Diversity Must Become a Profit Center for Enterprise to Flourish04/23/2012 06:00AM
The latest Nielsen study, State of the Hispanic Consumer: The Hispanic Market Imperative - revealed that if US Hispanics were a standalone country, their market buying power would be one of the top twenty economies in the world. This study makes it clear that organizations must establish new ways to earn and build trust with the changing face of the employees they serve and consumers they sell to.
As the United States reinvents itself, all across America – corporations and communities alike are experiencing a rapid-paced transition of the new immigrant American economy. As the faces of America quickly become much more diverse, the US is lacking the required infrastructure and resources to support and manage this demographic shift that is now being represented in the workplace, in colleges & universities, throughout the media and every other place you can think of. What are corporations to do in order to fully embrace this shift? Diversity and Inclusion (D&I) must transition from being managed as a traditional cost center to being lead as a profit center for enterprise to flourish. Those organizations that make this commitment will soon find themselves winning the war on talent and market share. They will dominate their industry and positively impact their bottom line for several years to come.
This opportunity remains wide-open across multiple industries and it’s time for America’s corporations to act now. Not only for the sustainable growth of their organizations - but for the accelerated revival of the US economy. Diversity management is truly a time-sensitive business imperative as the global market demands it.
As corporations worked diligently to overcome the pressure from Wall Street during the economic crisis that abounded in 2008 – their workforce and consumers changed. Now that C-suite leaders are starting to look over the mountain that has kept them blinded from the demographic changes that suddenly emerged – they now realize that they must quickly become educated with the requirements to build new relationships for their business that demands cultural intelligence and an approach to win over their most valuable assets: employees, clients and consumers.
In anticipation of the upcoming Linkage Institute Conference (Leading Diversity & Inclusion) that will be held in Atlanta, GA on April 30th – May 2nd, I spoke with diversity executives from Walgreens (Steve Pemberton, Divisional Vice President and Chief Diversity Officer), EMC (Jackie Glenn, Global Diveristy Officer and Edwina Mays, Senior Diversity Consultant), McKesson (Janice Little, Senior Director of Diversity) and Abercrombie & Fitch (Todd Corley, Senior Vice President of Global Diversity & Inclusion) to get a behind the scenes look at what these market leaders are doing to assure that diversity is directly tied to driving business outcomes and bottom line impact. Our conversation addressed three questions that remain top of mind for most organizations.
Question #1: What are the Most Effective Ways to Measure D&I Return on Investment?
Jackie Glenn and Edwina Mays: At EMC, we measure ROI based on three factors: First, is our diverse talent staying and are they being developed. This is critical as we are in the people and innovation business. Second, does our brand attract diverse talent? As we broaden our global reach, the war for talent becomes more difficult. Partnerships that support our diversity initiatives are important. Finally, we share our diversity best practices with our clients to help develop relationships that support our business goals.
Todd Corley: At A&F we focus on three areas to drive ROI: First, in-store experience – high energy, good music, good looking people, diversity in our staff. We want to make our customer feel excited about what happens when you walk into the store. Whether you are Latino or Asian we want them all to connect with our brand and feel the experience. Second, employee engagement – we want our employees to see people that look like them and / or people they would like to “hang out” with. Finally, we believe in driving “diversity champion behavior” – behavior that is consistent, vocal and impact-driven. We want our associates in the store to be courageous and challenge one another about the values of diversity and in dealing with tough situations. We want to teach them to be resilient, learn to take risks and understand the power of being vulnerable regardless of title.
Question #2: What will Change the C-Suite Conversation about D&I's Role in Directly Impacting BusinessOutcomes?
Steve Pemberton: C-suite executives are busy; they have a what’s next mentality. The ability to penetrate this issue at that level can be challenging. Therefore, it is important to address issues that matter most to them. For example, knowing what our competitors are doing with D&I and if their efforts are contributing to any potential loss in market share. Legacy is another important factor. At Walgreens we are a historic company and it is important that we sustain our legacy by recognizing that the demographic shift is already here and we need to act now. For example, the one that does not act to the Latino market will lose share for the next 20 years. Finally, having a competitive advantage is about being more culturally competent to consumer segments that are driving the business opportunities.
Janice Little: McKesson is in the B to B business. When you can show the C-suite that a diversity project with a client attributed to increased business growth, this changes the conversation. You must create a culture knowing that diversity drives innovative ideas that supports new business niches. We must continue to create the business case that supports new business opportunities with our B to B clients that impact their and our bottom line.
Question #3: What are the Most Pressing Hurdles America’s corporations must still overcome regarding D&I?
Todd Corley: When U.S. based companies can move beyond looking at diversity and inclusion as just the right thing to do and place it its proper category of “good for business,” we will move the dialogue further and faster. When U.S. based companies begin to see how D&I efforts crossover other areas of the business, D&I will become a greater focus area. For example, if the legal department is guiding a team focused on international expansion – they should not only be just focused on intellectual property issues, but should also be conscious of country laws that surround the dimension of diversity (e.g., gender, religion) in that country. If not, it may lead to ultimately derailing a successful business opportunity.
Janice Little: Diversity has always been about representation and requires a much broader perspective. We need to transition from dealing with only compliance related issues and focus directly on how diversity in today’s marketplace is about how business must foster innovation through its diverse employees and global client base. People don’t want to support diversity because it’s the right thing to do – it must be much more. It’s about increasing shareholder value. Until this happens, diversity initiatives will continue to be thrown out the door during times of reduced performance / budget cuts. Inclusiveness is mandatory for companies to compete in today’s global market.
Steve Pemberton: It’s about changing the organizational mindset about what diversity really means and its business implications. Also, diversity & inclusive conversations have historically resided in the middle and entry levels of the organization. D&I must be a fully encompassing dialogue that impacts the entire organization and business supply chain. Finally, strategic partnerships are important; especially those partnerships that support and compliment diversity initiatives that directly impact business outcomes.
Jackie Glenn and Edwina Mays: We must create a comfort level around the D&I conversation. Not everyone comes with a sincere intention toward D&I and its multiple nuances. In the end, diversity must become a natural part of the business.
It was clear from these discussions that D&I is at a stage of heighten awareness with a greater sense of purpose and necessity. One thing is certain: diversity management in America’s corporations can no longer be viewed as an expense, but rather as a strategic investment in the future.