As diverse communities grow – and changes in the consumer base and workforce accelerate – retailers and manufacturers must find new ways to connect with their consumers.
Forging that connection rests largely on the consumer products and retail industries’ ability to create culturally competent organizations – organizations that not only
have diverse employee bases, but also capitalize on that diversity in their idea generation and decision making.
Now more than ever, gaining a competitive edge is dependent on the ability to leverage the diversity of today’s workforce.
Memorándum de Entendimiento (MoU) entre Codelco y SQM
The Changing Consumer and the Workforce
1. The changing consumer and
the workforce imperative
Executive perspectives on diversity in the
retail and consumer products industries
2. Contents
Foreword 3
Executive summary 4
Opportunities in diverse communities 5
The diverse workforce imperative 12
Building diverse work teams 14
The path forward 20
Endnotes 22
2 Executive perspectives on diversity in the retail and consumer products industries 2
3. Foreword
Your consumers have changed – now it’s your turn
“The business case has been demonstrated quite Diverse communities are the fastest-growing part of retail
buying power – and an opportunity too big to ignore.
thoroughly. When you’ve got over one-third of this But too many retailers and manufacturers are failing to
country as people of color, a diverse workforce seize this important moment. The marketing and talent
benefits in terms of connection and creativity. management strategies of just a few years ago aren’t
effectively tapping into today’s consumer preferences.
Whether Latino, African American, Asian –
regardless of the group – it is hard to form a brand As diverse communities grow – and changes in the
relationship unless you have people that come from consumer base and workforce accelerate – retailers
and manufacturers must find new ways to connect
those cultures and ethnicities that can connect.” 1 with their consumers.
— Don Knauss, chairman and CEO, The Clorox Company
Forging that connection rests largely on the consumer
products and retail industries’ ability to create culturally
competent organizations – organizations that not only
have diverse employee bases, but also capitalize on that
diversity in their idea generation and decision making.
Now more than ever, gaining a competitive edge is
dependent on the ability to leverage the diversity of
today’s workforce.
You’ve heard the stories: A car salesman who ignores a
woman buyer and talks to her husband instead; an agency
that translates its ads from English to Spanish without any
cultural translation in between; a company that paints its
product pink and waits for female buyers who never come.
Volumes have been written about the importance of
diversity to business. This report presents a different
perspective. It not only outlines the opportunities
presented by diversity, it explores the real-world experience
of multiple industry executives who have forged the critical
connection between their multicultural consumers and
their multicultural workforces.
Executive perspectives on diversity in the retail and consumer products industries 3
4. Executive summary
Overview • Multicultural talent will drive the innovation that keeps
This study is based on one-on-one interviews with two companies relevant to a changing consumer base. On a
dozen retail and manufacturing executives and information strategic level, the multiple perspectives of a fully diverse
from secondary research sources. Deloitte Consulting team lead to the fresh and original ideas necessary to
LLP (“Deloitte”) employees conducted these interviews in propel a business forward. Because the best consumer
person and by telephone in early spring 2010. insights come from those who share a consumer’s
cultural experience, recruiting, retaining, and advancing
Findings a diverse workforce are integral to creating a brand-
• The consumer landscape is in transition. For the past consumer connection. Further, consumers feel most
few decades and looking forward to the mid-21st comfortable doing business with companies whose
century, diverse communities have represented and will employees mirror their communities, and they manifest
continue to represent a growing share of consumer retail this affinity through brand-loyal behavior.
spending. To remain relevant, companies must take steps • Retail and consumer products organizations must take
now to drive innovation that will meet the needs of the deliberate steps to bring diverse employees into their
changing consumer segments that wield this vast and companies through ambitious recruiting efforts and
growing purchasing power. strategic practices specifically tailored to attract and
• One in three individuals in the United States is a person develop such talent.
of color, and by 2050 that proportion is expected to • Top management must come to view workforce diversity
climb to one in two. Nearly 16% of the population is not as a stand-alone program, but as an essential
Hispanic.2 The size and faster-than-average growth element for their business survival. Inclusion must replace
rates of diverse communities – and their rising mere tolerance for differences and be actively embraced
disposable incomes – have taken them from a niche to for the value it brings. With the unwavering commitment
a mainstream opportunity. Creating relationships with of their top leadership, retail and consumer products
these consumers is increasingly vital to the survival of organizations can redefine the culture of their companies
retailers and consumer products manufacturers. and genuinely reflect and embrace pluralism for the
• Retailers and manufacturers cannot serve the changing benefit of their consumers, communities, employees,
consumer without better understanding them. To build and shareholders.
market share and loyalty in diverse markets, retailers and
manufacturers must offer products, pricing, marketing,
and in-store experiences that appeal to these customers
and meet their needs.
