Page 353 - leadership-experience-2008

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334 PART 4: THE LEADER AS A RELATIONSHIP BUILDER
The Value of Organizational Diversity
There is no question that the workforce is changing and organizations have to

change to reflect the new workforce composition. However, there are a number of
other reasons leaders want to incorporate diversity.
Recent research supports the idea that diversity adds value to organizations

and can contribute to a firm’s competitive advantage. For one thing, leaders can
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use internal diversity to meet the needs of diverse customers. Culture plays an im-
portant part in determining the goods, entertainment, social services, and house-
hold products that people use and buy, so organizations are recruiting minority
employees who can understand how diverse people live and what they want and
need. Diverse employees can also help an organization build better relationships
with customers by making them feel connected to the organization. When cus-
tomers see and interact with people like themselves, they feel better about doing
business with the company. An astute leader at Pepsi-Cola recognized this as early
as the 1940s and embarked on an experiment that proved the economic value of
diversity, as described in the Leader’s Bookshelf. Allstate Insurance Company has
built its success on the principle that the organization should be inclusive rather
than exclusive. Allstate launched its fi rst diversity program in 1969 and today ties
25 percent of managers’ bonus pay to diversity performance.

IN THE LEAD Allstate Insurance Company
You’ve probably seen the commercials: a popular African-American actor promising
you that Allstate won’t raise your rates just because of an accident, or telling you the
company will give you $100 off your deductible for each year you go without having
one. It’s part of the diverse face that the leading insurance company for minorities
presents to the world. “Being in a relationship business, how can you not look like and
sound like your clients?” asks a vice president of sales for Allstate Insurance. “It’s an
obvious competitive advantage when you can mirror the clients that you serve.”
Of the nearly 39,000 people working for Allstate, more than half are women
and nearly 30 percent are minorities. Among offi cers and managers, 40 percent
are women and nearly 20 percent are from minority groups. Allstate’s diversity
initiatives have earned the company a string of awards, including being named
the No. 1 employer for African Americans in 2006 by DiversityInc. They have also
led to some solid business results. A study by Simmons Research Group found
that Allstate is the number one life and auto insurer among African-Americans and
the number one homeowner’s and life insurance fi rm among Hispanic Americans.
Allstate’s internal measurement systems show a steady increase in the customer
base and growing levels of customer satisfaction.
The company’s diverse workforce has helped Allstate establish solid relationships
with culturally and ethnically diverse communities. At the Sunnyside neighborhood
office in Queens, New York, one of the most ethnically diverse communities in the

country, customers often relate to sales reps like members of their family, consult-
ing them on problems that might have no relation to insurance. Mike Kalkin, the
agent who heads up the offi ce (and who is himself from an immigrant family), often
recruits employees from within the community because they understand the local
population’s unique needs. A different situation exists at a northwestern Arkansas
office, where a growing retired population means placing more emphasis on serving

the needs of older customers.
Diversity at Allstate is a business strategy that provides us a competitive
advantage,” says Anise Wiley-Little, an African-American woman who serves as
the company’s Director of Diversity. At Allstate, the best human talent is diverse
because the customers are.
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