Diversity management has developed largely in the United States—but diversity impacts organisations across the globe. There are seven elements to an effective global diversity program:
1. Cultural Intelligence
Reflecting its civil-rights roots, North American diversity programs are heavily orientated towards racial inequalities and other legally protected categories, including gender and sexual orientation. But when an organisation is operating globally, managing cultural diversity is significant, both in terms of overcoming cultural barriers and for leveraging diverse knowledge and perspectives for innovation and access to new markets.
Global diversity efforts should include the development of Cultural Intelligence—a focus that may be overlooked in programs originating in the United States. Cultural Intelligence is the capability to manage cultural diversity. Individuals with high Cultural Intelligence (CQ) display four critical competencies:
CQ Drive is the willingness to work with others from diverse backgrounds. It includes an ability to overcome explicit or unconscious bias and the capacity to persist in challenging intercultural settings – even when the individual feels confused, frustrated, or burnt out.
CQ Knowledge is the understanding of culture and cultural differences. That involves more than awareness of variations in language, customs, and appearance. Core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked.
CQ Strategy is the ability to flex mentally. With high CQ Strategy, individuals are not confined to a single worldview. They are open to new or integrative ideas.
CQ Action is the ability to flex verbal and non-verbal behaviour. CQ Action decreases the risk of miscommunication and helps an individual respond to diverse others in a manner that conveys respect and builds trust and rapport.
As a tool for managing any form of cultural diversity—whether national, gender, generational, ethnic, health status, sexual orientation, or other subculture—Cultural Intelligence is as relevant at home as it is abroad.
2. ‘Glocalisation’ of diversity management
Diversity issues vary from one country to the next, and they are often more complex outside the United States. Yet global diversity issues are commonly overlooked. Organisations can waste valuable resources aiming at the wrong problems or implementing the wrong solutions. Effective global diversity management needs adaptation to reflect different cultural contexts. At a minimum, adaptation should occur nationally. Regional changes should also be considered. Modification may be required to the content, rationale, language, and methods.
To overcome the limitations of United States-based diversity programs, some companies have delegated diversity efforts to local offices. However, local diversity initiatives may lack the resources and commitment required from senior head-office management to succeed, or they may not have access to individuals with adequate training and experience in diversity management. The best approach is midway between the two; combining head-office expertise, resources, and strategy with local knowledge of and sensitivity to the specific diversity issues facing that office.
3. Flexible human resource management
When foreign companies employ local staff, human resource policies need to be adapted to reflect the cultural profile of local employees. Factors that influence employee motivation, job satisfaction, and organisational commitment vary across cultures. Conflict resolution and giving and receiving feedback also differ across cultures, with implications for performance-appraisal.
4. Inclusive culture
Global diversity management needs an organisational culture that recognises, respects, values, and embraces cultural differences. It must encourage the expression of unique cultural identities and shared cultural learning. Inclusion seeks to motivate and engage all employees and values the contribution of every individual. Inclusion is achieved when every member of the organisation is enabled to fully participate in and contribute to an organisation’s decision-making processes and operations.
Diversity, per se, does not necessarily foster inclusion. Without an inclusive culture, social categorisation processes and associated biases are likely to overshadow the potential benefits of diversity. Diversity may even detract from performance. Prejudice, discrimination, stereotyping, and isolation may prevent culturally diverse employees from fully contributing.
5. Diverse and inclusive senior management team
Global organisations should ensure that senior management support extends to cultural diversity as well as the traditional focuses of race and gender. Support must be visible, active, ongoing, and consistent. It can take different forms:
- Integrating cultural diversity into the organisation’s values, mission, vision, and strategy;
- Establishing a cultural diversity council composed of senior line managers;
- Modelling Cultural Intelligence;
- Allocating time and financial resources for the development of Cultural Intelligence;
- Regularly communicating a commitment to cultural diversity;
- Supporting cross-cultural mentoring initiatives;
- Recognising cultural diversity efforts internally;
- Seeking external recognition via participation in benchmarking studies and award schemes;
- Empowering culturally diverse groups of employees;
- Holding managers and employees accountable for cultural diversity goals;
- Responding to employee cultural diversity concerns;
- Championing culturally diverse community programs or initiatives for improving intercultural relations.
A culturally diverse senior management team is important. Cultural diversity at senior levels normalises intercultural interactions and can send a powerful message to lower-level staff.
6. Diverse partnering
Best practice diversity programs do not limit their cultural diversity internally but also seek cultural diversity in their external stakeholder relationships, including suppliers and community groups.
7. Cultural knowledge management
Cultural knowledge is a significant organisational resource that can be leveraged for competitive advantage. The value of this knowledge grows exponentially when it is shared. Cultural knowledge management links individual-level cultural learning to a broader network of colleagues who can then use and integrate this information innovatively.
Knowledge management is more of a people issue than a technology one. This is particularly true for cultural knowledge. Cultural knowledge is largely tacit. It is not easily codified into explicit knowledge for capture by technology, such as database systems. The effective management of tacit knowledge is reliant on an organisational culture that supports open communication, continuous learning, the sharing of ideas, and collaboration. Online technologies can support this by quickly connecting individuals with others who may have the cultural expertise or knowledge they can use.
When global diversity management is done well, it yields significant benefits, including:
- Access to new consumer markets;
- Increased innovation and agility;
- Improved performance of diverse workgroups;
- Greater employee engagement and well-being;
- Attraction and retention of top global talent;
- Improved access to and better relations with suppliers and other external stakeholders;
These benefits flow through to the bottom line. Research continues to produce results that support the importance of effective diversity management for organisational performance. Studies show workforce diversity drives growth, sales revenue, profitability, market share, share price performance, and return on equity. In particular, cultural diversity offers the insight and flexibility needed for sustainable global success. Organisations with a culturally diverse workforce are 35 percent more likely to outperform their industry peers.