Spencer Owens Case Study

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10 April 2016

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In 2000, following a careful national search, Spencer Owens & Co., a forty-five year old international consulting firm focusing on foreign and domestic economic development, recruited its first female executive director. Agnes Richards, a white woman in her mid-50s, welcomed the opportunity to lead this successful firm widely recognized for its achievements, including those in the area of diversity. She believed Spencer Owens offered a unique working environment uncommon to the industry.

Hiring Richards was the culmination of an effort, initiated in the mid-1980s by Spencer Owens’ then all-white-male executive team, to increase racial, ethnic, and gender diversity throughout the company, from entry-level positions to executive ranks. The new affirmative action plan read, “Spencer Owens will consider people on their merits and for their capacities to do what is expected or required of them.” To implement the plan, they set hiring goals, communicating them to all employees and creating accountability.

Over the next decade, numerous women and people of color were hired and placed on career paths toward becoming project managers and leaders in the firm. The company’s two-hundred-member staff was divided between operations and program services. Operations included general management, community relations and special programs. The company’s areas of expertise, or programs, spanned criminal justice, economic justice, youth support, humanitarian assistance, immigration and conflict prevention.

Initial Success

By 1995 Spencer Owens boasted the most diverse staff in the industry at all levels of the company and was considered a model of successful diversity efforts. About 50% of the firm’s 150 managers and professionals were women, and 30% were people of color. Many qualified entry-level employees of color had been promoted into managerial positions over time. A third of the company’s 12-person executive team was women and a quarter was people of color; the associate director was an AfricanAmerican man. Exceedingly competent, the firm’s staff was built through aggressive hiring and advancement practices that set high qualification and performance hurdles in addition to affirmative action goals.

Spencer Owens’ leadership and much of the staff were proud of the company’s achievements. As one Latina project manager stated, “A significant number of people of color is a sign of something ________________________________________________________________________________________________________________  good about the organization.” The firm’s commitment to fairness and equality encouraged people to ignore gender or ethnic differences. Typical comments from employees across the board included “I don’t see people in color,” “Everyone is the same and is treated the same,” and “We are all human beings here.” A white manager described the firm as having “made tremendous progress in its commitment to build both a just society inside, as well as a just society outside the organization.” He continued:

I think the organization has committed itself to restructuring its personnel makeup in order to right some of the wrongs caused by racism and sexism in our society. People of color have enriched the organization; they have helped us live up to our ideals of equality and justice. To complement its affirmative action program, Spencer Owens undertook several other initiatives. The firm required that every staff member attend “sensitivity training” sessions. Coupled with follow up discussions, the training was intended to raise people’s awareness of individual prejudices and institutional racism, sexism, and homophobia. In addition, top management embraced employees’ efforts to form networking groups for women employees and for employees of color. The two groups aimed to ensure the development and advancement of women and of non-white staff at Spencer Owens as well as to leverage their perspectives on work produced by the firm.

Tensions on the Rise

Since assuming her directorial duties, Richards had noted growing friction around race relations. It seemed that employees of color were quick to bring charges of racism against whites in the organization. Also Richards was disturbed by the frequency of complaints brought by the two networking groups. Three years into her tenure at the firm, amid concerns that the firm had not done enough to deal with prejudice in the organization, Richards and her leadership team reinstituted sensitivity training for all staff, but the attendance was poor, especially among racial and ethnic minorities.

Recently, a few high-potential employees of color had resigned. Racial tensions escalated when Richards fired Sahara Johnson, an African-American manager in Human Resources who had a history of lateness and what her superiors called “an attitude problem.” The incident was like the breaking of a dam, and everyone’s anger and frustration came pouring forth. During 10 years at the firm, Johnson had worked her way up to a managerial position, and many people, particularly women of color, had looked up to her as a role model. Her firing divided the firm into those who considered her dismissal abrupt and unjust and those who felt it was long overdue.

In the aftermath of Johnson’s removal, Richards turned to her executive team to discuss the undercurrents at the firm. Together, they decided to hire consultants to undertake a systematic study of the firm’s race and gender relations and to help formulate a corrective strategy. The race- and gender-diverse consulting team engaged for the task, led by an African American man, interviewed a cross-section of employees, including executives and managers, program staff, and support staff from the operational and program areas in the firm.

Despite success with the number of hires, the interviews revealed numerous concerns about the affirmative action initiative. White staff acknowledged that the firm was successful in reaching its affirmative action goals, but some maintained that the diversity program was adversely affecting the quality of work put out by the firm. White male managers complained that the newer employees were undermining Spencer Owens’ traditional strength in hard-core quantitative analysis by advocating for incorporation of interviewing and observation into data-gathering methods.

Minority project leaders had also challenged standard practice by suggesting that Spencer Owens’ program staff seek input from middle managers and the rank and file at client organizations, instead of focusing exclusively on senior managers. Long-term employees, especially white program staff, feared these ideas were pulling the organization away from its original mission and values, which were grounded in rigorous analysis of economic development strategies. By contrast, people of color were critical of the affirmative action program for having achieved merely superficial results.

For example, one African-American project leader felt that the firm tolerated minorities without fully accepting them. Another minority staffer confirmed “they say we are just one big happy family, but there are some stepchildren in this organization.” Many non-white professionals reported having their ideas routinely disregarded. A Latino program staffer explained, “Until white people discover an idea, until they express it with their own words in their own style, it’s as if it doesn’t exist.” An African-American project leader in charge of Eastern Europe shared the following experience:

We were mapping out our strategy, and I tried to get people on the team to consider the idea that actually these countries had more in common with certain parts of Africa and Latin America than with Western Europe. I pointed out that the firm’s white, Eurocentric orientation might lead us to assume—erroneously—that white countries have more in common with one another than with nonwhite countries and that, as an African-American, I was probably less committed to that view. But when I raised the idea that our race might influence how we saw things, they all thought I was being racist.

These complaints were routinely brought to the attention of the networking groups, which interjected themselves in defense of women and people of color whenever they deemed necessary. Some whites complained that these groups had taken on a policing and advocacy function, and several white project leaders believed the groups had “more leverage and more power than perhaps they ought to have in decision making.” One manager complained, “They are sometimes allowed to make interventions and judgments of certain programs based on their political clout rather than on actual facts.”

When a person of color was fired, whites observed that “people [of color] are up in arms and saying it’s racism.” A white manager complained that it had become “increasingly difficult for supervisors to provide firm, fair, constructive supervision to people of color, who are prone to charge racism if they are criticized.” In turn, many employees of color lamented the missed opportunities for valuable feedback, and some resented what they perceived as white supervisors’ fear of confrontation. “There’s a real sense on the part of some white people that whatever they’re going to do they’re going to get in trouble,” a black woman had told one of the consultants. “Their biggest fear is being called a racist.”

To gain a better understanding of how widespread these attitudes and perceptions were, the consulting team administered a company-wide survey with questions based on the varied points of view expressed in the interviews. Ninety-two percent of the employees responded to the survey (see Exhibit 1).

The executive team was taken aback by the gravity of the problem exposed by the survey. Faced with the results parsed by race and hierarchical level, Richards realized that she had to find a solution and set a new course for the company. Sitting at a round table, she turned to her team and to the consultants for ideas on how to steer the company out of this difficult situation.

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