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    Making Differences Matter

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    Phallin Tak

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    © All Rights Reserved
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    of 18
    Making Differences Matter A New Paradigm for Managing Diversity Executive Summary try eHFORTS 1 he wor rave been und lb tv a report, Two poradns eblem mintoncestarnass paradigm is boved ra tha dications wong. Ure cd by how wal Be company Ccheves recent and retin goo. The paras Halzesossmiaon and cor and gen bind on th cher hand, co ses foronce, Under ganizations sock coats 10.0 ose dee lene, triching hee demographics to aged lpecs of Bt that pore ca nave ientyroup ol plated, os facing marginalized or ores wih igh kr oleae, ah patedign shonin hat ben leon aks place and eganzasens become mor eaten ling he mislonsf employees ae encovoged to apt die sou len hom diveay hay ercenoge people rake axle use of cla experence at wk fey Fgh ll oms of dosinancs nd borat, lng to onethr ar oy erat hath neice ess ome rom @ genial 1 make way er cry acknowledged and resohed vith with dive Une eet many manager ane this question with the stron that diermination a wong. both egal and morally Bat ody manages ee Yoicng secon notion a yell Amorediverse wrk fore the ll ineensorganzationd electives. 1ewlift moral, rng gester aces to no segments ofthe mrkepice, and enhance prodnctity.Inahort Uy cla, cers willbe good fr busines Yetifthisistve—aol eieve it t—vehere are the positive impacts of diversity? Numerous and varied ini tiatives to increase diversity in comporate America have been under way for mate than two decades, Rarely, how Making Difcencer Matter ever have those efforts spurred leaps in organizational {éfectivenes. Instead, many attempts to increase diver: Sityin the workplace have backfired sometimes even helehtening tensions among employees and hindering a company’ peformance. ‘This sticl offers an explanation for why diversity efforts are not fling their promise and presents a new paradigm for understanding—and leveraging diversity Teisourblit that there ia distinct way to unleash the powerful benefit of diverse workforce. Although these benefits include inressed proftaility they go beyond financial measures to encompass learning creativity, fexibiity organizational and individ growth, and the ability of company to adjust rapidly and succes to market changes. The desited transformation, however, requltes a fundamental change inthe attudes and behaviors of an organization's leadership, And that wil come only when senior managers cbandon an undeeying and flawed assumption about diversity and replace with broader understanding Most people assume that workplace diversity about Increasing racial national, gender, or clas representa tion--in other words, reesiting and retaining more people from traditionally The new understanding of underrepresented “iden: diversity involves more than tty groups Taking this Increasing the numberof coramonly held assump. Aigerene identity groups on Von asa stating point the payrol. we tet out six years ago to Investigate its link to organizational effectiveness, We oon fond that think ing of diversity simply in terms of klentity-group repre sentation inhibited effectiveness. Thomas and Bly Organizations usually take one of two paths in man- aging diversity. In the name of equality and fairness, they encourage (and expect) women and people of color to blend in. Or they set them apart in jobs that relate specif ically to theirbackground, signing them, or example, to areas that require them to interface with cients or customers ofthe same identity group. Atcan American IM.B.As often find themselves marketing products to inner-city communities Hispanics frequently market to Hispanics or wor fr Latin American subsidies. ka those kinds of cases, companies are operating on the assumption thatthe main vite identity groups have to offers a knowledge of thle cwn people. Pie assump tions Limited—ane limiting—and deteimental to diver sity efforts, ‘What we suggest here i that diversity goes beyond inreasing the numberof different identity-group afliations on the payroll to recognizing that such an effort is merely the ist step in managing «diverse workforce forthe organization's utmost benefit. Diver sity should be understood the varied perspectives and ‘approaches to work that members of diferent identity ‘groups bring Women Hispanics, Asian Americans, African Amer ‘ans, Native Amerieans—theve groupe and others out side the mainstream of corporate America don’ bring ‘with them just their “insider information.” They bring Aileen important, endl competitively relevant knowl: fedge and perspectives about how to actualy do work hhow to design processes, each goal, fame tas, create effective teams, communicate ideas, and lead, When allowed to, members ofthese group ean help companies grow and improve by challenging basi asstmptions bout an organization’ functions, strategies, operations, 7 Making Difereoes Matter practices, and procedures. And in doing so, they are able to bring more of their whole selves to the workplace and identi more flly wit the work they do, setingin motion a virtuous circle. Certainly, individuals ean be expected to contribute i company ther firsthand familvty with niche markets. But only when companies stat thinking boat diversity more holstiall—as pro viding fresh and