By the Gonzales Group
RISMEDIA, May 15, 2008-It is no secret-businesses measure return on investment. And, while in many cases, diversity programs have been considered “soft” programs whose returns have also been “soft” and difficult to gauge, successful organizations are learning to demonstrate the contribution of diversity to a businesses bottom line.
A lack of measurement tools has forced firms to estimate the effectiveness of their diversity efforts. Organizations often look at the traditional and static measurement tools without leveraging and taking into account the potential that diversity initiatives can contribute.
Diversity initiatives are often not considered in the long-term meaning for the organization. Sadly, organizations position diversity as a “minority” issue rather than as an organizational issue.
By using broader organizational metrics, organizations can link diversity to business outcomes more effectively. For example, to show a measurable return on investment for diversity programs, link these efforts with the organization’s sales and marketing functions.
Ethnic markets are growing rapidly and each represents billions of dollars in spending power in the U.S. Companies are increasingly competing for these growing markets, especially at a time when population growth overall has slumped.
Linking internal diversity initiatives with external efforts to capture nontraditional or diverse markets for your firm’s products and services not only enhances the credibility of your diversity efforts-it also enhances the credibility of your marketing efforts to minority populations.
For organizations in the real estate industry, it is no different. Here are a few tips on how you can leverage off of the enormous opportunity that lies in the ethnic markets:
1. Consider a referral arrangement. Partner with an ethnically owned firm that can help put you in touch with home buyers in the Asian, African American or Hispanic communities.
2. Recruit one ethnic agent at a time. It’s okay to keep tabs on ethnic agents on the other side of your transactions. They’re already familiar with the real estate process and you could provide them with the next career step they are looking for.
3. Buy a company and merge it into your existing operation. There is no quicker way to merge disparate cultures than buying a company that already has a sound foothold in the ethnic community. Consider buying a company and leaving it as a stand alone.
While this could be the most efficient way to enter the ethnic market, be careful to not go in guns a blazing and potentially commit costly cultural mistakes.
Emphasize the support you can provide in gaining market share outside their existing market and access to JV opportunities with lenders, title companies, and access to tools only economy of scale can bring.
Understand that you also must be willing to adapt to practices that currently work in their market and may be foreign to you.
If you have a diversity initiative, make sure the effectiveness of a campaign directed at emerging market customers is being evaluated against your business plan on a timely basis. The only way to know if a diversity initiative is effective is to monitor and evaluate it. Ask yourself:
• What is being expended on the initiative?
• What is the return?
• How many more customers were gained?
• What is the company’s market share and penetration?
• What elements of the campaign worked well and which did not?
By creating a new balance sheet, you can help your organization measure the contributions of a diversity initiative. And, by putting diversity measures into a larger context and linking it to new measures of intangible assets, you can break out of the “soft” diversity silo to show that diversity is a value-creating process for your business.
As Einstein once said, “Not everything that counts can be measured, and not everything that can be measured, counts.”
For more information, visit www.thegonzalesgroup.com.