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The Top Ten Business Responses to Marketplace Diversity

The Top Ten Business Responses to Marketplace Diversity [i]

The combined purchasing power of ethnic group markets, according to Ethnic Trends is estimated to be $1.275 trillion dollars (African Americans $545 billion, Hispanic $460, Asian American $244). Each ethnic group’s purchasing power exceeds the GDP of more than 150 foreign countries. The marketplace is changing as a result of these demographic shifts.

All facets of business face the challenge of attracting these demographic groups with adequate strategies. The following is a list of questions your organization needs to address in developing the strategies.

  1. How has our organization traditionally segmented the markets and customers?
  2. What are we doing to discover how changing demographics may affect our traditional segments?
  3. What preliminary information do we have about new market segments?
  4. How do we begin learning about new segment customers in as much detail as needed?
  5. How can we conduct valid and reliable market research so that we know as accurately as possible what their interests and needs are?
  6. What are the economic consequences of not being able to compete for the products and services they want to buy?
  7. How do we assess our market plan to make sure we are on track, and our advertising approaches to avoid cultural blunders?
  8. How do our products and services compare to competitors’ or industry standards in terms of innovation, quality, desirability, and delivery?
  9. Have our marketing and service deliver teams launched the marketing campaign in a timely manner?
  10. Is the company gaining a share of the market and holding on to it? If so, why and at what cost?

The first order of business is to develop an ethnic marketing initiative. If you have one in place, assess the extent that your staff and sales force has the cultural competence needed to maximize the effectiveness of implementing the action plan. Keep in mind that it is not enough to put together a dynamite plan. Cultural competence safely drives the action plan past the landmines and over the obstacles of ethnic marketing.

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[i] Based in part on Cultural Diversity at Work 10:2 (Nov 1997), p 14.

Reading, Pennsylvania Police Union Files Suit to Remove Latino Officer: What Can Go Wrong Without a Chief Diversity Officer

Diversity Officers can learn a lot from a recent lawsuit.

A Reading, PA police union has filed suit against the city and it’s Police Civil Service Board. The lawsuit claims that the Police Civil Service Board ignored state civil service laws in hiring a Latino who was not on the required list of eligible officer candidates.

The Fraternal Order of Police Lodge 9’s suit is over the hiring of Officer Daniel Cedano-Erazo and it challenges the city’s authority to ignore state law to comply with a federal mandate.

Cedano-Erazo was hired in June as part of the city’s response to the settlement of a federal lawsuit that the Pennsylvania Statewide Latino Coalition filed in 2003.

The FOP wants Senior Judge Albert A. Stallone to revoke the hire and force the city to follow long-established rules to find a replacement. It claims those rules require the city to hire from among the top three candidates on the civil service list, which is ranked by test scores.

Cedano-Erazo, the suit claims, ranked 29th on the list that expired in 2006 and has not been on any list of eligible candidates since.

Cedano-Erazo has completed police academy training and was sworn in Dec. 23, the day after the FOP suit was filed. He is in field training.

The suit also names Mayor Tom McMahon and council President Vaughn D. Spencer as defendants.

Police Chief William M. Heim, who was looking at alternatives to get more Latinos on the force, has been under pressure from the city’s Police Diversity Board, which was established as part of the settlement of the coalition’s lawsuit. The diversity board has recommended creating a separate hiring list for police candidates who are bilingual.

Some city officials oppose the recommendation so Judge Cynthia M. Rufe, the federal judge the diversity board reports to, has appointed Senior District Judge Lowell A. Reed Jr. to serve as a mediator.

What can the diversity officer learn from this incident? First of all, responding to the federal civil rights suit requires more than compliance. You need to take care of all the stakeholders. This includes working with the police union in preparation for the changes.

The police union does not have to like the federal suit outcome, but they can start to consider how existing policies need to be reconsidered in the face of the federal mandate. Too often, the organization’s leadership put off talking to adversaries until a lawsuit has been settled. This protects against making hasty decisions at the cost of building relationships needed to address the outcome collaboratively. Both union representatives and the leaders of the organization with union members stereotype each other as uncooperative and self serving. This is where the diversity professional comes in.

Ongoing dialog between the parties with the goal of finding win-win solutions is the key. The diversity officer needs the competence and authority to mediate the dialog and keep it moving towards a solution in order to achieve the diversity recruitment goals.

Each party tends to see an all-or-nothing power battle when it comes to union negotiating on behalf of members. Diversity officers educate, motivate, tolerate, and communicate in their role. They educate the parties about changing demographics and the impact on doing business as usual. They show how preparing for the demographic changes in the present requires thinking differently. Toleration for resistance and disharmony while working towards workable solutions is a must. And listening until everyone feels heard is critical.

This report is based in part on an article by Don Spatz which appeared in the Reading Eagle News (12/31/2008 Last Update: 1/5/2009 7:14:00 PM).

