Diversity
HIGH STAKES
THIS ISSUE: DIVERSITY
On May 19, 2010, Novartis Pharmaceuticals was ordered to pay a class of 5,600 female employees $250 million in punitive damages in what is, according to Bloomberg, the largest employment discrimination verdict on record. With the monetary and reputational penalties associated with a perceived lack of commitment to diversity growing fast, we must recognize the intrinsic practical value of a strong diversity brand.
In this issue, we outline the steps that transform diversity crises into leadership opportunities…Gain insight from corporate and legal diversity expert Sandra Ezell…Examine the blogs covering diversity issues…And look ahead to how corporate law departments are making diversity a key driver of their legal buying decisions.
In this issue, we outline the steps that transform diversity crises into leadership opportunities…Gain insight from corporate and legal diversity expert Sandra Ezell…Examine the blogs covering diversity issues…And look ahead to how corporate law departments are making diversity a key driver of their legal buying decisions.
Strategies: Capitalizing on crisis to build a strong diversity brand
It may seem counter-intuitive, but companies and professional services firms embroiled in a workplace diversity controversy are often well-positioned to assume the mantle of leadership on the issue. It is precisely the position from which companies have written some of the best corporate diversity success stories of the 21st Century. As recent events demonstrate, those that have been through the eye of the storm are better able to summon the executive will that diversity leadership brands demand.
In 1999, Coca-Cola was targeted in a class action lawsuit initiated by four African-American ex-employees who alleged they were denied advancement because of the color of their skin. Before the case was settled a year later for a record $192.5 million, almost 2,200 class members joined the suit; the Rev. Jesse Jackson made a high-profile appearance at the annual shareholders meeting; stock prices plummeted; and a deluge of negative media reports significantly tarnished the company’s reputation.
Today, however, the findings of an independent task force charged with monitoring Coke’s inclusion efforts since the settlement have led the Atlanta Journal-Constitution to declare “Coke’s Diversity Case Closed.” The company has increased minority representation at the Assistant Vice-President level and higher, from 8.4 percent to 21 percent. The number of women in executive positions grew from 16 percent to 28 percent. And Coke is now honoring U.S. partner law firms that make minority inclusion a priority.
Companies that were once similarly caught in the crosshairs, such as Nike, Xerox, and Denney’s, all have similar “rags to riches” stories to share; even if those stories are rooted in court-ordered reforms. Like Coke, these companies have effectively capitalized on the media attention generated by crisis to ensure that stakeholders know exactly how their diversity efforts have been enhanced.
They’ve gone from big-game targets to industry leaders on an issue that is of vital importance to the bottom line, affecting public, internal, investor, and regulatory relations – not to mention transactions for which acquirers or partners need to know exactly how much liability they are taking on.
Most important, these companies have provided a template by which multinational behemoths as well as local professional services firms can tailor efforts to restore credible diversity brands. Among the key points to remember:
Conduct comprehensive self-analysis. To effectively anticipate diversity issues that may be lurking on the horizon – and thus prepare to respond quickly should need arise – companies must perform intensive institutional self-analysis. It may require the assistance of outside diversity consultants. Is the company serious in its commitment to diversity? Have employees at the point of sale received enough sensitivity training? Do minorities and women succeed in the company? Have they risen to management positions? Are they given marquee assignments?
Beware of staging. Your stakeholders will see past token attempts to demonstrate diversity by populating your website with faces of color after a diversity crisis has emerged. The easy way out is often a direct ticket back to Square One. If you’ve done nothing wrong, rely on the facts and your employees to tell your story for you. If the issues raised are legitimate, rely on messages that demonstrate contrition and affirm your commitment to reform. The marketplace requires more than just window dressing.
Don’t forget about your employees. With all of the attention to public sentiment required during a diversity crisis, don’t forget the people who may be the most vital audience of all; your workforce. The media will be looking for comment from any “insider” it can find, so maximize the likelihood that employees will echo your messages if necessary. Tailor messages to keep talent on board. If you’re committed to vindication, let your employees know that you’ll fight every step of the way. If redemption is your objective, let them know that change is in the air.
Identify the tipping point. In every crisis situation, there exists a tipping point where your stakeholders feel the crisis has been contained and they are ready to move forward. But that is not the time to relax. When the task force overseeing Coke’s diversity efforts was about to be disbanded at the end of its four year term – after significant progress had been made – it was Coke itself that requested continuing oversight for another year. The company was making a powerful statement about its commitment to change
The post-crisis phase is critical when old habits may start to reemerge or a new culture begin to evolve. What the company does at this point will determine if it’s a diversity leader or follower.
Industry insight: Sandra Ezell of Bowman and Brooke LLP
Sandra Ezell is a trial attorney at Bowman and Brooke LLP who works with companies both in and outside the legal profession to strengthen their commitments to diversity. Among her many diversity-related efforts, Ms. Ezell created “Diversity in the River City,” a program that seeks to foster inclusion in the Richmond, Virginia legal community. Ms. Ezell is also a frequent contributor to the Legal Divas Blog, where she shares her insights on the top diversity-related issues of the day.
