Get Set: Here They Come!

By Janice Castro

Shortly after he took over as chairman of Delaware-based E.I. Du Pont de Nemours two years ago, Edgar Woolard called a meeting of his company's 325 top managers at Palm Beach, Fla. Looking out at a roomful of white men, peppered with fewer than a dozen women and minorities, the new boss delivered a stunning ultimatum. The next time Du Pont's managers gathered, Woolard said, he'd better see significantly more women and minorities in the room. Last March, when Woolard and 390 executives attended the company's leadership conference in Chantilly, Va., 25% of those present were women and minorities. Though not all of them had reached the top ranks, they were more than window dressing. By soliciting their views at such conferences, the company hopes it can root out biased attitudes and broaden its appeal to future workers. Du Pont, where Woolard started 33 years ago in a plant with a segregated cafeteria and where less than 20 years ago women with chemical-engineering degrees often started as secretaries, is learning how to change.

And just in time. The U.S. is about to undergo the most wrenching shifts in the composition and quality of its work force in more than a half-century. While most companies have yet to come to grips with the new realities, the cold, hard fact is that corporate America is facing a deepening shortage of skilled labor in the decades just ahead. During the next 10 years, the U.S. population and the labor force will expand more slowly than at any other time since the 1930s. The work force grew by 3 million workers a year during the 1970s, but will swell by only 1.6 million new workers a year in the coming decade. For the first time in their working lives, U.S. managers are no longer able to pick and choose among an embarrassment of labor riches, but must compete harder than ever for well-educated workers.

At the same time, the face of the work force is changing dramatically. While the labor force will grow slowly over the next decade, two-thirds of the increase will be women starting or returning to work; minority males and immigrants will account for much of the rest. Most startling, only 9.3% of the new workers will represent the population from which nearly all top corporate managers have sprung: white, non-Hispanic U.S.-born men.

These changes are becoming evident in the labor market. While women, for example, still face formidable obstacles on the road to top management, they have made dramatic inroads into occupations previously reserved mostly for men. Nearly 18% of doctors are now women, as are 22% of lawyers, 32% of computer systems analysts and nearly half of accountants and auditors. Over the next several years, women will make up the majority of new skilled and educated workers.

Though most firms have been slow to respond to these developments, smart managers searching for talent are already courting the women, African Americans, Hispanics, Asians and others whom corporate executives have traditionally discounted or dismissed. They are re-examining from top to bottom their personnel policies: the ways they find and recruit new talent, the incentives and benefits they offer, how they organize work. They are learning that the new work force has different needs and are exploring ways to meet them.

Noble as these efforts are, the chief executives pushing open the doors to the executive suite are acting more out of pragmatism than probity. "It doesn't make sense to cut yourself off from half of the talented people in this world," observes George Harvey, chief executive of Pitney Bowes, the giant Connecticut-based office-equipment company. "If we're known as a good place to work, more good people will want to work here. That will make us more competitive, which means more sales and higher stock prices."

Since 1985 Harvey has enforced that philosophy with his 35-15 plan: at least 35% of all new employees hired must be women, and 15% or more must be members of a minority. Managers' pay and bonuses depend on meeting those targets. One result of such efforts: though the company had almost no female top executives 10 years ago, 17% of corporate officers today are women. Harvey has gone so far as to ban sexist comments from the workplace; persistent offenders are fired.

Colgate-Palmolive chairman Reuben Mark has similarly embraced "cultural diversity" as a company goal, comparable in importance to sales and profits targets. At the firm, which has 24,400 workers, about 25% of the managers are women, up from 9% in 1986. In August 1989, Mark promoted Louise Juliber to head one of Colgate's four main operating units. Says Mark: "The pressure has to come from the top. The organization reacts to what management values, whether it is profits or strong cultural diversity."

In Denver, after more than six years of pushing to diversify the nearly all- male senior management of US West, chief executive Jack McAllister reports that 77 of his top 350 managers are women. Since May 1988 he has been supervising an ambitious new management-training program designed to tackle an even more stubborn problem at the 65,000-worker Baby Bell. While in the past, 1 in 21 white males at the firm could expect to reach the supervisory level or higher, only 1 in 289 black and Hispanic women did so. Under the Women of Color Accelerated Development Program, though, US West has so far promoted 32 of the 50 program participants.

