On Diversity

Why focusing on gender equality will not solve the problem

Gender equality. Gay rights. Immigration. Discrimination. Those are the unfortunate hot topics of today. Participating in the public discussion is not something that I have longed for — in particular because it sometimes reminds me of a medieval war. The field is filled with poorly equipped tribes fighting each other. Recently my opinion was requested by our company’s equality group. Having spent considerable amount of time thinking my answer, I decided to make it public. In this post I will discuss diversity and its state in Finnish companies. I will then argue, why, when and how a holistic approach on diversity will provide competitive advantage.

According to Prasad et al. (2006) diversity emerges when a group of people differ from each other by age, ethnicity, gender, nationality, religion, sexual orientation or physical features. Equality means that no individual is discriminated, harassed or treated unfairly because he or she is characterized by one of these factors. Thus focusing on gender equality addresses just one dimension of the bigger problem. Going back to the medieval war metaphor, I believe it is time for the tribes to unite.

Finnish society promotes equality by law. First legislation specific to gender equality was enacted in 1986, followed by more generic equality legislation in 2004. Yet equality has been, if not neglected, at least overlooked in Finnish companies. Taru Vuontisjärvi (2006) has done an eye-opening study on the subject. According to her, over one third of companies fail to have an equality plan — a legal requirement since 1986. Of those who actually have a plan, little over 90 % explicitly forbid discrimination by gender, 50-60 % by age, race and religion. Other factors are more or less missing. Ignorance of companies becomes more evident, when asked about employee groups being monitored to promote equal opportunities. According to Vuontisjärvi, around one third monitor women, one tenth the elderly and that is about it. According to a later study from Schmidt and Vanhala (2010), the state of affairs is not improving. A diversity barometer from Finnish Occupational Health Institute shows improvement in attitudes, but does not discuss means.

Finnish companies simply do not see the business value in promoting diversity. Cox and Blake (1991) have found reasons, why it exists. One of them is better market understanding. The behavior of different subcultures is best understood by people from those subcultures. Another reason is increased innovation and problem solving ability. It emerges from different views and skills diverse people possess. More reasoning can be found in several related studies. An interesting anecdote related to gender equality is the influence of women on purchase decisions: women account for 85 % of consumer purchases. How about that?

The companies that do care about equality end up sub-optimizing the problem and deal only with gender equality. It’s like asking the gays to wait 50 years while we sort out the women. One could argue for the divide and conquer approach, but I claim that we can and we definitely should take a holistic approach on the diversity problem. Looking at the statistics, we can see that the amount of people from different cultures is slowly, but steadily rising. Clearly there is competitive advantage available even in domestic, let alone foreign markets. It is interesting that according to a study by Järvinen & Salojärvi (2007) and the diversity barometer, companies in fact consider equality and diversity to be strategic issues, but most fail to manage them. Why?

Equality is first and foremost about attitudes. Business is first and foremost about money. As long as senior executives — despite recognizing the advantages of equality and diversity — have more pressing concerns, those will get first priority. Driving equality and diversity in companies is for people with vision and commitment. These people with different attitudes will make their companies early adopters, and create competitive advantage — exactly via the benefits highlighted by Cox and Blake. The majority will follow, when next generation managers take the wheel.

In the meanwhile we need to create the correct attitudes. Yet this is something most equality initiatives seem to fail. They choose the easier approach and focus on the victims instead of the bullies. But changing attitudes is not as difficult as thought. I once had a team, who at first were against having foreign colleagues. Their opinion was ignored and interviews booked regardless of the candidate’s nationality. Minutes before the group interview of a foreigner some team members asked, if they could skip it. I asked them to open minded. The shock treatment worked. After the interview almost all had changed their minds about foreign colleagues.

One dimension of changing attitudes is providing people correct information, justification and first and foremost, experience. To break stereotypes and misconceptions, people need to hear, see, smell and feel it themselves. Companies could combine social responsibility and diversity education by, for example, compensating their employees for tutoring foreign students in Finnish.

Another dimension of changing attitudes is changing the way people interpret information that is provided to team. To break patterns of thought, people need to beware various natural, but disruptive, biases in our thinking. Here are two examples from Kunda (1999). The anchoring-and-adjustment heuristic suggests that existing information is accepted as a reference point. The confirmation bias suggests that information confirming our existing views is better noticed and remembered. Thus people are more likely to accept their stereotypes and even enforce them — for better and worse. But being aware of these various biases can make a huge difference in how people process new information.

I would like to emphasize that working with diversity has several levels. Raising public awareness, equal opportunities recruiting and everything else that is being done now is extremely important. To make the situation permanent, we need to broaden the scope of our actions and means. We need to change the attitudes. Otherwise the bullies continue to bully, they just do it under the radar — or so I believe.

One final note on public discussion. It has occasionally been heated, prejudice and without justification. But the beauty in diversity is that people need not be alike. By its very definition it is okay that some people are against diversity. Let them be — and enjoy the irony of it.

References

Cox, Taylor H. & Blake, Stacy. 1991. Managing Cultural Diversity: Implications for Organizational Competitiveness. Academy of Management Executive.

Järvinen, Vappu & Salojärvi, Sari. 2007. Henkilöstöjohtamisen trendit 2007. (Trends in Human Resource Management 2007.) Johtamistaidon Opisto.

Kunda, Ziva. 1999. Social Cognition: Making Sense of People. MIT Press.

Prasad, Pushkala; Pringle Judith K. & Konrad Allison. 2006. Handbook of Workplace Diversity. Sage.

Schmidt, Tiina & Vanhala, Sinikka. 2010. Henkilöstöjohtaminen Suomessa. (Human Resource Management In Finland.) Helsinki School of Economics.

Vuontisjärvi, Taru. 2006. The European context for corporate social responsibility and human resource management: an analysis of the largest Finnish companies. Business Ethics: A European Review. July 2006.