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Lots of companies talk a good game when it comes to the proposition that 'different is better'. International Business Machines (IBM) walks that talk. IBM, founded in the 1800s, is a world famous provider of computer products and services. Among the leaders in almost every market in which it competes, the company has over 398,455 employees worldwide with operations in Canada, South America, and other key locations.
A Heritage of Diversity
For many organizations, assessing diversity is a journey into uncharted waters. IBM's diversity journey commenced in 1899 when they hired their first female and black employees-20 years before women's suffrage, 10 years before the founding of the NAACP, and 36 years after the signing of the Emancipation Proclamation. IBM supported equal employment for decades, and focused on making everyone fit in. In 1935 the company issued an equal pay policy for men and women.
When Sam Palmisano, IBM's eighth and current CEO, took over the helm of IBM in 2002, he not only had the responsibility for heading up one of the world's leading global technology companies, but he was also entrusted with ensuring that IBM continued its commitment to diversity. This was no trivial matter, since each of Palmisano's predecessors had personalized their commitment to building an inclusive IBM community where talent was the common denominator. After more than a century of small victories, IBM's record in diversity is unassailable-one that is unmatched by any other company in its industry.
But what does diversity really mean?
Diversity is a concept that has traditionally been used in both broad and narrow contexts. A broad view of diversity has implications for the prevailing organisational culture, and is based on a variety of possible differences at the individual level, whereas narrow definitions of diversity focus on particular minority groups that are socio-culturally different in terms of age, race, gender, physical abilities, and sexual orientation and generally arise due to discrimination or exclusion. A broad understanding of diversity thus affects the organisation at all levels, while narrow definitions appear to be of similar orientation as Affirmative Action (AA) and Equal Employment Opportunity (EEO) initiatives.
Various distinctions have been made between EEO, AA, and Managing Diversity (MD). EEO gives people a fair chance to succeed without discrimination based on unrelated job factors such as age, race, gender, or nationality. AA refers to programs that require firms to make special efforts to recruit, hire, and promote members of minority groups. As such, AA takes a proactive approach to achieving equity in the workplace and focus is placed on certain social groups at a time rather than on individuals. AA involves an accommodation of difference, rather than the assimilatory approach consistent with EEO. MD involves going beyond an accommodation of individual difference, to a situation whereby organisational culture is reformed to value and respect it. MD is able to address a wider section of the working population than the more specific EEO and AA targets. Furthermore while EEO and AA requirements are covered by legislation, ensuring a truly diverse workforce requires management initiation. While EEO and AA may have been important stages in the evolution of MD, they are only narrow aspects of its current existence.
IBM is committed to building a workforce as broad and diversified as the customer base it serves in more than 170 countries. Reflective of this customer base, IBM has a broad definition of diversity. In addition to age, race, gender, physical disabilities, and sexual orientation it includes human differences such as culture, lifestyle, religion, economic status, gender identity and expression, marital status, thought, and geography. Thus, everybody is considered to be a diverse individual and IBM strives to ensure that it is inclusive and addresses the needs or requirements of any single employee. At IBM, diversity is composed of three areas: EEO, AA, and work/life.
Global Diversity Winning Plays
Today at IBM, they are attacking diversity issues through innovation and actions that they call "winning plays". These winning plays are distinctive and allow them to execute globally and compete locally. Here are some examples.
Building on what was America's premier corporate commitment to basic child and dependent care initiatives in the 1980s/1990s, IBM created the $50 million Global Work/Life Fund Strategy in 2000-2006. The first of its kind to address this issue worldwide, the IBM Global Work/Life Fund serves communities where IBMers live and work, supports research in dependent care topics such as family-friendly policies, invests in national initiatives to improve the quality of dependent care and invests in child care centres throughout the world where IBMers receive priority.
In 1995 when Lou Gerstner, then CEO of IBM, took a look at his senior executive team, he felt it didn't reflect the diversity of the market for talent or IBM's customers and employees. To rectify the imbalance, Gerstner launched a diversity Task Force (figure 1) initiative that has become a cornerstone of IBM's HR strategy. The effort continued through Gerstner's tenure and remains today under current CEO Sam Palmisano.
