Applying an Organizational Development Approach to Creating Diversity

This report, "Applying an Organizational Development Approach to Creating Diversity," explores how organizations can move beyond superficial diversity programs to create truly inclusive and multicultural workplaces. The authors, Richard S. Allen and Kendyl A. Montgomery, emphasize the importance of diversity in the 21st century, highlighting its benefits in terms of market share, customer understanding, employee motivation, and innovation. The report introduces Taylor Cox's typology of diversity, differentiating between monolithic, pluralistic, and multicultural organizations, and argues that only multicultural organizations, which value and integrate diverse perspectives, can achieve true success. It examines the reasons why many diversity programs fail, often due to a lack of internal commitment, generic approaches, and insufficient follow-up. The report proposes that a planned organizational change model based on organizational development principles can effectively transform corporate culture from exclusivity to inclusivity. It provides examples of companies that have attempted to address diversity challenges and underscores the need for tailored, research-based strategies to achieve lasting change and avoid negative consequences. This report is a valuable resource for managers seeking to reap the full benefits of a diverse workforce.

Applying an Organizational Development Approach to
Creating Diversity
Accepted for publication in:
Organizational Dynamics
March 2001
Richard S. Allen
University of Tennessee at Chattanooga
College of Business Administration
Management Dept. #6156
615 McCallie Ave
Chattanooga, TN 37403-2598
Phone: [phone]
Fax: [phone]
Email: [e-mail]
Kendyl A. Montgomery
Emory University
Atlanta, GA

Biography of authors:
Richard S. Allen is an assistant professor of management at the University of
Tennessee at Chattanooga. Dr. Allen received his B.S. from the Pennsylvania State
University and his Ph.D. from the University of Pittsburgh. Prior to entering academia,
he spent over 15 years in a variety of corporate management, training and consulting
roles at FedEx Ground (formerly RPS) and Texas Instruments. He has also done
extensive consulting with a wide variety of businesses in organizational development
and change, management skill development, team-building, process improvement and
re-engineering. Dr. Allen’s research interests are in the area of organizational
development and change. His current research projects and publications examine the
role of the reward system in support of organizational strategy and the relevance of
equity sensitivity.
Kendyl A. Montgomery is currently a doctoral student at Emory University
concentrating on Organizational and Stratification Theories. In addition, she is
completing her MBA at the University of Tennessee at Chattanooga. She received her
B.S. from the University of Tennessee at Chattanooga. Her current research interests
include Organizational Culture, Diversity issues, Industrial Sociology, Globalization and
Organizational Comparisons with a special interest in Health Care Systems. Ms.
Montgomery was previously employed as a Client Services Officer for Human

Resources Development Canada, where she specialized in interpretation of
Unemployment Insurance Law. She is also a former model.

Applying an Organizational Development Approach to Creating
Diversity
Executive Summary
A diverse workforce for the 21st century is one that is not only recommended, but
also necessary. As companies stretch their horizons to include increasingly diverse
markets, their capability to effectively transact business may be hinged on the cultural
makeup of their own work force. Many organizations currently go through the motions
of trying to change their corporate cultures to be diverse and include people of all types,
yet record numbers of discrimination suits are still being filed. The true issue is one of
changing a company culture from one that excludes individuals to one that not only
includes but values them as well.
We propose that a planned model of organizational change based on the
principles of organizational development can be applied to change a corporate culture
from one of exclusivity to one of inclusivity. Our approach is based on over fifty years of
theory and research from the fields of Organizational Development and Culture Change.
This article discusses what this approach entails and cites examples of companies that
are practicing different aspects of this approach to creating diversity. The model for
planned change presented in this article should be very useful for any manager who
would like to reap the full benefits of diversity.
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REAPING THE BENEFITS OF DIVERSITY
Diversity is fast becoming a business imperative in the new millenium. The
Labor Department predicts that by 2005, 85% of new workers entering the labor force
will be women or minorities. A 1998 study by the Society for Human Resource
Management found that 75% of the Fortune 500 and 36% of firms of all sizes already
have some sort of diversity program underway.
