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Up to this point, most diversity work has been focused solely on diversity-awareness training, she says. This raises the awareness of individual employees but does nothing to change the culture itself.

The report found that the annualized return for the 100 companies which rated lowest in EEO issues averaged 7.9 percent, compared to 18.3 percent for the 100 companies that rated highest in their equal employment opportunities.

But as the 1996 A.T. Kearney survey revealed, 74 percent of companies with diversity efforts attribute them to business, societal and/or political pressures—not basic ethical values. Given that, one of the primary business reasons to pursue diversity sensitivity is increasing the company's ability to attract and retain customers.

This is because training done in the absence of any formal support for change can increase divisiveness in the workplace. Why? Not only because it raises awareness of tense issues, but also because it can increase the expectations of women and minorities, and increase fear and resistance among white men.

We realized that diversity efforts can increase employee satisfaction," Cromwell says, "and the Harvard Business School has been able to demonstrate a strong link between employee satisfaction, customer satisfaction and shareholder value.

companies must begin to think of training as a component of their diversity strategy, not the strategy itself. Hyater-Adams believes companies must now concentrate on the second stage of diversity work that she calls "integration and application." This stage not only seeks to address what training ignored, such as management hypocrisy, but also seeks to make diversity work a business strategy. The goal, according to diversity experts, is to create a workplace in which white males, women and minorities are fully integrated and have equal access to power, promotions and opportunities.

At US WEST, for example, managers must demonstrate their personal commitment to diversity through direct involvement on committees, task forces or community groups-they can't pass the task off to a subordinate-and they must show how their commitment is changing the demographic profile of workers in their unit, division or community. Furthermore, a portion of their compensation is tied to the achievement of diversity goals.

"Most organizations that have invested in diversity training haven't received a proper return on their investment," Cox says. Just look at Texaco: the company had initiated a diversity effort a year before the secret tape was made, and senior executives had attended at least one awareness session.

Diagnostic work helps diversity professionals understand what issues to tackle first.

Finally, make sure you conduct regular evaluations. Companies must always be taking the pulse of employees to make sure that no diversity issue is overlooked. "What most companies need today is better information on minority issues," says Robertson. This includes statistics on the workforce profile, on major lawsuits or employee complaints of discrimination, and performance data about individual managers. This information must be shared with upper-level executives on a regular basis along with all the other profit-and-loss data they receive. If Texaco's executives had been receiving this information regularly, Robertson suggests they might never have been the target of a discrimination suit, or the ensuing negative publicity.

In the final analysis, perhaps the best way to look at this issue is the way Cross describes it: "Diversity isn't the problem, it's the ideal." It's certainly an ideal worth striving to attain—and a financial driver we can no longer ignore.

Performing regular diagnostics, in the form of focus groups and employee evaluations, can help HR executives uncover these issues. "Companies must [analyze] the data by different populations," says Cromwell. If they don't, issues that affect certain employee populations-the lack of informal mentoring for minorities, for example-may not be noticeable when combined with other employees' responses.

But if company leaders begin to approach diversity like any other major business initiative—be it safety, reengineering or self-managed teams—they'll be in a better position to institutionalize diversity and truly encourage and embrace the different perspectives of each employee.