Each Task Force comprised 15-20 senior managers, from one of the following demographic employee constituencies: Asian; Black (African-American and of African decent); Hispanic; Native American; Gay/Lesbian/Bisexual/Transgender individuals (GLBT); People with Disabilities; White Men; and women. The goal of the initiative was to uncover and understand the diversity among the groups and find ways to appeal to a broader set of employees and customers. In addition to having a sponsor, cochairs, and members, each task force was assigned one or two HR employees and a senior HR executive for administrative support, as well as a lawyer for legal guidance. The groups also received logistical and research support from the Global Work/Life Fund.
The Task Forces focused on the following areas for evaluation and improvement: communications, staffing, employee benefits, workplace flexibility, training and education, advertising and marketplace opportunities, and external relations. Several of the Task Forces share many of the same issues, such as development and promotion, and the need to recruit a diverse pool of employees. Other concerns are specific to particular groups, including domestic partner benefits (GLBT Task Force) and issues of access to buildings and technology (Disabilities Task Force).
All eight Task Forces recommended that the company create diversity groups beyond those at the executive level. In response, IBM in 1997 formed employee network groups as a way for others in the company to participate. The network groups today run across constituencies, offering a variety of perspectives on issues that are local or unique to particular units. IBM considers the network a significant tool of distributing information about diversity and increasing awareness in the organization. Members of the network can use an intra-net based forum to interact electronically, discuss issues specific to their constituencies and exchange information.
The metaphorical glass-ceiling effect still exists for too many people in the IT community. The term glass ceiling refers to situations where the advancement of qualified people within the hierarchy of an organization is stopped at a lower level due to some form of discrimination, commonly sexism. The ability to look up and see men, progressing further in the company hierarchy but not being able to pass through it, is still a major issue on the agenda of the women's Task Force.
Women within IBM certainly do thrive; female IBM researchers regularly win top prizes at awards (recently Blackberry Award, Female Inventor and Innovator of the Year award). Moreover, the National Association for Female Executives has named IBM one of the top 10 companies for executive women for the past 10 years. In 1995, there were 185 global female executives at IBM; today, there are 1,000. A 500 percent increase.
IBM strives to create a work environment in which women don't have to choose between careers and motherhood. Some 65 percent of its global women executives are working mothers, and benefits for working families include flexible work options, job sharing, child-care centres worldwide and hotlines for elder care and child care. IBM promotes the recruitment of technical women to the company by financially sponsoring a project called MentorNet, which pairs women studying technical subjects at the university level with e-mentors.
One recommendation put forth by the women's Task Force, aimed to rectify a shortage of women in technology, identifying young girls' tendency to opt out of science and mathematics in school as one of the causes. To encourage girls' interest, in 1999 a group of women engineers and scientists in New York, ran a pilot "EXITE" (Exploring Interests in Technology and Engineering) camp. The program brought together 30 middle-school girls to learn about science and mathematics in a fun, interactive way from female IBMers. In 2001 the program expanded internationally. In collaboration with IBM's technology group, the women's task force also created a committee focused on retaining women in technology currently at IBM. Through all these initiatives, the company is trying to bring down the glass ceiling.
IBM also has excellent benefits for same-sex domestic partners of employees; it provides them with health benefits and has an anti-discrimination clause. The Human Rights Campaign has consistently rated IBM 100% on its index of gay-friendliness since 2003 (in 2002, the year it began compiling its report on major companies, IBM scored 86%). In 2007, IBM UK was ranked the first in the Stonewall UK annual workplace equality index. IBM has won over forty gay, lesbian, bisexual and transgender awards globally. As part of IBM's diversity program, there is a GLBT Diversity Network Group, as well as a GLBT employee group (called EAGLEÂ - Employee Alliance for Gay and Lesbian Empowerment) with over 1000 registered members worldwide. What was the result of all these programs? The number of GLBT executives increased sevenfold.
