Diversity: It's more than just a 'nice-to-have' category, it's a competitive advantage

Diversity and Inclusion – while accruing more mindshare than ever before, is still bucketed in the ‘nice to have’ checklist category. Few organisations have appreciated its full potential as a competitive advantage.

Ironically gender diversity or inclusion as a construct is not new to the Indian subcontinent. We have been attuned to leadership position of women in our mythology and politics — producing six women heads of state — which is more than rest of the world put together. But the potential goes beyond just gender.

The Indian Army, for instance has a large section of demographic composition troops. The state of Punjab alone contributes three Infantry regiments (approximately 60,000 soldiers) while the four south Indian states field only one regiment. But the latter have a predominance in areas of technical specialisation like the Corp of Signals, Electrical Mechanical Engineers, Medical Corps and Sappers. Khalsa troops are known for bold exploitative campaigns, while Gurkhas specialise in stoic rearguard operations requiring nerves of a different calibre. The Naga troops meld into the jungles, Ladakh Scouts run up peaks that daunt professional climbers and the Rajputs can literally sense direction in a featureless desert. This force multiplication emanating from the ‘sons of soil’ DNA has given our troops an edge across operational theatres. That is the power of demographic diversity.

Diversity: Its more than just a nice-to-have category, its a competitive advantage

Representational image. Reuters

In the early sixties, educationist Kurt Hahn created a revolutionary form of pedagogy in which children from across the world between the age group of 16—20 were put through two years of senior schooling living in close proximity. These children who were old enough to have imbibed their own cultures, but young enough to be open to others, developed deep understanding of other cultures, formed bonds and created a network of global leaders. Among its 15 schools around the world, I was fortunate to be involved in setting up the 10th in India near Pune. The Mahindra United World College (MUWCI) as it is known, has over 80 countries represented in its 200 students and among them, each year the college also admits two children from orphanages. Once during lunch in the cafeteria, a group of children were complaining about the food – as children in schools often do – and one of the orphaned kids got up and said that through his sixteen years, the only time he had a dessert was during Diwali – once a year. And while they were complaining about the food, he felt guilty winning the lottery of life when thousands of his brothers and sisters still waited a year to taste a sweetmeat. There was a pin drop silence in the otherwise noisy cafeteria and suddenly every meal after that day tasted delicious. The one boy completed perhaps the most important aspect of everyone’s education. That is the power of cultural and economic diversity.

In mid 2000, Welingkar Institute of Management embarked on a bold experiment. They choose two housekeeping boys who were working with the Mahindra Group at random and combined them with 14 of their undergraduate students for two years. The objective was to make these two kids who had barely scrapped through class 12 from a government school pass the demanding two year MBA course along with them. No punches would be pulled or leeway given for their less privileged background. The 14 mentors had to teach them everything ranging from rudimentary skills like MS Office right up to Porter’s Five Forces theory using street vendor examples. During some of the sessions with these kids I had a sense that at times the mentors were getting frustrated at the inability of the two boys to cope up and was reminded of my own schooling.

My best friend in school came from a very poor background. Once we had bunked school to watch a movie but when we reached the theatre it was already houseful and the only tickets available were being sold in ‘black’, at twice the price. As I started to turn back disappointed, my friend held my hand and asked to wait. When the movie began — the black marketers started reducing the price and soon they dropped the price to less than one third. My friend had just taught me the principle of ‘perishable goods’. He also taught me that when the board says houseful, there are always seats, when they say no vacancy, there is always vacancy and when they say no budget – there is always a budget.

The students of Welingkar soon realised that the socially underprivileged boys brought a treasure trove of street savviness to the table and the learning became a two way street. Two years later the office boys not only graduated from the college, but also beat some of their mentors in merit. The experiment also yielded some unexpected results. Before they joined the college, these two earned about Rs 60,000 a year. Their first placement with ICICI Bank as management trainees was at 6 lakhs per annum – an exponential of ten times. But more importantly they made the orbit shift from one side of the tray – from where they served tea, to the other side – where they were now being served. They also now became potential customers for housing loans and vehicles – products of the very companies they worked in. This zero cost experiment named Nethratva — created new markets and went on to become the foundation for many such structured programs on much larger scales. And that is the power of social diversity.

Another tool for leveraging diversity is simply putting together people with diverse backgrounds and experiences into a cauldron and see what cooks up. An experiment called Jhamghat (which loosely translated means a gathering) essentially leverages this power of cross pollination to take a nascent technology and connect the dots of its applications to come up with path breaking ideas. For instance consider holographic projection as a technology that was leveraged extensively by our current Prime Minister during his pre-election campaigning. The cost of the technology has plummeted and is now affordable to be used in a variety of ways. One episode of the Jhamghat consisted of young students, creative artists, film makers, story tellers, engineers and people from all walks of life. When the holographic projection discussion began there were the obvious ideas about using the technology for training and virtual meetings. But then an idea emerged to project ‘virtual security guards’ mixing them with real guards in a building after working hours thus improving deterrence while reducing costs. Another idea was to miniaturize the projection system so it could be plugged into an electric outlet on the wall and used by aged people or those living alone so that a holographic projection would give the impression of people in the house thus deterring burglars. Interestingly, both the latter ideas did not come from engineers or security experts. Instead they came from women who find after office hours intimidating and people with aged parents living alone! And that is the power of experiential diversity.

India Inc is still coming to terms with LGBT (Lesbians, Gay, Bisexual and Transvestites). Few pioneering organisations like Godrej have embarked on the front but for many others it is still the elephant in the room. And that is a pity. Because it is not just about LGBT. All of us begin our work day with finite units of energy. But those dealing with socially persecuted differences dissipate a large quantum of that resource just ‘covering’ – a term sociologists define as hiding a disfavored identity to fit into the mainstream. This could be sexual preferences, cognitive or physical disabilities, domestic persecution, workplace intimidation or even sexual harassment.  When an organisation consciously embraces ‘uncomfortable’ issues, it unleashes massive suppressed potential. Addressing supposedly ‘taboo’ issues like sexual preferences emboldens co-workers facing their own demons to seek peer support and prevent persecution or wrongdoings which thrive on prejudiced and closed environments. Empirical evidence shows that openness acts like wind under the wings of the entire organisation, exponentially increasing their vibrancy and productivity. And that is the power of ‘full spectrum’ diversity.

But diversity is not about a choice anymore. It is an existential requirement for three fundamental reasons. Firstly, the business environment is becoming chaotically disruptive with rapid change cycles and varied disruptors. Homogenous organisations are by definition clunky, cumbersome and slow. An Uber disrupting the transport industry or AirBnB annihilating hospitality incumbents — is writing on the wall for organisations that don’t cultivate nimbleness and agility whose primary ingredient is healthy dissent and diversity.

Secondly, customers and investors don’t just buy products anymore. They buy the entire brand. They will shun companies who damage the environment, or have poor safety records or use child labor and they will punish companies which harbor prejudices. This is true for the talent pool as well.

Lastly homogenous companies will be unable to address huge segments of the market. How can an automobile or a construction company design products for women if they don’t have proportional representation in their own ilk. How can a financial company address emerging markets without understanding its nuanced realities?

Indeed how can any company aspire to be a forward looking global organisation while remaining ‘status qouist’ and parochial in their staffing strategy?

The above is the text of Raghu Raman’s keynote address in the NASSCOM Diversity and Inclusion National Seminar 2016. Raman is former CEO NATGRID and Group President Reliance Group of Industries. Views are personal. The author tweets @captraman

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Updated Date: Mar 23, 2016 16:45:02 IST

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