Navigating the Landmines of Diversity Leadership—PART 2

In the first installment of this series, I stated that diversity professionals must navigate the rugged terrain of uneven support, hostility, and apathy. Doing their job well takes political savvy that some are born with. In contrast, organizational development and effectiveness skills must be learned. But, where would diversity professionals have learned these skills? Most of them do not have a degree in diversity leadership, cultural competence, or organizational development. They have learned how to generally succeed in the diversity business from the School of Hard Knocks. A few can get by with this trial by error approach, but most continue to struggle especially in the areas of diversity politics and organizational change.
Seminar Adv

While a considerable number of diversity professionals can competently navigate organizational politics, even the best succumb to the pressures of an unsupportiveg leadership and limited authority when it comes to the diversity initiative.

This second article in the series continues the discussion about the top ten things diversity leaders need to know to navigate diversity politics. The full list includes the following:

1. Become a cultural diversity leadership expert and actively pursue continuous learning
2. Be clear about your own diversity lenses
3. Take the sting out of the diversity program in your business case
4. Be clear about the diversity and inclusion ROI
5. Have a really clear plan based on the big picture of the organization
6. Get the leadership on the front lines of promoting diversity and inclusion
7. Become part of a diversity professional network
8. Establish allies within your organization
9. Align the steering committee
10. Request the authority needed to do your work effectively
11. Neutralize diversity trouble makers
12. Hold managers accountable
13. Work with unit managers individually
14. Avoid personalizing criticism of the diversity program
15. Pat yourself on the back

A full summary of each item in the list is too lengthy for a single article. I covered the first three items in the first installment, which can be viewed by following this link. In this installment, I cover items 4-6 that represent diversity politics.

Be clear about the diversity and inclusion ROI

Until recently cultural diversity initiative funding was primarily targeted for compliance protection training. Anti-harassment, civil rights, and cultural diversity awareness training received most of the resources. Today, managers want to make certain that they are getting a sufficient return on their diversity initiative investment (ROI). They expect better talent selection, increased productivity, a reduction in insensitivity complaints, and improved employee retention for the resources they allocate. These are basic cultural diversity talent management expectations.

Measurement of diversity initiative ROI starts with defining the  business case, determining how much the initiative will cost, and verifying the amount of return.

Questions you will address in making your case are:

  • Why is the diversity initiative important?
  • What are the goals and objectives?
  • What is the amount of investment needed for a successful initiative?
  • How is the return on investment measured?

Start with making a case for the initiative

One of the most impactful cases for a diversity initiative in my experience is made with results from our diversity scorecard analysis. In one case, our client’s diversity committee struggled with getting on the same page about why their initiative was important. One group felt that the company had an obligation to society to promote a diverse organization. Another group emphasized the fact that the metropolitan area’s demographics were changing with the increased numbers of people of Mexican descent. The need to remain a competitive and innovative organization was a third rationale offered by another group of committee members. Different committee members were voicing different opinions about the group’s work to colleagues and managers as a result their different views about why the initiative was important.

We used the diversity scorecard method to create links along four levels of analysis: the organization’s (bank’s) bottom line (top of chart), its mission and vision, the operations needed to produce results, and the cultural competence needed to be productive (bottom of chart). Participants were asked a series of questions and the responses were characterized by arrows pointing between the four scorecard levels on the scorecard chart.

scorecard image

The set of arrows across the scorecard levels indicate that the bank’s ability to increase revenue is directly linked to its excellent customer service vision and mission, and that demographic changes require new skills in order to serve the new population, which in turn fills the mission and impact the bottom line. While other diversity initiative goals expressed by the diversity committee were appreciated and maintained in the overall business case, the culturally competent customer service delivery piece took center stage.

Diversity Initiative Goals

Once the culturally competent customer service cultural competence goal was established, the need to provide training became the focus. Obviously, if the bank wants to determine the ROI for training, the allocated resources, especially hidden expenses, must be accounted for. The assessment data from our example indicated that customers of color find the bank tellers so difficult to talk to that they avoid using the services to the extent possible. One young Latina said that “I have to go to the bank often. The tellers act as though I am a burden to them. They are unfriendly and talk to me as though I am not able to speak and understand English. I was born and raised in the United States.” The woman tries to avoid using the services. She is considering opening an account in another bank.

The bank tellers, on the other hand, say that they know it is important to provide each customer with excellent service, but find those with limited English difficult to serve. Their stereotypes about Spanish-speaking people being in the country illegally and not putting enough effort into learning English make it difficult to serve these customers equitably. Training is the key to making the customers feel included and the tellers feel more competent.

Measuring the ROI

The amount of investment in the diversity initiative is determined by the goals and time line. Our bank client wanted to have a competitive edge over other local banks in reaching out to Spanish-speaking members of the community. They invested in the initiative and considered it an extension of their advertisement. They saw the investment as an imperative.

The most important factor in measuring the return-on-investment for training is the diversity initiative goal. Measuring the amount of new accounts generated by the tellers before and after the training, for example, and then comparing the increase revenue with the cost of the training is the typical way to measure the ROI. Different components of the diversity initiative can be measured in a similar way. The diversity officer’s salary, support staff, and employee time away from the desk for training are other factors considered in ROI analysis.

