5
Understanding Difference

Understanding difference is the capacity to gather and integrate comprehensive and accurate knowledge about relevant differences so that the organization can successfully leverage them. This learning process is essential, because by definition the introduction of difference is the introduction of that which is new and unknown to the organization. Focusing on difference is thus an opportunity for innovation and change, but attempts to engage and leverage differences usually don’t work if these differences are not well understood.

Consider the case of Aeolian Accounting in chapter 1. CEO Alan Jerrold had made an unsuccessful push to hire women associates in the hope of gaining more female partners over time. His leadership team was worried that they weren’t getting access to the entire talent pool relative to their competitors, and they really believed it would be good to have more women within their ranks—though they weren’t especially articulate about why. They tried to make the change but failed at the execution stage. Aeolian had leapt to the step of hiring the women immediately, assuming that their mere presence would somehow produce the conditions for success, both for the women recruits and for the firm. What they missed, though, was any thorough understanding about women and about Aeolian itself. Senior leaders clung to the notion that these female accounting professionals were no different from the men in the same profession. In fact, they genuinely believed that assuming that there were any significant differences would be insulting to the women.

As a result, it never occurred to them that they should study the experiences of women in the industry to better understand what these new colleagues might encounter. For example, they didn’t know about an American Institute of Certified Public Accountants (AICPA) survey conducted among more than 20,000 accounting professionals. That research revealed that only 41 percent of senior women managers aspired to be partners, compared to 65 percent of men managers—and that aspirational gap widened the further down the hierarchy you looked. Aeolian leaders also didn’t realize how important it was for the women in the firm to have effective mentoring experiences and to see female role models. And they didn’t grasp the disadvantages women would face because of gender stereotyping.¹

Furthermore, Aeolian leaders didn’t fully grasp the strategic benefit they would receive from having more women. Company strategy emphasized the development and leveraging of relationships and social networks. This was critical for marketing the firm’s services, building strong client relationships, and insuring high performance by its global teams. Having women in leadership roles as well as in key functional areas could provide a distinct competitive advantage. Women have been shown, in general, to have a more participative and less directive leadership style than men, something that could enhance collaboration and team performance.² Finally, having more women could provide a context for learning how to create a more inclusive and flexible company culture, with more ways to establish and sustain a work–life balance and at the same time enhance performance.

Figure 4 Understanding Difference

Without these insights about who women were and how they mattered strategically, Aeolian was slow to create the kind of environment in which women could thrive. Though flex-time arrangements were put into place, there remained a stigma around taking advantage of the option; those who did so were seen as less reliable. Aeolian’s leaders did not really understand the experiences of the women they were recruiting, as they did not understand how having women fully integrated into the firm could further its strategic goals.

All too often, leaders and organizations see difference and attempt to leverage it without first educating themselves. They frequently assume that new people brought into the organization will figure out how to be effective in the same way that everyone else did. But this is an untenable assumption. And when it comes to differences in customer perspective, assumptions like this can lead to disappointing results in gaining market share.

Even attempts to incorporate difference into internal processes can go awry if rigorous learning hasn’t taken place. Kulick & Soffa, a manufacturer of semiconductor assembly equipment, was looking to achieve growth in its wire bonding tools segment—in particular, capillaries and dicing saw blades—through geographic expansion and entry into new markets.

In 2002 it manufactured the capillaries in Yokneam, Israel, and the blades in Santa Clara, California. Its leadership team, mindful of the substantial expense involved in maintaining two sites, had been charged with consolidating operations and designing and opening a single new facility in Suzhou, China. To make a wise move, they needed to understand both the cultural trade-offs between operating in Israel and China, as well as the technical tradeoffs. Their final decision to move to Suzhou took into account differences in the age of the labor force, turnover, and policies about intellectual property in China, to name but a few of the key issues they needed to consider.³

How to Understand Difference

Leaders promote understanding about relevant difference by build-ing—and supporting their people in building—competencies in four activity domains: individual learning, leveraging relationships across differences, having in place organizational systems for understanding difference, and managing resistance to understanding difference.

Engage in Individual Learning

Be Curious. One of the most important building blocks for understanding difference is the desire to learn about difference. This curiosity about differences provides the motivation to engage in the activities that actually enhance learning. People vary in how curious they are in general. Those who have a high curiosity level actively seek out and thoroughly process information in many areas. Those low in curiosity rely more on simple cues, cognitive heuristics, and stereotypes in interpreting situations and judging people.⁴ Obviously, being more curious fuels greater understanding of difference.

