The Alarming Truth About Diversity in Corporate America

Susan Reed
Posted: 09/29/2011

HRIQ speaks with Susan E. Reed, author of "The Diversity Index: The Alarming Truth About Diversity in Corporate America…and What Can Be Done About It."

HRIQ: In your book The Diversity Index, you identify based on extensive research, the crisis facing corporate America in terms of opportunity. What are some of these challenges the workforce, as well as the companies that employ them, are facing?

Susan Reed: We still have a white ceiling in corporate America. The difference now from 50 years ago is that Caucasian women are part of the power structure. In 2009, 90 percent of the top 100 firms employed white female executive officers while 40 percent employed no people of color.
Now the realm of business is global. What sort of effect has this had on the U.S. workforce and what kinds of effects may develop going forward?

American workers are competing with workers all over the world for the best jobs. This is especially impacting Hispanic and Asians who were born or raised in the U.S. In 2009, more than half of the Hispanic and Asian executive officers of the largest 100 firms were born outside of the U.S.

Success in a business is attributed to various factors – a diverse workforce being one of them. What is it about a diverse workforce that gives businesses an edge?

There is mounting research that shows that a diverse workforce can improve a company’s bottom line, induce more creative collaboration, and result in greater resilience in a company, all of which businesses need, particularly in a challenging economy.

Your research for the Diversity Index involved studies of companies such as General Electric, Hewlett Packard, Merck, and Pepsi Co. – could you offer some examples of challenges these companies faced and what steps were taken to overcome them?

In each of these companies, various chief executive officers nurtured diversity as a core philosophy because they saw that they could not get the best talent, excel in the most complex markets, or create the kind of meritocratic environment they wanted if they did not expand and increase their diversity hires and promotions.

From your research, you were able to identify 10 steps or methods the most successful companies have used to better their businesses in terms of creating and maintaining a diverse workforce. What are the steps and are they for leadership to implement alone?

The CEO leads a business to achieve greater diversity, but the organization keeps the process going through a series of tested practices and procedures. The most diverse organizations have been refining their processes for a long time, but it is never too late to start. A critical step is for leaders and managers is to articulate with a clear and compelling vision how diversity fits into the overall business plan, not to use diversity as something that is done on the side as a politically correct activity. This brainstorming—which should include employees--should be done on an ongoing basis to keep diversity to the center of an organization as a process that will enable it to better serve all kinds of customers.

At the same time, the rest of the organization can apply the other tried and true steps such as such increasing recruitment efforts, fostering employee affinity groups, investing in public education, and opening a dialogue about race, gender and sexuality. If a business has a white ceiling, but is otherwise integrated, leaders should ask themselves why this is. Some companies changed their performance measurements to become less biased. Each company is different and will have its own challenges.


Susan Reed
Posted: 09/29/2011

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