Are Diversity Initiatives Worthless?

Recently, Jack Welch, former CEO of GE, made some controversial comments at a Women in the Economy conference sponsored by the Wall Street Journal.  What did he say that upset at least some of the female attendees?  First, he said that working hard and showing how your skills can benefit the company are the keys to getting ahead.  In effect, he said, “over deliver … performance is it.”    Unlike what some may believe, this is not what upset them; who could argue against this, in the first place?

He then criticized mentorship programs and other diversity initiatives for women, referring to them as “victims’ units.”  He even mentioned some female executives who approached him while he was at GE, telling him that they refused to participate in these kinds of programs.  By inference, Welch would probably also argue against any kind of diversity initiatives for African-Americans or minorities.

We all know the numbers.  Of the Fortune 500 companies, only 3% have a female CEO today.  A survey of 60 major companies by McKinsey shows women occupying 53% of entry-level positions, 40% of manager positions, and only 19% of C-suite jobs.

In my experience, Welch represents the mindset of a generation of white male executives (mostly in their sixties), some of who still believe that there is true meritocracy in corporations, that there are no barriers to anyone getting ahead other than your own internal ambitions, and that regardless of the culture or work environment, those who are successful find ways to make it to the top.  In this Darwinian world, there is no need to do anything special or different for diverse groups.  You just have to figure it all out, since “the cream rises to the top.”  For these executives (I know; I have worked with quite a few of them in my career), diversity initiatives, affinity groups, and support networks for women (and by extension, African-Americans) are unnecessary and even unfair.  And some women and African-Americans agree with them!  Taken to an extreme, what Welch implies is that managers should have no responsibility in developing others.  Just leave them alone and let them figure it out for themselves. 

Contrary to what Welch implies, there continue to be cultural, systemic, and organizational barriers to success in today’s work place.  The evidence is overwhelming, and I don’t need to rehash this in this column.  Here are a couple of points I would like to offer based on what we know from the science and practice of Industrial-Organizational Psychology. 

First, we know from research and from schema theory that we have filters and expectations about individuals that tend to bias our perception of them.  And one of these pervasive biases is a “similar-to-me” bias.  We tend to like those who are like us, and tend to react favorably to those with whom we perceive to have similarities.  No question that this has been a barrier to females getting ahead.  Fortunately, through diversity programs and the track record of many outstanding women in the work force, I believe that individuals in corporations today are more “enlightened” than they have been in the past.  But the biases still exist.  In Europe during the eighties, many orchestras changed their practice from having judges watch and evaluate potential orchestra members audition in front of them to having them audition “blind.”  That is to say, the applicants performed behind a curtain so that the judges could not tell whether the applicants were male or female.  This simple practice led to a dramatic increase in the proportion of female orchestra members.

Second, while very few if any corporate executives would argue against evaluating people other than for their performance (as Welch suggests), how that performance is viewed can be subject to bias.  Here, attribution theory can shed much light.  Attribution theory states that we as managers not only evaluate performance, but also try to determine the causes of that performance.  Is the reason for their performance based on ability, effort, luck, or some other factor?  A manager’s evaluation of the potential of an individual may depend therefore not just on his or her performance but also ona the manager’s answer to this question of what caused the performance.

Welch implies that it is all about performance.  But wait.  Isn’t this the same Jack Welch who in GE introduced the famous 2 X 2 matrix where managers were evaluated not just on their performance (on the one axis), but also on their values (the other axis), and that a manager who performs well but who does not have the right values should be “terminated?”

Unfortunately, our biases creep into our evaluation of the causes of performance.  There is a lot of evidence, for example, that male managers tend to attribute the performance of their female subordinates more to luck than to ability or effort.

So what are the implications to individuals and to corporations of the Welch assertions?  First, for individuals, there is no question that your performance is your “foot in the door,” your ticket for punching your way to the dance.  This will mean making some personal sacrifices and trade-offs, and working some long hours to build a successful track record if your ambition is to be a successful executive.  But I don’t believe that this means rejecting whatever support and help you can take advantage of, whether within your company or outside the company.  For example, many of us need to build our networks (as Reid Hoffman calls it, your personal board of directors) and if your company offers programs to help you with this, there is no reason not to take advantage of them.  Believe me, the Welches of the world (white males in their sixties and seventies), when they were rising stars, had their own network and support system.  It may not have been formalized, but they still took advantage of them.  And many of these groups excluded women, whether intentional or not.