Gerald Ames, a senior executive from Diacom, exemplified the highly curious individual. Ames was a white male, born and raised in the suburbs of Washington, D.C. He was extremely interested in culture and ethnicity, and he was energetic—almost aggressive—in his questioning about what was going on in his company. He described how few candidates of color to whom they had offered positions had accepted the offers. He wanted to learn why, and he wanted to understand why the employees of color who did come were so dissatisfied. But his interest was not confined to company issues. He and I sat together at dinner one evening after I had worked with a group of high-potential managers in his company. He peppered me with questions, eagerly exploring the implications of a Barack Obama presidency (Obama had just been elected). How was the president-elect being perceived in black communities, relative to white communities? Was there uniform support, or was there friction? How would the president’s race affect his ability to lead globally? After we had talked for an hour, I asked Ames why he was so interested in all of this. “I don’t know,” he said. “I just want to learn about this stuff!”

Becoming curious requires a foundation of basic knowledge about a particular difference—“seed” information—that captures a person’s attention. Curiosity is difficult to muster without this.⁵ Seed information comes from reading books and magazines, attending films or plays, or regularly scanning such sources of information as newsletters or web home pages. Having a variety of communications media within an organization—newsletters, art exhibits, etc.—can be effective providers of seed information.

This seed information is the most effective when it is about some aspect of difference that’s personally and emotionally relevant. As it turned out, Ames had had a series of important professional and personal relationships with African Americans dating back to childhood. Those relationships had been the source of both enjoyment and regrets, feelings that motivated him to want to learn more. Finding these emotional “hooks” for oneself through reflection and conversation can illuminate a path for stimulating curiosity about difference.

Curiosity about difference is also encouraged when people become aware of a gap between what they know and what they think they know. Curiosity is frequently squelched when people are unaware of what they don’t know, whether it’s from lack of information and experience, overconfidence, dogmatism, or simple arrogance. Curiosity diminishes when anyone settles into the attitude that there is little else to learn. To combat this, the key is making gaps visible in a manageable way. Providing seed information or offering interpersonal feedback are two ways to do so. Self-awareness, in turn, can enhance curiosity.⁶ One caution about exposing blind spots: feedback can’t be too threatening, or the person is likely to disengage. When a trusted colleague privately told me that I was consistently behaving rudely toward a female colleague, I was embarrassed and decided to change the behavior and understand why I was doing it. Had that colleague reported me to the ombudsperson, I doubt if curiosity would have been the first thing to come to my mind.

Curiosity is fostered by a combination of incentives to learn mixed with the autonomy to decide how to learn. External motivators can foster curiosity, but nobody can be forced to be curious. Rather, leaders and organizations can create a context in which learning is an attractive option. The employees of one division of Allerton Consulting, a medium-sized management consulting firm, began the practice of monthly “Global Lunches.” The idea was to help colleagues better understand the global markets in which they were operating as well as some of the emerging markets they planned to move into. Allerton had a strong representation of managers and associates from outside the United States, and it had a very collegial culture. A group of employees came up with the idea of lunches at which a particular country or culture was featured. Cuisine from the focus culture was featured, and employees led spirited discussions about the country and culture.

The Global Lunches were always well attended and lively. Employees commented that they were terrific venues for learning about cultural differences and for stoking curiosity. They seemed to be effective for a combination of reasons. Allerton had people from different cultures already embedded in the organization: about 25 percent of the employees were from outside the U.S. The firm’s collegial culture made it appealing to learn about these colleagues; people were interested in those with whom they worked. And attendance was purely voluntary—only people who wanted to attend showed up. But the positive experience that spread from the events drew more and more employees. The curiosity was contagious.

Do Research. The most powerful method of gaining understanding is to gather information. One way to do so is through the cognitive learning that occurs by being exposed to information about difference. Exposure to news and current events, literature, films, and Internet sources can provide leaders and organizations with a continuous flow of information about differences.

These data sources need not be limited to passive modes of learning. Individuals can seek out events and experiences that take place where difference arises. In many organizations, managers arrange regular outings to cultural festivals in the local community as a way to expose themselves and their colleagues to cultural differences that characterize their customer base. At Credit Suisse in New York, the Diversity for the Americas team regularly gathered books and magazines about current issues around the globe. They made these available not just in designated diversity libraries but also in offices, reception areas, and leisure spaces throughout the firm.

All the activities discussed so far—cultivating curiosity, seeking out resources, and exposing oneself to experiences—can be self-motivated. Doing them in collaboration with others is often equally or even more powerful. But anyone who chooses to build competency in understanding difference can begin on their own without delay.

Learn in Relationships across Differences

The full power of differences in organizations unfolds in relationships between people across differences. That makes professional and personal relationships extremely fertile grounds for understanding difference. Yet it can be extremely challenging to cultivate those relationships in ways that promote deep understanding and ultimately help create the capability for leveraging difference in an organization. The case of Braylon Foster* and Erik Harmon* illustrates some of the dilemmas in cross-difference relationships.