Studies of diversity in organizations have shown that that an exposure to diverse
colleagues helps managers make better decisions and cultivate new ideas by drawing
on a larger pool of information and valuable experiences. A diversified staff can also
help an organization increase market share by better enabling the organization to
understand how to market to an increasingly more diverse customer base. This serves
to increase the agility and adaptability of the organization. Additionally, minority
customers often feel that a company's diversified staff can better identify with their
everyday experiences, thus enhancing company credibility.
McDonald’s and Wal-Mart are prime examples of organizations that are reaping
the benefits of an increased understanding of how to market to their increasingly more
diverse customers based on their own internal diversity strengths. Both organizations
realizing that the U.S. Hispanic market grew at a tremendous rate in the 1990’s decided
to attempt to improve their marketing to the Hispanic community. Due to an increased
understanding of the importance of the extended family in Hispanic cultures McDonalds
has reconfigured the seating in many of its restaurants to provide larger group areas
where extended families can sit together. Similarly, Wal-Mart has begun to advertise
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heavily in Hispanic areas in the period between Christmas and Three Kings Day
(January 6) in recognition of the tradition of Hispanics exchanging gifts on Three Kings
Day.
An organization that has achieved diversity throughout all levels of management
also stands a much better chance of recruiting, motivating and retaining talented
minority employees. Diversified leadership in the organization increases productivity
and innovation through the generation of new ideas, and the development of more
motivated minority employees. Minority employees at lower levels in the organization
feel more committed to the company because they find it easier to identify with minority
managers at higher levels in the organization. This results in employees who feel
valued, competent, and enjoy coming to work. Further benefits include improved
decision making and better quality management instilled by increased breadth and
openness from a happier workforce.
A Typology of Diversity
Taylor Cox has developed a framework that helps explain why organizations on
the forefront of diversity are significantly different from other organizations and better
able to reap these benefits of diversity. Cox’s typology concerns the attitudes that
organizational members have towards diversity. There are three levels of
organizations in the typology: Monolithic, Pluralistic, or Multicultural.
Monolithic organizations are at the least developed level with regards to diversity.
One large majority demographic group (typically white males) manages them. Women
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and minorities do exist in these organizations, but they are expected to conform to the
norms and values of the majority group.
The next level of diversity development is known as a Pluralistic organization.
This type of organization is typically populated by a much more diverse set of
employees because the organization has made a special effort to hire and promote
minority group members. They may have special affirmative action programs or
minority mentoring programs to help insure more representation of minorities throughout
the organization. But minority members of these organizations are still expected to
adhere to the norms and values of the overriding majority group.
The organizations leading the pack in terms of diversity and reaping the greatest
benefits have reached the final level of development. They are classified as
Multicultural organizations. These organizations actually value the diversity that they
have created within their workforce. Unlike the Pluralistic organization, Multicultural
organizations encourage members of different groups to learn from each other and
adopt some of the norms and values of minority groups. This helps to create an
environment in which differing viewpoints are valued and given consideration. These
organizations have created a new unique organizational culture. This new
organizational culture is better suited to deal with an increasingly multi-cultural and fast-
changing marketplace. This helps to give these organizations a competitive advantage.
WHEN DIVERSITY FAILS
Organizations, which fail to make the transition from the Monolithic stage, run the
risk of serious public relations incidents and negative bottom-line financial implications.
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There have been many highly publicized examples of organizations failing this diversity
test. Texaco is one example, in which videotapes surfaced of executives using racial
epithets and plans to destroy the evidence of their discriminatory practices were
uncovered. The Denny’s racial discrimination suit that alleged that black customers
were being discriminated against and that black employees were being systematically
fired was another highly publicized case. Likewise, Mitsubishi Motor Manufacturing
and Astra Pharmaceuticals are prime examples of organizations that lost big sexual
harassment suits. State Farm Insurance also lost a gender bias suit that alleged that
males were more likely to be hired. These are all extreme examples of Monolithic
organizations that have struggled with the issues of diversity, discrimination and bias
and have paid a high price in terms of corporate reputation and customer goodwill.
Given the serious implications of failing the diversity test on one hand and the
previously discussed potential benefits of achieving diversity on the other hand, it is a
much more common practice today for companies to actually attempt to create diversity.
