June 22, 2020

Dissecting Diversity

Dissecting Diversity

“The catalyst for my research on diversity and inclusivity in the workplace was actually skepticism”…”Diversity is more of a choice behavior among companies in terms of a philosophical bend that values difference and tries to leverage that difference toward organizational aims.” Patrick McKay, Fox Department of Human Resource Management

What does a commitment to diversity mean? Is it just whatever a business, organization or government says it is? Is it about embracing everyone for who they are regardless of their differences? Stanley and Franny Wang Professor of Human Resource Management Patrick McKay dives deep into the meaning of diversity and the pitfalls employers fall into when talking about the word.

Many companies treat diversity as nothing more than a buzzword. Employers often state that they are “working on their diversity initiatives” or “creating a pathway toward more inclusive behavior in the workplace.” While that’s great to hear, what does it actually mean? Are these companies truly taking these steps?

While hiring employees from different backgrounds is a great idea when applied appropriately, creating a culture of diversity is more important than checking off boxes on a spreadsheet. There is more behind the world of inclusivity than ideas like “blind” hiring and fairness practices. 

In this episode of Catalyst, the podcast from the Fox School of Business, we sit down with subject matter expert Patrick McKay of the school’s Department of Human Research Management. He discusses what creating a culture of diversity and inclusivity entails and illustrates why practices like blind hiring are not the solution to our problems.

What are the hard questions that company executives should ask about their diversity and inclusion efforts? And, most importantly, what stops business leaders from asking these questions? These and more questions are answered by McKay in this episode of Catalyst.

Key Links

Catalyst is a podcast from Temple University’s Fox School of Business about the pivotal moments that shape business and the global economy. We interview experts and dig deep into today’s most pressing questions, such as: What is the future of work? Will the robots really take our jobs? And how is my company using my data? We explore these questions so you can spark change in your work. Episodes are timely, provocative and designed to help you solve today’s biggest challenges. Subscribe today.

Podcast Transcript

Host: Welcome to Catalyst, the podcast of Temple University’s Fox School of Business. I’m your host, Tiffany Sumner. Companies all over the world loudly boast about diversity initiatives, but as we’ve seen in recent weeks, there is a need for real change at society’s core to have justice and equality for all. Today, business leaders and executives are in a unique position to help address these larger societal challenges. 

Patrick McKay, [00:01:00] Professor of Human Resource Management at the Fox School, offers his take: addressing diversity checkboxes doesn’t matter as much as changing the cultural climate of an organization. Companies that are tackling diversity with hiring initiatives or training days may think they are taking the right steps but Patrick argues that it takes more than that. 

On this episode of Catalyst, we will discuss the common diversity and inclusion pitfalls companies fall victim to and why focusing on percentages or demographics doesn’t work. Plus, we discuss why remote work and the coronavirus era might make inclusive climates harder to achieve. Patrick and I had this conversation on May 22, a few days before George Floyd was killed. The political and social unrest made this topic even more important for us to continue in the workplace. 

Patrick, what is an organization’s diversity climate? 

Patrick: An organization’s diversity [00:02:00] climate is primarily employees’ perceptions that an organization is fair and inclusive of all employees regardless of their demographic or social background. And so, it’s really a place that is fair and accepting of differences of its workforce. 

Host: So, how is this different than the metrics that a typical diversity initiative might track?

Patrick: Well, it’s primarily different because a lot of the diversity management space kind of was founded on federal compliance. With the equal employment opportunity commission, where you had to meet certain numerical targets based on protected groups, gender, race, different age groups, what have you. And so, companies primarily were focused on numerical targets, on making sure they can keep their federal contract to status and keep doing business with their government. Versus, diversity climate being more of a philosophical focus based on a value of difference [00:03:00] and seeing its potential influence—and more importantly, positive impacts on company functioning. So it’s two different things. One is kind of externally imposed on the company, EOC compliance versus diversity is more of a choice behavior among companies in terms of a philosophical bin that values difference and tries to leverage that difference toward organizational aims. 

Host: So, in order to achieve that, what are the hard questions executives should ask about their diversity inclusion efforts and what stops them from asking these questions?