For managers, this means that your responsibility as a manager includes developing and coaching others.  Catalyst just published some recent research demonstrating that a majority of high potentials received developmental support and are in turn developing others in their organizations.  This “culture of talent development” is critical for companies today, and yet Welch, of all people, would seem to suggest it is not necessary, or even desirable.      

For corporations, continuing to provide mentoring programs, affinity groups, and similar initiatives – and more broadly implementing diversity initiatives – will provide them with a competitive advantage.  After all, the business case for diversity in attracting, developing and retaining talent is well-established, notwithstanding the opinion of Mr. Welch.   

Global Mindset Part II

An example:  you are an expatriate manager of a multinational company in a Middle Eastern country  and you have just found out that no women are allowed to even apply for certain jobs in your department.  You say to yourself, “I just don’t get it.”  Another example:  an executive who works with Korean nationals once expressed his frustration to me that Koreans will never tell you what they really think.  “Why can’t they just be candid like Americans?”

I could give many more examples to illustrate reactions to differences in cross-cultural management practices that suggest a gap in global mindset, especially in one aspect:  that of developing empathy, which suggests an ability (and willingness) to understand another person’s or group’s perspective.  Actually, lots of research suggests that this skill differentiates effective negotiators from average ones.  For managers working cross-culturally, I believe that this “perspective-taking” skill is critical.  As two researchers from the University of Chicago (Epley and Caruso, 2008) have stated, “… the ability to accurately adopt someone’s perspective is better than chance but less than perfect.”  They point to three barriers, which I will paraphrase here. 

            

The first barrier is “activating” or switching on in our minds a willingness to do this.  As managers and leaders of global teams, this is sometimes difficult to do when there are so many mental balls that we are juggling.  And if we have not even made the effort to learn about other cultures, or to recognize that our way is not the only way, switching mentally to consider practices from another person’s perspective will be tough.  Our default mode is our own perspective, our own way of viewing things.  

  

The second barrier is our natural tendency is to react to things from our own perspective.  In one experiment which they cite, participants were asked to send either sincere or sarcastic messages to another participant, either over the telephone or via e-mail.  They were asked to predict, for each of 10 sincere and 10 sarcastic messages, whether the recipient would interpret the message correctly or incorrectly.  Recipients were not significantly better than chance at distinguishing between sarcasm and sincerity over e-mail, but not surprisingly, were significantly more accurate over the telephone.  But the senders did not think there would be any difference in the recipients’ accuracy when communicating over e-mail or the telephone.  “The senders’ intentions to communicate sarcasm or sincerity were so clear that it rendered them unable to appreciate … that the perception of the person on the other end of the computer monitor would be very different from the person on the other end of the telephone.” 

From my experience, I can recall many times when executives say they don’t understand why their messages are not being understood, or are being misinterpreted by employees.  If the executive working with Korean nationals has asked them for their opinions and they don’t give him any, it must be because they prefer not being candid!  The perspective that in some cultures, authority is so respected that voicing an opinion is tantamount to challenging the boss, is not something that would occur right away to this executive.     

           

Third, if we do recognize that we need to understand another person’s perspective, our ability to do this may depend on whether we believe that person is similar to us or not.  In either case, this may lead to problems.  Let’s say that you are a manager for a global company working with a group of Japanese employees in the Tokyo subsidiary.  You could make the assumption that because these employees belong to the same company as you they should react similarly to you.  Or you could make the assumption that because these employees are Japanese, they will react based on your “stored knowledge” of what Japanese are like – which may or may not be accurate.  Each of these assumptions will not necessarily reflect the Japanese employees’ perspectives.

I was recently in Singapore to teach a class in Global Leadership to a group of intelligent and experienced Asian executives, most of whom have regional roles working in global companies.  One of their challenges is in managing within a matrix environment and convincing senior management that certain global policies and strategies might have to be adapted for different markets.  In discussing their situation, we had a productive dialogue in looking at the situation from the senior managers’ perspective – what could be going on in their minds, what might be driving their behavior?              