What do businesses stand to gain from a strong commitment to diversity? What do they stand to lose if stakeholders feel diversity efforts are lacking?
Sandra Ezell: At the end of the day, diversity of perspective is something that all enterprises ought to be striving for. When you have a diverse group of problem solvers, visionaries, planners, and doers, what results more often than not is a more effective and efficient approach to navigating the challenges that all businesses face. Having a team comprised of people from different cultures and backgrounds naturally leads to better informed decisions for the simple reason that more perspectives are taken into account and varying experiences can be brought to bear to solve whatever problem might be at hand.
Of course, if you do not affirmatively embrace this concept and infuse it into your organization’s core value system, then the converse is true. At critical moments, you won’t have a team in place that can approach a problem from myriad angles and work together to formulate the best course of action.
What are the key elements of an effective diversity program?
Sandra Ezell: When you look at what makes a diversity effort successful, it isn’t about quotas and it isn’t about having a diverse group of people sitting in the conference room simply agreeing with their managers and supervisors. Rather, it’s about leaders soliciting opinions that might be different than their own and making better decisions based on those opinions.
In the legal profession – and especially in today’s economy – diversity is less of an issue in recruiting and more so when it comes to retention, promotion, and empowerment. If you’ve just brought in a diverse array of people for window dressing and those people aren’t made to feel as if they are contributing to the enterprise, then they aren’t going to stay long and you’ll soon be right back where you started.
That’s likely why more and more organizations aren’t just looking at their diversity statistics, but how current statistics relate to the past. You might be ten percent diverse, but is that ten percent comprised of the same people that were with the organization five years ago? Have they moved up the ranks of the organization? These are the questions that are increasingly important to an initiative that makes a real impact and nurtures the diversity of perspective I mentioned before.
Also, the importance of top-down support – both in terms of communications and the resources devoted to the effort – can’t be understated. When managers talk the talk and walk the walk by putting their money where their mouths are, then the organization gets the message that diversity is, in fact, a priority.
What are the most common mistakes that companies and professional services firms make when developing and implementing a diversity program? How can those mistakes best be avoided?
Sandra Ezell: One aspect of diversity initiatives that is often overlooked is the perfectly natural trepidation that majority members of an organization feel about the need for the program and how it will impact their futures. Thus, a candid conversation led by a majority member should be one of the first steps – and reasoning behind the program should be evident to all. Also, majority members should be represented on the diversity committee or whatever team is implementing and evaluating the program. This is about building a better company or firm – and as such, organizations need everyone on board. Again, we come back to the value of diversity of perspective.
Another mistake that many organizations make is taking a “diversity matters” approach when times are good, and then making a diversity program the first thing to go when resources aren’t as easy to come by. The message you send here is that diversity is more of a social policy than a business policy. Also, the program is almost sure to lose credibility when it comes to time to bring it back.
What’s next with regard to diversity? Are there issues emerging on the horizon that all companies and professional services firms need to be aware of?
Sandra Ezell: In the legal profession, we’re beginning to see corporate law departments looking hard at diversity at their outside firms and making buying decisions based on what they find. We’ve reached a point where we’ve been having the same diversity discussions for 20 years now – and we have the same statistics that we did 20 years ago as well. Talking about your commitment is no longer enough. Stakeholders want results – and they’ll start voting with their feet in greater numbers than before if they’re not seeing their own commitment to diversity reflected by those with whom they do business.
Blogs and diversity
Whether it’s an analysis of the latest judicial ruling, a look at a new corporate or professional services initiative, or an examination of the best practices by diversity managers across the country, the blogosphere is a rich source of the insight needed to develop, implement, and publicize an effective diversity program.
Here’s a look at four blogs that anyone committed to building a diversity brand ought to read:
The Big Tent
http://adage.com/bigtent/
http://adage.com/bigtent/
Published by Advertising Age, this blog is a valuable resource for professionals in the workplace diversity field, focusing on hiring practices, multicultural marketing, and advancing the diversity conversation.
Marshall Goldsmith (Harvard Business Review)
http://blogs.hbr.org/goldsmith
Leading educator Marshall Goldsmith of The Harvard Business Review maintains this blog on workplace culture and leadership, with a particular focus on diversity and equality.
http://blogs.hbr.org/goldsmith
Leading educator Marshall Goldsmith of The Harvard Business Review maintains this blog on workplace culture and leadership, with a particular focus on diversity and equality.
ACLU’s Blog of Rights
http://www.aclu.org/blog
This high-authority blog, maintained by the American Civil Liberties Union (ACLU) is an invaluable resource for managers and workplace diversity professionals to keep up with the latest developments.
http://www.aclu.org/blog
This high-authority blog, maintained by the American Civil Liberties Union (ACLU) is an invaluable resource for managers and workplace diversity professionals to keep up with the latest developments.