Patrick: They should ask: Why are they having a problem managing diversity? Why is there no representation of certain groups in the firm? Why are these groups repelled by this company? Why do they have a history of women not making it to management? Why do they have a history of few minorities employees ever being retained? And funny enough, it [00:04:00] comes back to compliance. A lot of times, they don’t want to ask that question because they don’t want the answer to be discoverable in data. I’ve had that said to me a lot of times with companies like, “Hey, look, we don’t want this to be a potential subject of discovery and a discrimination case.” So, they don’t want the data and that’s the problem. 

With diversity management, you need to have data to make decisions on it and realize that we are not doing well in certain respects in terms of managing diversity—maybe certain groups have more negative attitudes about the diversity climate in the firm or the business unit. So that, not being afraid to collect that data and more importantly, act upon it. A lot of times, I guess that’s a second example, they don’t want to have the data because they realize that employees will expect them to act on it. So, during that organization survey, they expect some responses to whatever the data suggest [00:05:00] and so, it’s those things, they don’t want it to be discovered, and they don’t want to have to act on the data or information that they receive. 

Host: So, avoidance, resistance to change. What are some of the other pitfalls for diversity inclusion that you’ve encountered as a researcher or as a consultant when working with companies?

Patrick: I guess it’s primarily this fetishizing of it. I guess you can say that they think it’s this magical thing that’s going to result in all of these great outcomes. Not realizing the work it takes to truly implement it well. I think people underestimate it. They really think it’s this easy thing, they can say the right things, they can say the right words—and not realize that involves embodying the principles behind it and the work that it takes and the commitment it takes to changing a company philosophy in terms of how to do business. So, I think it’s that, they think it’s this easy fix, say the right things to the groups that are affected by it you know will fall in line. [00:06:00] Then, not surprisingly, when people aren’t responsive the company’s kind of befuddled by it, it’s like, “What did we do wrong? We had Diversity Day!” Like yeah, but it’s diversity day, it’s not fundamental, it’s not a quick fix. 

Host: So, Patrick, can you talk to us a little bit about the types of research you’ve done in this area?

Patrick: Yes, I’ve studied this extent to which diversity climate influences various worker and business unit outcomes. For example, for employees I’ve looked at retention. There’s a diverse climate and how managing that well reduces turnover. I’ve looked at the effects of diversity climate on group differences in sales. So for example, there’s research that shows that racial groups may differ in their job performance and I looked at diversity climate, as a factor that might influence that and found that climate — stores that have more supportive diversity climates have fewer or smaller differences in performance—in particular, [00:07:00] sales per hour. So, it’s a really hard metric and so you have more parity in terms of performance across groups and it benefits the company overall. 

I’ve found that diversity influences customer satisfaction, so even third parties are affected by how well the companies manage diversity. And so that treatment spills over to the client,which is a very important thing to know, and it’s things like sales growth and a bunch of other outcomes. It’s really been a consistent set of findings that having supportive diversity climates leads to good things for companies.

Host: That’s great, and has your research focused in particular on one or two industries?

Patrick: Yeah, primarily in retail and that was really an access thing. It was a company that was interested in studying it and they were looking to see that diversity climate influences sales performance within their store units. And what I found was that store units that manage diversity [00:08:00] better outperform their fellow stores, so it’s a very consistent set of findings across these different stores.

Host: That’s an interesting finding. Can you tell us a little bit more about that? What did your research show and what were the key indicators on how inclusive climates or how stores with inclusive climates outperform their less inclusive peers?

Patrick: Well, the logic behind it is that, when you treat people fairly and include them, they see that it’s organizational goodwill. And so they are almost compelled to reciprocate that goodwill by doing what the company values and so they’ll perform to the benefit of the company in terms of customer satisfaction or customer service. And that could lead to things like better customer satisfaction, which would of course lead to sales, better personal performance from a motivational standpoint because when people are treated well, they work harder and they’ll work harder on behalf [00:09:00] of the company when they feel as though they’ve been treated an as equal and value, all sorts of things. So, it’s a basic principle. Treat people well and they will work harder for you as a company. So that’s been, kind of, the simple answer so those stores who manage it well, they get better efforts out of their employees which translate into better overall business outcomes.

Host: For the companies who are doing it well, what are they doing that works?

Patrick: The main thing they are doing is prioritizing it from the top down, so from the executive’s suite, down to the store, you know, employees or what have you in a given company. It’s prioritized and there’s policy built around diversity as a strategic objective, those are companies that are doing well. So, they may have a diversity recruitment initiative that advertises jobs very broadly to attract an array of people that just—a single group or a small set of groups. They may have things like retention benchmarks [00:10:00] for managers to reach so when they have a diversity initiative, they have to retain a certain percentage of those people or you don’t get as large a bonus. So, the idea is that you have to have policy built around reinforcing diversity as a strategic objective. I think, absent that, the diversity effort will fail. 