Although empathy and perspective-taking are sometimes difficult, developing this skill can be learned through practice and mindfulness.  I have three simple suggestions.  One, get to know the other person or group better, as well as their cultures.  By doing this, you will minimize your tendency to stereotype.  Second, learn to describe first before judging.  We have a quick tendency to evaluate based on first impressions.  But in cross-cultural situations, what you see is often not what you get, because our observations are filtered through our own cultural frame of reference.  And third, try to reflect on what is going on and what might be causing the behavior.    

So for the expatriate manager and the executive working with Korean nationals, learning about the local cultures might give them insight into why these practices exist.  It does not mean accepting these practices, but it may mean developing alternative approaches.  The executive working with Korean nationals, recognizing that he is an authority figure, might put more effort in asking specific questions rather than asking them generally for their opinion.  Ultimately the benefit of developing empathy and of having a global mindset will help you become a more effective global leader.      

Epley, N. and Caruso, E.  (2008).  Perspective taking:  misstepping into others’ shoes.  In K. D. Markman et al. (Eds.), Handbook of Imagination and Mental Simulation.  New York:  Psychology Press.

                     

Global Mindset Part I

Larry Parker (not his real name) was a marketing executive for the Asia Pacific division of a multi-national company.  He would hold regular teleconferences with his marketing directors in Asia and, according to him, he found it difficult to make much progress with them.  Asking for my advice, he commented, “Why is it that when I tell them that they need to meet a certain deliverable by a certain time, they all say they will do it, and yet nothing happens by the deadline.  I can never tell if they have agreed to do something or not.  Why can’t they just be straight with me?”

 

Does Larry have what many management experts are calling “global mindset?”  What is global mindset, anyway?  How do we know when someone has it?  Professors Anil Gupta and Vijay Govindarajan define global mindset as “combin(ing) openness to and awareness of diversity across cultures and markets with a propensity and ability to synthesize across this diversity.”  And The Thunderbird School of Management says that global mindset is made up of your:  intellectual capital (e.g., your global business savvy, your cosmopolitan outlook), psychological capital (e.g., your passion for diversity, your quest for adventure), and social capital (e.g., your intercultural empathy, your diplomacy).    

These are certainly reasonable.  As implied, global mindset is a mental attitude, an inclination.  It is not a behavior, but it should predict behavior.  In my own experience and interviews with executives and students, I would say there are four components which can be easily remembered with the acronym FACE:  Flexibility, Acceptance/openness, Curiosity, and cross-cultural Empathy.

I asked my students near the beginning of my course in Cross-Cultural Management to describe what global mindset means to them.  Here is a sampling of what they wrote:   

“Global mindset means that you are aware of your environment, of others and the impact of ideas and events in your business, strategy or position.”

“Taking a more macro look at things … understanding that things won’t work the same all over the world, and taking that into account.”

“Having an understanding that countries have different cultures, and going into each country, one must always be aware and sensitive to that country’s cultural ways.”

 “Someone who understands or has an open mind to understand different cultures and how these affect the outcomes of decisions.”

“Putting yourself in the other culture’s shoes.”

“Listening and resisting reflexive judgments.”

“Your way is not always the right way.”

“Understanding that different countries/cultures have different ways of doing things.  They value certain things differently.  A global mindset has to take all of that into consideration and be open-minded and willing to compromise.” 

When I asked Larry (a mid-westerner who had only begun to travel to Asia) what he thought was going on, he said that it was either because Asians don’t have the same sense of urgency as Westerners, and/or that they are not as candid.  Six months later, Larry requested a transfer from his position and eventually moved to a staff job in headquarters.

We can reasonably assume that Larry did not have a global mindset and was perhaps a poor fit in his global role.  He showed little curiosity for the geography he was managing, was not willing to explore other ways to accomplish his objectives, and could not imagine viewing things from his direct reports’ perspective.      

Developing a global mindset, on the other hand, is not easy.  Traveling to other countries, or reading about different cultures, may help, but is not sufficient.  And of the four components, developing inter-cultural empathy is probably the most difficult.  In a subsequent article, I will explain why, and also some of the ways you can develop global mindset.

