Chapter Seven

Diversify and Inclusify the Workforce

THE ISSUE OF diversity frequently is relegated to a small corporate department. Its minute size and unassuming place is disproportionate to diversity’s importance and potential impact on a firm. Justly applied, diversity is associated with the improved psychological and physical welfare of members of underrepresented groups and greater job satisfaction for everyone throughout the workforce. Organization-wide, diversity is associated with improved problem-solving ability and creativity, greater cultural sensitivity to products and markets, a larger pool of qualified candidates, and a more flexible and environmentally responsive workforce.¹ In addition to the many business benefits, the pursuit of diversity underscores a corporation’s commitment to social justice and principles of equal opportunity. Indeed, we believe that the business-case advantages should not overshadow the moral arguments for more equitable workplaces.

Owing to demographic trends in the United States, organizations awakened to the changing complexion of the workforce and to the emergence of diversity as employment fact several decades ago. The iconic Workforce 2000 report by the Hudson Institute in 1987 was central to a surge of interest in a diverse workplace, mainly because some of the results were falsely interpreted in cataclysmic terms.2 Many readers erroneously believed that the majority white male work population would be surpassed by minorities and women (or, more generally, minoritized groups) by 2000 and that wholesale organizational changes would be required to accommodate the size and rapidity of the change. Although some results were poorly portrayed, in actuality, the study maintained that minorities and women would incrementally constitute a greater proportion of new hires in the future because of baby boomer retirements, globalization and immigration patterns, college graduation rates, and an increasing number of historically underrepresented ethnic groups and women who were opting into the workforce. Women and minorities would constitute an incrementally growing share of the workforce; however, it would be 2045 before they eclipsed white males in absolute numbers.

In many ways, we always have taken diversity as a given in the workplace. We assume diversity’s importance whenever a task requires a combination of functional abilities for completion. For example, it takes a village of designers, computer scientists, engineers, and manufacturers to build a car. It takes a team of surgeons, radiologists, anesthesiologists, nurses, and allied professionals to restore people to health.³ Therefore, we do not question the wisdom of needing different kinds of people who must pool their physical and intellectual assets to solve problems. We may wonder, however, how the hiring of underrepresented groups fulfills those needs.

People of different races, cultures, and genders have different life trajectories and experiences and, as a result, unique worldviews, thoughts, and feelings. Additionally, because of different socialization experiences and different abilities in managing relationships, heterogenous groups have different interaction dynamics in which more questions are asked, more ideas are elicited, and communications are more open. Indeed, one study of boards showed that women influence the oversight effectiveness of boards by improving group processes.⁴ These inherited and acquired differences among people with dissimilar backgrounds offer myriad points of view and aptitudes that companies need to be productive. For example, it is hard to fathom how Procter & Gamble could effectively cater to its myriad customers without diverse product teams who have a firsthand understanding of the unique needs of their customers. Indeed, creative enterprise depends on the generation of multiple ideas and novel, nonredundant inputs of diverse populations to promote new pathways of thought. Specifically, the creativity of a team depends on the group’s ability to generate new ideas, elaborate on information, build on one another’s thoughts, and constructively piece together data into well-formulated solutions.5 Consequently, companies that embrace diversity are more likely to enhance firm value through, for example, innovations such as the number of patents per research and development (R&D) dollar spent.⁶ If the Darwinian principle of divergence is correct, diverse systems also are more likely to develop an ecological division of labor by which enterprising agents adapt to find and fill niches to exploit. Thus, we can imagine the agents of a diverse enterprise recognizing the untapped voids in markets.⁷

Many studies demonstrate the efficacy of diversity to organizational governance, risk management, innovation, and growth. For example, boards of directors have been shown to operate more effectively when they have a greater representation of women. A long-term study by Credit Suisse of companies with market capitalizations over $10 billion found that boards with at least one female director outperformed companies without female representation by 26 percent (in stock returns) and averaged higher-net-income growth and smaller debt-to-equity ratios.⁸ Several other studies show similar results with more diverse boards associated with higher quality earnings, less volatile stock returns, and greater market values.⁹ For example, a 2016 survey by researchers at the Peterson Institute found that increasing female representation on boards and in senior management from none to 30 percent was associated with increases in profits by 15 percent.¹⁰ Furthermore, evidence suggests that the reported effects are causal. A longitudinal study of the French CAC40 found that companies with greater gender diversity on their boards had directionally higher returns on equity.¹¹ Research further supports the fundamental idea of diversity as the contributory mechanism for heightened organizational value by demonstrating that women add a unique skillset to boards. Kim and Starks examined the breadth of knowledge of board members on such factors as financial acumen, international experience, and operational and technological knowledge. They found that the more heterogenous the board, the wider the distribution of knowledge.¹² In turn, these more expansive views contribute to a richer understanding of stakeholders and offer a keener perspective on business areas that might otherwise be overlooked.¹³