Host: What can leaders do to cultivate an inclusion climate?

Patrick: They have to embody a diverse climate in terms of managing a diverse climate. As a principal of the organization, it has to be a fundamental part of how the organization runs. So from the top down when they start recruiting, they have to have diversity in mind. Like, “We are going to make sure that we advertise our jobs to a broad, you know, set of people because we realize that talents can come in all forms and can come from different backgrounds.” It’s not a view where there’s only a single—certain individuals that can contribute. We have a view that people can broadly contribute and most importantly, those broad [00:11:00] ideas and diverse ideas can lead to organizational insight so that’s the main thing. You want different perspectives to bear on the work of the organization and that’s where innovation comes from, creativity and so it’s really that. Seeing diversity is truly a value versus something that’s fattish or ticking a box or legal compliance is another this one. So, it’s got to be seen as something they are truly valuable and invested in.

Host: When you’re changing an executive’s mind, I’m sort of curious, does it tend to be a lack of awareness? Or another point of view that is impairing them to commit more to a diverse and inclusive cultural climate?

Patrick: Well, I guess it’s kind of both. I guess the first thing is that they are unaware, they don’t realize what it takes to truly manage diversity well and more importantly I think they are focusing on the outcomes of it that they have heard in the popular press—oh it’s a great thing to do—not realizing what it takes to get there. So we [00:12:00] don’t realize that it really takes special forms of management to deal with all of this difference. Because from my sociology background, by default, different groups don’t like each other, that’s the default. We don’t like those people, whoever they are and so with that as a default. It’s just downright silly to expect to get all of these different people together and then magic is just going to appear out of the sky. No, you have to manage that well and make sure people are on the same page, that you can build trust, that you can trust your colleague and share information and think they have something of value to say versus excluding them or versus ignoring them, dismissing what they say. Because that’s the tendency, because “those different people are bad,”—I mean, that’s how we’re raised, so they don’t know those dynamics. 

I come at it from that perspective that the default is that diversity is going to fail and that should be their default when they approach. And so the idea is building a climate that will help it succeed. 

And that leads to my second part of my answer [00:13:00] . They don’t want to do the work, they have to change who they are and they like being who they are. We are this potentially sexist, homophobic, racist organization and that’s what we are comfortable with. We don’t want to have to be sensitive to other people’s needs and not say sexist, racist, homophobic things in the boardroom and crack crass jokes that they laugh at but our colleagues feel uncomfortable. It takes real work, that’s the impediment—it takes a true cultural change in terms of how the organization runs to make diversity a priority and manage it well. And I think that’s the bigger impediment than the ignorance—they don’t want to do the work.

Host: And so, it comes down to performance, right? I am—I perform better, my company performs better, we’re better in decision making. I’ve seen a lot of data about decision making and saying that a diverse and inclusive brainstorm is going to lead to better results because you have different perspectives. But also, it becomes about the bottom line, right? There’s [00:14:00]—I’ve seen a lot of executives say this in thought pieces and in the media, in their research just—it’s good for business. And part of that comes from a happy productive workforce right, like, this is instinctive in itself because it makes people happy. It makes people feel they have a stake in the game, their performance is going to get better, you’re going to get more out of them. 

But it does sort of seem like it to me, as a fairly progressive person there’s also a moral—I hope there’s a moral pressure, right? Like I hope this is a little bit of a moral issue. It doesn’t take us at Fox and at Temple, we really do try to focus on diversity, equity and inclusion in our strategic plan, to sort of say, “This helps our bottom line,” but the fact of the matter is—and I think you’re coming at this from a really realistic place—it’s that, it does take some organizations to have that motivation in order to change. 

Patrick: Absolutely, that’s the point. It takes that level of energy and commitment to it. A lot of people want a [00:15:00] quick fix and that’s why they call me and they expect me to tell them that. And I disappoint them by saying, “You have to change who you are. You can’t operate the way you did in the past and expect your diversity initiative to succeed, it’s not going to work that way. It takes a change at the foundation, you have to rip it.” It’s almost like renovating a home, you have to rip everything out and change it because you can’t have that same structure and expect it to succeed. And so, you’re spot on. It takes a commitment that a lot of companies aren’t willing to make. 

