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HEN MOST OF US THINK OF Lou Gerstner and

the tumaround of IBM, we see a great business story. A less-told but integral part of that success is a people story-one that has dramatically altered the composition of an already diverse corporation and created millions of dollars in new business.
By the time Gerstner took the helm in 1993, IBM already had a long history of progressive management when it came to civil rights and equal employment. Indeed, few of the company's executives would have identified workforce diversity as an area of strategic focus. But when Gerstner took a look at his senior executive team, he felt it didn't reflect the diversity ofthe market for talent or IBM's customers and employees. To rectify the imbalance, in 1995 Gerstner launched a diversity task-force initiative that became a cornerstone of IBM's HR strategy.
The effort continued through Gerstner's tenure and re98

mains today under current CEO Sam Palmisano. Rather than attempt to eliminate discrimination by deliberately ignoring differences among employees, IBM created eight task forces, each focused on a different group such as
Asians, gays and lesbians, and women. The goal ofthe initiative was to uncover and understand differences among the groups and find ways to appeal to a broader set of employees and customers.
The initiative required a lot of work, and it didn't happen ovemight -the first task force convened almost two years after Gerstner's arrival. But the IBM of today looks very different from the IBM of 1995. The number of female executives worldwide has increased by 370%. The number of ethnic minority executives born in the United
States has increased by 233%. Fifty-two percent of IBM's
Worldwide Management Council (WMC), the top 52 executives who determine corporate strategy, is composed
HARVARD BUSINESS REVIEW

IBM expanded minority markets dramatically by promoting diversity in its own workforce.The result: a virtuous circle of growth
and

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