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Renewing Diversity Part 11: The Mysterious World of Diversity and Economics – by Carlos Cortés

I’ve always been a bit perplexed when it comes to the intersection of economics and diversity.  Maybe this is inevitable because of the sprawling, multifaceted, and contentious nature of the field of economics itself.  As the old saying goes, “You can stack all of the world’s economists end to end and never reach a conclusion.”

So rather than belaboring you with false certainties and pat generalizations about the economics-diversity nexus, I’ll tell you a story.  It’s a story about one acquaintance and two friends, each of whom contributed to my still-developing thinking about this topic.  Here goes.

First is the acquaintance: R. Roosevelt Thomas.  Beginning in the early 1980’s, Thomas made his mark with the concept of “managing diversity.”   In 1984 he founded The American Institute for Managing Diversity.  

Thomas’ idea was seemingly simple yet intrinsically complex.  Diversity initiatives had developed in the 1970’s in a necessarily chaotic and unpredictable fashion, reflecting their turbulent bottom-up civil rights origins.  In an effort to provide regularity and predictability to the diversity picture, Thomas argued that institutions could benefit from diversity by approaching it from a systems-based managerial perspective.  

I met Thomas when we both presented at a diversity conference at Case Western University in 1991.  More important (for me) than his talk, which mainly synthesized some of the things he had already written, were our one-on-one conversations.  As Thomas shared with me, he believed that diversity could be managed, but only to a point.  He also recognized the complexities and limitations of his systems approach.

Because Thomas’ arguments pertained to organizations, they necessarily overlapped with economics.  Managing diversity could help institutions improve their fabled “bottom line.”  The operative word was “could,” not necessarily “would.”  He stood apart from those who proclaimed that diversity was good for institutions, full stop.  Thomas took a more muted position of suggesting possibilities, not inevitabilities.  For him, there were too many variables and complexities to guarantee beneficial results.

But some people demanded the demonstration of results.  Building in part on Thomas’ ideas were those who began to champion the idea of “the business case for diversity.”  For my enhanced understanding of this idea I want to thank my friend Louise Wilkinson.  I first got to know Louise through email in the late 1990’s when she asked me (and I agreed) to serve as one of the interviewees for her doctoral dissertation on the use of film for teaching about diversity.  A few ;years later we met in person at the Summer Institute for Intercultural Communication, then being held annually at Pacific University in Forest Grove, Oregon.  

A video writer, producer, and director as well as a diversity trainer at Boeing in Seattle, Louise had extensive experience in the corporate world.  This proved to be a good match for my focus on education.  We teamed up and soon began offering week-long courses on diversity at the Institute.

Louise had developed an interest in “the business case for diversity.”  That proposition argued that businesses could improve their so-called “bottom line” (profits) by incorporating the pursuit of diversity.  This could take many forms.  It could mean employing people of diverse backgrounds and encouraging them to bring their myriad diversity-propelled perspectives to the business enterprise.  It could mean casting a more inclusive net for suppliers and other external contributors to organizational endeavors.  It could mean recognizing the diversity of clientele and the need to develop different strategies for reaching such divergent “customers.”  

Some aspects of the “business case” seemed commonsensical.  If many of your clientele are monolingual speakers of a language other than English, it should be advantageous to employ bilingual marketers and salespeople to provide bridges to those customers.  Consider  bilingual salespeople in stores and tellers in banks who can communicate with limited-English other language speakers from surrounding communities.

Other dimensions of the “business case,” while inviting, seemed more iffy.  For example, by creating a diverse management team –- meaning characterized by the presence of both women and men (transgender was not yet a major topic) as well as  people of different ethnic backgrounds – a company would naturally benefit from their “diverse” perspectives.  This was a plausible proposition, but one which continues to be debated.

That’s where the problem comes in.  When, where, and under what conditions does diversity actually contribute to improving the bottom line?  Research exists, but it is inconclusive.  There are studies that support the business case proposition by providing evidence of diversity working in specific situations.  However, there are also counter arguments that racial, ethnic, and sex diversity do not inevitably translate into organization-enhancing viewpoint diversity.  If you want to prove that diversity actually works, show me the money.

Inevitably along came the growing fascination with – in some cases mania for — metrics.  Metrics became touted as the “proof” (or lack of it) that diversity contributes to the bottom line.   Here’s where my other friend, Marc Brenman, came in.  

I “met” Marc in various LinkedIn chat rooms and grew to admire his provide-me-with-hard-evidence skepticism, as well as his willingness to challenge those who relied on platitudes to champion diversity.  Our online conversations led to our first dinner together in College Park, Maryland, where I taught for several weeks each fall at the University of Maryland.

Marc championed the idea of metrics.  In fact, he insisted on them as one necessary dimension of diversity assessment.  Fuzzy proclamations of good intent could only take us so far.  A retired civil rights investigator for the U.S. Department of Education, Marc made a compelling argument.  If diversity efforts were to earn lasting respect, they needed to include a dimension of demonstrable metrics-based accomplishments.  Impressed with Marc’s analytical skills, I recruited him to write a substantive essay on diversity metrics for the four-volume Multicultural America encyclopedia that I was editing.   

These three personal and professional relationships – with R. Roosevelt Thomas, Louise Wilkinson, and Marc Brenman – have influenced the way that I view the economics-diversity nexus.  In addition, they have affected my thinking about the development of Diversity, Equity, and Inclusion as an institutional framework.   In a sense, these intersecting ideas have created a series of traps into which some diversity advocates have stumbled.  Let’s look at three of those potential traps and how to avoid them.

First, diversity can be managed, but only up to a point.  Overly-broad or obsessively-rigid group generalizations can hamper flexible thinking.  When mixed with category-based metrics in managerial situations, this can lead to into an over-dependence on the manipulation of categorical widgets and blind us to individual variations within all diversity categories.  Not all blanks are blank.  Kimberlé Crenshaw’s concept of intersectionality demonstrates the inherent presence of diversity within diversity and can help us avoid stereotypical thinking.

Second, diversity thinking and action can but do not necessarily enhance the business case for diversity.  But that does not mean that diversity for its own sake should be ignored.  In the pursuit of the metrics-driven bottom line, we should never lose sight of the importance of the equity, inclusivity, and social justice dimensions of institutional action.   Institutions may benefit from diversity endeavors, but greater equity for individuals and inclusivity of marginalized groups are goals to be pursued regardless of whether or not they contribute to the bottom line.

Third, while we need to continuously seek better diversity metrics, that does not negate the importance of qualitative assessment.  Albert Einstein put it this way: “Not everything that counts can be counted; and not everything that can be counted counts.”  We need to avoid falling into the trap of neglecting the uncountable simply because it can’t be counted.

The diversity journey is a long and winding road.  We need to be constantly aware of the self-entrapment that can arise by over-committing to rigid frameworks of analysis or narrow concepts of assessment.  We need to keep our eyes on the prize, even if the prize is fuzzy or resists precise measurement.

Dr. Carlos E. Cortés
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