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Prof. Susanne Schmidt (Photo: Jana Dünnhaupt / Uni Magdeburg)
30.05.2022 from 
Research + Transfer
The unused opportunities of diversity

Many cooks spoil the broth, they say. However, the proverb does not consider that many cooks can create a whole new, more flavorful porridge. For companies, this idea plays a crucial role. If they want to produce new approaches and innovative products, they should include versatile perspectives in their decisions. However, too few companies yet recognize and take full advantage of the economic success of diversity. This is shown by the research results of the Chair of Business Administration, International Management at the University of Magdeburg. The head Prof. Dr. Susanne Schmidt knows why this is the case and how companies can change it. In this interview, she dispels misconceptions and myths about diversity and offers tips on how good diversity management can succeed.

What is the biggest mistake companies make when it comes to diversity?

A big mistake, at least, is to assume that diversity only means being able to see people with diverse characteristics - i.e., for example, in terms of age, gender, and social origin - and then the company would be diverse and the work completed. But this is not the case, as we know from research that much of the work only begins at this point. Because the question companies need to ask themselves is: What does my diverse workforce need to be able to develop their skills in the workplace? In other words, what kind of environment do they need to bring in their different experiences and ways of thinking?

The answer is a diversity-oriented, inclusive work environment. Employees will not contribute their different perspectives, personalities, and uniqueness if they fear being discriminated against, disadvantaged, or excluded. So we need a change in organizational culture that explicitly values diversity and different views. Employees are not only seen in their uniqueness, but their different attitudes, experiences, and ways of thinking are heard and included in decision-making processes. This is diversity-oriented work culture.

That sounds relatively simple. What is the reason for the failure?

Because that's easier said than done. We know from empirical research that it is usually perceived as easier to work with people who have the same way of working as ourselves. As soon as different views and ways of working meet, there is friction, leading to conflict. These can be conflicts on the factual level that arise during the development of solutions. These conflicts can lead to better solutions because teams benefit from different perspectives. But these can also be conflicts on the personal level, which are destructive. The question is how to deal with conflict. The leader's task is to raise the conflicts from the personal level to the factual level and anchor a fundamental appreciation in the team. Coaches often say, "I'm okay, you're okay." This is an essential attitude that you have towards other people. If you manage to implement this attitude in the team, with everyone, with people from underrepresented groups, and with the perceived majority, you create an environment of appreciation for difference. Then it is also possible to discuss different views objectively and constructively.

However, in many organizations, openness to diversity does not yet exist; there is a norm to which people usually conform. A transformation process is needed and must be supported by all employees. This also requires breaking down and rethinking structures that may promote systematic disadvantage and establishing new structures, for example in recruiting or promotion. So it's a complex undertaking that takes several years.

Anchoring accountability in senior management, which drives these values and acts in a diversity-oriented way, for example, by taking diversity into account in strategic decision-making, accelerates the process of change. This is a very crucial success factor. If management does not support diversity and the development of an inclusive work environment, it is very difficult to develop diversity-oriented work culture.

How can a company do that on its own? Or does it need external support to do so?

Each organization is itself very unique and must find an individual path. Unfortunately, there is no checklist, no ten-point program, in the sense that: If you have checked off these ten points, your organization is diverse. And because there is no standardized solution, it is also difficult for organizations to find the starting point for the change process. External support can have an aiding effect here. There are now also more and more opportunities for this.

Your research finds that a community benefits from diverse experiences and views. How much may these differ from each other? Or is there always a common denominator?

The common denominator is openness to differences and the fundamentally appreciative environment, which each person can help shape. If there is this general willingness, this general attitude of "I'm okay, you're okay.” If there is also a willingness to question one's views critically, then one can discuss different views constructively, no matter how far apart.

Again, this is easier said than done. But ultimately, that's what diversity means: approaching each other with a general appreciative attitude that differences are okay while also developing a curiosity for the other person's point of view. Here again, the leader is called upon to bring these values into the team and to reassure them that it is perfectly okay to have conflicts sometimes, to have different views sometimes, that this is not a "bad thing," but that conflicts on a factual level can be beneficial. The leader exemplifies this; who brings the different points of view, which may be very far apart, to the table, listens, acknowledges, and values them to find the best possible solution.

Good diversity management thrives on compromise. Are compromises always the right solution for success, or does it sometimes take the assertiveness of a leader?

Diversity management thrives on an inclusive work environment where diverse views are genuinely heard, valued, and included in decision-making processes. To create precisely this working environment, the leader needs a great deal of stamina and assertiveness. It's not so much about compromise; it's about listening to the different perspectives, learning from each other, and finding the best possible solution, which is often innovative. Truly bringing everyone to the table - employees in underrepresented groups and the majority - leads to more differentiated decisions and is at the core of diversity-oriented work culture.

In the end, a decision must still be made. Does everyone then go along with this if diversity management is working correctly, or are there still employees who disapprove of the decision?

This can always occur, even with functioning diversity management. Diversity management includes friction and conflicts, and it's perfectly fine to have conflicts discussed on a factual level. Diversity management means seeing, recognizing, and valuing employees' uniqueness and bringing different experiences and perspectives to the table to learn from and incorporate into decision-making. On this basis, a decision is made that we would not have arrived at without the different perspectives. It does not mean that every person in the organization likes this decision. But as a member of the organization, it helps me know I've been heard. It's worse when you feel that your views aren't being heard, that your perspective isn't being acknowledged, and that decisions are being made regardless. It is not a matter of really always finding a compromise. It is about the best possible decision, which can be much more differentiated through different perspectives than if only one or two perspectives are included in the decision.

Many companies have signed the Charta der Vielfalt but rarely do they put it into practice. Is the Charta not practical enough, do the companies want to adorn themselves with other people's feathers, or what is the reason?

Signing the Charta der Vielfalt is already a huge step for organizations; it shows that they are committed to diversity, promoting diversity and an inclusive work environment. This sends a strong signal internally to employees but also externally to external stakeholders. This signal says: that we are making our way from confession to lived reality. However, this path is a very long one and requires much work because the lived reality means a complete organizational development, which can take several years. I am very happy that so many organizations have already signed the Charta der Vielfalt; currently, there are more than 4,500. We as a university have also signed the Charta; that means we have committed ourselves, we have declared our support for diversity, and we are on our way. But it will also take years for us to design the structures to implement an inclusive working environment in all areas.

If it is possible to create diversity in the organization, i.e., not only to have people with diverse characteristics in the organization but to create a working environment in which employees can fully develop their abilities, then the entire team benefits from this; i.e., not only employees in underrepresented groups but also the employees of the "majority.” The studies in the field show this very strongly. Motivation, job satisfaction, and quality of work improve significantly - throughout the entire team. Innovative solutions can be found when employees encounter a respectful environment where diversity is truly recognized and utilized, which is an important success factor for sustainable competitiveness.