meaningful approaches to work—and $op assuming that divecsity relates simply to how a pe son looks or where he orshe comes from, wil they be ale to reap it ful rewards, Two perepectves have guided most diversity iii tives to date the discrimination-andfaimass paradigm and the acces-and-lgitimacy paradigm. But we have identified new, emerging appronch to this complex ‘management issue. This approach, which we call the learning-and-efectiveness paradigm, incorporates aspects of the first two paradigms but goes beyond them byconcretely connecting diversity to approaches to work. Our goal sto help business leaders see what thee ‘own approach to diversity currently sand how it may already have influenced thelr companies diversity efforts. Managers can lear to asess whether they need tochange theie diversity initiatives and, iso, how to accomplish that change ‘The fllowing discussion wil also cite several exam: ples of how connecting the new deition of diversity to the actual dodag of work has led some organizations to markedly better performance. The organization der inmany ways-none are inthe same industry, for Instance—but they ae united by one simiat: Their leaders realize that increasing demographic variation oes aot in itself increase organizational efocivencs, They eealize that show a company defines diversity— 88 Thomas and By and what it does with the experiences of being a diverse ‘organization—that delivers onthe promise ‘The Discrimination-and-Fainess Paradigm Using the discriminstion-and-faimess paradigm is perhaps thus fr the dominant way of understanding Aivesty Leaders who look at diversity through thie lens ‘usally focuscon equal opportanity, at treatment recruitment, and compliance with federal qual Employ- ‘ment Opportunity requirements. The paradigm’s under Tying logic canbe expressed as follows: Prejudice has kept member of certain demographic ‘groups out of organizations such o cara Asa mater of fairness and to campy with federal mandates, we ned to work toward restructuring the makeup of ou organ lion toletit moro closely ref! that of society, We need ‘managerial proceso tha ensure that al ur emplyees fre trated equally an with respec and that sn are rot given unfair advantage over others. Although it resembles the thinking behind traditional afrmatve-action efforts, the discrimination-and fairness paradigm does go beyond a simple concern with rmbers, Companies tht operate with this plocoph ‘alorientation often insite mentoring and career: development programs specifically forthe women and people of color in their ranks and train other employees to respect cultural dference. Under this paradigm, nevertheless progressin diversity t meastied by how rel the company achieves its eeruitment and retention tals rather than by the degre to which conditions in the company allow employees to draw on tir personal sates and perspective to do thee work more efectvey Making DiderencesMavier 38 ‘The staf one might say. gets diversified, but the work does not. ‘What ate some ofthe common characterises of companies that have med the djermination-and fairness paradigm succesfully to inereae their dermo rape diversity? Our research indicates that they are ‘esualy ran by leaders who valte de process and equal treatment of all emplosees and whe have the authority to use top-down directive to enforce initiatives based ‘on those atitades Such companies ae often bares atic insteucture with control processes in place for monitoring measuring and rewarding individual perfor ‘mance. nd finaly, they are often organizations with entrenched, easily observable cultures, in which valet like nines ave widespread and deeply inculeated and cds of conduct are clear and unambiguous. (Perhaps the most extreme example ofan organization in which ail these factors aveat work is the United States Army’) Without doubt, there are benefits to this paradigm: it does tend to inerease demographic diversity in an ong nization, and t often suceeede in promating fale treat ment. Butt also has significant limitations. The frst of ‘thee ie thats color Companies needopen and ind, gender-blind weal explicit discusion of is tosome degree built on hove dierences can be used the implick assumption a sources of individual ‘and organizational efectivencss the same" Under this paradigm, it snot dese dle for diversification ofthe workforce to influence the ‘organization's work or cule, The company should ‘operate if every person were ofthe same race, gender, and nationality Is unbkoly that leaders who manage that "we areal the ate” or "we asite to being ll 40 Phomar and fly Aivesty under this paradigm will explore how people's Aiferences generate a potential diversity of effective ‘ways of working leading viewing the market, managing people and learning. "Not only does the dscriminetion-and-fairass paradigm insist that everyone iste same, but wth it ‘emphasis on equal teatment, ic pots prestore on employees to make sure that important diferences among them donot eotnt Gentine disagreements sbout work definition, therefore, are sometimes wrongly inter preted through this paradigm’ fairness-unfaiemess lens-—cspecially when honest disagreements are accom panied by tense debate. A female employee wh insists, for example, thet a company’s advertising strategy i not appropriate fo all ethnic segments in the marketplace right fea she Is vllatng the code of wsimilation upon ‘which the paradigm ie bull Moreover, if she were then to defend her opinion