For CIOs, An Uphill Climb to Diversity

By Edward Cone  |  Posted 07-14-2008

For CIOs, An Uphill Climb to Diversity

Outsourcing a health-plan service center to India provided the expected business benefits to the CIO of one Fortune 500 company. But it also brought some unexpected problems back at headquarters in the southeastern United States.

"We've heard jokes--more than jokes--about not being able to understand the accents of people at the call center," says the CIO, who asked not to be identified for this article. "Our team decided that we had to make it clear that we won't accept that kind of behavior. Our business case is that in today's environment, you have to be able to accommodate different cultures and lifestyles."

The matter was discussed in leadership team meetings, with managers expected to communicate the company line to their own staffers. Surveys, interviews and call tracking were used to determine the extent to which real language barriers existed. In a small number of cases, where the mockery was "severe and pervasive with an individual," the CIO says, the behavior became an issue for human resources.

Diversity has become a byword of good management in corporate America, with information technology organizations intoning the mantra as often as anyone. "Diversity is a characteristic of a good group," says Ken Harris, CIO of Shaklee Corp. "Part of an IT manager's job is understanding diversity and allowing it to flourish."

Yet diversity is proving to be a moving target, and, in some cases, an elusive one. The IT workplace is a less diverse place by some measures than it was at the beginning of this decade, with many of the gains made by women, blacks and Hispanics reversed in recent years, even as IT employment among Americans of Asian descent soared.

Adding to the difficulty is the fact that the understanding of diversity itself is dynamic: workers and companies cross borders freely in a global economy, bringing their own habits and expectations with them, increasing the complexity of the diversity equation in the process. A changing culture has pushed the issue of sexual orientation from taboo to workplace reality, while familiar themes such as age and generational differences have come to be understood as diversity problems. "The targets shift all the time," says Alice Leong, head of global diversity for SAP.

Sexual orientation, once unmentioned in the enterprise, is now part of the mainstream of corporate culture. "We've seen great changes," says Samir Luther, senior manager for the Workplace Project for the Human Rights Campaign Foundation. More than 90 percent of Fortune 500 companies now include sexual orientation in their diversity and nondiscrimination policies, as do many smaller companies and nonprofits.

American companies also have been successful in extending protections for gay workers around the world, although there are still countries that are hostile to the concept. Luther points out that the broadening of diversity is not over. About 35 percent of Fortune 500 companies now have policies that include gender identity and transgendered people.

Tech is Tough

Tech is Tough

Technology may be tougher to diversify than some other disciplines. For one thing, IT shops have a history of being largely male in makeup, with a certain boys'-club reputation. The indirect communication of the computer age doesn't help, either, says Lenora Billings-Harris, a consultant and author based in Greensboro, N.C. "It makes the job of achieving diversity and inclusion even harder, because people are disconnected from the opportunity to create relationships," she says. (For more, read "A Tale of Two Cultures")

Yet, IT has real incentives to value diversity, including the fact that technology staffers have to work with people from all over the enterprise, often globally. Shaklee's Harris says he's seen results of dealing with an overseas outsourcer vary, based on the specific individual in charge of the relationship.

Beyond the practical, legal and moral drivers, diversity is a bottom-line issue. IT shops can't afford to exclude large groups of skilled workers. "It's about maximizing talent, which is the core of innovation and competitiveness" says Ted Childs, the former director of diversity at IBM.

But good intentions alone won't enable CIOs to achieve and sustain meaningful gains in diversity, or to keep up with a workforce and a larger society that continue to change over time. "Most people think that if they just get a bit more educated about people who are different from them, everything else will fall into place," says consultant Billings-Harris. "That's a myth. It's not enough."

Thus, many organizations turn to newer, more purposeful approaches to achieving and managing diversity. These approaches include tactical moves, such as changing the way interviews are conducted, as well as structural changes such as the creation of diversity officers. In some cases, senior executives are playing a more visible and sustained role in the effort.

Above all, the shift is toward recognizing diversity as a cultural issue--both the cultures in which companies and individuals operate and the cultures of the enterprises themselves. The goal, SAP's Leong says, is "a cultural evolution" toward a truly diverse workplace.