U.S. companies spend an estimated $200 to $300 million a year on diversity training
programs. But unfortunately most diversity programs tend to meet with mixed results or
even failure. EEOC lawsuits filed by women and minorities continue to rise.
Organizations typically attempt to achieve diversity through a special program or
a series of initiatives. These attempts at creating diversity are often poorly planned and
disjointed in their implementation. At best, many of these organizations move to the
Pluralistic level of diversity development. More minorities are hired and eventually
promoted, but they are expected to conform to the majority organizational culture. A
truly diverse, multicultural work environment is never realized. These organizations
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become stuck in the Pluralistic stage of development and fail to reap the true
competitive rewards of a Multicultural workforce.
An excellent example of a company not doing enough to bring about full
multiculturalism in their organization is Publix Super Markets. In January 1997, this
company settled an $81.5 million dollar gender discrimination suit. In order to avoid
such suits in the future, Publix immediately responded with a diversity program. Their
program included increased job postings, the ability for employees to apply for
openings, the administration of standardized skill assessment tests and increased
information dissemination about the different jobs that the corporation offers and the
skills necessary to qualify for them.
While this served to improve the equity of promotion decisions, and Publix
exhibited an increase in women and African-Americans within their management ranks,
they failed to directly target the underlying cultural aspects of the lawsuit. As a result,
Publix has been subsequently hit with two additional suits - one for racial discrimination
and a second for gender discrimination. These new lawsuits suggest that their diversity
program is not having a corporate-wide impact on their organizational culture. It
appears that Publix has become stuck at the Pluralistic stage of development.
Why Diversity Programs Typically Fail
Diversity programs are doomed to fail if they are instituted in the wrong way or for
the wrong reasons. Diversity consultants have identified a number of reasons why
diversity programs typically fail. First and foremost are companies that start these
programs because diversity is viewed as the latest HR fad or because an outside
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consultant or agency recommends that they implement a diversity program. Unless the
impetus to create a program comes from within, the battle often becomes hopelessly
difficult.
Many companies, even if they recognize that they need a diversity program, fail
to implement a plan that is custom made for their organization. Instead many
organizations tend to choose an off-the-shelf, one-size-fits-all program. Unless the
program is based on the organization’s own unique culture, internal strengths,
weaknesses and needs (discovered through research), and implemented by an internal
consultant who knows the organization, the likelihood of buy-in from the staff in not
great.
Another common reason that diversity programs often fail is because they go
only as far as awareness training and never get to the point of providing their
employees with the tools necessary to put the theory into practice. Management may
give lip service to the program and not take the time or effort to ensure that there is
adequate follow-up to the awareness training. In these cases individuals are not
encouraged to practice what they have learned and as such, no real culture change
takes place. Frequently resources are not allocated to support the change, and if
money is made available, managers often fail to expend personal effort to practice what
they preach. Shoney’s restaurants are a case in point. When the CEO attempted to
organize diversity sensitivity sessions for top managers the board fought the sessions
based on their cost.
In summary, diversity initiatives often fail because they typically use a scattershot
approach instead of a planned approach to organizational change. Top managers often
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identify a need for diversity, they want the benefits, but the implementation is frequently
disjointed and takes on a “program of the year” approach. Employees instinctively
realize this and real cultural change is not enacted.
APPLYING AN ORGANIZATIONAL DEVELOPMENT APPROACH
As we reviewed the literature regarding the current diversity landscape it became
quite apparent to us that what has been learned by over fifty years of theory, research,
and practice on how organizations can best implement change is essentially being
ignored by the vast majority of organizations attempting to achieve diversity. We asked
ourselves what would a diversity initiative based on what has been learned from the
fields of Organizational Development and Culture Change look like? In other words,
how can practitioners interested in applying a systematic and carefully planned
approach based on theory and research help their organizational change into a diverse,
Multicultural environment? How can managers attempting to achieve diversity use this
knowledge to make sense out of the wide variety of diversity practices and activities that
are commonly available and develop a coherent approach with a greater chance for
success? The remainder of this article discusses an approach that answers these
important questions.