Foster wasn’t quite sure how to manage his relationship with Harmon. The two were associates at Allerton Consulting and often ended up working on the same project team. Both were smart, well trained, and capable, and they complemented one another well. Foster was particularly skilled in client relationship management. An excellent “translator,” he helped the team understand client needs, and he helped clients understand how the team worked. Harmon was an outstanding strategist with a keen understanding of how to address clients’ strategic challenges.

The two frequently worked closely together and really “clicked.” They had the same quirky sense of humor. But both realized there were tensions in the relationship: Foster was straight, Harmon openly gay. Foster became preoccupied with what he could or couldn’t talk about with Harmon. Sometimes he felt uneasy about appearing too familiar with Harmon for fear that others would think he, too, was gay. From time to time, the problems Foster had in romantic relationships made him question his own sexuality. Why did he get along so well with Harmon?

From Harmon’s view, Foster was clearly edgy when the two of them were working alone together, and this was starting to bother him. Harmon, unlike Foster, was in a committed relationship, and he and his partner were seriously considering marriage. Because he and Foster worked so closely together, he suspected that Foster, like so many straight men, was probably uneasy. Harmon was frustrated that all this was getting in the way of the great work that the two of them could accomplish when each was on his game.

Neither talked about their concerns. Foster was afraid that he would say something offensive or inappropriate, and that such a misstep could sour a good working relationship. Harmon was overcome with a sense of resignation that talking about this with Foster just wasn’t worth it. He had tried to educate straight guys about this kind of thing before, and usually he was met with defensiveness and homophobia, subtle or overt.

The inability of these two men to deal with the tension around sexual orientation has quietly built a wedge between them. Since they work well together, each convinces himself that it is too risky to address the tension. They both fail to consider two important factors. First, they don’t anticipate the potential impact of their mutual discomfort on the working relationship. Each acknowledges his own discomfort but is unable to fully understand and empathize with the other’s concerns. This disconnect can erode a working relationship over time and diminish productivity.

Even more costly is the fact that their unwillingness to talk about the situation deprives them of an opportunity to learn about difference from one another. This is one of the most profound inhibitors to understanding: colleagues are afraid to learn together. What can individuals like Foster and Harmon do to change this pattern? How can people who are different make their relationship an ongoing laboratory for learning?

Four Skills That Support Relationships across Difference

Engaging another individual across differences requires four core relational skills: inquiry, listening, self-disclosure, and managing feedback.

Inquiry—a skill motivated by curiosity—primarily means asking questions. By asking questions, a person gains understanding of the other person’s perspective and acquires knowledge about that person.⁷ But this skill goes deeper than simply acquiring information verbally. It extends to asking about the rationales that lead to the other’s conclusions, and exploring assumptions about the other person’s goals and interests.⁸

Listening is important in interpersonal interactions because it helps a person understand what another person is trying to communicate. It also provides an opportunity to elicit the maximum amount of relevant information during an interaction. But listening has long-term effects that are especially powerful in sustaining relationships across difference. The willingness to listen in the moment signals to the other person that you are interested in what he or she has to express. By conveying this genuine interest, the listener lays a foundation for trust and respect that carries over to future interactions. This mutual trust and respect bonds the two and eases the way when the relationship encounters the conflicts that are likely to emerge.

Self-disclosure is the act of sharing relevant information about oneself to the other person.⁹ This can be done through description or, more powerfully, through personal narratives about one’s own experiences involving the differences. If Foster and Harmon choose to strengthen their working relationship, for example, the ability of both men to talk about what it means and feels like to carry his sexual identity could be helpful to the other. But self-disclosure is also a dynamic process in which personal information and truths shift as two individuals are engaged in a relationship. To that end, it is important to share one’s reactions with the other as they emerge in the relationship. For example, if an individual is annoyed by something the other person says, expressing the annoyance is an act of self-disclosure. These “real-time” disclosures are an essential aspect of openness in relationships across differences, because such relationships are so often shrouded in misunderstanding and mistrust. This kind of disclosure promotes transparency and counteracts the experiences of silence and subversion that commonly characterize these relationships.¹⁰

Managing feedback—the fourth basic skill—involves both giving and receiving feedback. Access to accurate feedback about professional and personal behavior is essential for fostering high performance at work and maintaining vibrancy and authenticity in a relationship. However, a lack of comfort and competence in building relationships across many differences (such as race, gender, and sexual orientation) can make it difficult to give and receive feedback.