Diversity Ebb and Flow

Diversity Ebb and Flow

Several years ago, a new hire came to the United States from a conservative Middle Eastern country to work in a management development program at a huge multi-national company. "He was completely overwhelmed by the workplace," recalls his American boss, who has been a CIO at a global 100 company and asked to remain nameless in this article. "He couldn't deal with women. He started out by locking himself in his office, and then he stopped coming to work. We sent him home after about three weeks."

Today, the executive says, the process for hiring people across cultures would be more rigorous. It might involve video interviews, for example, with diverse panelists (including women) on the call. But the story says a lot about the challenges of creating a diverse workplace in a global age. People from different backgrounds may not be comfortable with the corporate culture of American and European firms, whether they hire on in Western countries or go to work in a local office closer to home.

At the same time, diversity gains taken for granted in the United States are not set in stone, and there, too, globalization plays a role. Since 2001, the number of African-Americans in IT has gone down by 25 percent, even as overall IT employment has increased. A survey conducted for the Information Technology Senior Management Forum, a group of black IT managers, found that many black workers essentially viewed the IT workplace as unwelcoming to them and saw limited advancement possibilities.

"Midlevel managers have a sense that there's a lack of opportunity for people of color--and more specifically African-Americans--in IT," says Viola Thompson, the group's executive director. Meanwhile, the perception that entry-level positions are being lost to offshoring and outsourcing is leading African-American students to shun IT. "They don't see the opportunities to excel," Thompson says.

The number of women in IT, meanwhile, dropped by nearly 8 percent during the same period. Workplace environment seems to be a factor here, too, with many women finding that male-dominated IT shops are not a welcoming place to do business.

"I don't see it as bias in the management ranks so much as less sensitivity than is needed to create an environment people want to be in," says Shaklee's Harris, previously CIO at the Gap and Nike. Either way, the trend is troubling.

A study done by the Center for Work-Life Policy reports that the fields of science, engineering and technology are "hostile to women in general," says Karen Sumberg, a staffer at the organization and co-author of a Harvard Business Review report called "The Athena Factor: Reversing the Brain Drain in Science, Engineering and Technology." Sixty-three percent of women surveyed by the group said they had experienced some form of sexual harassment while working in those three areas.

In other areas, Shaklee's Harris says, more overt bias may work against diversity. Age is one example, with older workers feeling squeezed by management and disrespected by their younger colleagues.

Former IBMer Childs points out another problem area, saying the two groups most likely to be disenfranchised in today's workplace are "the disabled and gay communities." But he adds, "It's becoming understood that there is a lot of talent there."

Here again, globalization can exacerbate some issues. Sumberg of the Center for Work-Life Policy puts it bluntly: "By American standards, some places are in kind of a time warp. If someone comes here from another country and finds a culture that makes them uncomfortable, it's a problem for everyone."

Translating company values globally while remaining respectful of local cultures is a major challenge. Says Shaklee's Harris, "People form worldviews based on the environment they grew up in--not just the obvious things, but things like having either an abundance mentality or a shortage mentality." Reconciling different worldviews is a key to managing diversity.

Leading the Charge

Leading the Charge

One critical element in building a culture of diversity is leadership from the executive suite. When the Information Technology Senior Management Forum held its quarterly meeting in May, financial giant UBS sponsored the event and sent top executives to discuss goals for diversity. UBS brass also participated in an earlier event for the Hispanic IT Executive Council.

At a different ITSMF meeting, Cisco CEO John Chambers spent more than an hour discussing diversity. He also initiated a program to increase diversity at Cisco's executive level. Since the effort began in April of 2007, the company has hired 23 new vice presidents, and 21 percent of them are women or minorities.

"That's one way to get it done, with the tone at the top," says Sumberg of the Center for Work-Life Policy. "Chambers is charismatic and involved, and he says 'make it happen.' Without that, the message gets muddled in the middle layers."

Leadership from above can take many forms. For example, SAP's Leong has spoken to CEO Henning Kagermann about increasing the visibility of the company's diversity at shareholder meetings, so that all stakeholders can see diversity modeled by and for the company's owners and managers.

Bob Greenberg, the former CIO of Nissan, says one way to inculcate the concept of diversity throughout the employee ranks is by making sure that people are really working together. "You put people on a plane [to meet with co-workers], you let them learn by doing and interacting," he says. "You have to be willing to make mistakes. In the end, people will react differently to people they know and trust."