Greater representation of women on boards also yields important side benefits. Companies with more women on boards have more women officers in senior management positions, line positions, and among the higher paid; have a more positive outlook on corporate social responsibility and community affairs; activate more CEO resignations following extended periods of poor performance and organizational decline; moderate risk-taking as evidenced by lower variability in total stock returns; improve customer satisfaction; and temper executive compensation.14 The effects of diverse boards ripple throughout organizations. Companies with more diverse boards implement more unique employee-friendly work-life programs that increase employee satisfaction.¹⁵

The same pattern of results for boards applies to diverse management teams. (The results of a typical study are shown in box 7.1.)¹⁶ More heterogenous management teams repeatedly have been shown to relate to better firm performance. For example, one study found that management teams with greater heterogeneity in educational, functional, industry, and organizational backgrounds were more sensitive to changing consumer needs and more adept at producing beneficial suites of market-responsive goods.¹⁷ The same study indicated that organizations with more diverse top management teams had higher firm performance as measured through a simplified formulation of Tobin’s Q (the ratio of the market value of the firm to total assets).18 Similar effects are seen in teams more generally.¹⁹ Mixed, heterogenous gender teams in business simulations generated higher sales and profits than male dominated teams and performed better over a three-year period.²⁰ Analyses of R&D teams found that teams with more diverse blends of tenures were more productive; specifically, they had higher proportions of sales that came from products and services that were new to the market and new to the company. Research on venture capital firms found that 10 percent increases in women in firms resulted in 1.5 percent increases in fund returns and more than 10 percent increases in profitable investment exits.²¹ And, more diverse teams of traders make more precise valuations of commodities.²²

Box 7.1
Illustrative Study and Results

A sample of 318 organizations was selected based on company size, region, and age, and racial and gender compositions were determined for each using the national organizations survey. The following table shows the relationship between racial and gender diversity and sales revenues.

Racial/ Gender Mixes	Racial Diversity			Gender Diversity
	Low	Med	High	Low	Med	High
Sales (in Millions)	52	324	809	45	303	640

A similar pattern of results was obtained for number of customers, market share and profitability.

Diversity, then, has significant consequences for organizational effectiveness. Indeed, diversity is the great stabilizer in dynamic systems, which include organizations, as well as ecosystems, the brain, and cities—any system from microbes on up.²³ To use an example supplied by Page, imagine that in a world of no diversity everyone has found an optimal solution to a problem: metaphorically, everyone is standing on a mountain peak. Next, suppose the plates of the earth move and the peak now is a smaller crest on the side of a higher mountain. The world has passed by the once-best solution and stranded the nondiverse population in a suboptimal place. In a diverse world, not everyone would have been standing on the peak so that after the tectonic movement some people would now be standing on the higher ground. Therefore, diversity allows the system to adapt—to resiliently counter abrupt changes in the environment—as well as to retain equilibrium by not creating all-or-none scenarios.²⁴ A more illustrative metaphor of the calamitous effects of homogeneity involves a boat tilting to waves at sea. To correct the tilt, a homogenous crew simultaneously run from one side of the boat to the other, overcorrecting the boat’s pitch in the opposite direction. This oscillating pattern grows more extreme until the boat capsizes. A heterogenous crew would have prevented disaster by recurrently sending only a few members back and forth across the deck to achieve a more steady state.

These examples illustrate one of the key advantages of diversity: it enables more reliable systems by delivering more consistent levels of performance over time through manifold functional capabilities. A large portfolio of functional abilities and strategies buffers organizations—and organisms—against sudden disruptive environmental changes, providing groups with a natural form of insurance. This ability is what makes organizations resilient.25 Diverse systems are more resistant to disturbances—rocked less by environmental shocks—and more rapidly return to an equilibrium following upheaval.²⁶ With more severe disturbances, communities may completely reorganize in response, creating in the vernacular of ecology, a regime shift in which the organization significantly departs from its baseline condition.²⁷ Several years ago when malware attacked the Symbian operating system on cell phones, the damage was negligible because each phone manufacturer installed slightly different versions of the operating system—creating a diverse repellant to widespread infection.²⁸ The same principle applies to internal systems in which diversity mitigates losses from attacks. The loss-dampening effects of diversity are well-known and ubiquitously applied in industries such as avionics, nuclear power, and telecommunications.