Finding and promoting good female managers is one thing; keeping them is proving to be a tall order. Many of the most accomplished women get fed up with corporate life when they fail to advance into the upper echelons. Twenty years after women entered the professional ranks in significant numbers, very few have broken through the middle ranks of management to the top jobs. A Korn/Ferry survey last year of all FORTUNE 1,000 companies found that of the top five jobs below CEO at each firm, only 3% are held by women, up from 1% a decade ago. The record is so dismal that earlier this year, Secretary of Labor Elizabeth Dole launched an investigation into bias in the corporate suite.

Companies that are serious about moving women into the corner offices and keeping them there have to bend some old rules. Two firms based in the Washington area stand out for their willingness to do that. At Gannett, the media firm, 41% of the workers in the top four categories are women, as well as four of 15 members of the board of directors. At MCI, where 42% of the 20,400 employees are female, women hold 12% of the 350 top-management jobs, double the number three years ago. Both companies attribute their progress in part to the efforts they have made to help working mothers balance job and family responsibilities.

At these firms, it is no longer career suicide to turn down a promotion or delay a transfer for family reasons. Both companies have jettisoned the rigid "get up or get out" corporate formula that held that managers, like sharks, must constantly move forward or sink. After all, many executives these days are women with small children or women whose husbands are pursuing ambitious careers of their own. John Zimmerman, an MCI senior vice president, cites the case of the corporate-development executive, a mother, who has turned down two promotions in the past year because she did not want to move. At Gannett, a woman declined a promotion to publisher because she was busy adopting a child. Her decision was accepted, and will not preclude a promotion the next time around.

But rejiggering work arrangements is relatively easy. The more subtle changes necessary to successfully manage a culturally diverse work force often scare the daylights out of even the best-intentioned executives. Many find themselves for the first time adrift in uncharted territory. Workers don't follow familiar codes of behavior. Bosses must rethink the way they evaluate people and unlearn habits that can alienate or confuse employees from different backgrounds.

A new Rutgers University study of the multi-cultural labor force identifies several sociological problems commonly faced by women, minorities and immigrants in the workplace. Because many Asians, for example, come from cultures that place a premium on humility, they often have trouble competing with American workers. While Asians view personal assertiveness as impolite, their white male competitors see it as the normal way of getting ahead and use it to their advantage.

Meanwhile, according to the study, African Americans and women alike have suffered from the "invisibility syndrome"; white male managers commonly tend to ignore them in meetings and, consequently, to overlook their contributions. Both groups have been handicapped by the tendency of supervisors to underestimate them, withholding the mettle-testing assignments that can lead to advancement.

Difficult and slippery as some of these issues may be, companies must address them. Otherwise they will fail to fulfill a vital responsibility of any firm: recruiting and nurturing strong future managers. Learning how to lead a diverse work force may be maddeningly complicated. But the alternative, management experts predict, may be alienated employees working at cross purposes. At Du Pont, an exhaustive series of new training courses helps employees explore sensitive issues dividing the sexes and races. In a three- day program, men and women hash out their differences in an encounter-style setting. Another seminar explores a topic that only recently has gained boardroom respectability: how management attitudes affect employee performance.

At a time when corporations increasingly expect employees to work with minimal supervision and to show more initiative, cooperation and fresh approaches are essential. Instead of viewing workers of a different sex and of varied cultural backgrounds as an unmanageable and imperfect lot, some top executives see them as a new and flexible resource. Says Colgate-Palmolive's Mark: "We do business in 60 countries. We are a multicultural company, so we should have multicultural managers." Encouraging diversity, after all, is not just an accommodation to the new realities of the U.S. labor force. It can be another way of ensuring that workers can contribute their best ideas and efforts in an intensely competitive international arena.

With reporting by Gisela Bolte/Washington, Lee Griggs/San Francisco and Thomas McCarroll/New York