Mission Accomplished

(With commentary by Bridge Partners LLC)

Four years ago, Choice Hotels, franchisor of mid-price lodging, realized that although it had a large percentage of minority-owned hotels, that pool wasn’t very diverse. Most of its hotel owners were of Asian or Indian descent. In 2004, the company added a new program to reach out to nontraditional hotel owners such as African-Americans, Hispanics and Native Americans to talk to them about hotel development and franchising with the company.

Choice is not alone in its motivation for increasing organizational diversity. For many organizations in the corporate sector, diversity and inclusion strategies are driven by the bottom line. But for organizations in the nonprofit, educational or government sectors, the incentive to have diversity and inclusion initiatives can be different.

According to Tory Clarke, co-founder and partner at executive search firm Bridge Partners LLC, “The differences are difficult to pin down.” She said the organizational differences in diversity and inclusion strategies likely depend on whether the initiatives or needs are driven by the community, bottom line, compliance or leadership.

For Choice Hotels, a desire for diversity was primarily driven by the bottom line and a need reach a wider market. “The lack of diversity in our hotel owners brought an issue to light. When we created a vehicle to go after that market we found out that, ‘Wow, this is a really good model,’” said Maria D’Ambrosio, senior director of diversity and inclusion at Choice Hotels.

Choice increased the number of nontraditional hotel franchisees to 40 in 2007, up 15 percent from a year earlier. The company also initiated internal efforts to recruit, retain and mentor its talent pool. D’Ambrosio said the company is close to reaching its goal of having unbiased turnover rates, where the turnover rate for women and minorities is the same as that for men and Caucasians. This is important since Choice’s 2007 annual report on diversity said 19 percent of its employees are minorities and 55 percent are women — and those numbers likely have increased.

At CDW, diversity and inclusion efforts are not only driven by the bottom line, but by the community it serves. The company lists diversity and inclusion as one of its seven growth strategies. Melissa Donaldson, director of inclusion at CDW, said for the company to achieve its mission to become the biggest provider of technology and services, it had to understand and reflect the needs of its diverse customers. To do that, Donaldson said the company is trying to cast a wider net in its recruitment efforts.

In addition to taking part in college career fairs, CDW sponsors and participates in career fairs such as Candidate 5 Fair, which caters to the LGBT community, as well as the Hispanic Alliance for Career Enhancement. In 2007, the company reported 35 percent of its new hires were people of color, up 5 percent from 2006.

Like the corporate sector, educational institutions also are boosting their efforts to recruit more diverse student bodies. This will create a global experience that mirrors the environment these students grow up in and will enter into upon graduation.

“In the early stages, you were preparing students for a national workplace, where students tended to leave here and work for a number of large American companies,” said Derrick Scott, director of the Multicultural Engineering Programs Office (MEPO) at the University of Michigan’s College of Engineering.

But as corporations have become more global, Scott said students are no longer “just being a citizen of the U.S. but really trying to develop themselves and their competencies to be world citizens.”

Scott, who has worked at the university for 30 years, said in the past, MEPO focused on providing underrepresented students access to education and academic success. While that aspect of the work continues, he said the office also is looking at ways to help students become global citizens by creating a more inclusive campus experience.

“We know this phase of inclusion is a direction that we need to move in,” said Scott. But he said the office wasn’t completely sure how to do that, as the university has a lot to learn from the corporate world on diversity and inclusion strategies. “It’s 25 to 30 years behind the models we have seen at [progressive corporate] organizations.”

Next year, MEPO plans to bring in a consultant to help it implement programs that promote inclusion.

Unlike corporations that may have included diversity and inclusion strategies as part of their core missions for many years, many educational institutions are just beginning to make it a campus-wide effort. In 2006, Inside Higher Ed reported that some 30 U.S. institutions created a new role for chief diversity officer. For instance, the University of Michigan started its campus-wide effort two years ago, though the MEPO has been working on diversity efforts for decades. Similarly, Yale University appointed its first chief diversity officer just two years ago.

Deborah Stanley-McAulay, the second chief diversity officer appointed at Yale, said the university decided to create the position as a result of its 2004-05 workplace survey. In the survey, employees were asked to rank a series of statements, and some of them — “During my employment I have been treated fairly,” “Offensive behavior, sexual harassment discriminatory remarks or insensitive remarks are not tolerated in my environment,” and “In general workforce policies are administered fairly and consistently at Yale” — were rated very low.