Companies, like environmental ecosystems, require large numbers of different agents to enhance system reliability (defined as the ability of a system to maintain a consistent level of performance over time) and resilience (defined as an ability to absorb change and disturbance while maintaining operational normality).²⁹ Actions speak for themselves in recognition of these principles. We diversify our investment portfolios to even out returns, eat a variety of foods for balanced nutrition, and encourage a range of economic investments within geographic regions to produce more stable and recessionary-proof industrial infrastructures.³⁰ Survival counts on diversity. Pastoral societies in East Africa rely on the judicious use of mobility and herd diversity as the means to combat fluctuations in environmental conditions. Livestock are moved according to temporal and spatial weather patterns of rainfall and forage. Herders also travel with a wide variety of livestock that includes camels, cattle, goats, and sheep. These functionally diverse herbivores are productive under different environmental circumstance. For example, if drought impairs cattle fecundity, camels may continue to produce milk.³¹ Similarly, the recent documentary film, The Biggest Little Farm, describes how two hundred acres of dead land are revitalized into a thriving farm through the agricultural ethos of biodiversity. For example, the farm went from a dilapidated monocrop operation to a thriving farm with ten thousand orchard trees encompassing seventy-five different kinds of stone fruit, lemons, and avocados. According to the farm’s owner, problems persist, but the system they created responds faster to infestations and epidemics and is more resilient in the face of climate change, with less soil erosion, an ability to store more groundwater, and higher levels of carbon in the soil than a typical farm.

Nevertheless, even with the increased emphases on, and benefits of, affirmative action and its conceptually less affecting sequel, diversity, progress in diversifying the workplace has been halting.32 In fact, many companies have made little progress despite bold assurances for change. For example, Silicon Valley’s attempt at change was mostly unsuccessful.³³ Without having first embraced a culture of tolerance for individual differences, and achieved a respectable critical mass from underrepresented groups, these companies run afoul of the Red Queen Effect: running faster and faster to just remain where they are. In the absence of progressive talent acquisition strategies with targeted outreach to women and other underrepresented groups, the potential pool of candidates may never reach a quorum that can sustain multiple minoritized hires. In fact, without Herculean efforts, organizations are unlikely to make any headway in diversifying (i.e., it will not happen organically).³⁴ At the very least, customary methods of hiring must be supplemented by what one study on federal contractors called “screening capital” that consists of harnessing referral networks; building strong relationships with intermediary organizations, such as schools, associations, and employment agencies; developing fair, unbiased testing methods; and implementing formal selection methods.³⁵

As a matter of course, companies should periodically assess the diversity of their recruitment and applicant pools and remain attuned to any insidious biases that may intrude on the hiring processes. For example, the wording of job postings or descriptions of companies may subtlety discourage, or encourage, certain applicants over others. An advertisement for a sale’s position that highlights a highly competitive, aggressive work environment where the fittest survive will be sure to turn off some applicants, and others on. Many companies also make wide use of employee referral programs because they are cost-effective recruitment devices that yield high-caliber employees who are better qualified, more satisfied, and less likely to quit than applicants from other sources.³⁶ However, employees are most likely to recommend people they know and like for employment. People tend to like others who are just like them. Indeed, one of the most robust findings in the social sciences is that we like people who have similar physical attributes, interests, values, attitudes, personalities, and hobbies. Thus begins a vicious circle of sameness in which companies hire then attract then hire certain kinds of people. For the underrepresented, getting ahead often means tapping into white male networks. One study conducted over a fifteen-year period showed that women who access the so-called boy’s network exponentially increase their chance of serving on a board. For example, a women’s probability of serving on a board increases by 116 percent in large companies if she plays golf.37

This propensity to lure like-minded and relatively similar people has conformist downsides that easily are avoided by selecting people on the right cultural dimensions. Broadly, these include a shared appreciation of the company’s mission; common values on how people are to work together and individually; and, a mutual understanding of how risks are assessed and decisions get made.³⁸ Nevertheless, the power of similarity is strong and the inclination to like and be attracted to others who are similar to us is one of the most robust relationships within the psychological literature.³⁹ Research has shown this relationship is fortified in stressful or uncertain circumstances, which is an outcome that may hasten companies’ self-destruction by increasing homogeneity when under duress. When people are faced with seemingly intransigent problems and high stress levels, they prefer to surround themselves with others who are similar for comfort and confirmation.⁴⁰ Specifically, the desire to be with like others intensifies when people are uncertain about themselves, their place within the social strata, or the right thing to do. As one study in banking showed, troubled companies tended to reduce the diversity of their boards and recruit for domain expertise. The result was to accelerate their demise by circumscribing their assessments of the environment and the array of options they entertained.⁴¹ Related research demonstrates a similar penchant for troubled organizations to narrow information flows. Troubled organizations more heavily filter information through increased centralization, thereby depriving themselves of more wide-ranging perspectives on the environment. Discourse becomes increasingly constricted and behavior increasingly lemming-like. Additional evidence in cognition suggests that greater homogeneity within groups promotes cognitive laziness or, conversely, people in heterogeneous groups think harder than people in homogeneous groups. In contrast to similarly composed groups, members of heterogenous groups expect differences of opinion and, consequently, are more engaged and effortful participants. For example, more diverse six-person juries more accurately recall case-relevant information and more astutely apply case facts in deliberations.42