What We Know About How Organizations Change
It is not enough to say analytically that diversity is what an organization needs. A
planned course of action is necessary. How is a company to go about gaining a diverse
roster of skilled employees who come equipped with the necessary skills to generate
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corporate sustainability in the decades to come? We propose that diversity programs
would stand much greater chances of success if they used a planned approach based
on what is known about how organizations change from the fields of Organizational
Development and Culture Change. An organization that wishes to develop diversity as
an enabler of competitive advantage can be most effective if it follows a set plan. This
organizational development plan of action must start with increasing awareness of
diversity and its associated benefits. Once the organization, starting from the top down,
has gained awareness that diversity is beneficial, then the organization can move
through a series of steps geared towards instilling a new culture throughout the
organization. Finally an organization must put in place mechanisms that will ensure the
new culture is perpetuated and the organization does not revert back to its original
state.
The field of Organizational Development is based in large part on the original
theory and work done by Kurt Lewin. In his seminal research on organizational change,
Lewin theorized that the forces driving change must be increased and/or the forces
resisting change must be decreased to a point in which the driving forces overcome the
resisting forces. Lewin believed that organizations, with their associated patterns of
attitudes, expectations and behavioral norms, behave much as other living biological
systems and are influenced by the concept of homeostasis. As such, organizations
tend to resist change and return to a previous state after a disturbance. In observing
instances of successful organizational change, Lewin noted that they these
organizations experience three distinct phases: freezing, moving and refreezing. His
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model of organizational change and resulting research was built around these three
stages.
Edgar Schein, building on Lewin’s work, has refined the model and extended it to
the changes in psychological processes that are necessary for an organization to
successfully change it’s culture. During the initial stage it is critical that the motivation to
change is increased to the point where the present organizational culture is unfrozen.
The present state must be disconfirmed and sufficient anxiety or guilt must be aroused
in the members to create this motivation. A state of psychological safety must also be
created to allow the organizational members to change without making them overly
defensive. Once the unfreezing has taken place, initiatives can be put into place that
actually serve to change the existing culture and move it in a new direction. Once the
change has taken place, systemic refreezing must occur to insure that the change fits
the organization as a whole and its various subsystems. Cultural changes must be
accepted at the individual, group, and functional and organizational levels if they are to
be long lasting. Otherwise, the organization, based on the concept of homeostasis, is
likely to return to its pre-change state.
Applying What We Know About Organizational Change to Diversity Initiatives
Since the transition from Monolithic or Pluralistic organizations to diverse,
Multicultural environments is essentially a change in organizational culture, we propose
that this model of planned change can be applied to increase the likelihood of achieving
true organizational diversity. Failure to address all three phases of the model is likely to
result in an organization either becoming mired in the Pluralistic stage of diversity
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development or reverting back to the Monolithic stage, thus foiling any attempt at
achieving the potential benefits of true Multicultural diversity.
Our review of the business practices associated with diversity suggests that there
are a wide variety of practices that help a business move forward on the path towards
achieving competitive advantage through diversity. But most managers fail to view
these practices as parts of a holistic, systemic effort of planned organizational culture
change. In other words, many mangers see the individual trees (practices which they
believe will promote diversity), but fail to see the forest (develop an overall plan that will
use these practices to evoke lasting cultural change). In the remainder of this article we
use the Lewin-Schein change model as a framework to organize common diversity
practices into a coherent program of planned organizational change. Our model is
summarized in Figure 1 and each stage of the model is discussed in greater detail with
examples from real-world organizations.
[Insert Figure 1 here]
Unfreezing
For unfreezing to occur, the forces advocating change must be increased to the
point that they overcome the forces resisting change. Something dramatic, such as
serious financial problems or a high profile lawsuit or public relations fiasco like those
experienced by Denny’s, Texaco, or Publix, can serve to unfreeze the organization. But
there need not be such a high profile event for unfreezing to occur. It may be a gradual
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realization on the part of top management that diversity is necessary to be competitive
in the present or near term future.
Top management support for diversity is certainly critical. Management needs to
begin the process of unfreezing the current culture by changing the system within which
it operates. One indicator of successful diversity programs is diverse company
leadership. Companies with diverse top management teams and boards of directors
are in a better position to gain the advantages of diversity. Diversity in high profile
positions sends a strong symbolic message to the rest of the organization.
