Home > Opinion > A fresh approach to disability employment
Rich Donovan
Rich Donovan is Founder and Chief Investment Officer at WingSail Capital, a New York based investment management firm that offers institutional equity strategies. Rich happens to have cerebral palsy and uses a disability lens to find investments that beat the market.
A fresh approach to disability employment
In the first of two articles, New York based disabled businessman and former Wall Street trader, Rich Donovan, considers what circumstances would lead to companies embracing disabled people as employees by first seeing their potential as customers.
Engineers are honest. They have to be, or bridges fail and people die. They have the ability to look at something, find a major flaw and fix it so that the 'thing' works the way it was demanded.
The first step to fixing a problem is to fully define it. The engineering community calls this 'declaring a breakdown'. Let's apply this idea to disability: the economic lives of disabled people are nowhere near what they could be. The promise to create job opportunities using laws and diversity programs has proven false. It's for this reason I am declaring a breakdown.
The first step to fixing a problem is to fully define it. The engineering community calls this 'declaring a breakdown'. Let's apply this idea to disability: the economic lives of disabled people are nowhere near what they could be. The promise to create job opportunities using laws and diversity programs has proven false. It's for this reason I am declaring a breakdown.
Equality laws don't work
Quotas and equity laws do not cause hiring, it's the promise of future profits that does. Despite this, we find ourselves in a situation where governments are forcing companies to hire disabled people without considering organisational realities within those firms.
Companies, by their very nature, act in their shareholders' best interests, doing what will grow revenue in the fastest way possible. This goal is baked into an organisation through incentives like bonuses and pay rises. It ensures everyone rows in the same direction, from CEO to marketing manager to those that make the hiring decisions.
Changing systems is far more complex than imposing a quota or a 'nice to do' mandate. It is difficult enough to achieve a business plan without the 'artificial' requirement of hiring people with disabilities, never mind the expected response "don't tell me how to do my job".
An ironic example of quotas not working can be seen in the US government, where four successive Presidents have mandated the hiring of at least 100,000 disabled federal employees.
All four mandates have failed and the level of employees with disabilities has dropped over this period to below 1% of the federal workforce. If the government can't do this right, who do we looked to for the solution?
Companies, by their very nature, act in their shareholders' best interests, doing what will grow revenue in the fastest way possible. This goal is baked into an organisation through incentives like bonuses and pay rises. It ensures everyone rows in the same direction, from CEO to marketing manager to those that make the hiring decisions.
Changing systems is far more complex than imposing a quota or a 'nice to do' mandate. It is difficult enough to achieve a business plan without the 'artificial' requirement of hiring people with disabilities, never mind the expected response "don't tell me how to do my job".
An ironic example of quotas not working can be seen in the US government, where four successive Presidents have mandated the hiring of at least 100,000 disabled federal employees.
All four mandates have failed and the level of employees with disabilities has dropped over this period to below 1% of the federal workforce. If the government can't do this right, who do we looked to for the solution?
They're 'customers' first
Perhaps the most troubling aspect of this 'breakdown' is the demand that firms hire disabled people before they understand the revenue potential in serving the market.
Historically, minority hiring has lagged minority marketing by 5 to 10 years. While there were isolated campaigns from as early as the 1920s, businesses like consumer products firm Proctor and Gamble ramped up their targeted advertising to women with vigour in the 1970s, but large scale hiring didn't really follow until the late 1980s and 1990s.
Companies must act on disabled people, treating them as customers first, with hiring coming as an 'effect' resulting from serving those customers.
The disability market is big, with ample room to increase sales and profits for business. With 1.1 billion people globally having a disability, controlling over $4 trillion annually, this market is about the size of China. Stakeholders in disability, friends and family, represent an additional 2 billion people with a disposable income of $8 trillion.
These are big numbers, the opposite of niche. But the opportunity and promise of big numbers is not enough - what you do with them is critical.
Companies need to understand that it's OK to make money from delighting disabled customers.
Historically, minority hiring has lagged minority marketing by 5 to 10 years. While there were isolated campaigns from as early as the 1920s, businesses like consumer products firm Proctor and Gamble ramped up their targeted advertising to women with vigour in the 1970s, but large scale hiring didn't really follow until the late 1980s and 1990s.