If diversity is to become reality in organizations, one thing for certain must occur: we must end discriminatory practices. That is, to increase organizational roles of underrepresented populations, companies have to inaugurate fair hiring, selection, and promotion practices and eliminate discriminatory barriers that keep capable people out of the organization or confined to areas in the workplace where advancement opportunities are limited. In an era in which we are acutely aware of the problems of discrimination and seemingly enlightened, it is tempting to believe that these problems have been largely solved. Far from it. The news furnishes a regular supply of companies that have been tagged by accusations for sexism, harassment, and bro cultures; the game developer, Blizzard, being one of the most recent.⁴³

The literature on bias in hiring and promotions is voluminous and continues to demonstrate discrimination with eye-popping clarity with significant adverse physical and psychological effects on those victimized.⁴⁴

Despite the many thousands of articles in this area, we can highlight a few key, recurring findings aided by the wonderful synopses provided by Katherine Phillips at the Columbia Business School and a recent review by Hebl and colleagues.⁴⁵ While we focus our comments on gender and race, much of what we say in these areas equally apply to sexual orientation, religion, age, disability, and weight.

Men and whites are selected over women and minorities despite having identical backgrounds and qualifications. A typical study involves showing decision makers two identical resumes, save for the names that imply the gender or race of the applicants. Racial and gender stereotypes intervene, and people infer attributes not contained on the piece of paper. If a member from an underrepresented class is invited for an interview, they are less likely to get a call-back because they are wearing a hijab; assumed to have a contrary sexual orientation; or are unattractive, an ethnic minority, or of an age of a “maybe baby” that is viewed as a potential inconvenience to the employer. Two recent studies highlight the size of the problem. The first example comes from a working paper in which the authors mailed out 83,000 job applications to 108 companies.46 Pairs of applications were matched on background and credentials; only the names were changed to denote race. The corporate response rate for blacks was approximately 10 percent to 20 percent lower than for whites. Another study of recruitment platforms found similar results. Controlling for jobseeker characteristics, call back rates were 4 percent to 19 percent lower for candidates with immigrant and minority ethnic groups. Women received 7 percent fewer responses but only for positions/professions dominated by men.⁴⁷

The same stereotypes that type-cast entire classes of people according to overgeneralized beliefs about the group’s personality, preferences, or abilities are used to block the entry of women and minorities into higher level positions because of a presumed absence of position-specific attributes. Thus, women, for example, are overlooked for leadership jobs because they ostensibly lack the agentic qualities such as emotional toughness that is required.⁴⁸ These affronts are easily justified by the lower performance reviews women receive than men, mostly owing to the ascription of unnerving personality traits, such as being too judgmental. Should women ascend the organizational heights, they often are assigned fewer flattering roles on teams. Women, for example, often are nominated to be the team clerk and scribe because of their superior organizational skills.⁴⁹

Also, men are given greater credit for successful outcomes than women, and women are given greater blame for unsuccessful outcomes than men.⁵⁰ Thus, women and minorities have to be more qualified than men to be considered for select positions and promotions. The latter, well-documented double standard states that more evidence is required to establish the competence of people within underrepresented groups and to establish the incompetence of white males. A substantial body of research shows the persistence of these effects: the standards that women and members of minoritized or underrepresented groups must meet are higher than those of white men.⁵¹ Therefore, even as more and more minorities and women have entered the workplace, career progress has been limited. These closures to advancement have been allegorically depicted as glass ceilings, glass cliffs, concrete walls, glass slippers, and sticky floors. (Box 7.2 summarizes these; for research on the falsity of the Queen Bee Effect.⁵²) These metaphors symbolize real barriers that regard women and minorities as less capable and less deserving or as foils to others’ personal ambitions.