Host: And a personal commitment, I think, among leadership, to actually say, “What are my unconscious biases?”—because we all have them, and that’s part of the work right? So, it is fascinating in this period of time that’s the work that we are doing and that’s actually equated to being a good leader and a successful company. Sort of being rebuilt into the fabric of the 21-century business mindset.

Patrick: Absolutely. And then the current workforce [00:16:00] of millennials, and beyond them, are going to demand it. They don’t hold those same attitudes that some of the early generations held in terms of being, kind of, separatist and stereotyping and operating under a prejudiced mindset. They’re more open minded and they’re going to respond more favorably to companies that exude those qualities. And so that’s another consideration—that you’re going to have trouble recruiting people that would be really strong contributors if you’re a company that practices these old “isms,” like sexism, racism, pick one. These new generations expect more of companies. They place more social dependence in terms of social welfare, social responsibility on companies than previous generations. 

Host: Yeah, we’ve definitely seen that especially in entrepreneurship and the types of businesses coming through the Fox School. Lots of socially conscious [00:17:00] organizations, lots of them are climate-minded or have some kind of philanthropic type of component to their business model. But diversity, equity and inclusion, I think, is really, really also a part of what—it’s not something you can opt out of having. You have to for them to have any kind of allegiance to your brand. 

So, something else millennials like is remote working. Now that we’re in the land of COVID-19, and hopefully recovery, people are behaving differently than they have in the past, where we are all remote, are gathering less and less often. How do you think COVID-19 and its effects will change the progression of diversity and inclusion in the workplace? 

Patrick: Well, it’s kind of twofold. I guess it could have positive effects in terms of workplace flexibility, in terms of scheduling. For employees, the downside is less contact between different people and [00:18:00] one of the mainstays of intergroup behavior that has helped reduce conflict is contact. The more you get to know someone—the old saying is “Familiarity breeds attraction.” And so being around that different person over time and seeing what they’re about and realizing the deeper level commonalities beyond the surface level difference is what brought folks together. So the thing that, kind of, concerns me is that working remotely, there will be less contact and so we won’t reduce or won’t break down those surface-level barriers based on skin tone, gender or whatever that might be. And so, we might operate more under our, kind of, surface-level biases because of differences. Versus if we operate more in terms of awareness of someone because of prolonged contact and getting to know them and seeing their deeper level values and how similar they may be to you then you might realize on the surface. 

Host: How do [00:19:00] you encourage a diverse workplace in a virtual environment?

Patrick: I think you try to encourage contact and discussion. I think it’s—that’s where you kind of break those surface-level barriers. Again, it’s kind of getting to know someone. And maybe it’s not just talking about business. Maybe it’s talking about kind of social things of personal interest. Find ways to bond with someone beyond just workplace issues. Because a lot of times once you get past, peel back that layer, you realize, “We’re more alike than we are different.” Everyone, kind of, has these core similar concerns in their lives and getting at those can break down some of these surface barriers that we maintain because of just who we are. We’re kind of threatened by difference in a sense because of unfamiliarity. Once you become familiar, it’s less threatening. 

Host: Do executives at some companies have a fantasy that they are doing diversity and inclusion better than they actually may be doing it? [00:20:00] 

Patrick: Well they’re—it’s funny you ask that. There are publicized cases of it—that I won’t name to protect the guilty—but yeah, there are companies who won diversity awards but had discrimination and class action suits against them. I’ll hint at a large soft drink company, I’ll say that. But yeah, it’s laughable right because they’re counting the metrics, “Oh yeah, we have this many managers that are minority, blah blah.” Yeah, and they hate it there! 

And that’s the point, they’re stuck on the numbers and not realizing that the climate that you can’t touch is far more powerful than the number of different people in the room. You can feel the climate, you can walk in the wrong business or the wrong neighborhood and feel you’re not supposed to be there. The same things happen for a lot of protected groups that work every day. They walk in a place and realize that they are not safe there and that’s far more powerful than counting the number of people that are in the room. [00:21:00] 

Host: And what would you say to those companies in particular who seem to think they are doing it well but you can see clearly and feel clearly that they are not? How do you challenge them to actually really re-examine themselves?