This can manifest itself in two ways: biased feedback-givers may provide feedback that is simply inaccurate; or one party in a relationship may withhold constructive feedback for fear that it will dishearten the other or make the feedback-giver seem unsupportive or prejudiced. In either instance, the ability of both individuals to learn from one another is compromised. For effective learning in a relationship, there must be timely and frank exchange of behaviorally specific information, coupled with clear communication about the behavior’s impact on task-focused and relationship-focused outcomes.

With these four basic skills in hand, dialogue across differences can happen in an atmosphere of openness and learning. Colleagues may talk about their differences because they are assigned to work together and want to perform well. Or they may talk simply to strengthen their relationship. Either way, they can act on their desire to learn and will be able to use their core skills to sustain the learning.

The Advanced Skill: Manage Conflict across Difference

Relationships across difference will engender conflict. Sometimes the conflict is overt. For example, a Sikh engineer is frustrated and offended when he is told by his supervisor to remove his dastar (the traditional turban required of baptized Sikhs) because “headwear is prohibited by company policy.” Or the conflict may be more subtle, as in the case of a white male manager who fears he will be perceived as racist or sexist if he gives critical feedback to his Latina subordinate. In these examples, the actions and fears of one colleague create discord in the relationship. Even interactions that are initiated in the spirit of openness and learning can be perceived initially as threatening or offensive by the other party.

Understanding difference emerges when individuals engage with one another in constructive ways. Unfortunately, people typically have strong incentives to do just the opposite. They avoid talking with one another in these situations because they worry they will be punished for having such conversations. They are concerned, for example, that complaints will be filed against them if they inadvertently offend someone. And they may worry about the more subtle retribution of being ignored when advancement opportunities arise.

The core motivation for not talking about difference, however, is the fear that doing so is risky, even dangerous. A manager feels the risk of interacting in a domain in which he isn’t very skilled, worrying that he might come off looking incompetent or, even worse, malevolent. Or he worries that he won’t be able to deal appropriately with his anger or frustration over a colleague’s remark. When a U.S. manager confused the names of two Chinese colleagues, the man being addressed felt demeaned by the name mixup and annoyed with his U.S. peer. When a male associate was chided by two female colleagues because he was “clueless about what women deal with,” he felt embarrassed and resentful. These are examples of what Robin Ely, Debra Meyerson, and I coined “identity abrasions.”¹¹ Identity abrasions are psychological “twinges” that one experiences when feeling put down or affronted—injuries to one’s self-image. Such identity abrasions prompt a person to behave defensively at critical moments in a cross-difference relationship. And they encourage that person to see the other as the problem.

Identity abrasions can easily push two people apart from one another. People tend to do whatever it takes to bolster and protect their images of themselves as good, well-meaning individuals. One common response to identity abrasion is to disengage, undermining any opportunity to use the relationship to understand difference better.

Turning debilitating identity abrasions into powerful opportunities to understand difference requires enlisting any or all of five principles of behavior.¹² Each principle carries with it a set of skills an individual can use to execute on the principle. These key principles are:

• Pausing

• Connecting to larger goals

• Questioning your own role in the interaction

• Seeking out balanced support

• Shifting your mindset toward seeing opportunities

You can draw on these principles at many different points in a relationship, but they are especially powerful at times of conflict. These principles aren’t meant to be invoked in a sequential way, or necessarily all for a single incident. They can be called upon, sometimes simultaneously, throughout the learning process in a relationship. But together they contribute to your overall ability to manage identity abrasions constructively and create opportunities for understanding in the relationship.

Pausing. Pausing means taking the time to identify feelings and consider the options that will help you to respond effectively in the face of identity abrasion. Pausing goes against the natural tendency to reactively feel and express anger, hurt, or blame—reactions that usually incite defensiveness in the other person, hinder the ability to learn, and fail to make us really feel much better. The core skill that supports the ability to pause is mindfulness, a receptive attention to and awareness of present events and experience.¹³

Pausing requires that a person be aware she or he is experiencing an identity abrasion, which in turn allows for short-circuiting the defensive reactions. Sam, a Jewish manager, was confronted at the year-end holiday party by a colleague who said he was “sick and tired of whitewashing Christmas because of all the other groups who might get offended.” Sam was ready to lash back, but instead he chose to take several deep breaths and not confront his colleague at that moment. This prepared him to act on some of the other principles.