Box 7.2
Ceilings, Walls, and Floors

Glass Cliff: A phenomenon in which women versus men are placed in precarious, high-risk situations where the likelihood of failure is high

Glass Ceiling: Describes the barriers that underrepresented groups face as they try to climb the organizational hierarchy, and the limits to career ascendency

Bamboo Ceiling: While Asian Americans are perceived as excellent workers, they are less likely to be promoted into management roles

Glass Slipper: A job has to fit the perceived social identity of the aspirant—a princess has to be selfless, kind-hearted, and beautiful

Glass Chains: Women (typically) are subdued by religious prescription or strong cultural/ familial norms

Sticky Floor: Typically, low-wage, low-mobility work that is believed to be well-suited for certain kinds of people

Snow-Woman Effect: Accumulation of snubs, passed over opportunities, and family obligations that marginalize contributions and curtail career progress

Queen Bee: The idea that powerful women present the greatest barriers to other women’s advancement (a theory that appears to have been debunked by studies that show women are tremendously supportive of other women)

Source: Hyun J. Leadership principles for capitalizing on culturally diverse teams: The bamboo ceiling revisited. Leader to Leader 2012; 2012(64): 14–9; Arvate PR, Galilea GW, Todescat I. The queen bee: A myth? The effect of top-level female leadership on subordinate females. Leadership Quarterly 2018; 29(5): 533–48.

And, then, many women and minorities must experience indignities in the workplace that most males and whites do not in the form of harassment and everyday microaggressions.53 The latter are insulting and invalidating putdowns that take many forms from impolitic gestures to outright dismissiveness. These microaggressions often have innocent intent and sometimes are disguised as compliments (“For a minority, you are really smart”; “What’s a pretty thing like you doing working in a place like this?”), but they all communicate hostile, derogatory, or negative slights and insults, and have the large reverberating impact of conveying secondary status to others.54 The New York Times in a jarring expose recently discussed the plight of Black doctors who patients often assumed entered their rooms to empty the trash.⁵⁵ Similarly, a black, female physician who went to the aid of a distressed passenger on an airline was asked to show her credentials.⁵⁶ Regardless of the speaker’s motives, the cutting meanings of microaggressions are not lost on those to whom the comments are directed. Invariably, the comments isolate people and foster distrust among groups. Unless pardoned, they have a corrosive effect on organizations and teams. We were in a team meeting that included one Black woman when, as a one-off remark, a voice over the conference speaker maintained that minorities have an easier time getting hired into the organization because of lower hurdles. What was pronounced as “fact,” was interpreted as “dismissiveness” and “disrespect.”

Research has afforded some insights into how discriminatory decisions can be curtailed. For one, underscoring the importance of selection decisions and a person’s accountability for making the best decisions can reduce bias. Instituting accountability practices, such as affirmative action plans, diversity committees, diversity metrics in performance reviews and incentive plans, and visible diversity-related staff positions, get results.⁵⁷ These practices translate into companies that have, for example, more diverse management teams. More generally, accountability for diversity initiatives increases diverse representation by 10 percent.

Mentorship programs have proven particularly effective in bolstering diversity. In combination with other diversity-enhancing approaches, assigning influential mentors facilitates retention and upward mobility among underrepresented groups.⁵⁸ In contrast, not having a mentor interferes with career progress and professional notoriety. First-time women and minority board members are provided with less mentoring from incumbent members regarding normative practices and, as a result, receive fewer invitations to participate on other boards. This may account for the fact that although women and minority representation on boards has been rising, women and minorities seldom are asked to participate on more than one board: only 8 percent of women and 5 percent of minorities do. Consequently, these underrepresented members will not enter the pantheon of the corporate elite, which requires participation on more than one board.⁵⁹

Additionally, better processes and better trained reviewers contribute to less prejudicial selection choices. One well-supported means to combat bias is through highly structured recruitment and selection procedures.60 These entail careful articulation of job content and selection criteria, and the establishment of valid and reliable methods for reducing the applicant pool to a chosen one. The more impressionistic the procedures, the more bias that intrudes on the decisions made. In that regard, the more noise that can be removed from the hiring processes, the better. For example, filtering out irrelevant sociodemographic information from resumes, and blinding reviews and tryouts to specific identities improves selection accuracy.⁶¹ The classic case of blind reviews occurred when the Boston Symphony Orchestra decided to hold blind auditions for musicians to eliminate, mostly, gender discrimination. Biased judgments continued until the floor leading to performance pit was carpeted and reviewers could no longer hear gendered footsteps.⁶²

