Managing Diversity for Success:
The Case of IBM
When you are a company that operates in over 170 countrieswith
a workforce of over 398,000 employees, understanding and
managing diversity effectively is not optional—it is a keybusiness
priority. A company that employs individuals and sellsproducts
worldwide needs to understand the diverse groups of peoplethat
make up the world.
Starting from its early history in the United States, IBMCorporation
(NYSE: IBM) has been a pioneer in valuing and appreciatingits
diverse workforce. In 1935, almost 30 years before the EqualPay
Act guaranteed pay equality between the sexes, then IBM
president Thomas Watson promised women equal pay for equal
work. In 1943, the company had its first female vicepresident.
Again, 30 years before the Family and Medical Leave Act(FMLA)
granted women unpaid leave for the birth of a child, IBMoffered
the same benefit to female employees, extending it to one yearin
the 1960s and to three years in 1988. In fact, the company ranksin
the top 100 on Working Mother magazine’s “100 Best Companies”
list and has been on the list every year since its inception in1986.
It was awarded the honor of number 1 for multiculturalworking
women by the same magazine in 2009.
IBM has always been a leader in diversity management. Yet,the
way diversity was managed was primarily to ignore differencesand
provide equal employment opportunities. This changed whenLouis
Gerstner became CEO in 1993.
Gerstner was surprised at the low level of diversity in thesenior
ranks of the company. For all the effort being made topromote
diversity, the company still had what he perceived amasculine
culture.
In 1995, he created eight diversity task forces arounddemographic
groups such as women and men, as well as Asians, African
Americans, LGBT (lesbian, gay, bisexual, and transgender)
individuals, Hispanics, Native Americans, and employees with
disabilities. These task forces consisted of senior-level,well
respected executives and higher-level managers, and members
were charged with gaining an understanding of how to makeeach
constituency feel more welcome and at home at IBM. Each task
force conducted a series of meetings and surveyed thousandsof
employees to arrive at the key factors concerning eachparticular
group. For example, the presence of a male-dominated culture,
lack of networking opportunities, and work-life management
challenges topped the list of concerns for women. Asian
employees were most concerned about stereotyping, lack of
networking, and limited employment development plans. African
American employee concerns included retention, lack of
networking, and limited training opportunities. Armed with a listof
priorities, the company launched a number of key programs and
initiatives to address these issues. As an example, employees
looking for a mentor could use the company’s Web site tolocate
one willing to provide guidance and advice. What is probablymost
unique about this approach is that the company acted on each
concern whether it was based on reality or perception. They
realized that some women were concerned that they would haveto
give up leading a balanced life if they wanted to be promotedto
higher management, whereas 70% of the women in higher levels
actually had children, indicating that perceptual barriers canalso
act as a barrier to employee aspirations. IBM managementchose
to deal with this particular issue by communicating betterwith
employees as well as through enhancing their networking
program.
The company excels in its recruiting efforts to increase the
diversity of its pool of candidates. One of the biggesthurdles
facing diversity at IBM is the limited minority representationin
fields such as computer sciences and engineering. Forexample,
only 4% of students graduating with a degree in computer
sciences are Hispanic. To tackle this issue, IBM partnerswith
colleges to increase recruitment of Hispanics to these programs.In
a program named EXITE (Exploring Interest in Technology and
Engineering), they bring middle school female studentstogether
for a weeklong program where they learn math and science in a
fun atmosphere from IBM’s female engineers. To date, over3,000
girls have gone through this program.
What was the result of all these programs? IBM tracks results
through global surveys around the world and identifies which
programs have been successful and which issues no longer are
viewed as problems. These programs were instrumental in more
than tripling the number of female executives worldwide as wellas
doubling the number of minority executives. The number ofLBGT
executives increased sevenfold, and executives withdisabilities
tripled. With growing emerging markets and women andminorities
representing a $1.3 trillion market, IBM’s culture of respectingand
appreciating diversity is likely to be a source ofcompetitive
advantage.
DISCUSSION QUESTIONS
1. IBM has been championed for its early implementation of
equality among its workforce. At the time, many of these
policies seemed radical. To IBM’s credit, the movement
toward equality worked out exceptionally well for them. Have
you experienced policy changes that might seem radical?
Have these policies worked out? What policies do you feel are
still lacking in the workforce?
2. If you or your spouse is currently employed, how difficult
would it be to take time off for having a child?
3. Some individuals feel that so much focus is put on makingthe
workplace better for underrepresented groups that the
majority of the workforce becomes neglected. Do you feel this
was the case at IBM? Why or why not? How can a company
ensure that no employee is neglected, regardless of
demographic group?
4. What types of competitive advantages could IBM have gained
from having such a diverse workforce?