Just pausing seems like a simple action, but it can be extremely difficult in the heat of the moment. Sam paused by stopping his impulse to lash out, sitting quietly instead. There may be other behaviors that you might choose in order to pause. For example, one can practice simple mindfulness meditation, focusing on breathing or some other simple stimulus. This can reduce physiological reactivity and enhance the ability to regulate one’s emotions.¹⁴ It can also foster a greater sense of choice in one’s behavioral responses.¹⁵ Another strategy is the “self-talk”—engaging in an internal conversation about the situation. Observers wouldn’t necessarily notice any significant behavioral change, but the affected individual would be engaged in rational-emotive reflection.¹⁶ Finally, writing down reflections about the experience may help some people to begin to process their reactions.¹⁷

Connecting to Larger Goals. The kind of moment Sam experienced, when unchecked, usually prompts us to focus inward on our own outrage and hurt. The first impulse is to burrow in and defend one’s position. Connecting provides a way to resist this impulse by focusing outward on larger goals—such as contributing to a task, strengthening a team’s dynamic, or fulfilling an organization’s mission. Meaningful goals make it easier to remember why it is worth engaging with another, even as the experience is threatening in that moment.

In his reflective moment, Sam thought about what would be helpful to promote more powerful learning about religious sensitivity and what would help him to interact honestly and respectfully with his colleague. He also thought about what would help the firm be a more hospitable place for people of different faiths. The colleague who had made the remark was someone he had to work with closely in the coming weeks, and he wanted their working relationship to be a great one. Sam decided to talk with his colleague about the meaning of the Jewish holy days for him when he was a kid, and about his hope that there could be a way for everyone to feel that their traditions were respected at this time of the year. The discussion about Sam’s own experience engaged his colleague, and they had a frank and powerful conversation about how people in the firm were treated.

That conversation happened because Sam was able to connect by asking himself some questions: What is most important, above and beyond my “attitude”? What would help my Jewish colleagues, and my colleagues of different faiths? What will help me be able to work well with this person? Questions like these help reframe a situation in a way that frees one from retreating into his or her own pain and frustration. And, by the way, doing so does not eliminate the opportunity for dealing fairly with an incivility or injustice that may have been the original source of the pain. Sam was hurt by the comment; it was a harmful act to him. Sometimes the appropriate response is clear feedback about the harm that has been done. But by connecting, Sam was afforded the choice of productive and creative ways to address that harmful act. He chose engagement.

Questioning Yourself. The principle of questioning yourself is difficult because it requires examining how you might be contributing to your own identity abrasion! It requires asking yourself how the way you see the situation could be biased or distorted. And it calls into question the righteous indignation that often results when it appears that someone has behaved hurtfully toward you. The reason for this questioning is to come to a realistic and accurate understanding of what is transpiring in the relationship. It invites you to consider—not concede, but consider—that part of the responsibility for the negative interaction or relationship may rest with you.

Susan had been executive assistant to Priya for two years and was about to quit. She was fed up with Priya’s autocratic behavior and dismissive style. Susan was extremely competent and had received feedback to that effect from her previous bosses. But Priya was constantly asking her to do more, and to do it more quickly. And when Susan met Priya’s aggressive timelines, Priya rarely acknowledged that her efforts were noteworthy. Priya offered a quick “Great, thanks” and moved on to the next task.

Susan’s initial reaction was that this Indian woman was just used to having servants at her beck and call. But realizing that she loved her work, Susan paused and tried to understand what was contributing to the tension she felt in relation to Priya. Motivated by the desire to make the situation better, Susan approached Priya to voice her concerns. She described her frustration, but chose not to blame Priya for making her feel that way. She asked how she could be helpful in a more satisfying way, expressing her desire to enjoy the working relationship more.

Priya immediately apologized and said she had not been aware of the impact her behavior was having. She shared that in her upbringing, she had worked with servants and was still in part operating from that mindset. Priya told Susan that she wanted to build a better working relationship and that she really valued Susan’s efficiency. The relationship improved somewhat, and although Susan eventually moved to another position, the two became friends.

Susan’s willingness to ask herself what she might have been contributing to the problem gave her the motivation and confidence to approach Priya directly to discuss the challenges they were facing. It also freed her from the self-righteous feeling that would have led her to blame Priya for the problems in their relationship. In conversations the two had over the several months before Susan moved, the two women shared stories and built an understanding about each other that illuminated their cultural, educational, and status experiences. This allowed them to fashion a stronger, more meaningful relationship and to collaborate better.

Seeking Out Balanced Support. It isn’t easy to undertake the steps to manage your reaction to conflict. Having support from others is essential, but having the right kind of support is what is most critical. Some friends and colleagues are great because they reinforce us, no matter what our behavior. They are our “puppy dog” friends, who show us their love and support with unconditional positive regard. They will even support us in denigrating someone we feel has wronged us.

These are not the friends we need in these situations. Instead, we need friends and colleagues who can help us sort through our abrasion reactions and connect with the larger goals. They question us and thereby help us question ourselves. Puppy dog support can feel good in the moment, but it is just the opposite of what we really need: the counsel of trusted colleagues who can help us see our choices about how to behave or what to believe, and point out alternatives.

