a couple of years off to get his MBA in entertainment marketing ("A Case for Skipping Grad School").

Again, he returns to the company that rejected him earlier. This time, he gets a meeting, but doesn't seem to be making any headway. Fred believes that media company to be short-sighted and feels more confident applying at other media firms. He is met with rejection after rejection. Fred's frustration is directed at the economy until his wife, Linda, helps Fred analyze his interviews.

Fred recounts his interviews at the various media firms he's been to: He recalls an awkward absence of white guys; he recalls that he was unfamiliar and uneasy with the African, Caribbean, and Hip Hop-related art concealing the walls of the firms; he paused when he realized that he didn't click with the often black or Latino interviewers.

Linda posits that Fred may have been a victim of systematic discrimination and encourages him to follow up and request to know why he didn't make the cut at these firms. When Fred follows up, he was unanimously rejected due to over-qualifications, under-qualifications, or sudden hiring freezes. He was encouraged to hang on until "something comes up."

What Fred would never know is that as a white guy, his interest in working at the media firms he applied for were directed to the firms' diversity departments, who have only so many people they can hire for their programs. Since most diversity programs simply fail to prove their value to the bottom line, budgets are cut, and making the firm more diverse fails. Regardless of his education, enthusiasm, and working experience in finance, Fred's value isn't greater than a black guy with just a B.S. degree from a community college who's only actual qualification is that he's a good friend of an executive's son.

It's Not Discrimination, It's Human Behavior

If you believe Fred was discriminated against, you're probably part of the minority group, because the perspective of the media firms is that they simply hire those they feel fit the ideals and culture of the firm, which is subsequently in the best interests of the firm. Often, one black guy just feels better working with another black guy. That doesn't mean that the hirer is intentionally discriminating, he's simply falling into a natural human behavior of being comfortable with the familiar.

It's fascinating that when this behavior is that taken as a whole, discrimination is not noticeable. A firm with a diversity program will always promote how they've got a diverse workforce, with 25-50% minorities in senior management positions (minorities include women). But on a micro-level, these minorities are often segregated in specific divisions, geographic areas, or even individual branch locations. (Been to a fast-food joint or retail bank lately?)

Getting Diversity Right

Any management consultant will tell you that doing the familiar is a sure-fire way to become stagnant and less innovative. But the desire to want change, including changing those you work with, is initiated from a high tolerance for risk, which humans are often programmed against (thanks to constructs like unions [Management Strategy: Unions] and the unique sue-anything-that-breathes U.S. court system).

Put another way, risk aversion leads to sameness; which leads to stagnation from lack of 1) fresh ideas, but also 2) alienated contributors.

When seen from the broader lens of natural human behavior, (not some systematic attempt to keep minorities out of the workplace that has to be bitterly opposed), behavior modification shouldn't be focused on sensitivity training, but rather training employees to increase their tolerance, and willingness to accept responsibility for, risk in the workplace.

Today, diversity is top of mind at the senior ranks of a firm. More than any other reason, it's because customers are now diverse. And customers are diverse because a full third of the U.S. population, or better yet, 95% of the world in which U.S. companies do business, don't share our beliefs, lifestyles, and ethnic background. As a major strategic issue, it's time to evaluate diversity not as a "feel-good" social matter, but what it really is, a true merit-based recruitment and hiring process by all risk-taking hiring managers, not just HR.

Addendum: Overall, the Diversity Conference hosted by the Conference Board at the Marriott Marquis in New York's Times Square on April 26-28 merited 4 pluses (+ + + +).

READ MORE
Pellet, Jennifer, "Driving Diversity", CEO Magazine, May 2004, page 49

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