But Monolithic or Pluralistic organizations do not commonly start with diversity at
the top. At the very least, the existing top management team must be exposed to and
convinced of the potential benefits that diversity can provide their organization. Once
committed, top management must then create a vision for the future in terms of diversity
and communicate it to the rest of the organization. Management must then begin to
show symbolic support for the diversity vision in their words and actions. For example,
their speeches, letters and other communications should include pro-diversity rhetoric.
Xerox is an excellent case in point. As far back as 1972, then Xerox CEO Peter
McCollough announced that diversity was as important a business responsibility as
profitability. Likewise, Corning Glass CEO James R. Houghton, made diversity a
primary business goal as far back as 1983. These organizations then went about the
business of making their diversity visions a reality.
Management must also devote adequate organizational resources to diversity. A
diversity steering committee comprised of top managers should be formed to oversee
and coordinate the organization’s diversity efforts. This steering committee is
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responsible for overseeing and guiding the overall diversity plan. It is also responsible
for making sure that sufficient organizational resources are committed to achieving the
plan and managerial follow-up is applied.
Microsoft is an excellent example of a company that has achieved a Multicultural
level of diversity. Microsoft’s top managers proclaim that their greatest assets are their
employees and that their continued success is reliant upon fostering diversity. They
have created a diversity department, which works to uphold the firm’s vision, “to
maximize the company’s performance through understanding and valuing differences ”.
A key initiative of their vision is to increase the number of women and minorities within
the company ranks. Microsoft believes that when a company sells products to people in
150 countries that speak 50 different languages, a singular point of view can be
detrimental. They have created a Diversity Advisory Council, which targets a number of
specific groups and tries to keep Microsoft an attractive place for all individuals to work.
These targeted groups include African Americans, Attention Deficit Disorder, Chinese,
Deaf/Hard of Hearing, Filipino’s, Gay, Lesbian, Bisexual and Transgender, Hispanic,
Indian, Korean, Native American’s, Single Parents, Women and Working parents.
Santiago Rodriquez, Microsoft’s diversity director, states that:
“We need to stress that all human cultures have common needs, a
common sense of humanity. But there are differences, too. How in the
world do you please a customer, for example, if you don’t know what he or
she values? That’s what culture is all about, that’s what differences are all
about. Diversity assumes not only that people are different – we know that
– but that their difference is value-added. If you know how to harness that
difference, you’ll be more competitive as a corporation than those firms that
don’t, whether in the domestic marketplace, and certainly in the global
marketplace”.
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As part of their diversity vision and planning process, top management and the
Diversity Steering Committee should identify a list of critical diversity related skills and
competencies that will be required for the organization to be successful in the future and
set measurable diversity improvement goals.
Moving
Once an organization has taken the initial steps to unfreeze their culture, they
must then move through a number of steps to achieve a complete organizational culture
change. This movement toward diversity should include such practices as recruiting
and outreach programs, co-op and internship programs, training and educational
programs, and mentoring and career development programs. The diversity vision and
symbolic actions of top management in the unfreezing stage can only be translated into
widespread organizational diversity through these sorts of concrete activities. But it is
important to note that each of these practices, done separately and not part of a
planned approach to organizational change, are much less likely to be successful in
changing the organization’s culture. The synergies between the practices and
application at appropriate points in time help to insure a more successful diversity
implementation.
Recruitment of new staff from underrepresented groups starts the process of
cultural conversion. Targeting recruitment efforts in regions or schools with high
percentages of minorities is one potential strategy. Likewise, placing ads in publications
or web-sites with high minority readership is another method to help increase diversity
in the candidate pool. These programs are useful in that they can supply the necessary
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minority candidates, but often fail to deliver what the organization really needs --
candidates with the skills necessary to succeed in corporate America. This issue is
compounded by the lack of opportunity for minority students to gain practical work
experience. As a result, minority students are often placed at a disadvantage when
entering the workforce, resulting in the employer overlooking their true potential.
Corporate recruiters, who have been frustrated with the experience of recruiting
qualified minority applicants using these traditional approaches, may also turn to co-op
curriculums and internship programs to help meet their needs.