by iting lt us say, hex personal knowledge ofthe ethnic group the company wanted 10 reach, she might risk being peeved a importing inap- propriate attitudes into an organization that prides tse ‘on being blind to cultural dflerence, ‘Workplace paradigms channel organizational think: Ingin powerfal ways. By imitng the ability of employees toacknowledge openly their work-related bt culturally bored diffrence, the paradigm actually undermines the ‘organiraton's capacity to lear about and improve is fwn strategies, process. and practices. Andi aleo keeps people rom identifying strongly and personally with their work-—a critical source of motivation and se ‘equlation in any business environment. Asan ilusration of the paradigms weaknesses, con: sider the cate of versen Dunham, an international consulting fir that focuses om foreign and donestic Making Diironces Matter 41 economic development policy (Like al the examples in this article the company it real, but its name is de- fused) Not long ago the firm's manager asked us to help them understand why race relations had become a divisive issue precisely at time when Iversen was ‘eocivng acolades for its diversity effort. Indeed, other organizations had even begun to use the frm to bench mark their on diversity programs. Iversens diversity efforts had begun in the exaly 19705, when senior managers decided to pursue greater racial and gender diversity inthe fim’ higher ranks, (the fr’ leaders were strongly commited tothe cause of social justice.) Women and people of calor were hited ‘nd charted on career paths towatd becoming projet Inaders High performers among those wo ha lft the firm were persuaded to reir in senioe role. By 1989, sou 50% of versn's projec leaders anu professionals ‘were women, and 056 were people of eolr, The 1 ‘member management committee, once exchsively white snd male, included five women and foar people of color. Additionally, Iversen had developed a strong contingent offoreign nationals Teas et about this time, however, that tensions began to surface Senior managers found it hard to believe that, afterall the effort to reat a air and mut ally respectful work community, some staff members ‘could still be claiming that Iversen had racial dscrimine tom problems. The management invited w to study the firm and deliver an outsiders sttessment ofits problem ‘Weead been inside the im for only a short time when itbecame cleat that Iversens leaders viewed the dyna ies of diversity through the lens of the discrimination and-faimess pared. But where they saw racial discord, ‘wedlscerned lashing approaches tothe actual workof 42 Thomasend Bly consulting. Why? Our research showed that tensions ‘were strongest among midlevel project leaders Surveys andintervews indicated that white project leaders welcomed demographic divesity asa general sign of progress but that they alo thought the new employees ‘were somehow changing the company pullingit away fromits original cltre ands mission, Common et ‘isms werethat African American and Hispanic stat made problems too complexty linking isies the ogani- 2ation had traditionally regarded as unrelated an that they brought on projects that seme to require greater cultural sensitinty. White male project leader alo com plained that their peers who were women and people of ‘olor were undermining one of Iversen's traditional strengths: its hard-core quantitative orientation. For Instance, minority project leaders had suggested that Iversen consultants colet information and sek inpt {rom others inthe client company besides senior man ‘ager—that is from the rank and les from middle ‘managers Some had urged Iversen to expand its consult Ingapproach to inchude the gathering and analysis of (qualitative data through interviewing and observation, Indeed these projec leaders had even challenged one of Iversen’ long-standing cove asumptionsthat the fens reports were objective, They urged Iversen Dunbanto recognize and adress the subyectve aspect ofits analy ‘ex: the frm could, fr example include nits eportsto client dissenting Iversen views, ifany existed or their part, project leaders eho were women and people of enor felt that they were not accorded the same leva of authority to carryout that work as their white male peers. Moreover, they sensed that those peers were skeptical of ther opinions and they resented that doubts ‘were not voiced openly Making Difbrences Matter 43, Meanwhile, there slo wa some concern expressed about tension between white managers and nonwhite subordinate, who calmed they were being treated unfairly. But our analysis suggested thatthe manager- subordinate confts were not numerous enough to ‘ratran the attention they were drawing fom top man tgement. We belived twa sgniint that senior manages found it easier to focus on this second type of Confit than on mid-level conflicts abot project choke tnd project definition, Indeed, Iversen Dunham focus seomed tobe a result ofthe firms reliance on its partie tla diversity paradigm andl the emphasis on fairies and elity Teva relatively easy to dingnone probs lems in light of those concepts and to devise a solution: just get managers to teat their subordinstes more fail In contrast, was dificult to diagnose peer-to-peer tension inthe framework ofthis model Such conflicts were about the very ate of Iversen's work, no simply “unair treatment. Yes, they were related to identity soup alations, bu they were not symptomatic of cas tsiracism, twas