Return on culture
More and more companies are realizing that an understanding of cultural differences in terms of background, age, religion, ethnic origin, nationality, disability or sexual orientation is not just ‘nice to have’ it is a business imperative. When culture is ignored costly mistakes can be made: they range from the premature return of a delegate from a foreign assignment, to the failure of a virtual international team to reach its targets on time, to ineffective post-merger integration. Increasingly it is not just a question of avoiding mistakes but of seeing cultural diversity not as a barrier to business success but as an opportunity.
The main business arguments for actively promoting diversity are the following:
Recruiting and retaining the best employees. As traditional sources of labour are declining new sources have to be found. Having hired staff employers have to be inclusive so as to motivate their employees to stay.
Making diverse teams work. Managers and team leaders need to be aware of differences in order to make sure that their teams function effectively. Ineffective management will lead to delays, costs and loss of customers.
Providing sources of new ideas. Innovation is a product of well functioning diverse teams.
Making mergers and acquisitions work. Diversity is a natural outcome of organizations merging, this is especially the case when mergers are across borders but is also significant within a national culture.
Responding to customer needs. An example of this is a large German furniture retailer which is focussing recruitment on people over 50 as they have proved to be more effect in advising the increasing number of customers who are also that age.
Demonstrating corporate responsibility for society. A key aspect of corporate responsibility is to value cultural differences.
Complying with legislation. Laws against discrimination are getting tighter and the costs of non-compliance high.
Siemens has done some pioneering work in this area but now it’s time to take stock and see how far we are really optimizing our ‘Return on Culture’ in daily business. Cultural differences are one of our key assets. Let’s not just tolerate diversity – let’s celebrate it!