Figure 1. The Vital Few Issues: Employees' Biggest Diversity Concerns
Interpreting the information gathered from IBM's eight Task Forces led to the list of issues above-what IBM calls the "vital few." These issues are still being used today to shape IBM's thinking about possible business and development opportunities.
IBM's commitment to people with disabilities goes beyond philosophy. IBM hired its first employee with a disability in 1914 and has continued to hire people with disabilities ever since. Once hired, IBM's desire for the success of persons with disabilities is evidenced in many ways. IBM offers sensitivity training for managers, providing information on how to prepare for an employee with a disability, and answering questions on subjects like assistive technology. Moreover, IBM ensures that managers do not pay for assistive technology out of their own departmental budgets. This means that they can make decisions based on skill needs without worrying about additional costs of assistive technology and services. Managers then work with the Accommodation Assessment Team (manager, medical, human resources) to provide job-related reasonable accommodations. Furthermore, telecommunications devices can be provided to lawyers, employees are allowed short breaks to walk around to ease back pain and if needed can use ergonomically designed chairs.
The shortage of African Americans in technical fields has organizations striving to initiate programs that promote math and science among young African Americans, and to boost career advancement programs for their employees. IBM has nearly thirty African American affinity groups across the country, and a unique program called the Electronic Welcome Wagon pairs upper-level executives with new African American hires for the first two months of their employment. The company recruits from about twenty historically black colleges and universities (HBCUs) that have significant engineering and computer programs. Its diversity campus executive program enables high-ranking African American IBM executives to work with top-level HBCU staff.
The business of workforce diversity is constantly evolving and presents IBM with new and different challenges, especially as business becomes more global. The number of workplace religious-discrimination complaints during the 2009 fiscal year was 93,000, a 2 percent decrease from the record set in 2008, according to the U.S. Equal Employment Opportunity Commission (EEOC), but still the second-highest level in the commission's history. Following 9/11, the EEOC reported an increase in religion and national origin-based discrimination complaints, many from people perceived to be Muslim, Arab, South Asian, or Sikh.
One major "winning play" they are developing at IBM is a global workforce strategy that will respond to these growing ethnic and religious minority issues. IBM provides Muslim women employees with two identification cards: one in which she is pictured with her hijab and one without, to be shown to female security officers. In Canada, the company also provides separate washing facilities for Muslim employees who must cleanse their feet and nasal passages before their daily prayers.
Furthermore, managing diversity is one of the core competencies used to assess the managers' performance, and it's included in the compulsory training of new managers. Effectively managing and developing a diverse workforce is an integral part of management at IBM. In interviews, one of the most frequently mentioned diversity-related HR practice is the five-minute drill, which takes place during the discussion of management talent at the corporate and business unit levels. Executives discuss any high-potential managers and an explicit effort is made to ensure that minorities and females are discussed along with white males. This has made executives more accountable for spotting and groom high-potential minority managers.
IBM is brilliant at conducting internal employee polls and surveys for programs. For instance, a work/life survey that was conducted provided the company with valuable confirmation that the right initiatives were in place. The survey also revealed a dramatic increase in the belief among IBMers that flexibility is encouraged. The surveys are anonymous, voluntary and take place every three years across 75 countries, 10 languages, and with thousands of people participating.
Along with providing flexibility, IBM is very committed to developing each and every one of its employees. All IBMers have the opportunity to have what is referred to as an individual, or development, plan. For the creation of this assessment plan, employees set short-term, mid-term and long-term goals. Then the management team, in conjunction with the organization, works with them to help them reach individual goals.
Pillars of Change
Any major corporate change will succeed only if a few key factors are in place: strong support from company leaders, an employee base that is fully engaged with the initiative, management practices that are integrated and aligned with the effort, and a strong and well-articulated business case for action. IBM's entire effort was designed to help the company develop deeper insights into its major markets, with a direct tie to two central dictates. One: IBM needed to get closer to its customers and become more externally focused. Two: It needed to focus on talent-attracting, retaining, developing, and promoting the best people. On both measures, I believe the company has come a long way.
