With globalization and the changing demographics of the workforce, corporate diversity programs are increasingly popular. But to what end?
Participating organizations stipulate goals such as eradicating discrimination, attracting top talent, enabling employees to reach their potential and mirroring the customer base (presumably to increase their appeal among minority groups).
Some argue that diversity management (the modern term for “equal opportunity”) calls for fundamental shifts in attitude. These days, companies don’t pursue diversity initiatives because it’s a nice thing to do but because they need to fully embrace diversity in order to survive. Businesses realize they can no longer rely on Industrial Age workplace hierarchies largely dominated by white men. Producers would probably do well to reconsider some of their customer-service and sales processes that have traditionally evolved around social events and relationship-building at baseball, church and golf. The growing sophistication among non-white males points to the need for diversifying the outreach and greater transparency around account expenses and the true cost (and value) of insurance.
Uncovering the next opportunity is about having an uncommon sense of the consumer.Tweet
This may seem to some far-fetched, if not provocative, since consumers, including women and other minority groups, are underrepresented on the boards and executive teams at most American businesses. Such complacency, however, ignores certain realities, including top talent expectations, skills shortages and growing consumer power in the Information Age.
The insurance industry recognizes that it needs a highly skilled workforce and enough consumer trust to ensure its products and services can turn in healthy profits. But it’s unclear whether industry leaders see this equation as a series of tactical initiatives or as a comprehensive strategic approach. While some insurance companies have established global diversity officers, diversity councils, workgroups and new metrics, it’s questionable whether these are adequate responses to meet the “new normal” conditions shaking up many traditional business models. Often the problem is not how companies act (or don’t act) but how they define diversity in the first place.
Insurance remains a robust economic engine touching millions. Why should the industry be thinking and doing anything differently? By 2050, more than half the U.S. population will consist of Asians, Hispanics and African Americans. Since the 1980s, women have accounted for 58% of college graduates in the United States—and nearly 70% in China. The purchasing power of the gay, lesbian and transgender community in the United States alone is estimated at $2 trillion. These groups are not just workers—they’re clients. They are not niche markets. They are the market.
GDP figures and purchasing power aside, many diverse groups experience barriers to professional opportunities, a human tragedy that affects individuals, groups and organizations with entrenched mindsets. The conundrum faced by many is this: Despite having education, smarts and ambition, their voices are not heard, and their skills are underutilized. This has a profoundly adverse influence on the individual, on team dynamics and on a company’s competitive advantage. The loss of corporate thinking agility, problem-solving capacity and the retention of motivated talent cannot be underestimated when companies continue to expect diversity to fit in with the traditional culture.
Despite advances to date, companies need to think about the existing workforce as well as generations to follow—and fast. Corporate leaders do not have the luxury of time to figure out the changing face of the workforce and consumer power—they are already a fact of life. I am not advocating for so-called diversity training, which has had mixed results. Such training often reinforces old stereotypes and biases, emphasizing our differences rather than finding commonalities. Nor am I a fan of equal opportunity programs, which have benefitted white females while leaving other groups out in the cold.
Many white males are asking themselves: “What’s diversity got to do with me? Why am I the scapegoat?” Exacerbating the pervasive negative is the fact that many diversity initiatives have been more for show, responding to the legal environment companies live in.
What we need is a courageous exercise of genuine (not patronizing) curiosity and engagement. We must recognize that this can be messy and difficult while also bringing rewards that others are already beginning to enjoy.
The lessons from pioneers who have taken an earnest look at diversity from a more up-to-date angle are those offered by such companies as Google, BlackRock and Deloitte. Google makes a point of reflecting the global audience it serves: “We don’t just accept difference—we thrive on it. We celebrate it. And we support it, for the benefit of our employees, our users, our culture and students interested in the technology industry.” The company heads to university campuses to hire ethnically diverse top talent, offers scholarships for Hispanics students, runs the “Black Googlers Network” and proactively supports doing business with gay- and lesbian-owned companies.
At Deloitte, “diversity inclusion” goes beyond gender, race, ethnicity and sexual orientation to include disability, generations, cultures, military status, well-being, and flexibility. The idea is to create a workplace culture that allows multiple groups to thrive and to ensure the diversity of skills necessary to solve their clients’ complex challenges.
BlackRock has long recognized the perils of assuming “think customer, think male.” Its initiative to increase employee awareness of the purchasing power of women, delivered in a four-hour training seminar, was credited with bringing in more than $750 million in increased revenue in one year.
Four hours. $750 million. One year. What’s not good about that?
For the insurance world, there are ample opportunities if efforts are taken to proactively explore diversity and learn how consumers and employees really feel about this industry and its products. This takes resources and courage, especially if you think you are doing well.
We all have blind spots. The key is to reduce the size of those blind spots by inviting feedback, having candid conversations with people who are different from you and being open to learning how others think and feel.
“Uncovering the next opportunity is about having an uncommon sense of the consumer,” according to the Nielsen Company. Having an uncommon sense of workers as current and future employees who are looking for meaning beyond good pay and work conditions will also create opportunities for your business.
It’s one thing for companies to acknowledge that diversity is important. The real test involves translating words into a paradigm shift that promotes commerce and is meaningful to the individuals, groups and corporations on which commerce depends. That is the difference between staying tactical and being strategic.