Diversity in Corporate America is a hot topic, but best-practices news on the issue can seem difficult to come by. That's where Diversity Inc. comes in. It was formed in 1998 to track and report on all things diverse in companies: to keep up with legal wranglings, report diversity-related news, and serve as a sort of watchdog for Corporate America. It publishes an annual a list of the top 50 companies for diversity.
BusinessWeek Staff Editor Jennifer Merritt spoke with Diversity Inc. partner and co-founder Luke Visconti about corporations and their friendliness -- or unfriendless -- to minorities. Edited excerpts of their conversation follow:
Q: Luke, with all the talk from companies about wanting a more diverse set of employees, why is it that Corporate America still is perceived by minorities as unfriendly?
A: Apart from a very few companies, diversity is being handled in a very loose way. It's not being handled as part of a strategy or in a very disciplined way, and that's why you're seeing the problems. There's an awareness that bad books will lead you to bad business decisions, that bad legal advice will lead to poor practices. But the awareness of diversity as a subject of that stature isn't so prevalent in Corporate America. Companies aren't treating this subject with the same seriousness as they treat accountancy.
Q: If companies aren't getting the results they want -- more minority representation in their ranks -- then why don't they adjust their strategies?
A: There's a huge disconnect. Since most corporations are run by white men, companies don't understand the importance of invitation or the feeling of being different. When you're part of the majority, you assume you're invited everywhere, and things will be fair. When you're not a member of the majority, you know better.
The second thing companies don't understand is that nobody wants to be alone. People feel alone because they don't have around them other people who are like them.
A third thing that's missing is the understanding of the issue of culture. Ask whites about their culture, and they'll have no idea what to say, or maybe even what you mean. Ask a person of color, and they'll know exactly what you're talking about and can describe it vividly.
If you don't understand the differences in culture, then it's as if you are blind to it, and that causes problems -- recruiting problems, retention problems, and ultimately, young minorities not wanting to get an MBA or even stay in the business world.
Q: So what should companies be doing?
A: Right now, there's a lack of standards and accountability. The approach to diversity at many companies is random. If your bonus depended on hiring and retaining people of color, for example, you'd add in accountability. Companies need to educate themselves on what America really looks like, on what the economy looks like, and where trends are going. In households of color, for example, income has grown at more than twice the rate of nonminority households.
The second thing companies need to do is to apply disciplined thinking to diversity -- treat it as a part of the corporate strategy, like they would accounting.
Q: What is the level of corporate awareness?
A: There are three levels, and the largest [group is at] zero [awareness]. At 20% of companies, they believe in diversity as the right thing to do, and that has nothing to do with business. The right thing to do isn't a compelling reason, for the most part. For 5% of companies, they understand it's the right thing to do for business -- it's a competitive advantage.
The biggest thing that would help this is education, an understanding of where growth in spending is coming from. In 1990, about 12% of consumer spending was by households of of color. In 2002, it had increased to nearly 19%. Increased household incomes are partly due to increased access to education. And remember, that spending benefited all Americans, not just people of color.
Minorities are the growth segment of our economy, and companies don't quite recognize it yet. If they did, you'd see this issue approached with all sorts of programs and seriousness.
Q: Is there anything business schools should do to educate the other 95% of companies?
A: Business schools should talk about the business case for diversity -- they've got to understand it and then explain it to corporations. The starting point is education: nonjudgmental, matter-of-fact numbers and statistics that reflect what our country really looks like.
Are business schools doing their part? No. If the issue is not enough MBAs of color, the question should be: What are we going to do it about it?
There's also a history issue here. It goes back to the crux of affirmative action. Jim Crow [laws] existed right up until 1964. If you think all those education-access problems are going to be solved in 40 years, you're kidding yourself. But it's not discussed because it's uncomfortable for people to think about it, to think about having systematically denied people access to education. The damage isn't repaired for several generations at least.