One way is to increase access and opportunities for minorities. We suggest that
this take place through the use of targeted recruiting and development of those who
have been traditionally overlooked. An example of this sort of recruiting and outreach is
INROADS, a national internship and placement program for minorities, which helps
corporations not only discover minorities, but also develop highly skilled employees.
INROADS mission is to develop and place talented minority youth in business and
industry and prepare them for corporate and community leadership positions. College
placement offices and corporate recruiters can apply lessons learned from the
INROADS model to more effectively promote minority placement and diversity in the
workplace.
INROADS seeks out high school minorities who are headed for college and
prepares them for the corporate world by providing them with valuable work experience,
business savvy, and developmental assistance throughout their collegiate experience.
Through summer internships with companies, employers gain the opportunity to groom,
pre-train, mentor and mold these prospective entry-level minority candidates for
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permanent employment. A survey of 258 corporations conducted by Northwestern
University indicates that the INROADS approach is quite successful. A key barometer
of success of co-op and internship programs is the percentage of participants who are
eventually offered full-time positions. Only 37% of all students nationwide who worked
in an internship capacity were offered full-time employment. INROADS’ posted an
impressive 75% offer rate.
While the organization is recruiting their future diverse staff, and nurturing their
current minority employees, they also need to provide their existing staff with diversity
training. Motorola, for example, requires that all employees enroll in 40 hours of training
per year. While all of this training does not focus specifically on diversity, any employee
can enroll in courses covering diversity as a competitive advantage, the spirit of
diversity, or the transition to diversity. Senior managers must attend two-day diversity
seminars; there are diversity and sexual harassment courses for all managers, and
diversity awareness and interviewing for managers and directors.
Companies should approach this component of their diversity strategy with care.
There are tradeoffs that must be weighed to ensure that each practice that is chosen fits
well with the overall organizational diversity vision and plan. Diversity training, while
useful in making people aware of differences, is often flawed in that the training
assumes that there will be an immediate change in people’s behavior after training.
This is not necessarily true. Training may address discrimination and oppression that is
deep-seated and often makes members of dominant groups uncomfortable. This
creates resistance because it uncovers the true levels of tension that exist among
organizational members and may point to specific conflicts that are present. It is for this
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reason that the organization first needs to go through the unfreezing stage in which
members become psychologically prepared for the change and a safety zone for
change is created. Diversity training and education initiatives can then be more
effective. The focus of this training should be on helping employees work better
together, opening better lines of communication and dialogue between different groups
regarding the inherent differences of individuals, increasing the understanding of the
value of those individual differences, and a realization of how individual differences can
help to make a company more competitive.
Training and education programs can take two different approaches  individual
awareness or systemic cultural change. We suggest that companies address both
tracks by creating diversity awareness within the company while also working on team
building and problem solving efforts targeted at addressing systemic issues. These
steps can be accomplished in tandem by creating workshops for increasing diversity
awareness, airing complaints, and deriving solutions. Additional efforts can be
expended through diversity support groups for minority employees.
R.R. Donnelley & Sons Co, a leader in the printing industry, presents an
excellent example of an organization that is following this approach. R. R. Donnelley, in
response to a 1996 multimillion-dollar race-discrimination suit that effectively unfroze
the organization, has implemented their own stepladder approach based on education
and training. R.R. Donnelley employees have reached a point of diversity sophistication
where as they identify instances of non-diversity they immediately stop to evaluate the
underlying causes, develop solutions, and then take steps to ensure that the problem is
corrected. This company’s policy of inclusion begins with recruitment, and extends to
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hiring, training and promotion. Diversity councils that are in place at each of the
company’s forty plants and insure that these practices are supported at the local level.
The next two practices that can help a company evolve through the moving stage
toward Multicultural diversity are mentoring and career development. Mentoring is a
way of ensuring that minority individuals who normally miss out on in-company
networking and promotion possibilities gain this valuable opportunity while being
advised by a more senior manager. Career development is the process of helping
employees work towards and attain their personal goals through continued education
and enhanced training. These two processes, while separate theoretically, work
together in practice. They are paramount to retaining a diverse workforce and preparing
minorities for higher-level management positions. Companies can improve employee
loyalty by ensuring that individuals are inspired and challenged to perform at their best.
Reassurance and support that proper opportunities and guidance will be available to
achieve their goals must also accompany this challenge.