Companies must act on disabled people, treating them as customers first, with hiring coming as an 'effect' resulting from serving those customers.
The disability market is big, with ample room to increase sales and profits for business. With 1.1 billion people globally having a disability, controlling over $4 trillion annually, this market is about the size of China. Stakeholders in disability, friends and family, represent an additional 2 billion people with a disposable income of $8 trillion.
These are big numbers, the opposite of niche. But the opportunity and promise of big numbers is not enough - what you do with them is critical.
Companies need to understand that it's OK to make money from delighting disabled customers.
See the 'value' not the disability
Corporate America has just begun looking at disability. Having analysed the 800 largest companies in North America(*), 6% of them are doing 'something' in disability that is related to their business and can be measured.
IBM's voice recognition product, for instance, was developed in the 1970s by Dimitri Kanevsky, a Russian genius who happens to be hearing impaired. This is a $5 billion business for IBM today, growing at 22% on an industry level.
Few companies are doing anything in this market because most still see it as charity work. In a typical company, disability is the red-headed stepchild of diversity. The 'action' includes events like 'lunch-and-learns', motivational speakers, disability 'etiquette' pamphlets and/or attendance at a charity dinner. These 'activities' do nothing to drive the ball forward. They should be avoided, as most observers will come to the conclusion that the firm is not serious in its efforts, and is oblivious to the business value in people with disabilities.
The worst offenders cut a cheque to a charity and walk away with their tax credit. They give no value to this marketplace of potential customers or employees. You've seen their logos on banners, programmes and websites as sponsors. When asked of involvement in disability, they point to support of XYZ event, and move on. Today's disabled consumers expect to be an integrated element of business strategy, not merely part of a corporate social responsibility plan.
The best companies, 50 firms in North America, readily admit that they are just scratching the surface. They are treating disabled people as they would any other new market. Alongside research, they act by signalling to the market that they have interest. An example of this is when PepsiCo ran an ad during the 2008 Super Bowl that was based on disability. They used humour to bridge between the broader market and disabled people, collecting more than 4.5 million hits on YouTube. This is a signal that Pepsi values this group as customers.
IBM's voice recognition product, for instance, was developed in the 1970s by Dimitri Kanevsky, a Russian genius who happens to be hearing impaired. This is a $5 billion business for IBM today, growing at 22% on an industry level.
Few companies are doing anything in this market because most still see it as charity work. In a typical company, disability is the red-headed stepchild of diversity. The 'action' includes events like 'lunch-and-learns', motivational speakers, disability 'etiquette' pamphlets and/or attendance at a charity dinner. These 'activities' do nothing to drive the ball forward. They should be avoided, as most observers will come to the conclusion that the firm is not serious in its efforts, and is oblivious to the business value in people with disabilities.
The worst offenders cut a cheque to a charity and walk away with their tax credit. They give no value to this marketplace of potential customers or employees. You've seen their logos on banners, programmes and websites as sponsors. When asked of involvement in disability, they point to support of XYZ event, and move on. Today's disabled consumers expect to be an integrated element of business strategy, not merely part of a corporate social responsibility plan.
The best companies, 50 firms in North America, readily admit that they are just scratching the surface. They are treating disabled people as they would any other new market. Alongside research, they act by signalling to the market that they have interest. An example of this is when PepsiCo ran an ad during the 2008 Super Bowl that was based on disability. They used humour to bridge between the broader market and disabled people, collecting more than 4.5 million hits on YouTube. This is a signal that Pepsi values this group as customers.
Walgreens, a national drugstore chain in the US, has integrated disabled employees into their distribution centres, learning from the way they do their jobs to make it easier for everyone to do their jobs. The centres that do this are 20% more productive, an outcome which demands serious attention.
Most people spend too much time analysing a problem. The disability community is certainly guilty of that. The key is recognising that what exists today isn't working and a solution should be found that will produce new and different results. After all, declaring a breakdown is not powerful unless a quality fix is the outcome.
(*)Taken from primary research done by WingSail Capital as part of its investment process in the 4th quarter of 2010.
Most people spend too much time analysing a problem. The disability community is certainly guilty of that. The key is recognising that what exists today isn't working and a solution should be found that will produce new and different results. After all, declaring a breakdown is not powerful unless a quality fix is the outcome.
(*)Taken from primary research done by WingSail Capital as part of its investment process in the 4th quarter of 2010.