Patrick: Well, they have to look at the fall out of the mismanagement. Are the retention rates that are higher among disenfranchised groups than non-disenfranchised groups? That’s an easy one to look at. A lot of times, the research suggests—because I’ve done internal research—suggests that members of protected groups turnover at two to three times the rates of their counterparts. Minorities more so than non-minorities is an example. And so, that’s telling you—I know of a large manufacturer that would do minority hiring blitzes every year to be in federal compliance and knowing they had a toxic climate for minorities and they had two hundred percent turnover rates. I mean that kind of stuff, trying to—just trying to game it enough to reach federal [00:22:00] compliance and make sure they sell the government goods but not ever fixing their climate and why they have two hundred percent turnover rates so it’s really that. I mean, it’s such a focus on bottom-line outcomes and lack of commitment to managing diversity well that could save them hundreds of thousands of dollars in hiring.

Host: So, an executive comes up to you on Zoom, we’ll say on Zoom—“Patrick, I want to do diversity better, diversity and inclusion better.” What is your response?

Patrick: My first response is having you done a diversity audit? You need to take the temperature of the company right now. What is your diversity climate like? Is it a supportive one? Are there pockets within your company that would say it’s negative? And so, I would collect that data, give a diversity climate survey and see what the pulse is. Maybe check the representation [00:23:00] of certain groups in your company. Are you skewed toward certain backgrounds versus others? It’s really taking the temperature and seeing what your baseline is and then devising a strategy based among where that baseline is. 

If you’re doing pretty well then maybe it’s tweaking a few things. If it’s a major issue or there are huge disparities in terms of how diversity is viewed in your firm, then that says it’s going to be some deep-level work that has to be done to undo those issues. One would be policy changes. It could be proclamations from the top that, “We are going to do things differently. Here’s the policies we’re going to follow. Here’s the bottom-line way we’re going to pursue this thing and get on board or get out.” I mean, that has to be the answer. So, it’s really that, take the pulse.

Host: So, if I’m not in a leadership position, how can I help promote an inclusive climate in my organization?

Patrick: Well, the first thing you can do is model the behavior that would follow from a supportive diversity climate. So be accepting [00:24:00] of your coworkers who are different than you. Engage them in conversations, include them in your work, ask their opinion on a work initiative you’re working on or collaborate with them. So, really participate with different people, model those behaviors and show some acceptance in a sense of their difference or if you see that they are being excluded, include them. Basically, they could be models of what diversity climate, a pro-diversity climate is all about. You involve those people that are different that might be excluded I mean that’s the main thing. Treat people fairly and with courtesy. 

Host: Before you began your research, you had said that you are skeptical of diversity practices. How did your research change your mind?

Patrick: That’s a funny question because I’m actually still skeptical of diversity from a numerical standpoint. I will remain that way because I think that’s just silly. [00:25:00] My sociology background says that different people don’t like each other and history shows it. So, I am more optimistic about managing a diverse climate, as these consistently have effects on organizational outcomes and no backlash effects, none of these negative things that happened that we’ve seen associated with managing diversity. 

So, that’s the main thing that I’m still skeptical of diversity on its own but when managed in an inclusive climate, it can work wonders for an organization’s effectiveness. So it’s really that. Shifting company’s focus away from the numerical targets built on compliance with EEOC to one that’s more philosophically bent toward managing difference and valuing people for who they are and what they have to potentially offer an organization. 

Host: Patrick, thank you for joining me. In light of the recent protests for racial justice [00:26:00] across the country, this conversation has been crucial. With this research, I hope our listeners understand how companies can authentically prioritize diversity and inclusion. For me, the most critical takeaway from our conversation is this: the answer isn’t simple, there is no quick fix. A true commitment to diversity and inclusion requires us to change at a foundational level. 

Companies need to do more than just consider demographics. Patrick’s research shows they must also foster a more inclusive climate. This takes a higher level of commitment but will mainly reap the rewards through a more inclusive society and better business practices. In today’s virtual world, we hope to encourage you to start or continue conversations on the topic wherever you are on and offline. 

Catalyst is a podcast from Temple University’s Fox School of Business. Visit us on the web at fox.temple.edu/catalyst. We are produced by Eva Terra, Megan Alt, Anna Batt and Stephen Orbanek, with help from Karen Naylor. Special thanks to Joe Williams at Temple University’s Tech Center. If you like what you hear, please leave a review on Apple Podcast. I hope you’ll join us next time. Until then, I’m Tiffany Sumner and this is Catalyst.