What policies would you be able to suggest in order to further promote diversity in that organisation?
The IBM of today looks very different from the IBM of 1995. After the launch of the diversity Task Force the number of female executives worldwide has increased by 500 percent. The number of self-identified GLBT executives has grown even faster - and the number of executives with disabilities has more than tripled. IBM's board reflects its diversity: The 12-member board has two Black members, one Latino member, one Asian member and three women members.
Going forward, maintaining the integration of their diversity initiatives within the mainstream of the corporation is crucial to IBM's future success in the information technology industry. Diversity is becoming a key factor in helping define leadership in today's marketplace - effectively reaching customers and markets. Today, continued diversity leadership at IBM will quench their insatiable appetite for talent and enhance their ability to create new revenue streams, retain talent, win and retain customers and maintain their marketplace leadership.
It is a common belief of IBM's management that the company should and can get more benefits out of Managing Diversity.
A type of diversity that is not always included in typical diversity discussions is generational diversity. In any large organization, you are bound to find people from at least four distinct generations working side by side. These generations are: the Veterans, Baby Boomers, Generation X and Generation Y. Generation Y have watched with horror as their parents worked punishing hours in their scramble for money and status. Now, as our group goes in search of jobs, we have different priorities. We care less about salaries, and more about flexible working, time to travel and a better work-life balance. There is also a new generation soon to enter the workforce. Generation Z are under 16 years old and are starting to join Retail and Hospitality workforces. As the economy moves into a recession, this will be a key formative difference between this generation and us, as we have been used to a long period of economic growth throughout their working lives to date.
In September 2009 IBM, along with dozens of other firms, announced that it will stop its final salary pension scheme in order to cut costs. Union Unite, the largest union in the UK, is predicting staff at IBM will walk out, opting for early retirement, rather than accept reduced pensions from the firm. Unite expects between 700 and 1,000 people will opt for early retirement before the new terms come into force in April 2011. The union reckons that staff in their mid-50s could lose up to £200,000 from the changes proposed. This could result in the decrease of employees from the two eldest generations - Matures and Baby Boomers- and thus a decrease in diversity.
Results of studies by the European Foundation of Working Conditions in 2009 confirm that falling birthrates and increased longevity are impacting the labour market, with major consequences for pension systems. In the European Union alone, older workers aged between 55 and 64 will increase by 24 million in 2030. Keeping the growing numbers of older workers in employment for longer, or finding them new jobs after they have been made redundant, are challenging objectives for organisations.
IBM could prevent this loss of diversity by providing the option of flexible retirement. Flexible retirement means that employees can request a decrease in hours and/or apply for a lower graded post while at the same time accessing their pensions early. The employees can continue to pay pension contributions and, therefore, accrue further pension service/benefits for their reduced hours and/or in their new lower graded post.
Looking to the future, it is in the interests of the organisation to increase the number of young women coming into the industry in general. Computer Clubs for Girls are widely recognised as an important tool in achieving this aim and could be a future IBM strategy. In the shorter term, IBM can use a variety of methods to ensure that its brand is registered positively with female undergraduates. Partnering with universities, offering scholarships, sponsoring and hosting events, such as dinners for female Computer Science students, can all be used to nurture potential recruits. Targeting the format of company stands at careers fairs to be more appealing to women and making a point of having women staffing the stands are both also worthwhile strategies.
Of course women look at advertisements for professional roles in the same publications, sites and agencies as men do, but by placing advertisements on websites and job boards such as www.womenintechnology.co.uk and www.wherewomenwanttowork.com IBM can make it explicit that they are serious about the employment of women. For example Google uses AdWords, its own main revenue generating vehicle, to place targeted recruitment advertisements, including ones focusing on female software engineers. An advantage of this technology is that it can be easily monitored for effectiveness, another crucial aspect of these guiding principles.