In general, the more accountable people feel for the correctness of the results, the more difficult the task, and the more they are aware of how mistaken attributions can subvert the process, the more deliberate and proactive people become and less likely they are to be thrown off by distractors. Specifically, people learn to think slow versus fast. Slow thinking is under cognitive control: it is effortful, deliberate, and selective. Fast thinking is involuntarily, automatic, inflexible, and subject to biases.⁶³ You may be familiar with the Stroop task in which subjects are shown words of colors printed in different colors. They are asked to recite the color of the word. Difficulties arise when, for example, “brown” is printed in red. In these instances, people will make errors particularly early in the task. If, however, they know about the possible incongruencies in advance, they can instantiate more active controls to minimize the interference and the errors. In essence, people are able to redirect their attention toward goal-relevant information and away from irrelevant information.⁶⁴ The anticipation of possible irrelevant information allows people to gain greater supervisory control over information intake, selectively guiding their focus to the most pertinent task-related data.

Business alone cannot remedy all of society’s deepest ills nor do they erect all the barriers. Some are thrust upon workers by society, upbringing, and nature.⁶⁵ For example, women do the lion’s share of work of childcare, medical appointments, shopping, cleaning, and cooking—and are financially penalized for it.66 As the population ages, no relief appears in sight as women now assume a greater role in the care of their aging parents. The Covid-19 pandemic has introduced even more house-bound duties that women again disproportionately assume. The uneven responsibilities between men and women take a cumulative toll in costly layers of career derailers: the spiraling collection of career stoppers has been referred to as the “Snow-Woman Effect” (see box 7.2).⁶⁷

“Personal choice” is a flip answer to the unequal allocation of duties within households as these choices come with significant economic and personal costs. One major survey showed that not only do women have to be more qualified than men to get a directorship, for example, the additional responsibility is associated with higher divorce rates.⁶⁸ Policies in the United States provide no relief. Stated bluntly, family-related policies are pathetically antediluvian. Universal childcare is expensive. The United States devotes the smallest percentage of its gross domestic product (GDP) to childcare of any industrial nation. Overall, the United States expends just 1.6 percent of GDP on family benefits, which places it well below the mean of all member countries of the Organization for Economic Co-operation and Development. Additionally, of 15 industrial economies studied, the United States is the only country that does not require paid maternity leave and is but one of only two without paid paternity leave. Some leaves in the industrial world are six months or longer and are paid at a rate of 70–100 percent of current salary for an average range of fourteen to twenty weeks. The Family and Medical Leave Act in the United States requires that employers provide twelve weeks of unpaid parental leave and reserve the individual’s position until the parent returns to work, but the act applies only to businesses with more than fifty employees, and employees must have worked 1,250 hours during the prior year (about twenty-five hours per week) to be eligible. Consequently, only about 50 percent of workers qualify, and getting those meager provisions through the U.S. Congress took many years of partisan tussles. Apart from the law, a recent exposé in the New York Times discusses the surreal obstacles pregnant women face in the workplace and their treatment as “lepers” versus people giving life.

Overall, the evidence amply shows that complicit cultures, implicit biases, a lack of powerful role models and mentors, inadequate access to training opportunities and resources, and select menial assignments play significant obstructionist roles to the progress of women and minorities in organizations.

Generating more diversity in the workplace is one obstacle to overcome. Trying to fully leverage the value of diversity is quite another. For each of the positive outcomes of diversity we discussed previously, there is an opposing finding. Many studies on diversity have produced null to negative effects. Surveys reveal that although many companies value diversity, men and women continue to have different experiences. Many women continue to feel marginalized in high-profile positions: as not credible and a lesser equal among peers. Indeed, in general, the contributions of women and minorities are devalued on teams on which the supposition is made that the placement was due to diversity versus merit. People of color and women, in these circumstances, are undervalued: they are viewed as less competent and their contributions to the group are minimized.

Specifically, the benefits that can be derived from diversity depend on several factors. First, the benefits of diversity only are realized in certain circumstances. Diversity does its best work in cases in which problems and tasks are complex, and a wider berth of knowledge and viewpoints are instrumental to task fulfillment. When a task is straightforward, a variety of input is unnecessary. In fact, lively discourse on a simple problem may slow down the process and encumber it with frustrating useless details. Therefore, the additive effects of complementary skills and abilities are greatest where, in fact, they would do the most good: when tasks are complicated and require frequent interactions and exchanges over prolonged periods.69

