Bidiversity

It has become imperative for businesses to use smart business practices to develop products. Gone are the days of “one size fits all” or “build it and they will come.”

Today, those approaches may as well be throwing money at the wall to see what sticks. Product development teams must go beyond knowing their target audience. They must understand how and why certain groups buy, as well as cultural idiosyncrasies and preferences, and then design their products and services to appeal to those specifics.

According to Tracey Gray Walker, chief diversity officer for AXA Equitable Life Insurance Co.,

“Our clients come from many ethnic and cultural backgrounds, and they look to us to help them build and protect their financial futures. To truly help our clients, especially in the economy we are currently facing, it’s paramount we first understand their goals, objectives and financial concerns.”

Creating product for the sake of creating isn’t the ultimate goal. Companies want to create new opportunities and revenue streams while servicing diverse customers in ways that make them want to work with or buy from the organization again and again. And diverse populations are growing rapidly, along with their buying power. The 2008 Selig Center for Economic Growth study “The Multicultural Economy” forecast the combined buying power of African-Americans, Asians, Hispanics and Native Americans in the United States will be more than $2 trillion by 2013.

Multicultural Awareness in Product Development

A product developer has to be aware of many kinds of sensitivities related to gender, economic level and religion. For example, a hat-maker in a Southeast Asian-populated neighborhood takes an entirely different sales approach than a hat-maker in a neighborhood with a majority population of Irish descent. Likewise, that Irish neighborhood may view local Catholic or Protestant religious products stores differently than the same stores in an Italian neighborhood because distinct cultural affinities influence product purchases.

Before products hit the shelves, multicultural teams should be involved in their development. Take the findings of Catherine Crago, a 20-year-veteran of the semiconductor industry and CEO of Diversity Interactive, which produces custom studies for diversity and innovation in the high-tech sector. Using the chip industry as an example, she said two key players in the U.S. semiconductor innovation supply chain are China and India, and a computer chip may be designed by a team in several countries, developed in Asia and the United States, and then manufactured in Europe.

“Even if a U.S. firm completes the first two critical research and design phases, it is likely the firm will still be dependent on supplier cultures that tend to be hierarchical and collectivist,” said Crago.

Because hierarchical and collectivist cultures are not the norm in the United States, Crago said this impacts several areas of the team collaboration phase, including how data and results are reported, how engineering specifications are understood and preferences for meeting agendas.

Although businesses and governments tend to classify themselves according to rank or hierarchy, what American workers experience is not as strict as other cultures. Collectivism, on the other hand, emphasizes “for the good of the group” types of messages.

Because most U.S. engineers have little product development experience in collectivist and hierarchical cultures, Crago said the learning curve is steeper. “When a U.S. engineer is unaccustomed to engineering preferences in both hierarchical and collectivist cultures, he or she can spend one year or more at 50 percent productivity,” she explained. “When outsourced work is planned or managed without respect to culture, a U.S. firm may inadvertently cause an Asian supplier, for example, to spend 30 to 100 percent more time communicating and resolving technical conflicts.”

Crago said companies looking at the impact of culture on time to market should look at business process as well as common practice, which is why her firm produces analysis reports that look at the impact of gender, cultural and global diversity on various elements of the product research and development process, including patents. She said U.S.-based product development efforts are influenced by the following trends:

* Mixed-gender patent teams outperform both single-gender male and female teams.
* The number of science, technology, engineering and math field workers in the United States is declining rapidly.
* Product innovations by multicultural teams are critical to the nation’s economy, and by most measures the United States produces far fewer engineering graduates than its innovation counterparts in China and India.

Where the Diversity Executive Comes Into Play

Product development and innovations don’t always occur in a large, culturally diverse metropolis. Businesses in small communities know the U.S. population is shifting, and an expert on workplace diversity and product innovation can facilitate efforts to take a product national or global.

Diversity executives can extend their contributions in product development innovations by expanding their knowledge.

“Look at how consumer goods companies have analyzed changing demographics, responded to the growth in income and have led the way to owning that space,” said Walker from AXA Equitable. “They were not only aware of changing demographics, they modified marketing strategies to leverage the new and growing markets. They were quick to analyze, quick to act on changes, and they were able to leverage the first-to-market business opportunities.”

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