The Diversity Projekt
http://www.thediversityprojekt.org/
Dedicated to promoting awareness and understanding of diversity issues, The Diversity Projekt is an important resource for understanding and acting on the latest trends impacting workplace diversity.
http://www.thediversityprojekt.org/
Dedicated to promoting awareness and understanding of diversity issues, The Diversity Projekt is an important resource for understanding and acting on the latest trends impacting workplace diversity.
What's Next? Diversity's growing role in corporate law department buying decisions
In March of 2010, a report issued by Diversity Scorecard revealed that the recent recession caused a startling decline in law firm diversity in 2009. At the same time the report was released, the stakes were raised dramatically when 11 well-known companies pledged to spend a total of $30 million retaining firms with a demonstrable commitment to inclusion.
Accenture, American Airlines, Comcast, General Mills, and Microsoft are just a few corporate titans now demanding that law firms mirror their own efforts when it comes to establishing diversity in the workplace. As Susan Blount, the Vice President and General Counsel at Prudential Financial, commented to Law360.com, “All things being equal, we would rather work with firms that share our values.”
Of course, winning and maintaining new business isn’t the only factor that law firms ought to consider when evaluating diversity efforts. If you read the news, peruse high-authority blogs, or just scan business or trade press media, you’ll likely find examples of professional service firms facing the harsh realities of a diversity-based workplace crisis.
Often, diversity “brands” are derailed at a high rate of speed because firms fail to adequately evaluate and plan for potential risk factors. The same employers who seek to promote diversity brands may wind up defending charges of racism and sexism. According to DiversityInc magazine, race and gender-related discrimination charges filed with the Equal Employment Opportunity have both hit all-time highs.
The real question firms must ask is not where they sit on the latest diversity ranking; but what is their level of preparedness for mitigating the risks that accompany lack of diversity in the workplace.
As diversity takes on added significance in legal or other service buying decisions, firms must be prepared to respond quickly and credibly to critics who can point to stalled or aborted progress. Whether triggered by actual patterns of discrimination, disgruntled employees, or the challenges of a global marketplace, diversity-based attacks must be met with prolonged efforts that seek – not to discredit the critics – but to annex their leadership position.
This month's top posts on Levick's...
Patrick Kerley takes a look at the Web resources developed by the Deepwater Horizon Unified Command and the lessons for other companies in crisis.
As global anti-corruption investigations continue to grow in frequency and scope, Richard Levick outlines why communication is such a critical component in any anti-corruption effort.
Larry Smith chats with attorney Robert A. Bracken about a recent suit against Second Life, which claims the company should be held responsible for depriving gamers of virtual goods.
Gene Grabowski highlights a crisis communications strategy BP might have pursued from the outset to control the story and build off past reputational successes.
Patrick Kerley discusses a recent Pew study that shows a significant disparity between what traditional and citizen journalists consider news.
Making Your Point
Making Your Point, a new book by Levick Senior Vice President David Bartlett, examines the fundamental strategic considerations driving effective communication. It defines that key component called “emotional intelligence.” It provides the simple powerful tools to make a point in person, prepare and deliver effective speeches and presentations, get messages across in a media interview, and communicate during crises. Making Your Point is an easy-to-use communications guide for professionals and non-professionals alike. Order your copy today.
Making Your Point, a new book by Levick Senior Vice President David Bartlett, examines the fundamental strategic considerations driving effective communication. It defines that key component called “emotional intelligence.” It provides the simple powerful tools to make a point in person, prepare and deliver effective speeches and presentations, get messages across in a media interview, and communicate during crises. Making Your Point is an easy-to-use communications guide for professionals and non-professionals alike. Order your copy today.
Stop the Presses: The Crisis and Litigation PR Desk Reference – now in its second edition – is a survival manual for corporate leaders, board members, lawyers, and communications specialists. This book provides the dos and don’ts of crisis planning and communications and articulates the essential strategic guidelines for navigating myriad bet-the-company issues. Order your copy today.Future High Stakes™ issues:
Maximizing Social Media's Potential:
Blogs, Facebook, and Twitter are shaping buying decisions like never before. Do you know the rules of social media engagement?
Patents & IP Litigation:
High-profile intellectual property cases threaten to sink stock prices. How can companies protect themselves in the wake of a negative ruling?
High-profile intellectual property cases threaten to sink stock prices. How can companies protect themselves in the wake of a negative ruling?
CEO Departures:
Whether in the midst of crisis or at the end of a long and successful run, CEO departures present critical communications challenges. Do you know how they are best overcome?
More to come:
- Coming to America
- Diversity
- Education
- Executives Behind Bars
- Food
- Global Capital Markets
- Intellectual Property
- Internal Communications
- Internal Investigations
- Monetizing Moments
- Money Laundering/Money Transfers
- New Media/Social Networking
- Product Liability
- Professional Services Crises
- Public Equity
- Whistleblowers
- Reputation Management – Celebrity
- Reputation Management – Corruption
- Reputation Management – SEC Investigations
- Tourism
- Trade
Next month in High Stakes™: DATA SECURITY
As high-profile data breaches increase in severity and frequency, High Stakes™ reexamines leading strategies for protecting reputations and rebuilding trust.