As you look around your office, is everyone just like you? Probably not. The demographics of American workforce have changed dramatically over last 50 years. In 1950s, more than 60% of American workforce consisted of white males. They were typically sole breadwinners in household, expected to retire by age 65 and spend their retirement years in leisure activities. Today, American workforce is a better reflection of population with a significant mix of genders, race, religion, age and other background factors.

The long-term success of any business calls for a diverse body of talent that can bring fresh ideas, perspectives and views to their work. The challenge that diversity poses, therefore, is enabling your managers to capitalize on mixture of genders, cultural backgrounds, ages and lifestyles to respond to business opportunities more rapidly and creatively.

Here are two examples of challenges inherent in managing a diverse workforce:

An American health insurance company hired employees from a variety of racial and ethnic backgrounds. The variety of different native languages and cultures, however, did not mix. Instead of making employees feel that they had a sub-group within their larger team, it gave rise to paranoia ("They must be talking about me.") and assumptions ("They think they are smarter than everyone else."). When group needed to learn a new intake system, rather than pull together, they became even more estranged and productivity and morale plummeted.

In an American subsidiary of a global bank based in Japan, a few Japanese female workers complained to management that their older Japanese male bosses were being disrespectful to them. The human resources manager questioned all of women in office. Every Japanese woman reported problems with Japanese men. In contrast, American women reported no problems at all. Confused, human resources manager questioned Japanese male managers. The answer? The Japanese men responded that they understood American expectations related to sexual harassment, so they were careful about what they said to American women. They were perplexed by responses of Japanese women. “What is problem?” Japanese men wanted to know, “They know that we don’t mean anything. Any Japanese person would understand.” Communication, which has never been straightforward and easy in first place, is becoming even more complicated as organizations take on global partners.

Diversity is no longer just a black/white, male/female, old/young issue. It is much more complicated and interesting than that. In The Future of Diversity and Work Ahead of Us, Harris Sussman says, "Diversity is about our relatedness, our connectedness, our interactions, where lines cross. Diversity is many things - a bridge between organizational life and reality of people’s lives, building corporate capability, framework for interrelationships between people, a learning exchange, a strategic lens on world."

A benefit of a diverse workforce is ability to tap into many talents which employees from different backgrounds, perspectives, abilities and disabilities bring to workplace. An impressive example of this is found on business cards of employees at one Fortune 100 technology company. Employees at this company have business cards that appear normal at first glance. On closer inspection, raised Braille characters of employee information are evident.

Many companies, however, still face challenges around building a diverse environment. Part of reason is tendency to pigeonhole employees, placing them in a different silo based on their diversity profile. If an employee is male, over 50, English, and an atheist, under what diversity category does this employee fall? Gender, generational, global or religious? In real world, diversity cannot be easily categorized and those organizations that respond to human complexity by leveraging talents of a broad workforce will be most effective in growing their businesses and their customer base.

So, how do you develop a diversity strategy that gets results? The companies with most effective diversity programs take a holistic approach to diversity by following these guidelines:

A: One reason I am so qualified to dispense sage business advice every week, Allen, is that I have made just about every business blunder you can imagine. I am like Evel Knievel of small business world, if Evel Knievel wrote a weekly column on motorcycle safety.

One of more unpleasant things I've had to do is fire a good friend who was not doing job I hired him to do. He needed a job, I needed an employee, so I thought I would give him a shot. It turned out to be a match made in business hell. He took advantage of our friendship by showing up late for work, spending time goofing off instead of working, and making a joke out of my complaints about his behavior. Because of our friendship I defended his actions to my other employees, but after a few weeks I knew I had to show him door. We're still friends, but certainly not like we were before.

The blunder I made was hiring a friend in first place. I let emotion, i.e. desire to help my friend gain employment, get in way of my business sense. That's what you are doing now, Allen, and I hate to be bearer of bad news, but you are going to have to deal with this situation soon or your entire operation may be affected by actions of this one person.

The blunder you have made is that you have befriended an employee, which is something you should never do. I'm not saying you can't be friendly with your employees, but you have attached a considerable amount of emotional baggage to employer/employee relationship and result is situation you are faced with today.

Friends expect preferential treatment simply because they are your friends. The workplace, however, must be a level playing field for all your employees, friends or not. While employees deserve your respect (if it is earned), giving one employee preferential treatment over another is never a good idea. This is a problem experienced by many business owners and managers who allow themselves to become too close to their employees.

I understand that he has become your friend over years and you'd rather eat rocks than fire him, but you have to consider how his behavior is impacting your business over all. What effect is he having on employee morale, on work schedules, on customer relations, on time spent fixing his mistakes, and most importantly, bottom line?