Shifting Your Mindset toward Opportunity. Enlisting the final principle helps shift our way of looking at conflict. Turning an internal abrasion into an opportunity makes it easier to see possibilities, and to see others as something other than simply villains. Developing the ability to make this shift requires practice. It takes persistent willingness to be introspective and to ask yourself questions like “What can I change?”

These five principles can be resources for confronting the habit of stepping away from relationships across difference when they become difficult. Any relationship becomes challenging in the midst of conflict and is often worth working on. But the relationships across difference are rare and precious resources that are both personally fulfilling and functionally essential if an organization is moving toward a Leveraging Difference capability.

Foster Organizational Understanding of Difference

Understanding difference through individual and interpersonal learning is necessary, but it’s not sufficient. Organizations that understand strategic differences gather information in more systematic ways as well. They conduct research with customers, employees, and other key stakeholders who can provide data and insight. They create processes to funnel information about relevant differences to the appropriate stakeholders.

Hyster Corp. is a manufacturer of lift trucks based in Greenville, North Carolina. The company’s objective is to manufacture the safest, most effective equipment on the market. It has focused on the changing diversity mix of its customer organizations as a way of providing value-added service. Hyster collects data by having its engineers observe operators from customer organizations. They observe the use of older equipment before they develop new models, and new equipment after it is delivered to customers. In their observations, they make a point of factoring in the changing diversity of customer employees. They pay attention to the increasing average worker age, and to the relative physical capabilities of male and female operators. But Hyster also learned from observation and feedback that operator fatigue is a major issue, particularly in the last few hours of a work shift. Engineers saw operators move around on the platform, trying to get comfortable and avoid fatigue. Being aware of studies showing that the shoe sizes of workers are increasing, they increased the size of the platform on their new pallet trucks.¹⁸ Such systems of end-user observation are a powerful way in which organizations gain intelligence about relevant differences. As was the case for Hyster, that observation can even lead to seeing new relevant differences.

Customer feedback systems aren’t the only systemic sources for an understanding of relevant differences. Organizations use both internal resources and external partnerships to generate ongoing understanding and promote experimentation. American Express Company is a global services organization providing payment and travel-related products/services worldwide. It is the world’s largest card issuer by purchase volume, processing millions of transactions daily for individual and commercial cardholders. The firm operates the world’s largest travel network, serving both individual consumers and businesses.¹⁹

Like many other retail organizations, American Express has developed a market segmentation strategy that emphasizes understanding the communities and customers it serves worldwide. It tries to drive business growth by designing appropriate and appealing products and services for those constituents. To provide the necessary knowledge to expand into new markets, American Express developed a patent-pending process called Diverse Marketplace Intelligence (DMI). This system draws insights from both the firm’s existing talent base and from strategically chosen external partners. The most prominent avenue for learning within the company is provided by employee network groups, such as those for Hispanic, black, and Muslim employees. External partners include nonprofit membership groups such as Catalyst, a research and advisory organization for advancing women in business, and the National Society for Hispanic MBAs.

An example of an innovation spawned by DMI is the Zync card, a charge card targeted toward young consumers. A key feature is that it lets consumers enroll in one of fourteen “Lifestyle Packs” that fall in the broad categories of travel, socializing, communicating, and eco/responsibility. Because there were fewer representatives of this younger demographic group internally at American Express, the firm needed to create an engaged community from which it could learn in order to develop this product. So it sponsored the 2010 One Young World inaugural symposium in London, sending five employee delegates and sponsoring five more nonemployee delegates. Through social networks including Facebook and Twitter, a Zync cardholder conversation was initiated in which cardholders could tell delegates which issues they wanted addressed and what questions they would like asked. This engaged community has subsequently been harnessed to influence how products are developed and how American Express markets to the demographic.

The effectiveness of DMI as a tool for understanding difference at American Express depends on its access to employees who carry knowledge about strategically relevant differences, and to the partnerships it can create to provide knowledge. Neither of these relies on specific individuals. Employees may come and go, and even partnerships may shift, but American Express has positioned itself to be able to test out new ideas for marketing to any demographic they pursue.

It is worth noting that the differences that are relevant for American Express are somewhat traditional. The previous example involved Millennials, people in the generation born in the last two decades of the twentieth century, but American Express also has had success with products for Hispanic and LGBT customers. Developing capabilities for Leveraging Difference does not mean avoiding traditional differences. It simply means not being constrained by them.

The Importance of Acquiring a Missing Difference. One vulnerability of the DMI process developed by American Express is that the company may find that it lacks internal resources for learning about a particular difference. Indeed, that is what happened with the Zync card: there were very few Millennials working at American Express. In that instance, the company created a “workaround” by engaging the community in a medium well suited for that demographic—social media. But in other instances, companies may find that they want internal resources for learning about a particular difference but haven’t hired the people to provide them. In chapter 1, I highlighted some of the challenges in recruiting and hiring people who are likely to carry the requisite knowledge about a relevant difference.