Summary

Take the political game out of diversity initiative by linking it to the organization’s purpose. Instead of getting caught in the trap of uneven commitment and negative stereotypes about cultural diversity programs, get your audience to focus on the bottom line. The rationale for implementing a cultural diversity initiative should be to improve the organization’s bottom line. A non-profit organization’s bottom line may be to improve customer service, while a for-profit organization may focus on increasing shareholders’ value. Help your audience make the connection with a diversity scorecard analysis.

The investment in an initiative consists of the cost of designing, developing, implementing, and sustaining it. By measuring the effect on the organization’s bottom line before and after implementing different parts of the initiative, and then comparing with the costs, diversity professionals can determine the return-on-investment.

The next installment of this article about Navigating the Landmines of Diversity Leadership will focus on (a) the benefits of belonging to a diversity professional network, (b) establish allies within your organization, and (c) align the steering committee.

Check out Navigating the Landmines of Diversity Leadership – Part 3

By Billy Vaughn, PhD

Misreading the Presidential Primary Polls: Because Barack Isn’t Black or White, Stupid!

Barack Obama is the product of a black African father and a white American mother. But, you would not know it from media coverage, university lectures, polling data, religious sermons, and your neighbors’ voting behavior. Americans love to simplify their world so mixed race people are difficult to categorize given our black-white mentality. But racial identity is no longer a simple matter. The ways in which Americans collude in ignoring Barack Obama’s race demonstrate that while the demographics of our society have changed, our ability to think inclusively remains under-evolved. It is very difficult to talk about race in American society as a result.
Interracial marriages have tripled in the United States since 1970, which constitutes about 400,000 marriages per year today, according to the Richmond Free Press. This represents a dramatic increase in the number of Americans with more than one racial identity. Their off springs are challenging racial categories. For instance, in at least 10 states, the percentage of multiracial Americans between ages 5 and 17 is at least 25%, according to 2000 census data, which is greater than the overall 19% for this age range. It is old news that America is demographically changing, yet we fail to recognize that we need new language to talk about our differences. Instead, we will continue to play the “race card” in talk about our differences.
Consider Hillary Clinton’s recent controversial comment about race in the 2008 Democratic presidential primaries:

“I have a much broader base to build a winning coalition on. The Associated Press found how Senator Obama’s support among working, hard-working Americans, white Americans, is weakening again, and how whites in both states who had not completed college were supporting me. There’s a pattern emerging here”.

At least one African American politician characterized her comments as divisive. Conservative political news commentator Patrick Buchanan came to Hillary’s defense. He says that there is a double standard when it comes to talk about race. Basically, Buchanan argues that when white Americans talk about black people, their words are scrutinized more than when a black person make statements about white people. He believes that when someone describes “facts” about racial differences, such as reported racial differences in poll results, it is absurd to claim racial animus. He is correct. There is an absurd double standard. The culprit, however, is our out-dated thinking about race, identity, and what it means to be American. Politicians need to understand that ignoring that Obama is bi-racial can lead to accusations of race baiting and racial animus.
Consider Indiana and North Carolina voting patterns in the primaries across racial groups as examples. Indiana is 88% white American, 9% African America, and 5% Hispanic. In North Carolina, African Americans, white Americans, Latino Americans, and Asian Americans constitute 21.7%, 74%, 6.7%, and 2% respectfully. Clinton won by 2% of the vote in Indiana. Indiana exit polls showed that Clinton got the majority of votes from white Americans, as she had in Pennsylvania and Ohio. Obama received more than 90 percent of the African-American vote and about 40 percent of white votes in North Carolina. The question becomes how much impact does Obama’s bi-racial identity have on the results. We will never know the answer to the question until pollsters ask it.

Pollsters want to know if race plays a role in voting, but they collude in racial politics by not asking if Obama’s mixed race has any impact on voting outcomes. If Barack is half white, then a considerable number of white Americans should be comfortable voting for that part of him they identify with. Using the same logic, many blacks should vote for him as well. The point is that mixed race candidates pose special challenges in making sense out of poll data. Coverage that ignores the fact that Obama is both black and white undermines the democratic process. West Virginia is 94.9% populated by white Americans. Hillary Clinton will likely win that state by a large percent, but she will not receive 100% of the vote. We deserve to know how the white Americans voting for Obama view him along racial lines.

Research supports this view. It turns out that when an African American shares many traits stereotypical of white people (e.g., “intelligent”, successful, “articulate”, and bi-racial), white Americans have a difficult time categorizing the person along racial lines. They tend to create a special category for the individual so as to maintain the integrity of their black-white racial distinctions. This is referred to as subtyping. So even if white Americans ignore Obama’s bi-racial background, they will sub-type him because he does not fit their stereotypes of black people. In my experience, African Americans also make faulty assumptions about Barack. Their experience in American society leads to over-emphasis on his skin color. He is African American whether he likes it or not from their point of view. A common justification is that he has been forced to identify as black in American society because it is so race conscious.  The result is that Barack’s bi-racial identity is both an asset and a stigma for him at the same time.

American beliefs about race remain out-dated in the face of a multi-cultural, multi-racial reality. How do we get out of it? We need to recognize, embrace, and celebrate our achievements in blurring the racial boundaries. This is the way we help Americans get out of the crazy, unproductive identity politics.