“Diversity in the workforce is a business imperative. The best leaders
and the best companies will leverage and exploit diversity to help make
their organizations more relevant and sustainable. Their workforce will
view the world differently. They will come up with better solutions and
be more effective in the market by seeing the opportunities that others
in the industry do not see.” 3
— James White, president and CEO, Jamba Juice
4
5. Opportunities in
diverse communities
Multicultural is the new mainstream. The trend is clear: As the U.S. consumer market becomes more diverse,
the United States is becoming an increasingly diverse products, advertising, media placement, and the shopping
nation. According to the U.S. Department of Commerce experience itself must be tailored to resonate with each
Minority Business Development Agency’s report, “Minority expanding market segment. Effective multicultural
Population Growth: 1995 to 2050,” over the next 40 years, marketing requires cultural competency – genuinely
85% of U.S. population growth will come from non-white understanding and addressing the cultural nuances,
ethnic groups. Moreover, for nearly the past two decades, preferences, and values of diverse communities. Retailers
the growth in buying power of minority communities and manufacturers who fail to recognize the changing
has greatly outpaced that of white consumers. While consumer landscape do so at their own peril.
purchasing dollars among whites increased 139% between
1990-2008, growth was 337% among Asians, 213% Dave Dillon, chairman and chief executive officer of
among Native Americans and 187% among African The Kroger Co., recently explained how he came to
Americans. The difference is even more dramatic among better appreciate the diverse consumer market and its
Hispanics, whose buying power rocketed 349% compared relationship to the bottom line: “At one time, we had
to growth of only 141% among non-Hispanics during the men in charge of buying for the feminine hygiene product
same period.4 category – they couldn’t understand why the products
weren’t selling. After exploring many different options,
they came to a conclusion: Men didn’t have a clue as
to what mattered to the consumer who actually used
the product.”
“Kingsford brand was 10% of revenue and basically a brand that was
supposed to be dead because of gas grills. However, via research and
insight work with Latinos, and the general trend to staying at home,
Kingsford has resurged to six percent growth. This is largely due to the
family orientation in general and in the Latino community. Latinos
barbeque and cook outside more often, oftentimes with wood char. We
focused on getting them acclimated with charcoal briquettes.
Connecting with them and our brand and introducing charcoal
transformed what was a flat business to a growing business.” 5
— Don Knauss, chairman and CEO, The Clorox Company
Executive perspectives on diversity in the retail and consumer products industries 5
6. Dillon continued, “Then there was a personal experience “It’s critically important to understand customer
I had in Hutchinson, Kansas. I was approached by an
African-American customer who didn’t like shopping in needs in the retail industry. If there is product not
Dillon stores. She said, ‘Because you don’t have people selling in a particular store, there is usually a good
working in the store that look like me and you don’t carry reason. Most likely, it’s because the product is not
products that I like, I won’t be shopping here anymore.’
This insight made us value and appreciate the needs of our right for that store and its customers. At Sweetbay,
shoppers. We became intentional about hiring from the we are focused on making sure that we merchandise
community and ensuring that the right products were in and assort our stores appropriately based on store
the store. As a result, we grew our sales in this area.” 6
and customer needs. While we continuously work
Four communities with our vendors and suppliers to negotiate low
A large part of future retail growth will come prices, it is equally important that we offer the most
from four communities: women, Hispanics, African
Americans, and the lesbian, gay, bisexual and relevant products to our customers. For our
transgender (LGBT) community. These markets each suppliers, it’s critical that they are investing in the
present a valuable opportunity to savvy retailers and same commitment, whether it’s through the people
consumer products manufacturers.
they hire, the research they conduct or in the
The Hispanic market will increasingly represent a products they sell.” 7
larger proportion of all buyers as it is expanding in
size more rapidly than other groups, according to U.S. — Mike Vail, president and COO, Sweetbay Supermarket
Census figures.
Women’s market
Women control $4.3 trillion of the $5.9 trillion in U.S.