fversen’s paradigm that led managers tointerpret them as such, Remember, we were asked to assess what was supposed to be a racial discrimination problem, Ivereensdscrimination-an-faimes paradigm had reated «kind of eognitive blind spot;and, as result, the company’ leadership could not fame the problem accurately or solve itefectively. Instead the ‘company needed cultural shit needed to grasp ‘what toda with its diversity once had achieved the rnumbers. [fal Iversen Dunham employees were to om Intute tothe fills extent, the company would need paradigm that would encourage open and explicit dis ‘xssion of what identity group differences relly mean ‘and how they can be used as sources of individual and ‘organizational effectiveness Today, mainly because of senior manager resistance tosucha cultural transformation, ersen continues to steugale withthe tensions arising fom the diversity of its workforce ‘The Access-and-Legitimacy Paradigm In the competitive climate of the 19803 and 1990s, new "rhetoric and rationale for managing diversity emerged. IF the dserimination-and-faimess paradigm can be sd to have deslizadasinlation and color-and gender blind conformism, the acessand-legtimacy paradigm was predicated on the acceptance and celebration of die ‘ences. The underying motivation ofthe acces-and: legitimacy paradigm canbe expressed this way We are living ina increasingly malialtral county, cand new ethnic groups are quel gaining consumer power: Our company neade a demographically mor diverse workforce to lp us gain acces to these diforen tiated segment We nod emplayees with mldingual lls order to uaerstand al serve our caster et ter and ogo legitimacy with theme Diversity ian’ just {fair it mos busine son ‘Where this paradigm has taken hod, organizations hhave pushed for access to—and legitimacy with--a mote diverse clientele by matching the demographics ofthe ‘organization to those of eitieal consumer or constituent groups. In some eases, the effort has led to substantial Increases in organizational diversity. In investment banks, for example, nical finance departments have Jong led corporate finance departments in pursuing demographic diversity bests of the typical makeup of the administration of ety halls and county board. Many ‘onsumer-produets companies that have used market segmentation bared om gender, racial and ater de igaphic differences have als reuently read dedi ‘ated marketing positions fr each segment. The peradigi has therefore led to new professional and man [eetal opportanities for women and people of color ‘What are the common characterises of organizations that have successfully used the aceese-andegitimacy paradigm to increase their demographic versity? There Jsbut one: such companies almost atays operateina business environment in which there isincrensed diver sity amongeustomers, clients othe labor pool—and terelorea clear opportunity oran imminent teat to the company. Again, the paradigm has its strengths. Its matket- bused motiation and the potential for competitive advantage that it suggests are often qualities an entire company can understand and therefore support. Bat the paradigm is perhaps more notable for is Kimita tions In their pureitof niche markets, acces legitimacy organizations tend to emphasize the role of altura diferences in a company without really analyz: ing those differences to see how they actualy affect the work that is done. Whereas disrimination-and-fainess leaders are too quick to subvert differences inthe inter est of preserving harmony, access-a-leitimacy lad fs are too quick to push staf with niche eapabiities into differentiated pigeonholes without trying to under: Stand what tho expabiites really are and how they could be integrated into the company’s mainstream ork To iustrate our point, we present the caze of Acces Capit Access Capital Intematonal isa US. investment bank that in the early 1980s launched an aggressive pan to expand into Europe, Initlly, however, Access encoun tered serious problems opening ofc in interaationst ‘markets the people from the United States who were ‘installed abroad lacked credibility, were ignorant of local caltaral norms and market conditions, and szply couldn't seem to connect with ative clients, Access responded by hiring Europeans who had atended North American busines schools and by assigning them in teams to the foreign offices. This strategy was «marked sucees.Bofore long, the leaders of Access could take snormous pidein the fac that thei European oper ‘ons were highly profitable and stated by «tray inter national corps of professionals. They took to cali the ‘company the bet investment bank inthe world” Several years passed. Access foreign afices contin: ved to thrive, but some leaders were beginning to sense thatthe company was not fly benefiting fom ts diver sity efforts Indes, some even suspected tht the bank hod made tsa vulnerable because of how it hal chosen tomanage diversity. A senior executive rom the United States explains {fehe French oan al resigned tomorrow, what would we do? Fim mot sare what coud de Wow mover attemptadto learn what thee differences and ular competencies realy ar, how they change the proves of ong business, Whats the Germar county tear ata lly doing? We dot know. We know theyre god, but we ‘ont know the subteties of how they do what they do. We ‘assumed and dunk correctly that cltare makes a digeronce but that's about as fares we went We hired ‘Earopoane with American MBAs