ARE DIVERSITY OFFICERS CHANGING THE FACE OF CORPORATE AMERICA?
November 25, 2005
Are diversity officers really changing the way that companies do business, or is corporate America simply paying lip service to the diverse communities it serves?
Less than 20 percent of Fortune 500 companies currently employ diversity officers, but that number is growing quickly. And experts who have been keeping an eye on this booming corporate trend say that, when it comes to welcoming underserved communities into the corporate fold, including the Asian American community, overall effectiveness varies from one diversity officer, one company and one industry to the next.
JoAnn Mar, assistant vice president of ATM Banking/Distribution Strategies at Wells Fargo and a member of Wells Fargo’s Asian Connection Team Member Resource Group, representing APA employees, credits an aggressive diversity management program with helping 150-year-old financial institution better reflect the market’s ever-changing demographic landscape.
This year, Wells Fargo ranked 40th on DiversityInc magazine’s list of the “Top 50 Companies for Diversity.”
Asian Connection is just one of the more than 70 employee groups at Wells Fargo that regularly advises the company’s chief diversity officer, a member of the human resources team, on policy.
Since it was founded in 2000, Asian Connection has implemented a number of successful programs, including leadership development and mentoring programs for Asian American employees and an internship program for Asian American college students.
Still, Edith Chen, senior director of Leadership Development and Diversity for New York-based Altria Group, believes APAs, along with blacks, Latinos and women, are underrepresented at the middle-management and executive levels of American companies. Altria Group, parent company of Kraft Foods and Philip Morris, ranked first on DiversityInc’s Top 50 list.
“[Their] numbers are large at the lower levels, but their rates of moving into management are low, like less than 5%,” explains Chen. “I think it’s like that at a lot of companies, so that’s what a lot of [the diversity officers] are focusing on right now.”
Forging an unknown path
The focus for diversity officers has changed numerous times since the late 1990s, when CEOs began appointing them to deal with growing numbers of employee discrimination complaints.
Since then, industry leaders have found that mirroring the market’s increasing diversity is a competitive necessity in an ever-more globalized market.
“More and more of these companies are having to build relationships with suppliers and vendors in other parts of the world,” explains DiversityInc co-founder Luke Visconti. “And let’s face it, 80% of the world is not white.”
But without a prescribed route to achieving corporate diversity, the first generation of diversity officers found themselves having to make it up as they went along.
“Yeah, there was no big master plan [for diversity management],” says Paula Lin, a writer/editor at Washington, D.C.-based Diversity Best Practices. “There still isn’t. It’s still sort of a ‘learn as you go’ process.”
“[And] imagine being told, ‘It’s now your job to end racism and sexism and homophobia,’” explains Larry Brinkin of the San Francisco Human Rights Commission. “Wouldn’t you be like, ‘Uh, okay, where exactly should I start?’”
The long and winding road
Many early diversity officers started with the obvious –– recruitment and hiring. Efforts to fill positions with qualified candidates from underrepresented communities were stepped up, and diversity officers strategically partnered with staffing agencies and leadership groups that serve women, people of color and persons with disabilities.
But these efforts did little more than colorize a sector of the workforce. Creating a truly diverse workplace, they soon realized, was going to require applying diversity management principles across the board, from hiring and advancement, to marketing and community involvement, to purchasing practices.
Many large companies, such as Bank of America, overhauled dated marketing strategies and launched multicultural advertising campaigns prominently featuring models of color, and with messages tailored specifically for consumers of color.
“Consumers are now putting more emphasis on corporate citizenship,” explains Bill Imada of IW Group, a Los Angeles-based advertising and marketing firm that specializes in helping companies reach the Asian American market. “They want to see themselves reflected in corporate culture. And case studies show that [multicultural] ad campaigns are generating a lot of new business, and driving incremental share growth.”
First American Title Insurance Company has had similar success with multicultural marketing. A pilot program created by the company’s then-director of diversity marketing, Pablo Wong, was so successful in the booming Bay Area region –– where 6 out of 10 new homebuyers are minorities –– that the program has since gone national.
Wells Fargo’s Asian Connection has gotten more involved in the APA community. For instance, the group sponsors an annual community leadership breakfast that benefits Asian-serving nonprofit organizations.
Altria Group and South San Francisco-based Genentech allocate a percentage of their annual procurement budgets to minority- and women-owned suppliers.
“Diversity is becoming more and more a part of the fabric of companies,” says Lisa Tealer, diversity manager at Genentech. The biotechnology company has consistently been rated one of the most-friendly companies for women, LGBT and people of color.
“At this point, diversity has really been engrained into [Genentech’s] corporate culture,” she adds. “I mean, the patients we serve are diverse, so, as the provider, we should also reflect that diversity.”
Who is calling the shots?
Toni Wilson, founder of AquaInternational, a Bay Area-based leadership consulting firm, says a red light goes off for her whenever she hears a diversity officer or a CEO talk about “reflecting the diversity of the marketplace.”
“I think corporate America puts on a great diversity front,” she says. “And it’s a pretty window dressing, I’ll admit, but I want to know what’s inside the store.”
Wilson, a former vice president and chief diversity officer at the California State Automobile Association (CSAA), believes corporate America should be a lot further along than it is in terms of diversity management.
“Sure, you’ll see more Asians and Latinos and women in the workforce,” she explains. “But where are they sitting –– in an office or a cubicle? When the really tough decisions are being made about strategic directives for the company, how many women and people of color are sitting at that table? One, maybe? I’m sorry, but that’s just not acceptable!”
What’s holding companies back, according to Wilson, is a lack of accountability. She would like to see board chairs become more actively involved, particularly when it comes to evaluating their diversity team’s performance.
