Even when you know a diverse workforce will help your business, the question remains: How do you achieve balance without making race or gender more important than competence?

Affirmative action and workforce diversity are the current hot buttons for corporations, politicians, and the media. The question for every successful businessperson, however, is, If we're doing well, if our promotion system is truly based on competence, and if our employees feel the culture is fair and just, then what's the problem? In my experience there are several problems, and I believe they can make the difference between an upstart venture with no future and a solid, well-balanced company with the foundation to survive almost any obstacle.

When I started MacTemps, a staffing firm, in 1987, I thought that if I just hired according to merit and turned a blind eye to race, age, and gender, I'd get a diverse and balanced workforce without imposing rules or guidelines. I was idealistic and believed in the market's invisible hand. Moreover, I disliked affirmative action because it allowed people to typecast me. Did I get into Harvard University solely because I was a minority? I felt that I'd worked hard for my own success and that I should be recognized for my efforts, not my ethnic background.

After eight years of frenzied growth, MacTemps had $50 million in sales, had made the Inc. 500 list twice, and had a staff of more than 150 people. I thought my "meritocracy" was doing rather well. Then, in the course of an interview, a New York Times reporter remarked that our organization seemed skewed by gender and race: white males at the top level of executive leadership and a preponderance of white females in positions traditionally held by women in our industry. When I looked at the numbers, I realized my company mirrored the industry. And so a dilemma arose: how to achieve balance -- which is important for my particular business -- without making race or gender a more significant factor than competence.

Despite my hope for a diverse workforce, where had I gone wrong? Looking back, here's what I think happened. First, my meritocracy was based -- I thought quite fairly -- on blind hiring for experience. When experience is the deciding factor, though, you take on the baggage of the past. The staffing industry has historically been skewed toward secretarial and clerical occupations. Since the traditional labor and middle-management forces of the industry have been women -- by and large, white women -- they're the ones with the best experience. By choosing employees based on experience, I hired a disproportionate number of women in traditional roles -- which is fine, but it didn't help my company in terms of true diversity.

Second, many start-ups grow by hiring friends. I certainly did. My management team comprised my friends, the partner's friends, and friends of friends. When you're in the initial start-up phase, you're not thinking about diversity for the future, you're thinking about getting sales, and you count on the people you know. The pitfall of hiring friends, of course, is that they tend to be like you in terms of race, socioeconomic status, age, and gender. Before you know it, you've got a lot of the same kind of people hanging around making management decisions.

So what's wrong with that? Here's what I've found. First, diversity helps you make better decisions. Can a bunch of white males create policy for all internal and external audiences? Not likely.

Externally, markets are becoming far more diverse, and managers need to be intimately acquainted with them. It may be simpler to manage a homogeneous group -- consensus is easier -- but the demands of global business require that we deal with heterogeneous groups and people. In our industry, decision making is critical, and there are no decisions more important than marketing ones. For example, if you do business in Miami, you need skilled staffers who speak Spanish as well as English. MacTemps has two publishing clients in Miami that we would never have landed if we hadn't hired a native-Spanish-speaking assignment manager. In the higher-skilled area, balance is even more critical. In our Los Angeles office the entertainment industry reigns supreme, and a major demand now exists for animation artists -- many of whom today come from China and Japan. With a Chinese staffer intimately familiar with both cultures, we were able to supply our clients with a number of highly skilled animators. Our office even sponsored that staffer's citizenship application, recognizing the value she brought to the organization.

Internally, managers who determine corporate policy cannot be homogeneous. For example, can a committee of all men create an informed maternity policy? As a management team made up of college friends, we missed things all the time. Since we were all the same age, we created advertising materials that we liked but nobody over 45 could read because the typeface was too small. Ageism never occurred to us.

Second, balance strengthens a business structurally. At the most basic level it's good for recruiting. When I was a graduate student at Harvard Business School, it was common for all recruiters to trumpet their equal-opportunity efforts, but I knew many talented minority graduates who looked carefully at the actual diversity and composition of the recruiting companies and avoided those that appeared strongly imbalanced. The best candidates will do that, and recruiters need to be aware of that.

Third, if a business ever wants to do government work, it will need balance simply to meet the bidding requirement. And last, if a company isn't balanced, it just looks lousy. How can a business claim to be the best if the organization is so lopsided? Clients will, in many cases, judge a book by its cover, and your workforce is your cover. Note how easily a reporter scanned the composition of our organization and observed that our imbalance didn't help our advancement toward true innovation in staffing services.

So, assuming as I do that balance is critical to your business, how do you accomplish it? If you're a young company, it's a matter of conscious action in the beginning. I believe nothing happens by accident, so the solution is a matter of managing balance and diversity from day one. Don't wake up one day with a horrible imbalance. Believe me, it's hellish to correct. And don't put yourself in the position of having to institute a hiring policy in which you put ethnicity or gender above qualifications; in that case, you do a disservice to the candidates, your current employees, and yourself.

Our solution took into account the rapidity with which we can promote from entry level. We're bringing more people into the entry-level track who reflect the ethnic composition of the country -- and of the countries in which we would like to do business. We're making sure our pool of entry-level employees is proportionally balanced in terms of gender, ethnicity, and age. We have diversity goals -- but not quotas -- and will never promote a less qualified person over a more qualified person. The eventual result of this effort will be an internal staff with a wider perspective, as well as the cultivation of a more diverse workforce that can be hired by our customers.

From my own experience, I can attest to the ease with which balance can be ignored. But, as they say, to do so is at your company's peril.

John Chuang is the CEO of MacTemps Inc. in Cambridge, Mass.