Says the Fortune 500 CIO who dealt with call center issues, "We make it clear during the interview process that we are looking for people who can work in multi-national environments. Are they strong enough to work with strong personalities, to share their opinions and influence decisions?" The CIO's leadership team, which was made up exclusively of white men just a couple of years ago, now includes three women and an Asian-born regional CIO.

Once a culture of diversity is established, other critical elements that come into play are hiring and team-building. "You have to set rules [when hiring], including ones that address things like gender and sexual orientation," Billings-Harris says. That's true no matter where in the world you operate. "You don't go into another culture trying to change it, but you do need to say that if you come to work for this company, there are some basics that apply."

The HR department becomes very important in this context, as a conduit for helping people understand expectations and consequences. "This might mean hard choices for senior managers," Billings-Harris adds. For instance, it might require replacing workers who are productive on the job but disruptive socially, because that kind of behavior can lower the performance of the larger group. It may even cause newly hired workers to quit, and replacing them could be quite expensive.

The hiring process can be challenging. "You have to be careful that your perceptions aren't colored by what you see," former Nissan CIO Greenberg says. "It can be a sensitive judgment call you have to make, to reconcile in your own mind whether you're being biased or you really sense a potential lack of fit on your team."

Shaklee's Harris has used the Myers-Briggs personality assessment to put together inclusive teams. Diverse groups, he says, "tend not to be as harmonious as a bunch of clones." To make it work, the manager has to let everyone know that any idea can be put on the table and will be greeted with respect. "You can challenge the idea, but not the value of the person who puts it forward," he says.

Changing Corporate DNA

Changing Corporate DNA

SAP launched its diversity office in the summer of 2006 as a response to its rapid growth around the world. The program at the software giant does not focus specifically on gender or race relationships, but instead on what Leong calls "intercultural relations."

Why the careful wording? Starting with charged topics can put people off, she explains, while culture is more "relatable" in a business context. "Our definition of diversity is diversity of thought," Leong says. "The concept of culture is much broader than a national boundary. One department in a company can have a different culture than another."

The program, offered to teams with as few as six people and as many as 150, has been marketed across the company largely by word-of-mouth recommendations from groups that have been through it. Formal courses are available through the in-house educational function, SAP University.

Diversity training has a certain eat-your-spinach reputation, and creating a diverse culture is still an uphill climb. "I was more Pollyannaish when we started," Leong acknowledges.

Building a diverse organization requires more than diversity training. The Information Technology Senior Management Forum encourages employers to take a proactive approach to retain minority staffers and support their advancement. According to Thompson, this includes exposure to internal and external leadership programs and a deliberate effort to put African-Americans in positions where they can prove themselves as executive material.

The ITSMF offers professional development programming of its own, and also pairs midlevel managers with senior executives in mentoring relationships. Since that program began four years ago, about 30 percent of managers participating have achieved promotions within their firms. "That's a good number, but we'd like it to go higher," Thompson says. In March, the Forum launched a series of events on college campuses, in which CIOs meet with students in business and IT programs to discuss career paths and opportunities.

In the end, managing diversity is a mind-set that requires buy-in from across the organization. Consultant Billings-Harris advises companies to focus on four areas if they are "serious about making diversity and inclusion a foundational piece of corporate culture." Those areas are knowledge, understanding, acceptance and behavior.

Most organizations start out with the expectation that diversity should be a goal. "They have diversity seminars, feel good stuff, celebrations," she says. "It's the lowest risk, and it has to be done first, but it's not enough to retain people who might feel on the outside."

Understanding, the second phase involves moving past the "what" of differences to the "why"--the reasons people believe and behave in disparate ways. It means focusing on personal interactions, like mentoring, across groups. Companies that reach this level tend to be more successful in attracting and retaining a diverse workforce, Billings-Harris says.

Acceptance, the third level, involves putting understanding into practice. This includes practices such as putting together teams that are diverse in makeup, so that "respect and inclusion are built into the fabric of corporate life," she says. When that becomes routine, a company moves to the fourth level, where diversity is part of the behavior of the organization.

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