Many women working in IT are concerned that maternity leave and career breaks accelerate skills obsolescence. Although funding is allocated to training graduates (new entrants) this is generally not the case for women returners. IBM could review policies to help women returners, who are an under-utilised pool of talent. A key policy area for change is education, where there is an opportunity to develop conversion courses for people with a degree in a discipline other than computer science, enabling them to take up an IT role. Women returners, whether organisational (i.e. returning to IBM) or occupational (i.e. returning to the workforce in general), are more likely to require flexible working arrangements, as a result of caring responsibilities. It is highly recommended that the potential for flexible working, including the number of hours and/or the working location, is made explicit in advertising, to demonstrate how much the skills and experience that women returners bring to the workforce are valued by employers.
There are many cultural issues that are very different when one is coming from a Native American background into a high-tech corporation such as IBM - this is reflected by the fact that in 2009 only 0.6% of the total number of IBMers were Native American. As a result of differences in values, many Native American employees find themselves struggling in the organization. Traditional Native American values include: patience, nonverbal communication, indirect criticism, modesty, and emphasis on the group. In contrast, traditional European industrial values include: aggressiveness, verbal communication, direct criticism, self-attention, and emphasis on the individual. Programs designed to promote diversity for the Native American minority group could include: diversity training to help all employees in the company to understand the Native American culture; workshops on Cultural Communication Skills for new employees and mentoring to help Native Americans to acclimate to the corporate environment and to one's life as a Native American professional, role model, and leader.
For IBM, another critical issue is the declining rate of U.S. engineering graduates (not nearly enough to even cover the expected demand by 2010). And while that talent deficit continues to grow, IBM is in the midst of a massive market shift toward increasing revenue share coming from outside the U.S. Promoting the subject through camps and mentors could be a an approach that will lead to positive results. The increased usage of a competency based approach to recruitment and career development, with the shift in emphasis to behavioural competencies, rather than specific qualifications, immediately opens the field to potential employees with a wider-range of educational and experiential backgrounds. Some organisations have redefined what they view as 'essential' qualifications and experience.
Moreover, the bridge between marketplace and workforce should be reinforced, by strengthening the connection between IBM's diversity strategy and its people/market objectives. The company's values should be demonstrated in practice, embedded in the culture, organizational competencies, development and assessment programs. Thus employees will be further engaged to help define the future.
Strategic diversity priorities should aim to extend the ownership of diversity within IBM through awareness training and other stakeholder-led strategies such as workshops and conferences, the promotion of diversity related roles (i.e. diversity champions) and communication in company newsletters and emails etc. Funding to staff networks that promote diversity and inclusion, raise awareness of different cultures/religions or backgrounds and assist the company's drive to be "Employer of Choice" should be provided or increased.
The Hispanic imprint on American culture and business is undeniable. As the largest and fastest-growing minority community in the United States, Hispanics represent 15.8% of the population and that percentage is expected to nearly double by the middle of this century. As their population grows, so does the importance of dealing with their diversity in corporate America. It will thus be advantageous for IBM to increase the percentage of Hispanics in the organization. This could be done by nurturing the skills and knowledge of Hispanics coming into their workforce, while at the same time providing mentoring and career development to Hispanics already employed at the company. Drawing in and cultivating diverse talent is key to driving change in the marketplace. IBM should work on reducing the educational achievement gap among Hispanic students, whose high-school-graduation and college completion rates lag significantly behind their white counterparts. IBM programs can promote the entry of Hispanic students into educational programs that will prepare them for careers in technology, science and engineering.
Above all, according to Ron Glover, vice president, Diversity and Workforce Programs at IBM, the company needs to embrace the new reality: that the global economy is the talent economy. Glover envisions a future where diversity programs move beyond legal compliance and quotas to focus on inclusive workplace initiatives and global constituencies. They'll simply be part of the company's strategic fabric for building global competitive advantage.
What is the future of diversity at IBM and where is it heading? According to IBM's current CEO Sam Palmisano, the lesson IBM draws from a century of leadership in diversity is to stay true to the company's shared values. Their success in the promotion and maintenance of diversity is what will take IBM from good to great.