Capitalizing on Diversity in your business

This final article in a three-part series about net Globalization TM covers the last three steps in developing the mindset and business practices that companies will need to succeed in the developing global marketplace. The previous two articles (Sep/Oct and Nov/Dec 1999) described how a business can assess its global readiness and then proactively start to develop the necessary skills.

In this article, authors Susanne Marshall and Sandra Zoratti point out that companies also need global skills at home-to help them focus on customer expectations in an already culturally diverse domestic marketplace.

Companies that want to succeed in the developing global marketplace will need to replace obsolete business practices and strategies that, until the age of netGlobalizationTM, have been successful. NetGlobalization is our term for describing the current global revolution, an all-encompassing outcome of the Internet and the network age which is forcing us to change traditional business practices, approaches, and cultures. Those who doubt just how widespread and fast paced this revolution can be need only look at the recent e-commerce explosion.

Step 5: Revisit Diversity In the age of netGlobalization, professional diversity has emerged as one of the most critical issues in business. As U.S. businesses are marketing to customers and clients based in overseas locations once inaccessible to Americans, intercultural communication skills have become increasingly critical. But the ability to communicate with people who have a frame of reference that is ethnically, linguistically, and culturally different from that of Caucasian Americans is a skill no less important in the corporate environment here in the United States.

Whether you work for a large or small company, chances are you interact daily with people who have cultural backgrounds that differ from your own. At the end of the 20th century the U. S. has become more culturally diverse than at any point in its history. As a result, many of our accustomed views of "minorities" simply no longer match today's reality, Consider some of the following data, provided by the National MultiCultural Institute:

Through the 1990s, people of color, women, and immigrants will account for 85% of the nation's labor force

By 2000, women will account for 47% of the labor force

Over the next 20 years, the U.S. population will grow by 42 million. Hispanics will account for 47% of the growth, Blacks 22%, Asians 18%, and Whites 13%

The population of Miami is twothirds Hispanic

The population of San Francisco is one-third Asian

While women and "minorities" are -visibly present in the U.S. workforce, their numbers in professional leadership positions remain minute. A recent survey of the 50 largest public companies in northeast Ohio, for example, shows that of 497 executive officers, only 5 are Black. When other minorities and White women are added, the number of "minorities" in executive positions rises to 38.' It is clear, then, that women and "minorities" continue to be less likely to advance professionally than Caucasian men, perpetuating the notion of a professional glass ceiling.

The issue of a lack of diversity in corporate leadership has broader implications than the perennially embattled debate surrounding affirmative action seems to suggest. As many organizations continue to maintain a work environment that does not satisfy the needs of their employees, thev will fail to maximize employee potential for professional contribution. The contribution of a diverse workforce, however, is often critical for a company's success. If we want to connect with members of the U.S. population as customers, clients, and alliance partners, we need to understand who they are and what they want.

Companies whose strategic planning rests with individuals who are representative of only one small group of an increasingly diverse population will simply be less successful. The uniformity of perspective that defines U.S. corporate leadership today suggests that if we managed lower level diversity, in the workplace more effectively, we could achieve two goals at once. We could maximize employee contributions and also create a workforce that more accurately represents social reality.

Creating a work environment that capitalizes on diversity remains one of the great challenges of the age of netGlobalization. Despite the ready availability of cultural diversity programs in many U.S. organizations, the issue has yet to move out of a pigeonhole in the human resources department and into the strategic center of the corporate environment, in part because its validity remains in doubt.

How do we know that the way we manage diversity in the workplace really makes a difference in corporate performance? Research by Carol Ko-vitch from the University of California, Los Angeles, offers answers. Ko,vitch shows that culturally diverse work groups tend to perform on either side of a bell curve showing group effectiveness, turning in efforts that are either highly effective or highly ineffective. Homogeneous teams consistently stay in the middle of the bell curve. If we succeed in providing a supportive work environment for diverse teams, then, we can expect a heterogeneous team to outperform its homegeneous counterpart on a consistent basis.2

Anyone who has ever worked on a truly diverse, cross-functional team can appreciate the validity of Kovitch's findings. Your social background, your ethnicity, your age, your education, your language skills, and the way you were socialized irrevocably shape the way you approach any given task. The frustrations that can accompany your efforts to communicate your interpretation of that task to a team member who does not share your frame of reference can be enormous.

