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Workforce Diversity Management for Creativity and Innovation

Workforce Diversity Management for Creativity and Innovation

TAE Won-You, LEE Sang-Woo

Nov. 11, 2011

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Originally released on September 21, 2011

Korean companies have made significant progress in their "external" or surface-level diversity from 2001-2010. During this time employment of women, foreigners and people with disabilities increased 1.6-fold, 4.0-fold, and 5.7-fold, respectively. In a survey of Korean CEOs, 68.7 percent of respondents indicated that workforce composition had become more diverse than it was five years ago, and that greater diversity had led to performance improvements. Diversity management at Korean firms, however, remains immature, and is not yet capable of effectively exploiting synergies between groups like women, foreigners, new talent, and younger workers. A closed organizational culture with low respect for diversity still causes global high-caliber talent to depart, and complaints remain that experienced new hires find it difficult to adapt to their new organizations.

This paper thus proposes the following six suggestions in personnel systems, culture, and strategy to promote more effective workforce diversity management:

First, in personnel systems, fairness must be strengthened. Japan's Mizuho Bank has led in this area by aiming to make women account for 30 percent of new graduate hires, and set ting recruitment goals by gender, in addition to educational attainment and work experience. Successful diversity drives in personnel systems have also required continuous management of minority promotion rates to strengthen the monitoring of results and ensure feedback.

Second, a minority workforce needs to be strategically fostered. A variety of career path models must be available to enable women, foreigners, and people with unique talents to thrive in the workplace without discrimination. Leadership education programs can provide further support to allow them to become future leaders that can driv e organizational change.

Third, in organizational culture, communication must be revitalized. As with the example of Johnson & Johnson, who runs a "Diversity University," it is critical for companies to raise their organization's level of acceptance of differences by encouraging awareness of other cultures. This can lead to better understanding of characteristics like gender, nationality, occupational cluster, and age group, as well as different ways of thinking and cultural traits.

Fourth, a team-centered organizational culture of creativity and innovation must be established. There is a need to strengthen diversity management with a focus on teams, the basic units where creativity and innovation activities take place. Team leaders must be empowered with autonomy and responsibility for personnel and budgets, and an autonomous and creative climate must be nurtured through job rotation and revitalization of collaborative work.

Fifth, in strategy, firms need to learn how to leverage diversity for business. A diverse workforce within organizations can be a strategic asset in responding to customers and discovering new businesses. At Ford UK, for example, a panel of female engineers has been playing a pivotal role in reflecting the needs of women customers in vehicle design.

Sixth, a company-wide diversity management system must be established. To exploit synergies from communication among diverse employees, it is imperative that firms open a diversity affairs office responsible for implementing systematic and sustainable management of diversity. At the same time, companies may also consider establishing a diversity management index that can continuously manage and improve an organization's diversity and acceptance.

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