September 3, 2008 — Over the last two decades, companies have been struggling to address challenges brought on by changing workforce demographics and rapid globalization. Many companies have been successfully diversifying their workforce through hiring policies, but research from the University of Virginia's illustrates that long-term organizational success involves more than just equal-opportunity hiring.

Martin Davidson, associate professor of business administration at Darden, has been examining the ways that people deal with difference within organizations for the past 15 years. His work is informed by formal field research as well as consulting work. Davidson is interested in the role of difference broadly defined. "What is it that allows perspectives and ideas of difference to become central to how an organization operates — to how it thrives?" he asks.

Davidson is currently working on a book, tentatively titled "Leveraging Difference for Excellence," that draws on his research.

"The book is really about a model of diversity that is distinctively different from traditional approaches to diversity, and that is tied very strongly to strategic goals for organizations," he said.

In the book, Davidson differentiates two specific models of diversity. He terms the conventional model "managing diversity" and the new model "leveraging difference."

"In a managing-diversity world, the tendency is to think about diversity as a problem—to see diversity as primarily a people issue," Davidson said.

This involves the categorization of people by characteristics such as gender, race and sexual orientation and the idea of diversity as an issue to manage or control.

In contrast, under the leveraging difference model, Davidson notes that diversity and difference are viewed as a source of excitement and opportunity.

"In a leveraging difference world, leaders and companies see diversity as not just an HR or people issue," Davidson said. "It's actually about innovation, it's about work processes and how people do work together, it's about collaboration. It's about creativity and strategic thinking."

The leveraging difference model also broadens the scope of differences that could impact work relations beyond race and gender to include factors such as place, thought style, work ethic and temperament.

In his research, Davidson has found that those who are effective in leading diverse organizations have a common attribute — self-disclosure about their experiences with difference.

Some of the most effective white male leaders easily share their experiences with difference in the workplace, such as growing up poor or having strong relationships with people of color. These conversations help them gain respect, trust, and credibility with colleagues of difference, despite perceived class or racial boundaries.

"Their ability to tell those stories seems to be a capability that helps them be effective in leading their organizations toward leveraging difference," Davidson said.

Other factors that made leaders successful were openness to learning about difference and asking questions, as well as giving and soliciting feedback.

On the organizational side, managing diversity companies often have cultures of "political correctness" or "niceness" that preclude them from dealing with diversity-related conflicts, while leveraging difference companies are able to tolerate and effectively deal with such conflict, Davidson said.

Since perseverance and problem-solving yield innovation, this quality can generate a competitive advantage.

Davidson noted that the changes that occur in leveraging-diversity companies are beyond the surface level of hiring or managing people, and thus are more sustained.

"What's happening for the leveraging difference companies is that they've simply made a shift in that they really believe that their ability to work with difference is essential — it's vital to their ability to be competitive in the marketplace," he said.

Most companies today are using the managing diversity model, and so more research is needed to show how the leveraging difference model positively affects business performance, but one company that Davidson followed saw immediate financial returns after adopting leveraging difference practices. In one division of the company, this meant an impressive 50 percent increase in profit.

Davidson said that such successes are powerful not just because they affect the company's bottom line, but because they spark curiosity and conversation between different parts of a company that might not otherwise be connected, opening lines of communication and creativity.

Davidson was just named associate dean for diversity and chief diversity officer at Darden, so he is ideally positioned to address these issues.

"In corporate settings and within the University, my experience so far is that there is a real interest in seeing diversity through this new lens — and I'm excited about the possibilities," he said.