Second, although diversity is a concept whose meaning we broadly understand, the definition of diversity is murky. That makes it hard to say when an organization has it (diversity), or not. Diversity applies to a wide range of characteristics that may not be of equivalent organizational value to the tasks at hand. Additionally, groups may differ on the range of attributes possessed by group members and the amount of overlap or separation among members on relevant attributes.⁷⁰ Thus, you can introduce diversity without improving your chances for success if you have not mixed the right ingredients of capabilities in the right proportions. In addition, many of the conventional measures of diversity insufficiently capture the nuances of the construct and changes over time.⁷¹ (See box 7.3 for one of the most common measures of diversity, the Blau Index.⁷²) Does adding one woman to a board make the board diverse? How many additions of disparate types of people make a group diverse? The answers are complicated as they seem to be, “It depends.” Indeed, given the differential statuses and perspectives of “majority” and “minority” groups, each has different ideas about where the line between diverse and nondiverse lies.73

Box 7.3
Blau Index

The Blau index is one of the most frequently used measures of diversity.

B = 1 − ∑ P_g² × 100, where g is the number of groups and P is the proportion of members within each group; for example, two of ten board members are women: (1 − (.2² + .8²) × 100 = 32.

Diversity can change through addition, substitution, or subtraction.

Addition: Adding a woman, B becomes 40

Substitution: Replacing a man with woman, B becomes 42

Subtraction: Removing a woman, B becomes 20

The answer to what makes an organization diverse has practical implications. Too little representation presents concerns of tokenism or of representation-based concerns that women and minorities will be evaluated through the lens of their ethnicity or gender.⁷⁴ Consequently, members of minoritized groups often feel scrutinized by others and unduly pressure themselves to prove their mettle. Whereas increasing numbers may be a necessary part of the solution, this alone is not sufficient.⁷⁵ Sufficiency requires that the addition of people who are unalike in many respects are able to work productively together.

This raises a third barrier to attaining the advantages of diversity. Although diversity introduces desirable variability, it also can introduce undesirable conflict among people that impairs team performance. Such differences can lead to distrust among members that disrupts constructive communications and teamwork. Therefore, the very thing that presents opportunities also can interfere with group cohesion and decision making.⁷⁶ As a consequence, a group may become locked into dysfunctional conflict and never realize its inherent potential.

Thus, diversity in groups may create factions and interpersonal frictions called “faultlines,” those impenetrable boundaries that people are forbidden to cross. Said succinctly, diversity does not do much good if people, say, of different races do not get along and are unaccepting of one another’s advice or assistance. It is fair say that in instances in which the inclusion part of diversity is absent, as in “diversity and inclusion,” the introduction of diversity does much more harm than good because the group is negatively affected by higher levels of interpersonal warfare. Unfortunately, the idea of inclusion often is treated as the proverbial stepchild that comes along with something more important. Yet, without it, trust is impaired and relationships falter.77 Whereas diversity expresses a value system that prizes differences, inclusifying (to use the word originated by Stefanie Johnson in her 2020 book, Inclusify: The Power of Uniqueness and Belonging to Build Innovative Teams) provides the vital lubricants of mutual acceptance and feelings of worth that make diversity work. For example, a study of 224 R&D teams from twenty-nine companies found that the diversity within these groups yielded productivity gains only when the internal networks were dense—that is, when the groups had formed strong working relationships.⁷⁸

As neatly illustrated by the Romans (box 7.4), inclusionary practices are not new and may contribute to the preservation or dissolution of empires.79 In the industrial business era, the need for inclusion stretches back to the early twentieth century. Cummings Engines, founded in a garage in 1919 in Columbus, Indiana, adopted the financial founder’s sense of community and social responsibility. Despite not making a profit for nineteen years, the company decided to remain open and keep people employed. In the 1940s, a grandnephew of the family founders remained true to the family’s vison of social justice when choosing to hire Black Americans and women and desegregate the factory lines. Cummins was a company ahead of its time in promoting racial integration well before the civil rights movement and a national consensus had been reached on the issue. Since they first desegregated factory lines in the 1940s, the company has consistently appealed to its organizational history and identity to reinforce its values and support a culture of diversity.⁸⁰

Box 7.4
Inclusion in the Roman and Persian Empires

Observers of history have argued that the continuity of the Roman Empire and the relatively short duration of the Persian Empire owe to differences regarding the inclusiveness of the two cultures. For Rome, inclusion was largely achieved through military service where it was natural to inculcate Roman values and learn a common language. The life-or-death service also necessitated high levels of interdependence among the soldiers, which engendered trust among diverse parties. Most importantly, military service provided a path to citizenship for non-Romans with the rights and privileges it entailed. States-persons, including emperors, could come from anywhere within the Empire: emperors came not only from Rome but also from Spain, Africa, and the Balkans. In contrast, the peoples the Persians conquered were never admitted entry as participants into Persian society; their allegiance was secured in exchange for economic and political stability afforded as a protectorate of the Empire.

