New Study: racial and gender diversity in leadership

Fort Worth, TX

6/20/2008

Study looked at effective methods for diverse succession planning

With growing proportions of women and minorities in the workforce, more companies are including diversity initiatives in their succession planning for key positions. Many of these firms are enjoying the benefits of having greater diversity in their upper-level leadership, but others have experienced pitfalls.

One of the few examinations of diverse succession planning, a new study reveals effective diversity practices as well as those that have proven self-defeating and at high risk of failure. “Diverse Succession Planning: Lessons from the Industry Leaders,” by Dr. Charles R. Greer of the Neeley School of Business at TCU, and Dr. Meghna Virick of San Jose State University, appears in the summer 2008 issue of Human Resource Management.

“We found several advantages to successful diversity succession, but also found that poorly conceived/implemented diverse succession practices that can create some of the problems they were meant to address,” says Dr. Greer, a widely published authority on human resources issues.

Strategic advantages of diversity initiatives in succession planning include: 1) access to new markets through key personnel who reflect those markets; 2) improved decision making; 3) better solutions to problems; 4) overall more creativity and insight as the diversity of the team is increased; 5) revitalized corporate thinking and innovation; 6) improved public image; 7) elevated employee morale; 8) increased productivity; 9) decreased turnover, and; 10) reduced risk of litigation.

As one interviewee passionately stated, companies should “throw their arms around women and minorities.”

However, early promotions for women and minorities to accelerate their rise in the company can sidestep the developmental experiences necessary for success in their new roles, thus setting them up for failure. Additionally, establishing special programs for women and minorities can lead to resentment from other workers because these programs are not available to everyone.

Even so, due to the continuing dearth of diversity at upper levels, women and minorities may indeed require special consideration for the white-male status quo to change.

“This really is a paradox,” says Dr. Greer. “We heard time and again from the people we interviewed that companies should not have special programs for women and minorities, but the reality is that these special programs can provide great benefits to the organization.”

The key, he explains, involves integrating diversity into the company’s overall succession planning, such as ensuring that the talent pool targeted for advancement includes both genders and all races.

“Programs that incorporate diversity into succession planning should be viewed as pipelines loaded with talent instead of special programs just for women and minorities,” says Dr. Greer.

Other recommendations offered by Greer and Virick include:

1) Formalizing a commitment to diverse succession planning throughout the organization and viewing it as a broad-based strategic imperative instead of solely a human-resources function. “The company must clearly envision diversity as essential to business strategy because of the competitive advantages that follow,” says Dr. Greer.

2) Identifying early on the talented individuals who can be developed for advancement

3) Designing objective standards for performance evaluations

4) Identifying and cultivating outstanding mentors

5) Allowing the chief diversity officer to have direct access to the CEO

6) Basing executive bonuses partly on achieving diversity goals.

“Companies need to reach deep, almost down to entry level, for talented women and minorities who can rise to leadership positions. Early identification and development of talent is crucial,” says Dr. Greer. “Also, identifying skilled mentors and fully utilizing their talents should be a priority. Mentoring has great importance in terms of succession.”

Patience and persistence are required, he says. Results can take four or five years, or more. So companies should be ready for a long-term commitment and be willing to work through the risks and challenges.

However, choosing not to pursue diversity in succession planning carries its own perils.

“If executives, managers, and key professionals don’t reflect the workforce, the company is missing opportunities,” says Dr. Greer. “Employees will ask ‘Is this company accepting of me? Are there people who look like me higher in the organization?’ We think diverse succession planning can make positive contributions to company performance.”

For more information contact Dr. Charles R. Greer, professor of management, M.J. Neeley School of Business, Texas Christian University, (817) 257-7565, c.greer@tcu.edu.