Seeking a return on diversity investments

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Seeking a return on diversity investments

Postdoctoral fellow Jonna Louvrier’s research reveals the importance of diversity resulting in equality in the workforce.

by Jonna Louvrier on Wednesday, March 4, 2015 - 11:49pm

Earlier this year, Intel’s CEO Brian Krzanich announced an investment of $300 million in the company’s diversity initiatives. During his announcement, made at the annual Consumer Electronics Show (CES), he said it was time to step up and do more to increase the number of women and underrepresented minorities in the tech industry. Indeed, women face real challenges in the Silicon Valley. Media reports of underrepresentation have been numerous the last weeks: Newsweek addressing the “bro community” and gender-biased hiring practices, Fortune featuring a Stanford undergrad’s experiences with sexism in the tech industry, and the Los Angeles Times reporting that women are leaving the tech industry due to hostile environments.

Investing in diversity is clearly needed, however, it is far from something new.

Diversity has been a big business for decades. Today, as poor diversity numbers in many organizations still are a fact, we can come to the conclusion that there either has not been enough diversity work done, or that the work has not been very efficient. Based on my research on diversity management in Europe, my take is that both hold true.

One reason for the inefficacy of diversity work may lie in the relationship diversity has with equality. The idea of diversity management emerged in the United States in the 1980s, and in order to become a field of its own, it had to be distinguished from Affirmative Action. This was done by stressing the business reasons for diversity and by downplaying equality objectives.

Today, it is still common to conceive of diversity as either being motivated by business or by social justice and equality. While establishing the business case was needed at the outsets of the diversity management movement, having two distinct cases is today not only unnecessary but also counterproductive for efficient diversity work. Now that diversity is a well-established field of its own, in which companies are ready to invest big sums, equality should gain a central place in every diversity initiative.

The key to diversity management is organizational change that advances inclusion and equality

The problem of seeing diversity as either being about business or about social justice and equality, is that it suggests that diversity could be managed without carefully tackling inequalities in the organization. 

The problem of seeing diversity as either being about business or about social justice and equality, is that it suggests that diversity could be managed without carefully tackling inequalities in the organization. There is a risk that challenges related to differences are ignored, believing that merely increasing the numbers of women and minorities will be enough.

In my study of 19 organizations in Finland and France, this belief was strong among companies that managed diversity solely from a business perspective. The companies had no diversity initiatives in place within the organization: Their only diversity practice was to have a diversity statement available for the external public.

The idea behind the business case for diversity is that a company will benefit from the different viewpoints and experiences of their diverse workforce. However, without an ambitious efforts to support equality at work, the different viewpoints are very unlikely to be voiced.

Based on interviews conducted with 52 ethnic minorities working in the 19 companies included in my study, no one felt confident enough to bring their difference to the discussions. In every company, minorities experienced their own difference as a burden, as a factor harming their career prospects. 

This led to a series of behaviors every diversity manager would want to eradicate from his or her organization. The minority employees masked their difference, they stayed silent in meetings, they avoided social situations and they made up fake identities. 

The real question of diversity is how to make organizations equal enough that persons with minority identities will feel safe to voice their experiences, voice their viewpoints and bring their valuable perspectives to the tables. It is these viewpoints the business of diversity is based on, and companies invest $300 million in diversity to gain these viewpoints. Without a serious sense of equality and justice there is a real risk that the investments will remain without returns.  


Jonna Louvrier presented her study, “Diversity, Difference and Diversity Management: A contextual and interview study of managers and ethnic minority employees in Finland and France,” at the January Faculty Fellows lunch.

Jonna Louvrier
Postdoctoral Fellow 2014-16

Jonna Louvrier holds a Ph.D. in Management and Organization earned at the Hanken School of Economics, Helsinki Finland. In her doctoral thesis she examined the meanings of diversity, difference and diversity management in Finland and in France from the perspectives of both diversity managers and ethnic minority employees.

Central themes in Jonna’s research are diversity and equality in work life. While at...