Creating synergy from a variety of often radically different professional perspectives is hard, but it is also an opportunity for excellence. Finding ways to foster such synergy will invariably improve the quality of your team's effectiveness. In the age of netGlobalization, it might also offer the only way to successfully focus on customer expectations.

What can you do to foster intercultural synergy in a diverse team environment? Answers to that question revolve again around our suggestion that success in the age of netGlobalization depends less on entirely new professional concepts than on more effectively using tools we already have at our fingertips. The most important concepts to support interculturally diverse teams have been in your managerial repertoire for years:

1. Selecting team members: Select team members according to their abilities and professional strengths, not their ethnicity.

2. Setting team goals:

Allow your team members to have input in establishing a team goal. This goal should be superordinate and should not be reduceable to a number of individual goals.

3. Encouraging differences in approach;

Allow every team member input in matters of prioritization and project focus. The project's basic structure should reflect the diversity of its participants.

4. Evaluating team goals:

Make external feedback a focus of project assessment, and communicate findings to both individuals and the group as a whole.

While these ideas per se are certainly not new, they take on an entirely new level of importance in a diverse work environment.

Shared strategic intent cannot be created in meetings during which some team members feel more comfortable expressing their ideas than others. True intercultural synergy in the workplace evolves not only when everyone speaks, but when everyone is heard. Such synergy is essential in efforts to connect with an increasingly diverse U.S. marketplace. Without it, we will not be able to take the essential step from the Golden Rule (treat others as you wish them to treat you) to the so-called Platinum Rule (treat others as they wish to be treated) .3

It is the Platinum Rule that marks our beginning recognition of the fact that there is no substitute for knowledge. We need to develop a more accurate understanding of the U.S. marketplace if we want to be successful at home. Such understanding cannot develop if we continue to fail to bridge the ever-widening gap between marketers and their market.

Step 6. Adopt a CustomerCentric Approach

Today, customers make the rules. They have almost unlimited options and alternatives from which they can choose, and they can find out about these options readily via the global network. Often, these choices will include a high level of customization, delivering exactly what the customer values, specifies, and desires. The creation of both products and services is often engineered to deliver customerspecified goods for an audience of one. Thus, the mantra of "customer focus" is no longer a philosophy, it is an absolute requirement.

In the industrial age, businesses operated with a product or processoriented focus. That approach worked well with mass production manufacturing and a relatively slow rate of change. Today, Internet years (seven calendar equals one Internet year in real time) are creating timelines and rapid-fire change that is downright disorienting. As customer needs develop, change and seek a high level of customization, companies that choose to change swiftly to accommodate those needs will be the winners.

The truth is, as a business or business professional, you don't establish what is of value to your customersthey do. That fact is a time-tested truism. However, in the past, customer choice was greatly limited. No longer is that the case. Today, customers can expressly precisely what they want, need and value most, and often get their requirements fulfilled. If not, they shop elsewhere. Customer satisfaction is a moving target. Thus, a customer-centric approach has become a core necessity in a world where customers make the rules and are given hassle-free choice on a highly personalized basis.

Three key points clarify the necessity of a customer-centric approach:

1. The need for growth: Customers are your only source for profitable growth. So, if growth is your goal, you need an effective handle on emerging customer needs. Being able to prioritize and customize efforts around those highest priority customers is of paramount importance to your future.

2. The need for value creation: Your business model is about creating value for profit. in order to create value for your highest priority customer groups, you must be in constant communication around their needs and priorities. Unless you have a planned, systematic approach to managing your accounts and their connection points, you will be unable to assess accurately or anticipate their needs. Without this assessment, your value proposition can become stale, outdated, and irrelevant. With this assessment, you are much more likely to create true value for your customers, which in turn catalyzes sales longevity, account loyalty, and higher profitability.

