Competitive diversity intelligence (CDI) is an especially
valuable tool in the workforce competitive intelligence suite.
It can be defined as the systematic and focused study of the diversity
strategies and results of your direct competitors and your labor
market competitors. CDI provides top management with an early warning
of potential problems as well as new ideas and best practices to
improve diversity results.
Benefiting from our increasingly diverse
Diversity once was viewed by many senior managers
as a stylish, politically-correct, "feel good" type
of activity. No longer. Diversity isn't a compliance issue,
it is a bottom line issue of strategic importance.
Reason: The American
population, workforce and consuming public is becoming less white,
less male, and less English-speaking at a stunning annual rate.
Businesses whose supervisory, managerial and executive ranks do
not yet reflect this new reality run an increasing risk of groupthink,
loss of relevance and declining customer loyalty.
review two classic diversity cases.
Perhaps Wal-Mart didn't
know about CDI
On June 22, 2004, a federal judge in San Francisco
ruled that a 2001 lawsuit claiming Wal-Mart systematically denied
equal pay and promotion to female employees could proceed.
this the largest class-action suit in history, 1.6 million women
who have worked at Wal-Mart since December 1998 are bringing the
class action. The suit alleges, according to The
that "while two-thirds of hourly paid employees are
female, only a third of management employees are women, and
that competitors have a much higher proportion of women in senior
Clearly, senior management was not very sensitive
to the issue of gender diversity and equality at Wal-Mart. Why
this was the case is hard to know from the outside. But we wonder,
might Wal-Mart have been more alert to the dangers they were courting
been conducting competitive intelligence on the HR practices and
policies of their competitors?
No doubt any number of sharp people
in Wal-Mart's management
realized they had a problem. Had a formal intelligence process
been in place, these observations about the external landscape
would have been collected, analyzed and presented to top management.
Specifically, a dedicated competitive diversity intelligence program — a
systematic and focused study of competitors' diversity
policies and results — would have shown Wal-Mart management
the growing discrepancy between their own HR practices and those
of their competitors.
information probably would have been a real eye opener for Wal-Mart
management. And it might have ended up saving the stockholders
billions of dollars by the time this case either settles or goes
Denny's gets an accurate picture
from a well-known case of a company correcting acute diversity
shortcomings is taken from the June 21, 2004 Wall
Street Journal article, 'Casting a Wider Net:
Diversity in the boardroom is gaining as a way to improve governance
— and business decisions," by Andrew Blackman.
The background is that Denny's
Corporation had suffered serious harm to its reputation from a
series of lawsuits on behalf of minorities who charged that they
had been mistreated at Denny's restaurants.
The company has since made a concerted effort to diversify its
management and board, and has won awards from Fortune
Magazine as a result.
James Adamson, the former Denny's CEO who championed
the diversity effort, was quoted as saying, "Much more important
than diversity of race or religion or background is diversity of
Adamson tells a story in the article that shows how
five years ago, Raul Tapia, the only Hispanic member of Denny's
board, prevented a major marketing plan failure at the company's
El Pollo Loco chicken restaurants. Advertisements were presented
to the board, which was ready to sign off on them. The
Mr. Tapia asked why the ads featured only white meat. The reason
was that most consumers prefer white meat, he was told. But
Mr. Tapia pointed out that most Hispanic consumers prefer dark
meat, and that El Pollo Loco, which was founded in Mexico and
offers many Mexican dishes, depended heavily on Hispanic customers.
The ad campaign was swiftly modified to emphasize dark meat instead."
ad agency and internal creative staff plus the other members of
Denny's board "didn't know what they didn't
know." Fortunately for Denny's stockholders, the board
was cultivating a diversity of ideas and knowledge and was learning
to listen to contrary opinion.
Take a global view
Diversifying the workforce at all
levels is rapidly becoming seen as not only inevitable but desirable.
And the companies that diversify intelligently and enthusiastically
will be the leaders in the global economy in the 21st century.
Competitive diversity intelligence can help you explore, understand
and profit from diversity.