beetuse we dit now why we could busine in Europe ust Making Differences Matter 47 assume there was something cultura about why we xa’ connoct. And tan years later we all don know wha ite Ife know, thn perhaps we coud take tad teach Which part ofthe neste banking process unversaland which part oft draws upon pavtcla el tural competancios? What are the commanalites and if ferences? may not be German, mayb cal do et ter at understanding what imeans to bean American ding business in Germany. Our company's bigest fling {shat the department heads in London and the directors the various country tous have these ultra ident sues openly. We knew enough ue people's cutual re scone learn fon thane mer talked about Acces’ story makes an important point ant the main limitation of the sccess-and-leytimacy parade tinder its influence, the motivation fr diversity usualy teineges from very immediate and often criss oriented heed for acces and legit When a busines regards imnacy—in this case the ‘emplayees'experience eed to broker dealin ‘a sel only to gain access Earopean markets. How to marrow markets, fever, once the organiza those employees may feet ion appears to be achiev exploited, Ing gal the leaders seldom goon to identify and analyze the culturally based sil, beliefs, and prac ties that worked so well Nor doth ‘organization can incorporate and lear fom those skills boli, or practices in order to capitalize on diversity in the long rn. consider how the Under the acezss-and-teitimacy paradigm, I as as ifthe banks country teams had become litle spt-off ‘ampanies in their own right, doing thet own exotic, slightly mysterious enltural- diversity thingina niche market of their own, sing competencies that for some reason could not become more fully integrated int the lange organization's understanding of isl Diflerence was valued within Acces Capital-hence the develop rent of country teams inthe frst place—but not valued ‘enough that the organization would ty to integvate it into the very core ofits culture and into its hasinese practices, Finally, the access-and-logtimacy paradigm can leave some employees fling exploited. Many organizations using this paradigm have diversified only im those areas in which they interact with particular nighe-market seg ‘ments. In time, many individuals reerited fortis func tion have come to feel devaled and ase ws they begin to sense tht oppoctunitisin other parts ofthe orga zation are closed to them. Often the larger organization regards the experience ofthese employees st more lm: ited or specialized, even though many of them in fact, started ther carers inthe mainstream market before ‘moving to special markets where thet cultural back grounds werea recognized asst. leo, may of thes people say that when companies have needed to down Sue or narrow their marketing facts, tis the special departments that ate often the frst to go. Tht situation ‘creates tenuous ad ultimately untenable career paths Foremployees inthe special departments, ‘The Emerging Paradigm: Connecting Diversity to Work Perspectives Recently inthe course of our research, we have encoun tered small numberof organizations that, having relied Initially on one of the above paradigm to guide their Making Difrence Matter 49 ivrsty efforts, have come to believe that they are not ‘making the mos oftheir own pluralism. These organize tions, ike Aocess Capital recognize that employees ie quently make decisions and choices at work that draw ton ther caltaral background —choiers made bocate of thei identity group affliations. The companies have tlko developed an outlook on diversity that enables them to incorporate employees perspectives into the main workof the organization a to enhance work by fethinking primary tasks and redefining markets, pro tet, tategies, missions business practices, an even tutes Sach companies ae using the learning-and- tffectivenes paradigm for managing diversity and, by Aloing so, are tapping diversitys true benefits case in point Dewey & Levin, small pubic inotest law frm located in a northeastern US. city. Although Dewey & Levin had long been a profitable practice, by the mid-1980s its all-white legal staff had becom concerned tha the women they represented in cemployment-eated disputes were exclusively white Te firs attorneys viewed that fact as. decieney In ight oftheir mandate to adoeate on behalf of al women Using the thinking behind the aceess-and- Tetimacy paradigm, they also saw is bad for busines Shorty thereafter, the firm hired a Hispanic female attorney. The partner’ hope, simply put, was that she ‘would bringin clients from her own community and also dlemonstzate the firm's commitment to representing all women, But something even biger than that happened. The now attorney introdiced ideas to Dewey & Levin bout what kinds of case it should take on. Senior ma agers were open to those ideas and pursaed them with teat cess, More women of color were hired, ad they, too, brought fresh perspectives. The frm now pases ‘ates that its previonsly all-white legal staff would not hhave thought relevant or appropriate because the lnk between the firm's mission and the employment ses involved in the cases would not have been obvious to them. For example the fr has pursued precedent setting ligation that challenges English only policies fn rea that once would have ignored beaut sue policies did ot fll under the purview of traditional ifrmatve-action work. Yet it aow sees a link between Engli-only policies and employment ase fora large np of women — primarily ecent immigrants—whom Ithad previously failed to serve adequately. Ax one ofthe ‘white principals explain, the demographic composition ‘of Dewey & Levin “has feted the workin terms of expanding notions of what are [relevant] issues and tak Jing on issues and framing them in ereative ways Una ‘wold have never been done [vith an al whie staf]. 