Managing Diversity

Margarita Mayo

1 December 2002

Women in the workplace, an aging population, the single European market, migratory movements and multidisciplinary teams are all leading in one direction: toward more diversity of the Spanish workforce. But diversity is a two-edged sword.

Spanish teams are now more varied in gender, age, culture and functions. This has drawn interest from executives in top firms who are seeking new management approaches to respond to the demands of a varied labor force.

But diversity cuts two ways. On the one hand, disparate groups generally produce more creative solutions, since they have a broader range of knowledge and skills, and discuss different points of view. A further advantage is their access to more varied networks of personal contacts - useful when responding to a market that is itself highly diversified.

On the other hand however, diverse groups face greater challenges, particularly in the early stages of teamwork. Several studies have shown that diversity tends to increase both the number of people leaving the organization and absenteeism, since differences make communication and social integration harder.

These differences, while proving advantageous later, need to be considered from the outset, and this can cause conflicts. Nonetheless, early efforts to develop a diverse group can be sound investments, since when initial obstacles are overcome, the diversity within the group can be beneficial for teams seeking innovation, complex problem-solving and effective decision-making.

Recognizing diversity as a competitive edge and accepting it as inevitable in today’s globalized world has led many firms to implement new initiatives for managing diversity. The most frequent is training.

The objective of training is to raise awareness among participants. But generally, training is only the first step. To be effective, it must be accompanied by changes in the firm’s human resource systems and policies which respond adequately to the needs of a diverse group. One demand of most working mothers is flexibility. A study of an American company revealed that flexible working hours significantly trimmed absenteeism and improved productivity.

But training and formal systems are not everything. The firm must likewise create a corporate culture that values diversity. This culture is created and transmitted through executives, whose behavior make it clear that they value such differences. Yet leadership of diverse groups is not easy. One study showed that leaders of mixed groups had a more negative perception of their teams than leaders of homogenous groups, even when the team’s performance was positive.

[*D The diversity within the group can be beneficial for teams seeking innovation, complex problem-solving and effective decision-making *]
What kind of leadership is effective when the workforce is so varied? Some studies suggest that personal charisma and global vision matter most. When members of diverse groups are asked, they state clear preferences for the charismatic leader who focuses on the entire group process and personal development, not only on results. They prefer leaders who offer a global vision; one who can recognize individual differences yet set a common goal with which everyone can identify.

Demographic and organizational changes are expanding diversity in Spain’s labor market. This heightened heterogeneity may offer a competitive advantage to organizations seeking innovation, growth and flexibility. Success lies in unifying differences while respecting particularities. This can be achieved through training, leadership and sound human-resources policies.

Yesterday’s world was homogenous and stable. Tomorrow’s will be dynamic and diverse. Twenty-first century leaders who recognize diversity, value it and manage it strategically are safeguarding their companies’ competitiveness in the global marketplace.

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