Lucent Technologies and General Mills are examples of organizations that do an
excellent job of combining these two aspects of diversity advancement. Lucent has
designed leadership programs to develop their future leaders. In addition to these
comprehensive and proactive opportunities for advancement within their company, they
additionally promote mentoring relationships through thirty women’s employee networks
that help foster women’s development. General Mills has a formal mentoring program
in which mentors work with minority employees on individual development plans that will
enhance personal growth and promotability.
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All of these practices, when rolled out as part of a comprehensive plan following
a period of unfreezing, will help to change the culture of the organization. Members will
begin to understand the importance and potential payoffs of diversity. New minority
candidates will be recruited, hired and eventually promoted. The organization will begin
to value their differences and assimilate new ways of thinking and problem solving into
their organizational culture. A new Multicultural type of organizational culture will result
that will be better able to compete in the increasingly diverse marketplace. But a final
critical stage still exists for the organization intent on gaining the fullest benefits of
diversity.
Refreezing
Finally, the organization must insure the changes of the moving stage are
institutionalized. This is accomplished by aligning the organizational policies,
procedures and the reward system to perpetuate the new culture. Without this critical,
final step the organization runs the risk of reverting back to it’s original pre-change
culture.
This process begins by reviewing the existing policies and procedures to insure
they support rather than conflict with the new culture of diversity. Most notably, job
description and job evaluation language should be edited to insure they reflect inclusive
language. This stage also entails updating existing performance appraisal and
compensation plans to insure that they reinforce values of diversity. This is often a
difficult issue to tackle and encompasses the issue of comparable worth. Creating fair
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pay standards that reward comparable pay for work of comparable value should
eliminate pay disparities, between minority and majority employees.
Programs that include manager accountability, directly linked to sustained
diversity, and that are tied to manger bonuses, compensation and advancement are
exceptionally effective in sustaining this change. One corporation that has effectively
created diversity as a business priority and has taken steps towards diversity
sustainability is the Gannett Company. They have established management
responsibility for diversity and incorporated performance and accountability measures
that insure that managers are motivated to achieve diversity goals. Finally, they have
created human resource policies that are supportive of their diversity vision and goals.
Managers are responsible for perpetuating diversity and are accountable for their
people as well as profit and product goals. Gannett calls this the three P’s and they
have been practicing them since 1980. Performance appraisals for managers at
Gannett reflect the importance of diversity by holding management accountable for
minority recruiting, development, promotion and retention. This process is backed up
by incentive rewards to managers as well as individual organizational units who use
diversity to garner exceptional quality. The entire package is called Partners in
Progress, a program which focuses not only on issues of race and gender, but also on
issues of community demographics, harassment and discrimination, matters of work/life,
flexible benefits and training, in addition to general diversity initiatives. The success of
the Partners in Progress program at Gannett is evidenced by the fact that minorities
comprise 33% of their Board of Directors, 13% of their middle managers, and 15% of
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their front-line managers. Accordingly, women comprise 25% of their Board, 25% of
their middle managers, and 35% of their front line managers.
Motorola and Xerox are other prime examples of organizations that realize the
importance of the refreezing stage. Much like Gannett, their diversity initiatives also
include manager appraisals and compensation packages that are tied to achieving
diversity goals.
GAINING A COMPETITIVE ADVANTAGE THROUGH DIVERSITY
Diversity is a competitive advantage that is indispensable in the 21st century.
Previous research has shown that diversity can provide the benefits of increasing and
keeping market share, cost savings derived from reduced turnover, increased
productivity and innovation, better quality management, and a corporate resiliency born
of a multicultural workforce. Diversity will allow an organization to better achieve a
sustainable competitive advantage in a quickly changing global marketplace.
To be successful in gaining these advantages it is important for diversity to be
properly and completely implemented in a holistic, systemic, and planned fashion. This
can be best accomplished by applying an organizational development and culture
change approach such as presented in this article.