1¢s really changed the substance—and in that sense enhanced the qualty—-of our work” ‘Dewey & Levin's increased business succes hasten forced its commitment to diversity. In addition, people ‘fcoor atthe mn uniformly report feeling respected, not simply "brought slong as window dressing” Many of the new attorneys ay their perspectives are heard with a kindof openness and interest they have never exper enced befor in a work setting Not surpsingly, the im has had itl difficulty attracting and retaining a compe tent end diverse professional sta. Ifthe diseriminationant-faieness parelgm i orgs nized around the theme of assimilation in which the aim isto achieve a demographically representative work force whore members teat one another exacly the same—then the aoess-an legitimacy paradigm can be regarded as coalescing around an almost opposite com Making Diferences Matter 5 capt diflerentiation, in which the objective ito place {lferent people where thelr demographic characteristics natch those of important constituents and makes “The emerging paradigm, in contrast to Both xg izes itself around the overarching theme of integration. Assinilation goes too far in pursuing sameness Difleren tition as we have shown oershootsin the ater dizec- tion. The new mode! for mansging diversity trenscends both Like the faimess paradigm, it promotes equal ‘oppotunity forall individuals. An lke the acoess paradigms it acknowledges cultural diferences among, peopleand recognizes the value ln those differences Yet this new mode for mangling diversity lets the organiza tion internalize diferences among employes so thet i Teams and grows because of them Indeed, withthe ‘model flyin pace, members ofthe organization can say, We areal on the same team, wth our diferences— ‘ot espte ther. Bight Preconditions for Making the Paradigm Shift Dewey & Levin may be atypical nits eagernets to open itself up to change and engage in long-term transfor. ‘mation process. We remain convinced, however that tnless organizations that are currently inthe gep ofthe ‘other two paradigms can revise tele view of diversity 0 ts to avon cognitive blind spots, opportunities wl be ‘mised, tensions will most likely be misdiagnoted. and ‘companies wil continue to find the potential benefits of diversity elusive Hence the question arses: What sit about the lw finn of Dewey & Levin and other emerging third paradigm companies that enables them to make the ost oftheir diversity? Our research suggests that there Are eight preconditions that help to position organiza tions to use identity-group diffrence in the service of ‘organizational learning growth, and renewal 4 understand that a diverse 1. The leadership m workforce wll embody different perspectives and fpprosches to work, and must tly value variety ‘of opinion and insight. We know of financial ser ‘ces company that once assumed thatthe only auc ‘ceaful ales model was one that utized aggresive, rap-ie cod als. (need, ts incentive sytem rewarded salespeople in lange par for Une number of calla made) An internal review of the company’s versity initiatives, however, showed thatthe com: ‘anys first and third-mos- profitable employees, were women wo were most ikely tose a sales, technique based on the slow but sare bailing of ‘elatonships. The company’s top management has now made the ink between diferent identity groupe ‘nd diferent epproaches to how work gets done and has come tose that there it more than one ight way to get positive results. 2. The leadership must recognize both the learning ‘opportunities and the challenges that the expres on of different perspectives presents for an orga nization, In other words, the second precondition is leadership that is commited to persevering during the long proces of learning and relearn that the rw paradigan requires {The organizational culture mm tation of everyone, Such a culture intone that expects less feom some employees than from others, Some or st ereate an expec standards of performance fo Making Diferenoes Matter 5% nizations expect women andl people of ear to “undesperform—a negative assumption that too often ‘becomes asl fuliling prophecy. To move othe third paradigm, «company must believe that al its rmetubers can and should contribute fall ‘The onganizational culture must stimulate per sonal development Such a culture brings ont peo ple fal range of useful knowledge and sklls—usu fly through the careful design of jobs that allow people to grow and develop but also through training ind education programs. The organizational culture must encourage open- nese, Sach culture instills» high tolerance for debate and supports constructive confit on work related matters ‘he culture must make workers fel valued this precondition s met, worker fel committed to—and {Empowered within~-the organization and therefore feel comfortable taking the initiative to apply their skills and experiences in new ways to enbance their fob performance The organization must havea well-articulated and widely understood mission. Such a mission enables ‘people tobe clear Leaders who appreciate shout what the con Aigerences igh allforms —panyistryingto of dominance including accomplish 1 grounds fanyfnctional area's and guides discussions resumption of superiority about work-related changes tat staff ‘members might sug- set Being lear about the company’s mission helps keep disessions about work iferences from ‘ver another, 5 Thomasand Bly generating into debates about the validity of peo ple’ perspectives A clear mission provides a focal point that keeps th Plishment of goals. 