But an added challenge is that the people who represent a relevant difference frequently are anathema to the culture of the organization. Consolidated Technologies,* a manufacturer of commercial heating systems, had established a distinctive capability for high quality in its production process. They had focused on achieving zero defects in one particular process and had built a reputation as the industry leader in executing that process. Becoming that good required recruiting and hiring meticulous, detail-oriented managers. But they also needed to innovate in both product and manufacturing process design. Consolidated was flush with managers trained to think in detail, but they were lacking in people who could think outside the box. Moreover, the company was hierarchically structured, and employees were conditioned to follow orders and procedures. To innovate, though, they needed people willing to take risks. The problem they faced was that the culture of order and risk aversion was so strong that innovators didn’t want to join the company. Some were attracted by compensation, but they didn’t last long.

To combat the challenge of a cultural mismatch, leaders must develop a strategically driven, single-minded focus on results. A number of leaders known for successfully increasing diversity in their organizations have approached talent acquisition in just this way. Henry Schacht was strongly committed to creating a diverse team of leaders as CEO at Cummins Engine Company and later Lucent Technologies.²⁰ Steve Reinemund talks about his passion for creating a similarly diverse team when he was CEO at PepsiCo. At one point he mandated that he would only approve new hires if they were women or persons of color. When his advisors cautioned him, he refused to back down.²¹ Jamie Dimon, CEO of JPMorgan Chase, has been adamant about acquiring the needed difference:

Look, it’s all very wonderful, you’ve done great things, but you haven’t moved the friggin’ needle [on getting the right representation of talent]. And there is only one way to move the needle, and that is to be clear about results. I don’t want to hear any more conversations at the leadership level about process and awareness-raising. I assume it’s going to happen, and a lot of it’s going to have to happen, but any conversation I have about the topic can only be about results.²²

These leaders, though emphasizing traditional differences, were operating with clear and cogent strategic intent.

Managing Resistance to Understanding Difference

Understanding difference is inextricably linked to organizational change. As a result, it can foster anxiety and resistance among those who need to learn about relevant differences. One of the more prevalent activities designed to facilitate understanding difference in U.S. organizations has been diversity training, but even the best-designed training programs encounter pushback from participants.²³ This pushback occurs for different reasons. Learning about difference may signal that the status quo will shift, and that can be especially anxiety-provoking for those who hold positions of power and privilege in the current environment. They may resist because they don’t want to lose that standing.²⁴

Resistance can also result when activities promoting understanding difference include content that generates identity abrasions. Participants may be exposed to information about the business environment, society, and history that challenges their self-images in the context of the organization and even society as a whole. And finally resistance can emerge if an organization’s practices and culture are in conflict with an openness to understanding difference. For some organizations, even a strategic imperative to understanding difference is hindered by longstanding cultural norms that reinforce their parochialism. Any or all of these factors can undermine an organization’s attempt to promote understanding of relevant difference.

Elegance USA, Inc.,* a wholly owned subsidiary of the Elegance global cosmetics company, is located on the East Coast. It produces hair and skin products and fragrances for consumer and professional markets. Since its founding in 1953, the company’s rapid growth has been fueled by the same traditions of excellence that characterize the parent company. Elegance USA has traditionally had a “boutique” culture about it. Despite its relationship to the parent company, its employees think of themselves as owning a special personal brand that sets them apart from any other operation in the world. Their high level of performance has contributed a kind of “diva” attitude as part of the organizational culture.

One of Elegance USA’s major challenges has been penetrating the markets for women of color. These markets were seen as today’s most significant growth opportunity, and the U.S. market presented a variety of opportunities. But the crossover was challenging because of the historical schism between women of color and white-dominated cosmetic companies like Elegance.²⁵ The cosmetics industry was trending toward positioning beauty products multiculturally, which had the benefit of being able to sell to women of all ethnicities. But Elegance realized they just didn’t know their customers well.

As part of their attempt to understand the differences in these markets, the Professional Products department planned presentations on African and African American, Arab, and South Asian cultures as a way of enhancing the company’s ability to market to these communities. The members of the working group were predominantly white and, by their own admission, had experienced limited contact with women from these groups. As they immersed themselves in learning, not all were enthusiastic. Several expressed reservations about investing time and resources when they could each learn enough just on their own initiative. After three learning sessions consisting of facilitated case discussion and role-playing, one of the women, Anne, became quite agitated. She said she resented being forced to attend these sessions like a “child in grade school.” In further conversation, she voiced what some other women were also feeling: she found it difficult to discuss issues of culture, race, and discrimination against people of color when she so acutely dealt with sexism on a daily basis. She found it exceedingly difficult to keep an open mind, especially when portions of what the group was learning focused on men from the different cultural groups.

