David A. Thomas

When most of us think of Lou Gerstner and the turnaround of IBM, we see a great business story. A less-told but integral part of that success is a people story—one that has dramatically altered the composition of an already diverse corporation and created millions of dollars in new business.

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Reprint: R0409G 

IBM&#8217;s turnaround in the last decade is an impressive and well-documented business story. But behind that success is a less told people story, which explains how the corporation dramatically altered its already diverse composition and created millions of dollars in new business.
By the time Lou Gerstner took the helm in 1993, IBM had a long history of progressive management when it came to civil rights and equal-opportunity employment. But Gerstner felt IBM wasn&#8217;t taking full advantage of a diverse market for talent, nor was it maximizing the potential of its diverse customer and employee base. So in 1995, he launched a diversity task force initiative to uncover and understand differences among people within the organization and find ways to appeal to an even broader set of employees and customers.
Gerstner established a task force for each of eight constituencies: Asians; blacks; the gay, lesbian, bisexual, transgendered community; Hispanics; white men; Native Americans; people with disabilities; and women. He asked the task forces to research four questions: What does your constituency need to feel welcome and valued at IBM? What can the corporation do, in partnership with your group, to maximize your constituency&#8217;s productivity? What can the corporation do to influence your constituency&#8217;s buying decisions so that IBM is seen as a preferred solution provider? And with which external organizations should IBM form relationships to better understand the needs of your constituency? The answers to these questions became the basis for IBM&#8217;s diversity strategy.
Thomas stresses that four factors are key to implementing any major change initiative: strong support from company leaders, an employee base that is fully engaged with the initiative, management practices that are integrated and aligned with the effort, and a strong and well-articulated business case for action. All four elements have helped IBM make diversity a key corporate strategy tied to real growth.

Diversity as Strategy

Reprint: R0409G IBM’s turnaround in the last decade is an impressive and well-documented business story. But behind that success is a less told people story, which explains how the corporation dramatically altered its already diverse composition and created millions of dollars in new business. By the time Lou Gerstner took the helm in 1993, IBM had a long history of progressive management when it came to civil rights and equal-opportunity employment. But Gerstner felt IBM wasn’t taking full advantage of a diverse market for talent, nor was it maximizing the potential of its diverse customer and employee base. So in 1995, he launched a diversity task force initiative to uncover and understand differences among people within the organization and find ways to appeal to an even broader set of employees and customers. Gerstner established a task force for each of eight constituencies: Asians; blacks; the gay, lesbian, bisexual, transgendered community; Hispanics; white men; Native Americans; people with disabilities; and women. He asked the task forces to research four questions: What does your constituency need to feel welcome and valued at IBM? What can the corporation do, in partnership with your group, to maximize your constituency’s productivity? What can the corporation do to influence your constituency’s buying decisions so that IBM is seen as a preferred solution provider? And with which external organizations should IBM form relationships to better understand the needs of your constituency? The answers to these questions became the basis for IBM’s diversity strategy. Thomas stresses that four factors are key to implementing any major change initiative: strong support from company leaders, an employee base that is fully engaged with the initiative, management practices that are integrated and aligned with the effort, and a strong and well-articulated business case for action. All four elements have helped IBM make diversity a key corporate strategy tied to real growth.

Diversity as Strategy

Summary.

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