Making Diversity a Reality

By QS Contributor Updated Sep 29, 2014

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Introduction
The role of business schools
The total business case

Read about MBA hiring trends in the QS Jobs and Salary Trends report

TopMBA.com finds out how businesses, MBAs and business schools are helping to make workplace diversity the norm in the new global economy.

In a marketplace where even the smallest organisation can conduct business on an international stage, the MBA has rapidly become one of very few universally recognised qualifications. But how are these three prized letters helping to make workplace diversity a reality in the new global economy? As the first rule of warfare is to know your enemy, so the first rule of business is to know your customer. Easy enough perhaps when your customer lives around the corner and looks and sounds just like you. Somewhat more difficult when he or she speak another language, comes from a totally different cultural background and lives on the other side of the world. Welcome to business in the age of the internet.

For many organisations, the key to this simultaneous challenge and opportunity has been almost blindingly simple - the development of genuinely diverse workforces that mirror the customer base and consequently understand its increasingly diverse needs, aims and requirements. Take, for example, the case of motor manufacturer Ford in the UK. Research found that one of the most lucrative potential markets for its small vans was small entrpreneurial companies, many of which were owned by families originating from the Indian sub-continent. But how should a marketing department without direct experience of this demographic group go about addressing it effectively? Fortunately for Ford, an organisation that had been focused on the diversity issue for many years, a ready-made solution presented itself. The professional marketers set up a task force from the high proportion of Asian personnel already within the workforce and the resultant insight helped sales to soar.

Another major organisation that has demonstrably grasped the business case for diversity is the pharmaceuticals giant, Eli Lilly, According to the company's Rafael Fernandez, "We're acutely aware that we need to reflect the diversity of our customer base in our own staffing in terms of colour, culture, age and gender. And, for a company like us that operates in 146 countries around the world, it's particularly important to reflect, not just domestic diversity, but diversity on a global scale." While commitment to workplace diversity may have originally been a US-based initiative, it is now starting to spread worldwide. Deutsche Post World Net, for example, has been working on the issue since 1995 and now has its own in-house director of diversity, Susanna Nezmeskal, while another company with German roots, Siemens, has introduced diversity training into its management development programmes.

The role of business schools

Not surprisingly, major business schools have enthusiastically spread their net to produce the MBAs who will lead this diverse workforce into a bright new business future. Reims Management School in France, for example, now draws its student body from 27 countries, Solvay Business School in Belgium from 30 and IESE in Spain from as many as 55. Even a relatively young school such as INCAE in Costa Rica has an intake drawn from 20 different nationalities. And, while this delivers benefits during the programme itself, it also plugs graduates into an international network that can provide support, advice and business opportunities throughout their careers. The alumni association of Spain's IE-Instituto de Empresa, for example, has members in 85 countries, while that of Manchester Business School in the UK covers more than 130. And the strategy of broadening the student base certainly appears to be paying off. "We specifically target schools with a high proportion of international students," says Rafael Fernandez, "to ensure we are drawing not just from a local but from an international pool of MBAs."

"We're acutely aware that we need to reflect the diversity of our customer base in our own staffing in terms of colour, culture, age and gender."

Of course diversity doesn't mean just addressing ethnic and national issues, it also means creating an environment of opportunity for a key group that still remains under-represented at senior levels of most workforces - women. Investment bank, Morgan Stanley, has gone about this through the creation of mentoring programmes such as that devoted specifically to women in the organisation and another geared to the needs of all personnel with babies or young children. "Morgan Stanley has managed to develop a very fair, very meritocratic culture where you get rewarded and recognised for doing a good job and the opposite for doing a bad one," says Anneke de Boer, a managing director in the fixed income area. "In my experience, this is all irrespective of gender, ethnic background, nationality or the like.

And, if you want hard evidence of this commitment to diversity, you only have to look at what is going on at the very top of the firm." Deutsche Post World Net has also used the mentoring approach to open up the management structure to more women. "The women's mentoring programme will become a global one over the coming year," says Susanna Nezmeskal, "and in the process will hopefully increase the very high proportion of women that Deutsche Post World Net already has at top management level - around 24% of our current senior management team is female."IT giant, Hewlett Packard is working to set targets to increase the number of women in management and leadership. According to Claudio Vespucci, one of its international managers for diversity, "We want to leverage differences in the best way possible to enhance creativity. We are creating an infrastructure with new policies for flexible hours, part time working, job shares and mobile working. We want everyone to perform at their best." He is currently running two particular initiatives for women. "We've begun a study of why we lose women who have children, asking what options might keep them? And when leadership roles come up, we are raising the visibility of high performance women as potential successors."

The total business case

Back at the business schools the message seems to be getting across to potential applicants that an MBA can be an ideal stepping stone towards the sort of employer who is committed to developing the full potential of its female employees. According to figures from the QS World MBA Tour, the largest international programme of business school information fairs, of over 45,000 candidates who attended Tour events in 2005, 35% were women, in comparison to 34% in 2004 and only28% in 2003. These figures are mirrored in the experience of many of the top international schools, such as Manchester Business School in the UK which saw applications from women rise from 23% in 2004 to 35% in 2005.

"Talented people are talented people, whatever their gender, race or culture."

The business case for diversity also embraces much more than just the commercial imperative of mirroring and consequently understanding a customer base. For enlightened and ambitious employers it also means a recognition that, in the "war for talent", focusing recruitment and retention policies on a narrow group is short-sighted and self-defeating. According to Amany Attia of Lehman Brothers, "Leadership is not gender "based," a sentiment that is echoed by Merrill Lynch's Chantal Hegy, who says, "Talented people are talented people, whatever their gender, race or culture. However the essence of the case for workplace diversity in any serious global player is perhaps best summed up by Abbas Jaffer, the director for diversity in Europe at Morgan Stanley. According to him, "No organisation can be complacent about the nature of top talent, because the old perception of a white, middle class, male-dominated organisation is being swept away. Intellect and ability don't have a colour and are distributed right across the ethnic spectrum. It means that, if we want to be identifying, attracting and developing the best people, we simply can't afford to be hampered by outdated ideas." Source: QS TopMBA Career Guide.