Anne had a difficult time negotiating two facets of her identity. On the one hand, she strongly identified herself as a woman; that was her dominant view of her social group membership and shaped how she saw herself across a wide range of situations.²⁶ She was also white and American-born, but though she would not dispute either fact, she rarely thought of herself as just a white person or just an American. Training that focused on cultural and racial bias challenged Anne to put her primary group identity aside and consider parts of herself that she didn’t typically see as central. This challenge was made all the more difficult because these were aspects of her identity that gave her societal privilege. Being white and being native-born are sources of higher status in the United States than being a person of color or being an immigrant. For people who identify primarily with a lower-status group (for example, females), it can be difficult to explore higher-status aspects of their identities.²⁷

Leaders can help circumvent resistance in three ways. First, they need to be explicit and transparent about the strategic importance of understanding relevant differences in order to provide learners with a rationale for the activity. One of Anne’s resistant behaviors was to insist that understanding could be achieved by individuals on their own time. This implied that understanding the relevant difference was not business critical, when of course it was. Learners are galvanized when a leader can provide a continuous and consistent credible message that the difference matters. The goal of the learning activity is to help members of the organization understand more deeply how to capitalize on that difference.

The second step that leaders can undertake is to create and support effective vehicles for understanding difference. This could range from ensuring that difference training is conducted by skilled facilitators to making sure that processes (like American Express’s DMI) are well designed and implemented. The key task for the leader is to institute quality control and accountability for understanding-difference methodologies.

Finally, leaders must model understanding difference. They must participate in practices that promote understanding at every opportunity. This can take a variety of forms. A leader might serve as a resource for a project team that has a mandate to explore a relevant difference. Or a leader might enlist her assistants to join her in attending and then facilitating training modules to promote understanding of a relevant difference. At Landmark Communications, Inc., managers attended and then led workshops on how to leverage relevant differences in different parts of the business. A leader can also initiate and involve herself in relationships across differences, professionally and personally. By doing so, she sends the signal that behavior and practices that promote understanding difference are essential.

How Understanding Encourages Seeing

In concluding this exploration of how leaders and organizations understand difference, one dilemma emerges: How can leaders see difference if they don’t understand it? In the absence of some understanding of the difference, how can leaders effectively assess its relevance? From a practical perspective, of course, some potentially relevant differences will be missed if leaders simply have no point of reference for perceiving them. You have to understand at least a little bit about a difference for it to be seen as relevant.

But the more important dynamic on this part of the cycle is that seeing and understanding difference feed one another. It is possible to see a difference that is likely to be relevant, even without knowing much about it. Leaders may even use tacit understanding, experience, and intuition to decide whether a difference is relevant.²⁸ But once leaders establish a competency for understanding difference, they have two options with any difference they see.

First, they can move beyond perception or intuition to build verifiable knowledge that the difference is—or isn’t—relevant. The tools outlined in this chapter will help them refine their understanding of the difference and, if it really is relevant, prepare to engage it. Or they can reject the difference as irrelevant and seek out other differences that are relevant.

Second, an enhanced understanding of a difference can reveal secondary differences. A team of human resource leaders, looking at the challenges of hiring Millennials, revamped their strategy once they realized that members of this generational group differed depending upon ethnic identity. They decided that they could segment their target market further and speak directly to Hispanic, Asian, and black Millennials in distinctive ways. Part of their original mistake, they concluded, was that they had been operating as though all Millennials had a common profile: the MTV Millennials. This exemplifies one way in which a new relevant difference can be seen as the result of understanding another difference.

Understanding difference is fundamentally a dynamic process. It is not simply gathering data and placing it in a file or on a bookshelf. It is a process of collecting and interacting with that information in ways that allow leaders and organizations to use it ultimately. Along the way, understanding is enhanced by taking risks, making mistakes, engaging in conflict—and learning from all of these. And this enhanced understanding sets the stage for engaging the difference.

Key Takeaways

1. Understanding difference is the capacity to gather and integrate comprehensive and accurate knowledge about relevant differences.

2. In order to understand difference, leaders and managers must do these things:

• Engage in individual learning: be curious and do research.

• Learn in relationships: be inquisitive, listen, self-disclose, give and receive feedback, and manage conflict by pausing, connecting, questioning yourself, seeking balanced support, and shifting your mindset.

• Develop organizational systems that help you understand difference.

• Manage resistance to understanding by providing vision, managing the quality of learning vehicles, and modeling learning behavior.

3. Understanding difference can encourage seeing new relevant differences.