3. The need for cost control (so that growth translates into profitable growth):

It is often cited that finding a new customer costs five times more than retaining an existing one. Let's name two costs not often measured or even quantified: customer acquisition costs and customer replacement costs. These costs are real, quantifiable, and often significant. A sizable component of these costs is time, and time is of ever-increasing value.

So, increasing the profit percentage of your customer base is directly related to reducing the cost and frequency of account acquisition, management, and retention. Simply stated, the longer you can manage and maintain a mutually beneficial customer base, the lower your account development costs and, most likely, the stronger your customer relationships. The result is a stronger bottom line and a more stable future income stream.

To ensure a customer-centric approach, companies must keep a never-ending and sharply keen eye to the marketplace. Now that technology enables information collection, measurement, and management at unprecedented levels, the role and importance of customer information has been elevated exponentially. Customized databases, knowledge management programs, and other informational tools are being developed at warp speeds so that they can drive business decisions and marketing programs. The concepts of market research and the Internet are now interchangeable and should be linked together as such. Market data can be collected online and in real time. With these up-to-the-minute information tools and communications vehicles at our fingertips, customer development and management at a specific and highly accurate level is truly feasible.

Customer information needs to be at the foundation of your business. All systems, information, management, sales, marketing, customer support and operations need to revolve around the customer's key needs. Thus, building incredible flexibility into a manufacturing or service process is often the only way to ensure an effective, on-target answer to these ever-evolving customer needs and standards.

Step 7. Understand the "Then" and "Now"

The domestic mindset of yesterday's industrial age is "then." The key to achieving a mindset appropriate for today's global and technology-oriented economy is "now." And, more importantly, it is the adoption of a global mindset and behavioral change that is the first and thus most important step to "going global."

Some key characteristics (see "Then vs. Now" sidebar) can be juxtaposed to illustrate the difference between "then" business in the industrial age vs. -now" business in the age of netGlobalization.

At Your Fingertips: Components of a Global Mindset

The tools we suggest you utilize to thrive in the new professional environment created by netGlobalization are not unknown to you. They have, in fact, always been at your fingertips. The factor that differentiates them is urgency. If you don't develop a global mindset now, your company will simply not succeed. Another look at the components of the global mindset will underscore its importance.

Broad Scope

The global mind focuses on developing a novel business approach capable of transcending narrow views of markets, competition, and possibilities. The success of this approach depends on using the expanse of global knowledge we now have at our fingertips. Functional alliances with suppliers and competitors all over the world as well as accurate benchmarking against best-in-world competitive forces thus become possible.

Conflict Management

The global mind focuses on viewing complexity, contradiction, and conflict as generative, positive byproducts of change. Rather than attempting to control and silence conflict, the global mind works to balance counter-forces to create new possibilities and uniquely balanced solutions.

Process

The global mind focuses on a process-based approach to management that is essential for the adaptability and agility required in today's global economy. Corporate structures geared toward managerial control are outdated because they are rigid and will not allow for the swift change necessitated by the global revolution.

Interdependence

The global mind focuses on establishing alliances and partnerships rather than on developing an individualistic business approach. The interdependence of multicultural teams and virtual organizations is a fuel source for accelerating into the global network.

Opportunity

The global mind focuses on accepting change as economic opportunity. Change cannot and should not be eliminated.

In the age of netGlobalization, we cannot refuse to change and hope that all will be well. When the world around us changes, standing firm in our old shoes cannot help us adapt and survive in an emerging environment. Standing still will limit us dramatically and create great confusion and strife within our professional lives.

When the game changes, its old rules become invalid. In order to play a new game, one must first explore the new game's characteristics and then develop new rules so that everyone can compete and be a viable play er. Exploring the characteristics of the age of netGlobalization is critical for business success in the 21st century. 0

[Sidebar]

Rank Your Level of Diversity

Answer the following questions with yes or no.

1 .One or more persons in my company whose position is comparable to mine is of an ethnically or culturally different background.