“The board will say [to the diversity officer and the CEO], ‘You were supposed to do this, that and the other. Why didn’t you?’ There would be rewards for meeting objectives and sanctions if they don’t.”
But Visconti of DiversityInc emphasizes the role of the CEO, to whom board members often entrust the responsibility of decision making to modify existing company policies.
“The CEO is the one you need to have onboard,” he says. “A company can have a truly farsighted diversity officer, but if the CEO isn’t onboard, forget it, nothing is going to change.”
“I agree 100%,” says Tealer of Genentech. “The support that our diversity council gets from [our CEO] and the Genentech community is what has allowed us to be so successful. [Diversity] is a strategic tool for success, and management recognizes that.”
Altria Group’s Chen says that, based on her experience, upper management is onboard with corporate diversity. Middle managers, on the other hand, have been slower to recognize diversity as a legitimate business concern.
“The upper echelon, they get it,” she explains. “But middle management is where a lot of the hiring and promotions are going on, and they still think of diversity as human resources’ job. That’s been my biggest challenge, engaging [middle management].”
“The biggest barrier isn’t at the top,” echoed Wong of First American Title. It’s at the middle, making them understand that diversity isn’t a social agenda, it’s actually good business.”
Why diversity? Why now?
“Diversity is the science of relationships,” expounds Visconti. “It’s about recognizing differences, understanding them and really utilizing them. The companies that get that are prospering. Companies that don’t, aren’t.”
As evidence, Visconti points to failed telecommunications giants MCI and AT&T, both of which had less than robust diversity management programs. Earlier this year, Verizon, which ranked ninth on DiversityInc’s Top 50 list for 2005, bought out MCI. Late last month, SBC, which ranked 15th on this year’s list, bought out AT&T.
“No one would have predicted that, but that’s what’s happening in every industry across the board,” he says. “Companies drag their feet in regards to diversity management and they get run over.”
Who is leading the charge?
Logic, in this case, does not prevail. Most would guess that progressive industries, such as health care and biotechnology, would embrace corporate diversity. Yet on the whole, it has been the consumer products industry and traditionally conservative industries, like banking and insurance, that have been leading diversity efforts.
One reason for this, says Larry Brinkin of the San Francisco Human Rights Commission, might be the way that diversity management principles are applied. Brinkin says that every company is different, and he believes that diversity officers should be taking advantage of the fact that there aren’t yet any standard diversity management practices to tailor a program to meet their specific needs.
As an example, he points to corporate sensitivity training regularly conducted by HRC staff. He says the curriculum is tailored to each audience: “Training a group of medical providers is much different than training a roomful of auto mechanics.”
Genentech’s Tealer concurs: “Nothing is set in stone yet. So you can customize [a program] to the company. There are a number of different paths that people can take to reach the same goal. And that’s because diversity management is still a fairly new idea.”
How diverse are we?
Chen wants to see more women and people of color moving into middle management and executive positions: “I attend a lot of external peer functions and, very often, I’m the only Asian there.”
Visconti says that Native Americans, transgenders and persons with disabilities are grossly underrepresented at every level of the workforce.
Imada would like to see more diversity on corporate boards: “They’re still primarily older white men. That needs to change.”
Mar of Wells Fargo’s Asian Connection says her group is working to help more Asian American employees get promoted into upper management: “I’m proud of what we’ve accomplished, but we’ve got a long way to go [still].”
‘There are always new opportunities [to make the company more diverse],” explains Tealer. “Every time we meet one goal, we go, ‘Okay, what’s next?’ because we can’t afford to leave any rock unturned. It’s really in our best interest that we tap into all of the different groups.”
“It’s getting better,” adds Brinkin. “[We’re] seeing a lot fewer [discrimination] complaints being filed against big businesses. They’re learning. The complaints that we’re getting now are against the small businesses. That’s what we have to work on next.”
Profile of Diversity Officers
Average Salary: $225,000
Average Budget: $2.3 million
Average Staff Size: 8.2 employees (58% have 4-20 employees)
Average Tenure: 10 years at the company; 4 years in the position
Source: Diversity Best Practices, 2004
“I don’t think any company can say they are representative of today’s world. There’s always room for improvement.”
– Edith Chen, Senior Director of Leadership
Development & Diversity, Altria Group
Birthplace: Hong Kong
Education: Engineering degree, University of Toronto
Started as: Line Manager, Kraft Foods
Hobbies: ?Hobbies? I’m a working mother with 8-year-old twins at home.?
“The biggest challenge [to corporate diversity] right now is retention and keeping the pipeline filled with qualified people.”
– JoAnn Mar, Assistant Vice President of ATM Banking/Distribution Strategies, Wells Fargo Bank and an advisory board member of Wells Fargo’s Asian Connection
Birthplace: Oakland, Calif.
Education: Finance degree, California State University, Hayward
Started as: Project Manager
Hobbies: Gardening
“Companies that embrace diversity and integrate it into their business practices are very successful.”
– Lisa Tealer, Diversity Manager, Genentech
Started as: Lab Analyst
Hobbies: Teaches aerobics for plus-size women
“I think some [middle-managers] feel threatened [by corporate diversity].”
– Pablo Wong, Vice President of Emerging Markets, First American Title
Birthplace: Managua, Nicaragua
Education: Agricultural Economics degree, University of Hawaii
Started as: Director of Diversity Marketing (Before joining First American Title, Wong served as Manager of Community Affairs for the California State Automobile Association.)
Hobbies: Recently appointed by Governor Arnold Schwarzenegger to the California Economic Strategy Panel
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