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Comments
Red-headed stepchild? Hmm....
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'uses a disability lens'
Like looking through a telescope the wrong way around?
Greed is good!
pete
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The first photo on the blog as a wrong vowel in it.....should be an e perhaps or the way these bankers malinger 'unwell' st.
pete
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This guy is dead on. It's about time someone called it like it is. We must put our hopes of utopia aside and start dealing with reality. A wise person once said "In the absence of perfection, work with the reality in front of you".
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This guy is absolutely right. We need to start dealing with reality, rather than hoping for utopia. I'm certain it was a wise woman who said "In the absence of perfection, work with what is in front of you."
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I agree strongly with Rich's thesis and look forward to the second part in his article. Like Rich, I have also spent my career in the business sector (28 years in marketing, management and executive roles in IBM) and now run my own business. I have also lived with a disability (quadriplegia) following a diving accident at age 16.
The current approaches we are taking to disability reform generally, and to increasing employment opportunities for people with disabilities specifically, are not working. We have exactly the same challenges here in Australia that we see all around the world. Participation rates in all forms of education significantly lower than the general population, those who are participating are gaining lower-level qualifications than they could, a 30% difference in workforce participation and, where people with disabilities are working, again they are often not working at levels anywhere near their capacity.
As Rich so correctly points out, whether we like it or not, there is one thing that drives the business sector to put focus on anything - return on investment. When you get the revenue generating parts of the business recognising a business opportunity, you don't need governments telling them to invest. Rich also correctly points to the market potential: 20% of the population of the disability at least one other person is directly affected by that person's disability. I've got money, but why would I buy a product I can't use? Why would I travel with an airline that treats me like a pariah?
But now we hit the real problem. "People with disabilities live on pensions so they won't be able to buy my product". That's partly true, of course, so maybe all people with disabilities won't be able to buy products that meet their needs today (and I'm not talking specifically about "disability" products - I mean computers with built-in voice recognition, cars that can be ordered from the factory with a "drive from wheelchair" opption, a standard bank account that I can actually access!). But Rich can, I can, and so can millions of other people with disabilities.
And there's also the problem that business thinks creating a product that will attract a disabled consumer is expensive. Not with universal design, it's not. It is if you tack a bit of a retrofitted garbage onto an already completed product.
Businesses worldwide are struggling to find new markets. But come on, Business, the largest untapped market in the world is staring you right in the face.
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We can't appeal to businesses to employ us - they have to be made to do it. And don't "incentivise" them. They should do it because it's the right thing to do - not because they can get tax breaks for doing it.
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We can't appeal to businesses to employ us - they have to be made to do it.
You've missed the point of the article Chris. Trying to force them doesn't work. They resist, and the evidence shows that their efforts to resist are successful. Rich Donovan is spot on with pointing to profit as the means to genuinely motivate business to be interested in us as customers and then as employees. It's not a new idea either. That kind of thinking has been kicking around in parts of the disability community for decades. In our current times of top down state led negativity which is only serving to further disable people it is refreshing to be reminded that there's a much better and more valid approach to driving up employment which we ought to be hoping comes to fruition.
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'Engineers are honest. They have to be, or bridges fail and people die'
Er....' and they do. As the lack of proper engineering re safety in the nuclear field is currently unveiling in Japan.
Sorry Rich, know you're immersed in the business model and the idea that's what's good for business is a panacea to all but there's a few people in the Niger Delta with direct experience of the operations of a certain company exploiting oil reserves in the area that might argue that one as there are around the world.
In fact the profit motive, if left to blossom on it's own, without stringent enforceable laws, might even lead to some in the investment field cutting corners and making vast profits - Oh hang on that's already happened somewhere or other... hasn't it?
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equality laws do NOT work you are quite right, if your face doesn't fit that's it basically. It's OK in America you can sue anyone's ass off for anything, but here in the UK it's a bad joke really, disabled are openly targeted as frauds, liars, lead swingers by an rabid press, and a government who decides you can still walk without legs, still hear with no ears, and still see with no eyes... and then to add insult to ironical discrimination employers can say no to work if you are disabled... if you challenge them they up sticks and go to bloody china or asia where exploitation is perfectly legal.. and disabled made to beg for food in the street.... Stop press, they are starting it here already...
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