SCIENCE OR PHILOSOPHY?

There is a phrase that is universally shared by scientists and it goes something like this, "If you can't take your theory to the lab and prove it, using scientific methods, then it is not science. It is philosophy." Personally, I do not know if there is a similar mantra that applies to the world of business management, but there may be.

If a corporation had planned to alter its operating framework, the executive management team would require assurance that the results of the process changes would fall into a predictable and acceptable output range. For example, when Quality Programs were in their infancy, the data was available to support the decision to proceed. Corporations implemented quality initiatives in phases and each phase was monitored, measured and evaluated. What resulted were complete and fully implemented quality programs for which there is a body of data and reports that quantifiably document the benefits that the corporation derived. Based on the fact that the benefits of quality are both profound and proven, corporations the world over have woven quality into every aspect of their operations. Total Quality Management, Six Sigma, ISO900x and many other initiatives have evolved and they flourish today.

SUBTERRANEAN HOMESICK BLUES
Diversity Programs and Diversity Initiatives have many similarities to those in the Quality arena. The most profound similarity is that corporate leaders do not have a choice in deciding whether or not to have a commitment to quality or diversity. It was dramatically demonstrated that companies providing products and services that adhered to quality standards were more successful than those who hadn't. The United States automobile and semiconductor industries were the first to learn this painful lesson, but the dominoes soon began to fall across the corporate landscape. No industry was untouched.

Diversity Programs do not have the same genesis. Corporations are creating and implementing significant Diversity Programs despite the fact that there is a lack of objective documented results that validate diversity as having bottom line business benefits. So, why are the CEOs implementing Diversity Programs now? Why not wait for the management consultants and the researchers at the elite business schools to make the case for diversity before spending the time and resources to develop the programs? That is the way it is done with all other aspects of business management. Why should diversity be different?

Corporate executives do not need to wait for the researchers to do their research and they surely don't need to sit idly by while the management consultants develop an innovative new program. Bob Dylan said it most succinctly in 1965 when he released Subterranean Homesick Blues. Bob said, "You don't need a weather man to know which way the wind blows." Our world has evolved rapidly due to explosive developments in communication, transportation and migration. Just one generation ago, you would need to travel the world to experience the diversity of mankind. Today, simply walk down the avenue of any major US city to have the same experience. Diversity has now come to Main Street USA.

CEOs are not waiting for the "weather man". They can plainly see that the complexion, so to speak, of its current and future employees has changed. The diversity of its customers, suppliers and partners now mirrors the diversity of the world. Therefore, it is intuitively obvious that the time to implement change and start the process of transforming the corporation is now. Diversity is not a program, nor is it a response to societal pressures. It is a business imperative. If diversity is not embraced, where will corporations get their employees to sustain and grow the company? Where will its future leaders come from? How will they effectively relate to their customers and clients? Failing to embrace diversity in today's world might be viewed as a self-imposed corporate death sentence.

INTRODUCING...ZERO & MINUS

Since it is so obvious that corporations, government agencies and universities should aggressively pursue a policy of diversity, it would seem equally obvious that the benefits will be significant and apparent. But, they are not! Corporate America is still waiting for someone to generate a documented study that is scientifically sound which will showcase the business benefits of diversity. The wait goes on.

There is significant anecdotal "evidence" that a diverse corporation or institution is benefiting from its diversity initiatives. One of the most profound statements on diversity came from a group of former leaders of the United States military, filing a brief with the United States Supreme Court in support of the University of Michigan Law School. The brief argued that a diverse officer corps is essential to national security. In essence, they have deemed diversity to be a critical asset. Obviously, if the military leaders have determined that diversity is an asset, they would not want it eliminated. Assets should be increased and their value maximized.

To date, there has been a dearth of documented benefits attributed to diversity that resulted from the application of certifiable research methods and processes. To gain some perspective on why that is happening, let's go back to the dissertation on quality. One aspect of quality is that when a change is made to the process, no matter how small, an analysis is performed to determine the quantifiable results of that change. Since the change was made to correct, improve or optimize the result that is what is to be expected and anticipated. This being science, not philosophy, there is always the possibility that the change made to the process will not generate an improvement in the outcome. In fact, it might degrade the result. Those are possibilities that are not desired, but may occur. Note, in the case where a process change neither improves nor reduces the outcome, the change may still be warranted if that change simplifies or streamlines the process.

In quality programs, it was the processes and the products that were subjected to analysis and inspection. These "objects" are not offended when they are objectified and analyzed. People, on the other hand, are not comfortable with such scrutiny. For that reason, Corporate America is exhibiting symptoms of The Elephant in the Room. In the case of diversity, there are actually Two Elephants in the Room. One elephant represents the fact that, despite the best efforts and good intentions of everyone involved, Diversity Programs may not yet have any measurable business benefits and those "facts" might not yet be acknowledged.

The reason that the second elephant is standing in the room is to remind everyone that Diversity Programs may actually have detrimental effects on the performance of the corporation. For those reasons, the names of the elephants are Zero and Minus.

DIVERSITY ROULETTE

The true measurement of diversity's impact must be made relative to standard business metrics. To name a few, they are Revenue, Market Share, Employee Productivity, Return on Assets and Return on Investment. There are other criteria by which Diversity Programs can be measured, but they are outside the sphere of Operational Impact. The measurements and analysis have primarily focused on the Diversity Enrichment Zones, i.e. Affinity Groups, and the Diversity-Enhanced Management Systems. These will be discussed and illustrated later in this article.