8. The organization must havea relatively egaitar fan, nonbareaucratic structure. I's important to haves structure that promotes the exchange of kleas and welcomes constructive challenges to the usa, ‘way of doing thing-—from any employee with vl ahle experience. Forward thinkg lear in urea ‘cratic organizations must retain the organization's ciency promoting contol systems and chains of ‘command while finding ways to reshape th change resisting mind-set ofthe classi bureaucratic model ‘They need to separate the enabling elements of bureaucracy (the ability to get things done) fom the isbn clement of bureactacy (those that create resistance to experimentation), First Interstate Bank: A Paradigm Shift in Progress All eight preconditions donot have tobe in place in ‘order to begin asi from the fst or second diversity fotientations toward the learning and/-flectiveness paradigm. But most shouldbe Fist Interstate Bank, -mldsize bank operating ina midwestern ety lustrates thispoint First Interstate, admittedly, sno a typical bank. Hs lien base isa minority community, and its mission it exprestly to serve that base through the development of highly talented workforce.” The bank is unique in other ‘ways it leadership weleomes constructive cntelsn i - Making Differncer Matter 55 stricture is elatvey egalitarian and nonbureaueratic, Andis culture is open-minded Nevertheless, Fist Inter state had long enforce a policy Uhatlo oficers had to hold collage dogres. Those without wete hited only for supper staff jobs and were never promoted beyond or tutsde eappor functions. ‘Two yeas ago, however the support staff began to challenge the policy. Many of ther had been with Fist Interstate for many years and, wt the company’ active support, had improved their skills though raining ts ershad expanded thei kills on the jo, again with the bunks encouragement, learning to run eed checks, prepare presentations for cients and even caleuate the tlgorithms necessary for many loan decisions. Asa result, ome people on the support staff were doing ‘many ofthe same tasks as loan officers, Why, then they wondered, eouldn' they reeive commensurate rewards intitle and compensation? This questioning led toa series of contentious meet: ingsbecween the support staff and the bank’s senior ‘manager. It son became clear that the prem called for managing diversty-diversty based not on rece oF gender but on clas. The support personnel were un form from lower socioeconomic communities than ‘were the college-eiucated loan officers, Regardless, the Principe was the same as for race- or gender-based diversity problems. The support staff had diferent ideas bout how the work af the bank shoudl be done. They fngued that thoae among them with the requisite skills should be allowed to ise through the ranks ta profes ‘ional positions and they believed their ideas were not beg heard or ccepte Tei bli challenged assumptions thatthe com ‘peng’ leadership hal ong held about which employees shoul have the authority to desl with customers and bout how much responsiblity administrative employ tees should ultimately receive. In order to take up this ‘challenge, the bank would have to be open to exploring the requirements that a new perspective would impose omit. It would need to consider the possiblity of m ping out an educational and career path fr people with fut dogreesa path tha could put such workers on the ‘oad to becoming loan oie. In other words the lead csp would have to transform itself wilingly and embrace fluidity in policies hatin times past had been ‘leary stated and unguestioningly held ‘Today the banks leadership is undergoing just such a transformation The going however, i far from easy. The banks senior managers nove must look beyond the ten sions and acrimony saved by the debate over dieing work perspectives and consider the bank's new direction {an important learning and growth opportunity. shift Complete: Third-Paradigm Companies in Action Firat Interstate. shit in progress but fn addition to Dewey & Levin, there are several organization we know of for which the shifts complete In these cases com pany leaders have played a ertical ole as faltatrs and {one setters We have obseved in particular that in org nizations that have adopted the new perspective, leaders ‘and managets-—and, following in thelr rack, employees In general~ate taking four kinds of action ‘They are making the mental connection. Fistin onganizatons that have adapted the new perspective, the leaders are atively seeking opportunites to explore how Me 7, Making Differences Matter 57 identity group diferences affect relationships amoag, workers a affect the way work gets done, They are Jnvesting considerable time and energy in understanding how identity group memberships take on social mean jngsin the organization and how those meanings mani fest themselves inthe way work s defined, assigned, and avcotpished, When there ino proactive kare to. understand, then