The U.S. Department of Commerce Minority Business
consumer spending, making them “the largest single
Development Agency reports that the African-American
economic force in the world,” according to the U.S.
population is seeing gains in disposable income, giving
Women’s Chamber of Commerce.8 Factors affecting their
that segment the ability to spend more.
buying clout include increased rates of higher education,
greater levels of entry into and advancement within
Members of the LGBT community are tech-savvy early-
the workforce, more small business ownership, and
adopters, brand loyal, and more willing than some other
responsibility for 85% of consumer-buying decisions.9
segments to use their substantial buying power for
increased discretionary spending, according to “The Gay
It’s little surprise that shopping attitudes and behavior
and Lesbian Market in the U.S.: Trends and Opportunities
split along gender lines. Many women opt to go to the
in the LGBT Community” by Packaged Facts.
computer instead of the mall; it’s been reported that more
than one in five – 22% – shop online at least once a day.10
And women really do control the purse strings. They
Wharton marketing professor Stephen J. Hoch describes
are not only experiencing social gains that are positively
the difference in gender attitudes this way: “Women think
impacting their purchasing power, but they also make
of shopping in an inter-personal, human fashion and men
most of the buying decisions, even in traditionally male
treat it as more instrumental. It's a job to get done.” 11
categories such as automotive.
Understanding and catering to the female purchasing
mindset will be a critical advantage in successfully wooing
this enormously powerful buying segment.
6
7. Hispanic market Two important factors distinguish the Hispanic community
U.S. Hispanic purchasing power has grown from $212 from others. First, Hispanic buying power is much more
billion in 1990 to $489 billion in 2000 and $978 billion geographically concentrated. The five states and 10 states
in 2009. It is projected to reach as much as $1.3 trillion with the largest Hispanic markets account for 66% and
by 2014.12 Factors such as rapid population growth and 80% of Hispanic buying power, respectively, with California
immigration, as well as a rise in high school graduation alone accounting for 27%.16 Second, there are important
rates and the number of Hispanic-owned businesses, all differences among various segments of the Hispanic
contributed to the surge in Hispanic purchasing power.13 community. Mexican-American, Cuban-American, Latin-
American, and Puerto Rican consumers all have different
The spending habits of Hispanics differ from those of cultures, preferences, and needs. A common error that
the average U.S. consumer. According to the most recent many companies make is to market to them as a
Consumer Expenditure Survey by the Bureau of Labor single group; understanding the individual nuances
Statistics, Hispanic households spend only about 82% of each target audience is essential to making a
as much as the average non-Hispanic household,14 but positive connection.
spend relatively more in areas such as groceries, telephone
services, furniture, men’s and boys’ apparel, children’s
clothing, and footwear.15
Figure 1. Hispanic buying power in the 10 states with the largest Hispanic markets, 2009
These 10 states account for 80% of Hispanic buying power
In Billions of Dollars
$300
$250
$200
$150
$100
$50
$0
California Texas Florida New York Illionis New Jersey Arizona Colorado New Mexico Georgia
States
Source: “The Multicultural Economy 2009, Selig Center for Economic Growth, Terry College of Business, The University of Georgia”
Executive perspectives on diversity in the retail and consumer products industries 7
8. African-American market
The Selig Center for Economic Growth at the University of
Georgia’s Terry College of Business reports that African-
“One miss that I still see in many companies is
American buying power has grown from $318 billion that they don’t really approach multicultural
in 1990 to $590 billion in 2000 to $910 billion in 2009, markets from an aspect of cultural competency.
and projects it will reach $1.2 trillion in 2013. This is a
54% gain between 2000 and 2009 and exceeds both
In other words, they don’t really demonstrate an
the 46% increase in white buying power and the 49% understanding of cultural nuances or history of
increase in the total buying power of all races combined. multicultural markets. You still see lots of
This segment’s rising spending power is spurred by many
factors, including higher-than-average population growth,
translating instead of truly interpreting the
improved access to education resulting in better job cultural perspective – merely taking a
opportunities, an increase in the number of black-owned mainstream perspective and translating it can
businesses,17 and the community’s relative youth.18 really miss the mark.” 19
— David Casey, vice president and diversity officer, CVS Caremark, Inc.
Figure 2. Top 10 states with the largest African-American market share, 2009
The District of Columbia and Mississippi have the largest African-American market share
Percentage
30%
25%
20%
15%
10%
5%
0%
District of Mississippi Maryland Georgia Louisiana South Carolina Alabama Delaware North Carolina Virginia
Columbia States
Source: “The Multicultural Economy 2009, Selig Center for Economic Growth, Terry College of Business, The University of Georgia”
8
9. Compared to other segments, African Americans spend a
significantly higher proportion of their money on groceries,
housing, natural gas, women’s and girls’ clothing, and
gasoline.20 Despite the country’s economic recession,
this market’s purchases related to the home – including
appliances, computers, and electronics – have continued
to increase in recent years.21
The 10 largest African-American markets by state – New
York, Texas, California, Georgia, Florida, Maryland, Illinois,
North Carolina, Virginia, and New Jersey – account for
61% of the group’s total buying power.
