Look at the environment in which companies operate today. The U.S. used to be the unchallenged world economic power. Today, America faces stiff competition. More and more, we need new ideas and solutions to solve complex problems. Those answers demand different approaches. Embracing diversity will give employers new perspectives, values, options and approaches. People with different backgrounds bring to work different sets of experiences and perspectives. By learning to understand the new perspectives brought by a wider range of employees, we can provide better services to our clients and customers and to departments within our own organization. New perspectives will enhance our problem-solving skills and allow us to make better and more inclusive decisions. We can learn to ask better questions initially, to identify areas of opportunity and increase customer satisfaction.

For example: Advertisers who have traditionally ignored groups, such as minorities and the elderly, have realized that those populations have tremendous purchasing power. According to the Population Reference Bureau, in 1990, African-Americans, Hispanics and Asian-Americans had an annual spending power of $424 billion. Experts predict it will reach $650 billion by the year 2000. Minority markets buy more goods and services than any of the countries who trade with America.

To tap into these markets, a company must understand these consumers' lifestyles, needs and values. To capture creative and innovative ideas, a company can use the diverse backgrounds of its workers by putting people from each of these groups on decision-making teams, and at all levels within the organization. By managing a diverse work force well, your company can adapt to the demands of today's environment: a diverse market at home and increasing competition from abroad.

Competition and Competitiveness

In an effort to recruit and keep top-tier employees of all races and both genders, Fortune 500 companies have begun to address diversity issues in the workplace. Lynwood L. Battle of Procter and Gamble said, "We make no apologies for making this a competitive issue. The companies that are going to survive and thrive in the next century are the ones that take full advantage of their workforce." This is not simply a matter of social good will or moral imperative. It is a bottom line, competitive positioning issue.

When Avon's sales dropped, the organization began a very aggressive development and recruitment program. Management realized it had not understood the impact of demographic changes--including the effect of women moving into the workplace--which meant fewer women stayed at home to receive the "Avon lady." Said James E. Preston, CEO of Avon: "We understand that managing diversity is not something to do because it's nice, but because it is in our interests."

Businesses receive many benefits by recognizing and encouraging work force diversity. Among the many benefits, consider the economic impact of these top three:

1. Purchasing Power

• Older Americans spend over $800 billion annually. They control more than half of all discretionary income.
• Minority markets buy more goods and services than any country that trades with the United States.
• Understanding different values and perspectives opens new markets and helps organizations tap into new revenue sources.

2. Reducing Costs by Reducing Employee Turnover

• Highly trained workers will stay with organizations that are responsive to their needs.
• Retraining is expensive.
• High employee turnover reduces morale and productivity.

3. Receiving the Benefits of Productivity, Creativity and Innovation from All Employees

• New perspectives enhance problem solving.
• Business success is often dependent on group performance.
• An inclusive environment builds respect, ownership and loyalty.

A company that manages diversity successfully will capitalize on its employees and pull ahead of the competition. If you do not capitalize on the benefits of diversity, your competitors will!