lating from diversity. ithappens at all-can oceur only reactvely—that in response to versity related exises The situation a lversen Dunham listeates the rmissed opportunities resulting fom tha scenario, Rather than acing differences inthe way project leaders ‘fined and eppronched ther work san opportunity to tin new insights and develop new approaches to achiev {ng its misson the frm remained entrenched in its ra ditional ways able to arbitrate sch diferences only by thinking about what was fie and what was racist. With this quite limited view of the roe race can playin an ‘organization, discussions about the topic become fraught with fee and defensiveness, and everyone misses ‘ut on insights about hoe race might influence work in postive ways A second case, however, strates how some leaders sing the new paradigm have been able to envision—and ‘make-—the connection between cultural diversity and the company’s work. Avie president of Masti, a large national insurance company, received a complaint fom ‘ne ofthe managers in her unit, an African American ‘man. The manager wanted to demote an Asean Amer ‘an woman he had hired fora leadership position from ‘nother Mastiff division ust Uhre months before. He told the vie president he was profoundly disappointed with the performance of is new hie hee her because Twas pretty certain she had tremendous leership sil” he sai. “lenew she had a ‘management style that was ery open and empowering. tras also sure she'd havea great impact onthe rest ofthe management tat. But she hast done any ofthat ‘Surprised the vice president tried to find oat fom him what he thought the problem was, but she was not ing any answers Ut abe fl ell defined ola fated the root ofthe problem. Prvatlyit puzzled her that someone would deide to demote a 15-year veteran fof the company—and a minority woman atthat—so ‘00m after bringing her to his unt The vice president probed further. In Une course ofthe conversation, the manager happened to mention that he Knew the new employe from church and was familiar with the way she handled leadership there nd in other ‘community settings. In those less formal situations. he Ina scen her perform as an extremely lfetve, sensitive and infentil leader. ‘That is when the vice present made an interpretive leap. "Iftha’s what you know about he," the vie pres dent said to the manager, "then the question for uss ‘why cat she bring those aks to work here?” The view president decided to arrange a meeting with all three present to ask this very question directly Inthe meeting fhe Afvican American woman explained," dda think I ‘would last ong if acted that way her. My personal style of leadership—that particular tyle—works wel Ifyou. have the peemission to do i fully; then you en just dot and not have to ook over your shoulder” Pointing to the manager who hed planned to fre her, she added, "He's right. The tye of leadership Tuse out ‘ide this company can definitly be efetive. But Ive been at Mastif for 15 yeas. know this organization, Making Differences Matter 50 and 1know if brought tat piece of myslf—if became tat authenti—just wouldnt survive hee. ‘What this example ilstrates is that the vic pes: dents learning-and-effetiveness paradigm led er to fexplre and then make the link between cultural diver iy and work tle, What was occurring, she realized, ‘rasa mismatch betooen the cle background ofthe ‘eeently promoted woman andthe cultural environment “ofher work setting. Ithad little to do with private at tures or feelings, or gener issues, or some inherent lack pfleadership ability. The source ofthe underperfor- tance was thatthe newly promoted woman had a cer: tain tyle and the organization's eltare di aot support her in expressing it comfotably. The vce president paragn Ted her to ask new questions and to seek out ew information but, more important, it alo led her to interpret existing information diferent The two senior managers began to realize that part of the African American woman's inability to sce herself as ‘leader at work was that she had for so Tong been under- ‘aluod in the organization. And, ina sense, she ad become used to splitting hersalf off rom who she was in her owns community. In the 15 years she had ben at Masti she had done hee ob well as an individual eon tnibutor, but she had never received any signals that her bosees wanted her to draw on her cultural competencies inorder to lad effectively ‘They are Iegitimating open diseussion. Leaders and tanagers who ave adopted the new paadign ae tak ing the initiative to "yreenlight” open discussion about how dentity-group memberships inform and influence ‘an employee's experience snd the organization's behav Joe. They are encouraging people to make explicit use of background cultura experience and the pools of kiow- ‘ge gined oatsde the organization t inform and enhance their work. Individuals often dose ther cu: tural competencies at work, but ina closeted, almost embarrassed, way. The unfortunate result is tha the ‘opportunity for collective and organizational learning and improvement isles. ‘The eae ofa Chinese woman who worked a & chemist a Torino Food Company lustrates this point Linda was part ofa product development group at ‘Toriano when a problem arose with the favoring of nev soup. Ale the group had made a numberof sien Lie attempt to correct the problem, Linda came up With the solution by setting aside my chemistry and

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