2. One or more persons in my company whose position is senior to mine is of an ethnically or culturally different background. 3.I have some contact with customers and clients who do not share my culture and/or ethnicity. 4. I have regular contact with customers and clients who do not share my culture and/or ethnicity.

5. The marketing strategy of my company takes intercultural differences into account, both among employees and among customers/clients.

6. The recruiting strategy of my company focuses at least in part on the necessity to recruit minority members.

7. My company has a cultural diversity program.

8. I have participated in my company's cultural diversity program.

9. My company rewards the formation of cross-functional, intercultural teams.

10. I have been a member of a cross-functional, intercultural team.

Each yes earns one point. Your total points reveal your level of diversity as follows:

10 points: Congratulations. Your strong commitment to diversity in the workplace makes you and your company true trailblazers.

7-9 points: Your efforts in generating stronger workplace diversity are impressive. There is room for improvement, but you are doing a very good job so far.

4-5 points: You and your company need to sharpen your focus on diversity. An action plan can help generate a sound strategy for increasing diversity in your workplace.

0-3 points: You and your company need to re-work your approach to diversity in the workplace. Now is the time to re-focus: if you don't develop a strategy to maximize the potential of your workforce, and it you don't use that maximization to reach a more diverse group of customers and clients, you and your company will not succeed in the age of netGlobalization.

[Sidebar]

Rank Your Level of Customer-Centricity Answer the following questions with yes or no.

1 .We have a marketing function.

2. We use technology to gather and use customer information.

3. We can articulate our customers' most pressing needs.

4. We can list our key accounts.

5. We customize our products and services to specific customer requests.

6. We measure and track customer satisfaction.

7. We know our customer share per key account.

8. We track and nurture customer loyalty.

9. We involve the customer in joint planning processes.

10. We plan and implement iteratively.

Each yes answer earns one point. Your total points indicate the following levels of customer-centricity:

10 points: Excellent. Your customer focus is sharp.

7-9 points: Doing all right. Some improvement needed to keep up with the current standards. Invest in some customer development activities and systems to fine-tune your customer focus.

4-5 points: Danger zone. Your customer focus is waning or lame. Immediate action to improve the situation is required to stay competitive.

0-3 points: A total re-work of your customer focus effort is needed. If you do not change, your sales will decline at some future point and you will not understand why. Be proactive, conduct a customer information-gathering blitz, and build from there.

[Sidebar]

Ideas for Ensuring a Customer-Centric Approach

1. Pay out bonuses based on an on-going measurement of customer satisfaction.

2. Involve key customers in the planning process.

3. Cultivate highly involved, in-depth customer interaction.

4. Be flexible.

5. Understand megatrends affecting your customers.

6. Employ a helpful, knowledgeable, pleasant receptionist/telephone operator.

7. Use technology to capture and organize data into information-in real time.

8. Blend the market research and information technology functions.

9. Develop a key account management program.

10. Measure customer share vs. market share.

11. Implement a high level of customization.

12. Elevate the importance of every customer interface.

13. Use every customer interaction to gain feedback and improve your offering.

14. Know your global competitors.

15. Understand and track your key customers' most pressing needs.

16. Plan and implement continuously through trial and error.

17. Listen to learn.

18. Develop a "customer-radar" function.

19. Get out of the office!

[Reference]

References

[Reference]

1. The Plain Dealer Oct. 3, 1999, 1-A.

2. Atsushi Funakawa, Transcultural Management. San Francisco: jossey-Bass Inc., 1997, p. 131.

3. A.P. Carnavale and S.C. Stone, "Diversity Beyond the Golden Rule," Training and Development Oct. 1994, p. 24.

[Author Affiliation]

Susanne Marshall, who holds a Ph.D. in modern languages from the University of California, Riverside, is the founder of Language at Work, a linguistic and cultural consulting firm that specializes in the development of custom-designed context-specific global training programs.

[Author Affiliation]

Sandra Zoratti, a chemical engineer with a master's degree in business administration, is founder and partner of Zoratti Incorporated, Mentor, OH, which provides management, marketing, and educational services related to new business development and global expansion.