Implementation should start with the process of unfreezing at the top. Movement
towards full diversity will evolve as the new philosophy funnels down through the
organization with the help of new recruiting, outreach practices, diversity training and
education of the current staff, mentoring, and career development. Once this
momentum has been established and the organizational culture begins to transform
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itself, changes to the formal policies, procedures and reward system must be put in
place to insure institutionalization of the new culture of diversity. The organization will
then be in a much better position to realize the potential benefits of diversity. The
planned program of organizational change proposed in this article will assist the
company in gaining a sustainable competitive advantage as opposed to the disjointed,
piecemeal approach used by many unsuccessful organizations.
One final example of this approach is Sears, and Roebuck & Co. In 1992, Sears
posted its worst net loss of $3.9 billion. This major event effectively caused the Sears
culture to unfreeze and become receptive to change. It responded with a moving phase
of major restructuring, closing under-performing stores, discontinuing its traditional
catalog business, and spinning off non-core businesses. Part of the new organizational
vision was to change the culture at Sears and become more diverse. Valuing diversity
is now one of the twelve key leadership skills for managers. Various diversity initiatives
were put in place at Sears to effect the change. For example, the ethnicity and gender
of store location personnel are now expected to mirror the community that they service.
Recruiting and hiring practices were changed to reflect this goal. Sears advertising and
marketing strategies now incorporate diversity themes. The ranks of management are
expected to more closely resemble the general population. Mentoring, career
development and promotion practices have been changed to help achieve this goal. To
insure these initiatives have a long-lasting impact Sears has addressed the refreezing
phase with a measurement system for tracking progress on their diversity goals.
Managers’ appraisals and bonuses are tied to performance on these measures. The
new emphasis on diversity appears to be showing positive results. Sears now reports
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that 17% of their employees are black and 11% Hispanic. They also report that 17% of
their managers are minorities with an even split between males and females. Women
and minorities now account for 29% of Sears’ executives. Sears reports that measures
of employee and customer satisfaction are on the rise. They estimate that these
improvements have translated into more than $200 million in additional annual
revenues.
Many forces are combining over the next few decades to make diversity an even
greater concern to business leaders. The labor market will most likely remain tight, as
baby boomers retire the workforce will actually shrink and unemployment is expected to
stay in the 3.5 to 6.5 percent range. New entrants into the U.S. labor force are
forecasted to be comprised of 70 to 80 percent women, minorities and immigrants. As
such, minority and women consumers will control an even larger share of the U.S.
marketplace. Globalization of corporations is expected to accelerate, which will force
organizations to be able to think even more internationally.
It certainly appears that multicultural diversity will be required to be able to
effectively compete in the future. The bottom-line, competitive implications of not
achieving diversity are clear. Our hope is that leaders of organizations interested in
creating a diverse, multicultural environment will use our model, which incorporates
what has been learned from over fifty years of research on organizational development
and culture change to develop and implement coherent, holistic plans for creating
diversity within their organizations. This approach will help them attain the full benefit of
multicultural workforce diversity and compete more effectively in the increasingly
diverse marketplace.
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Figure 1
Model for Creating Diversity
Unfreezing
 Top Management Commitment and Vision
 Management Symbolic Communication And Actions
 Goal-setting
Moving
 Recruiting and Outreach Programs
 Co-op and Internship Programs
 Training and Education
 Mentoring and Career Development
Refreezing
 Policies & Procedures
 Job Descriptions
 Reward System
Competitive Advantage
 Improved Creativity and Decision Making
 More Agile and Adaptive Work Force
 Improved Ability to Market to a Broader
Demographic
 Increased Market Share
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Selected Bibliography
For more on the advantages and different forms of diversity, see Ann Morrison, The New
Leaders: Guidelines on Leadership Diversity in America, 1st ed. (San Francisco, CA: Josse-
Bass, 1992); Taylor Cox and Stacy Blake, “Managing Cultural Diversity” Implications for
Organizational Competitiveness,” Academy of Management Executive, Vol. 5, no. 3 (1991),
pp. 45-56; Taylor Cox “The Multicultural Organization” Academy of Management Executive,
Vol. 5, no. 2 (1991) pp. 34-47.
For more on the seminal work done on Organizational Development and Culture
Change see Kurt Lewin, Field Theory in Social Science, New York: Harper and Row
(1951), Edgar Schein, Organizational Culture and Leadership, (2nd edition) San
Francisco: Josse-Bass (1992).
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