Since the business imperative for diversity was based on the changes in the makeup of the population, evaluating its impact could be delayed for later study. Diversity Programs are now entering Phase II of its maturation process. At this juncture, what results could one rightfully expect? Because there are no scientifically certifiable studies that have been completed, the impact of diversity may simply fall into the ranges of probability. One-third of the diversity programs may yield positive results, while another one-third are yielding no apparent results and another one-third are actually having a negative impact on previous performance.

Due to corporate inertia, these probabilities might be skewed to the middle of the curve. That would make Zero the Big Elephant in the Room, but Minus is standing close by.

The experience and skills of corporate leaders is what gives them the ability to exercise corporate governance, not corporate gambling. In the case of diversity, are the CEOs taking a gamble on the expected results of their diversity initiatives? That seems doubtful. At this juncture, most Diversity Programs are reaching the level of Organizational Impact but the CEO must now focus on its Operational Impact. For that, the area of concentration must be the dynamics that take place in the workgroups. Most large corporations have spent years developing and optimizing an operating style which has enabled it to achieve its goals and objectives. I refer to the "mechanics" that drive the workgroups as Operational Engines. These engines were designed and "tuned" to provide the greatest efficiency and maximum power. In business-speak, that would translate to be the most efficient use of time and personnel, while producing the maximum Return-on-Investment.

As a result of corporate Diversity Programs, the fuel that drives these Operational Engines has been altered. The engines are still running, but the octane of its fuel has been changed. Diversity Programs must now be extended to the Operating Groups. Since the fuel has been enriched with the octane of diversity, it is important that diagnostic checks be performed on the engines to determine if they are performing at, above or below historic levels of efficiency and power. Depending on the data, there may be a need for an engine tune-up, overhaul or replacement.

As a rule of thumb, the number of Diversity Enrichment Zones should approximate the number of Affinity Groups represented in the population, and the number of people in each zone should equate to that group's percentage within society. On a global scale, multinational corporations should have a correlation between these factors. However, on a local level there may be wide variations in the number of zones and the number of people in each zone. For example, a corporation, which has its headquarters in Japan, would have fewer Diversity Enrichment Zones when compared to a corporation based in the United States. Each corporation deals with its employee, supplier and customer base at the local level, where the degree of diversity can vary greatly. Whether the company is operating in a highly homogeneous or dynamically diverse location, the CEO will be measured per the standard criterion of corporate performance.

On this basis, we can begin to understand why diversity cannot have assumed advantages and benefits. As the illustration shows, diversity is one element that affects corporate performance. Only through the application of diversity assets into the corporate operating engines can one measure the upside, downside or negligibility of diversity on performance indicators such as ROI, ROA, Sales and Market Share. Corporate leaders do not manage their assets in isolation, but in systematic symbiosis. The objective is to enrich the fuel, as well as to design and operate the best engine. The fuel potential can only be measured in the kinetic context of running the engine. Engines cannot be tested unless they are consuming fuel and generating power.

DIVERSITY-OPTIMIZED ENGINES

If there was a direct corollary between degree-of-diversity and corporate performance, a cursory evaluation would demonstrate that the most successful corporations reside in the countries, and the areas of a country, that have the highest degree of diversity. Look no further than Toyota and you will understand that this would be an unfounded hypothesis. Toyota has done what all successful companies have done for over one hundred years. They set goals, create plans and acquire the necessary assets to execute the plan and reach the goals. They develop the systems and processes to accomplish those objectives. The systems/engines for which we have interest are those that define Organizational Development, Organizational Operations and Organizational Optimization.

PAINTING STRIPES ON A HORSE AND CALLING IT A ZEBRA

Would anyone think to put jet fuel in an automobile fuel tank and anticipate that the car's performance would improve? Of course not! Jet fuel was refined and processed with one purpose...power a jet engine. The list of analogies could fill a page, but the object lesson will be the same. The fuel and the engine must be chosen and designed with the other in mind. When the two are brought together to fulfill their destiny, their performance must be monitored to ensure that they work properly and efficiently. Control systems are put into place to perform diagnostic analysis and tuning.
As long as conditions remain relatively constant and predictable, it is possible to tune a corporation's operating engines to the degree of precision found in the engines of the highest performance racecars. Unfortunately, in the corporate universe, conditions do not remain constant. Metaphorically speaking, the fuel changes as well as the demands placed on the engine...today it is speed and tomorrow it is torque.

For the corporations who have chosen to be leaders in the field of Diversity, it is now time to create tangible, measured and documented benefits from its diversity initiatives. Unless the engines that drive the operational infrastructure is comprehended in the analysis, the ability to prove that diversity has bottom line benefits will remain elusive. As the scientists would say, "it's only philosophy."

Until CEO's tune-up, overhaul or replace their operating engines, the tactical and strategic potential of diversity will not be realized. Zero and Minus will still be in the middle of the room, whether or not their presence is acknowledged.

POOF! GO THE PACHYDERMS

A collaborative decision-making methodology has been specifically developed to enable diversity programs to realize their operational potential. Cramer's Cube creates a dynamic environment within which all members of a workgroup are given the opportunity, actually the responsibility, to contribute their unique talents, uniqueness and insight to important team assignments. The engines that drive Diversity II will utilize the principles of Cramer's Cube to create solutions that are innovative and possibly revolutionary. Workgroup members achieve a level of pride and satisfaction, seeing that their talents have been applied to practical and important assignments that impact the bottom line.

Vincent M. Cramer is the author of Cramer's Cube. He is also the founder of Winchester Consulting Group, an Organizational Development and Training Company specializing in the principles of Cramer's Cube and its application to Diversity Asset Management™.