Corporate Survival Demands Full Use of a Diverse Work Force

Across the country, organizations are restructuring, re-engineering and reinventing--buzzwords that describe a desire to become more flexible and adaptable. These efforts are a response to technological advances and a global marketplace in which traditional organizational structures, power relationships, work arrangements and leadership styles are being tested.

Traditionally, most corporations have had hierarchical structures with vertical power relationships, 40-hour workweeks, face-to-face supervision and top-down decision making. Efficiency was more highly valued than flexibility because efficiency implied productivity; indeed, efficiency and flexibility were seen as incompatible.

Today, flexibility is directly tied to corporate survival. Business alliances require structures that look more like spider webs than pyramids. And computers, cellular phones and fax machines make it possible for employees to work in a wide variety of settings, shattering the notion of working in one place.

As organizations become more horizontal, management is more likely to be collegial, consensual and consultative. And as power becomes more diffused, managers will need to find new ways to supervise and monitor employees.

Although the buzzwords of organizational change have become part of the corporate lexicon, there remains widespread resistance to change. This is understandable. Sharing power, control and information is a new experience for many executives, which is why off-site or home-based work and self-directed teams are still the exception to the rule. The inability to observe employees directly means the empowerment of others and building trust--skills not often taught in business school--have become important.

Even as corporate leaders struggle with information, power and control issues, shifting demographics require that they also deal with cultural diversity. But while most corporations see “reinventing” as a corporate economic imperative, cultural diversity is seen as a social equity concern of lower priority. To recruit and retain the best and the brightest, organizations need to make all employees--regardless of sex, skin color, physical condition or sexual orientation--feel valued and fully utilized. However, the financial costs of not doing so are poorly understood.

The result: Re-engineering and diversity issues are not perceived as related. Making corporations more adaptable to rapid change is the responsibility of CEOs, while addressing the issue of cultural diversity is the responsibility of the company’s human resources department.

In fact, the two have a symbiotic relationship.

Both have to do with the competitive advantage of using people effectively. Both require similar change strategies--issue awareness, organizational audits, philosophical change, modified policies and practices, evaluation and monitoring. By definition, efforts to make organizations more flexible make them less tied to traditional rules and performance measures and more inclined to policies and practices that are inclusive rather than exclusive.

In other words, as executives become more like spiders in the middle of a web than captains on a ship, they are confronted with the need to value diversity in work arrangements as well as management styles. No longer can they depend only on those who look and act like them. As performance increasingly is measured in terms of team rather than individual behavior, cooperative rather than adversarial relationships and output rather than “fitting in,” managers must think and act in new ways.

The Charles Schwab brokerage firm understands the link between addressing diversity issues and achieving organizational change. Hugo Quackenbush, senior vice president, says that as Schwab steps back to review its business processes, it configures the desired outcome to include the power of a diverse work force.

For example, Schwab has discovered that the most efficient way to handle its customer transactions is in large, central telephone centers. In setting up the centers, the firm has incorporated on-site training of Latinos and African Americans--people who don’t usually regard the brokerage business as a career opportunity. That’s because Schwab doesn’t see diversity as an affirmative action issue. It sees it as a way to take advantage of an underutilized labor pool and gain a competitive edge.

As organizations such as Schwab start measuring success in terms other than assimilation, there is an unleashing of human potential. When employees are given freedom to work in the ways most comfortable for them, they become more innovative and productive. It is no surprise that firms that adopt flextime and flex-place policies are those where diversity is seen as a resource rather than a problem. They are also the firms with low absenteeism, low turnover, high productivity and high worker loyalty.

Corporate leaders who understand and build on the symbiosis between increasing corporate flexibility and addressing cultural diversity will have an economic advantage over those who do not. For the two issues are compatible--they go hand in hand. Treating them together in an overall corporate change strategy is not only socially desirable, it is efficient and fiscally responsible.