During the turbulent 1960s in the United States, major employers such as Polaroid, Connecticut General Life Insurance, Exxon, and AT&T looked for ways to reduce conflict caused by new hiring mandates and the rising diversification of the workplace. And it was not just corporations that saw the need to forge closer team ties. Communities, schools, and government agencies all saw the need to stich new seams in a fabric that was rapidly changing and coming apart. They reached out to the organization development (OD) community for help with team integration. For OD, it was a homecoming of sorts. The need to build group solidarity resuscitated practitioners’ longstanding interest in interpersonal trust, tolerance, and social justice.⁸¹ Often overlooked in OD texts is that many of the seminal OD practitioners of this period were women, such as Billie Alban and Edith Seashore.⁸²

These OD practitioners quickly discovered what seems to have been oft forgotten today. Building trust in groups in which members are suspicious about one another’s character and abilities takes time. The goals of integrating groups, reducing biases and discriminatory behaviors, valuing differences, creating mutual perspective and understanding, and promoting a diversity climate focused on fairness and equality are long-term holistic initiatives that require the weight of the entire organization for success. It became clear that the occasional intervention designed to bring people together will fail miserably without cultural preparation and postintervention persistence.⁸³ In this regard, we all can be humbled by expedient, but superficial, attempts to bring people together that have been unsuccessful. Unfortunately, much of the meaningful change efforts of the past has disadvantageously morphed into a ravenous $8 billion diversity training industry with a focus on consciousness raising, legalisms, and compliance that produce short-term changes in beliefs but little to no longer-term changes in behavior.84 Producing a greater appreciation of the legal and organizational issues at stake has its place, however, changing behaviors requires more intensive and abiding interventions. Indeed, analyses indicate that sporadic, fact-based training has little to no effect on key outcome measures of reducing prejudice and discrimination, facilitating constructive intergroup relations, and enabling better utilization of team skills and abilities. In general, traditional trainings in organizations tend to be short-lived, ineffective, or counterproductive (e.g., elicit backlash effects). To be effective, trainings must be ongoing and coupled with other organizational initiatives, such as mentoring.⁸⁵ A recent article in Nature also shows that changing attitudes about diversity may evoke more inclusive behaviors. In conditions in which prodiversity attitudes were viewed as normative, members of marginalized groups had an increased sense of belonging, reported more inclusive treatment by others, and performed better.⁸⁶ Although most measures of inclusivity follow the example in this paper and depend on subjective reports, inclusivity may be tracked and measured through network analyses. Through email exchanges and other tangible interactions, it is possible to graphically depict members who are central within networks and to identify who lies on the periphery.

In many respects, we do not need to invoke the ideas of diversity and inclusion to recognize the value of acceptance for our mental health and ability to perform. Belonging is one of our most basic human needs regardless of the mix of people. Wherever we are and whoever we are with, we want to feel essential, influential, and welcomed into the life of the community. Diversity simply makes those possibilities more difficult by presenting a more challenging starting point from which to bring people closer together. As a beginning, however, we can make it easier on ourselves by considering the different ways in which groups can be diverse. For example, faultlines are more severe when within-group attributes are strong and between-group attributes are weak. In the parlance of statistics, community building is easier if not all the variance is unique—that is, if groups have some variance in common. The diagrams in figure 7.1 show two groups of three people each. Both groups are equally diverse. In figure 7.1(a), however, the groups are more dissimilar than they are alike, and in Figure 7.1(b), they are about as dissimilar as they are alike. In the latter case, perhaps members of the disparate groups went to the same schools, have similar interests and hobbies, hold similar organizational positions, or at one time worked for the same CEO. They are different but connected. The connections blur the faultlines that can be more or less salient, or activated.⁸⁷ The less salient the delineation among people, the easier it will be to promote teamwork.

Figure 7.1 Two forms of diversity.

Diversity is a group attribute, not an individual attribute. As such, consciously or not, group differences become organizationally meaningful when they hold the potential to divide the group according to those perceived differences. For example, boards that were highly differentiated among factors such as age, gender, years on the board, number of boards, and so forth, were associated with lower firm performance: the separation among subgroups was too great to bridge.88

From its earliest days, OD has concentrated efforts on building the capabilities of groups to elicit the full participation of members and collective use of their skills. These tactics include the creation of shared goals, emphases on common outcomes, frequent interactions, and group reflection on their processes and effectiveness; these are the traditional OD methods that date to the 1940s, if not earlier. As guardians of social justice in organizations, it seems fitting that much of OD practitioners’ efforts have been to bring those who are different together.