The Leadership of Steve Jobs

By now, many of us have read, watched, and listened to many accounts of Steve Jobs’ many contributions can achievements.  There is a passion from consumers about Apple and Steve Jobs that is rare in the corporate world.  Not long ago, I walked past an Apple store in Soho and saw hundreds of Post-It notes and flowers from so many thanking Steve Jobs.  As his biographer Walter Isaacson and others have pointed out, however, Steve Jobs was far from perfect.  I’d like to comment in particular on his leadership and management style.  It is well-known that Steve Jobs could be arrogant, dictatorial, and mean-spirited.  Yet he was a great leader.  So does this invalidate the claims of some management writers and thought leaders today that effective business leaders today need to be nice, kind, humble (Level 5 leadership), and practice “servant leadership?”  Does this mean that executive leaders should now not worry about being ruthless, imperial and aloof?

Not at all.  I think this apparent contradiction can be explained by two sets of factors.  One, we have to recognize that leadership style is situational.  A style that might work under some circumstances might not work in others.  Of course this concept has been around for years, but I am still surprised at the claims being made about “universal” leadership characteristics and behavior.  Those of you who have worked overseas and led cross-functional global teams will surely recognize that your leadership needs to be adapted to specific cultures.  I believe that Mr. Jobs’ leadership style (not to mention his genius in design) was a key ingredient in Apple’s success; had he used a different style, he might not have achieved the same spectacular results at Apple.

Two, despite the observations of some about Mr. Jobs’ arrogant style, I believe that he had at least three qualities that great executive leaders have:  a clear vision, a passion for the company and its people, and an ability to inspire trust.  This is what I would consider his leadership character.  In fact, Mr. Jobs not only had a vision, he made sure that everyone in the company bought into that vision, and this created a “higher purpose” for the company that really excited Apple employees.  Of course, his passion for the company and its products is legendary.  And employees trusted Mr. Jobs – not because he founded the company but because he showed time and again his competence in many areas, especially product design and marketing.  And because employees saw - through his behavior - that Mr. Jobs was not driven by his own ego or by some self-interested needs (like the outrageous pay packages of some executives), they trusted him.  So if Mr. Jobs was at times arrogant, even nasty, employees viewed these behaviors in the context of these underlying qualities.

I think the lessons for executives today are clear.  Leadership style is situational – your behavior can and should vary depending on circumstances.  What is important to consider is the character of your leadership.  Do you have a clear vision for your team or your company?  Do your team members believe in that vision, and are they excited enough to become part of the journey towards achieving that vision?  And do they trust you to do what is ultimately best for the company, the stakeholders, the customers, and employees – not what’s best for you?                      

Lessons for Mr. Buffett

Recently, I spoke to my class in Organizational Behavior about what I would advise Mr. Buffett after the recent incident with Mr. Sokol.  Here is a summary of what I said.


Number one, be aware of your cognitive biases.  You like people who are like you.  So do most people.  But don’t let that color your judgment.  You liked Sokol because he came from the same school as you, has had a good track record and is results-oriented like you.  You have many things in common with him.   But you still need to judge him based on his performance AND his values.  In OB, these are called "similar-to-me" and "knowledge-of-predictor" biases.


Number two, make sure you get multiple sources of feedback – preferably using a 360-degree  process.  Recognize that you are the boss, and information to you gets very filtered – sometimes you are the last to know.  Jack Welch recognized this early on, and this is part of the reason why he created the Crotonville Management facility.  By the way, if you reach out and ask people two levels down what they think of their boss, chances are you won’t get the straight scoop - at least not right away.  In many cases, after a manager is fired, people will come to you and say, thank you for firing him – he was a terrible leader; what took you so long?  So having a process like 360-degree feedback will help you get a more rounded view of your team.  


Number three, adapt your management style, and specifically your decision-making style, to the situation.  You like to delegate.  It seems that you spend most of your time in your office, reading or talking on the phone.  You don’t generally manage by walking around.  You trust your direct reports.  You like to empower them.  This suits your personality and is understandable, given the diversified nature of your company.   That’s fine in most circumstances.  But when there are yellow or red flags, or when the situation changes, you have to be willing to change your style also.  Sometimes as a boss, you have to dig deep and you need to ask a lot of questions.  This is not the opposite of delegation nor does it suggest that you no longer trust your people.    This is to make sure you have a good understanding so you can best support your team.  In my experience, your team will not view this as "interfering" but as a positive perception that you are interested in their business and willing to help.  It will also help you connect the dots among your various businesses and see where you as CEO can truly add value.