Stanley-McAulay is now responding to those statements. Yale has held pilot manager and staff diversity programs to encourage discussions around what it’s like to be a minority at the university, and the university is working to establish more programs in the near future.

Stanley-McAulay said one of the challenges she faces as the university develops diversity and inclusion initiatives is equating those efforts to a bottom line. “When you are a corporate organization, you have a product; you have profit and loss. So it’s very easy to equate diversity, education and career development to the bottom line,” she explained. “Our product is non-tangible, the knowledge piece. It becomes harder to equate that.”

That’s also the case at the Federal Deposit Insurance Corp. (FDIC). “Most government agencies are not like corporate America; profit is not our bottom line,” said Michael Collins, director of Office of Diversity and Economic Opportunity at the FDIC. “Our bottom line is basically serving the public and ensuring that depositors can feel safe that their money is going to be safe and protected.”

To better serve the public, Collins said the FDIC workforce has to reflect the community it serves. But due to government regulations, the FDIC cannot cherry-pick candidates to create a diverse workforce. Instead it employs a targeted recruiting strategy to create a diverse candidate pool and encourage more candidates of different backgrounds to apply.

Collins said many government agencies employ this strategy. The FDIC recruits at minority institutions such as Hispanic Associations of Colleges and Universities and at the National Urban League. It also offers internship programs to give minority students a look at opportunities inside the organization.

In the nonprofit sector, the communities that organizations serve also tend to drive diversity and inclusion efforts. However, for many nonprofits, budget remains a big issue. “We don’t have the huge budget that large corporations have,” said David Thomas, vice president of diversity and inclusion at YMCA of the USA. Thomas is a veteran of diversity and inclusion efforts in the corporate sector, having previously worked for LaSalle Bank and Sprint.

Sue Wilke, executive director at the Leadership Council of Human Services Executives, said for many nonprofits, having diversity and inclusion initiatives is a luxury due to limited budgets. If there is funding, first it would go toward the organization’s mission.

In nonprofits, diversity and inclusion efforts also may be used differently. At the YMCA of the USA, diversity strategies are used to attract and reflect changing demographics within communities. But at the National Forum for Latino Healthcare Executives (NFLHE), diversity and inclusion efforts are more external and geared toward promoting diversity in other organizations. The nonprofit is pushing for more Latino representation at the executive level in U.S. hospitals and health systems.

NFLHE President Michael Anaya said the organization achieves its mission through advocacy, establishing a national presence and by grooming the next generation of Latino health care executives. Part of the nonprofit’s grooming efforts was to create a diversity internship with the Colorado Hospital Association. The internship helps recent graduates better understand health care policy development and legislative affairs by letting them participate in meetings in which those discussions take place.

Interestingly, the first intern to go through the program was not a Latino, but an Asian-American woman. Anaya said despite the organization’s name, which reflects its membership, the organization aims to advocate diversity and inclusion across the board.

As is seen in the case of the YMCA of the USA and the NFLHE, different organizations’ missions affect how diversity and inclusion strategies are implemented. Some may focus more on external efforts, while others may pay attention to both internal and external drivers. But two key factors likely affect differences in diversity and inclusion strategies: leadership and budget.

Executives in the corporate sector were among the first to make diversity and inclusion part of their core mission, so more of their efforts are centralized when compared with other sectors. Further, corporations typically spend more on diversity and inclusion initiatives. The combination of the two has made those in the corporate sector leaders in diversity and inclusion efforts. That may be because companies such as Choice Hotels and CDW see a clear link between diversity and inclusion initiatives and their profits.

The monetary link is less clear for organizations in the education, government and nonprofit sectors. For organizations such as the University of Michigan, YMCA of the USA or the FDIC, diversity and inclusion efforts largely are driven by the needs of their communities and not by profits.

The ability to link profit to diversity and inclusion activity can affect how soon those strategies are put in place, as well as how relevant they are to an organization’s core mission. For any organization that wants to reap the benefits of diversity, it is important to emphasize accountability. For instance, tie executive compensation to the results of diversity and inclusion strategies.

Chi-an Chang is a freelance writer and translator based in Chicago. Her work has appeared in BusinessWeek, Chicago Reader, Environmental Leader and Taiwan Indigenous Television. She can be reached at editor@diversity-executive.com

Mission Accomplished

Keywords: diversity, corporate, non profit, academia, education, inclusion, business case, core mission, bottom line