Executive perspectives on diversity in the retail and consumer products industries 9
10. LGBT market
About 15 million adults in the general U.S. population
identify themselves as gay, lesbian, bisexual or transgender,
“To win in the marketplace, we must understand
according to “The Gay and Lesbian Market in the U.S.,” a what motivates the purchasing choices of our
report published by Packaged Facts in collaboration with customers and position ourselves to quickly respond
Witeck-Combs Communications, Inc. The buying power
of LGBT consumers in the United States will grow to an
to their changing needs. To be relevant, our leaders
estimated $835 billion by 2011.22 And while research making the decisions must mirror the customers we
indicates that gay men actually earn slightly less than want to attract and retain. Success is defined by
their heterosexual counterparts, the fact that gays and
lesbians are less likely to have children and more likely to
customer satisfaction, which can only be achieved if
have two-income families translates to higher per-capita we are diversified, inclusive, and engaged with our
household income.23 workforce, so that the best decisions and outcomes
are achieved. Everybody wins when diversity is
embraced by the organization and becomes part of
the culture…it’s the right thing to do!” 24
— Donna Giordano, president, QFC (Quality Food Centers), The Kroger Co.
Figure 3. Projected growth in gay and lesbian buying power, 2007-2011
Per capita Aggregate
Year Population Cumulative growth
buying power buying power
(thousands) (millions)
2011 16,314 $51,204 $835,337 26.5%
2010 16,115 $49,415 $796,317 20.6%
2009 15,919 $47,686 $759,120 15.0%
2008 15,726 $45,298 $712,368 9.4%
2007 15,535 $44,407 $689,858 4.5%
Source: “Buying Power of Gay Men and Lesbians in 2008,” Witeck-Combs Communications, Inc.
10
11. Geographically, the LGBT market is concentrated in major
metropolitan and suburban areas.25 Research indicates a
high percentage of gay consumers are college-educated,
shop online, and purchase the latest technology.
Approximately 80% of gay men and 76% of lesbians
actively use the Internet. Some 63% of gay and lesbian
consumers have made purchases online, compared to
53% of heterosexual consumers.26 Gay and lesbian
consumers are more optimistic than other Americans
about the overall direction of the country and the
economic recovery, which may lead them to increase
their spending despite the country’s slow progress in
rebounding from the recession.27
LGBT consumers are loyal to LGBT-friendly brands;
consumer data indicates that 78% of gay online users
prefer to buy from companies that specifically advertise to
the gay market.28
Executive perspectives on diversity in the retail and consumer products industries 11
12. The diverse workforce imperative
“Diversity brings innovation and relevance. I think the greatest benefit
we have found is that diversity drives innovation. People from different
backgrounds engaged in thoughtful debate leads to groundbreaking
solutions. When you have a team that is engaged and reflective of your
consumer base, you can better understand, anticipate, and meet the
needs of your guests.” 29
— Tracey Burton, former director of diversity, Target Corporation
In an era of global competition, retail and manufacturing The diverse workforce will be drawn, increasingly, from
companies must fully utilize all resources within their the same diverse communities driving retail spending.
control, not the least of which are their human resources. According to the U.S. Bureau of Labor Statistics, the
A diverse workforce is an essential element in developing overall labor market will grow about 6% between 2010
cultural competence, without which an organization will and 2018. While white workers will increase by only 4%,
likely become irrelevant and unsustainable in the changing Hispanic workers will increase by 27%, Asians by 23%, and
marketplace. It’s clear that a diverse workforce is no longer African Americans by 9%.32 For that reason alone, retail
merely an option, but a business imperative. and manufacturing organizations must focus on these
groups as the key to their future workforces.
A diverse workforce provides key advantages:
• Multiple viewpoints and experiences lead to Although companies have found it difficult to measure
innovative decision making and development the bottom-line impact of diversity and inclusion (D&I)
throughout the organization. initiatives, research indicates that executives from market-
• Insights by employees who understand cultural nuances dominant companies overwhelmingly agree that diversity
firsthand result in more relevant products, marketing, is profitable. When asked how important diversity and
and shopping experiences that directly impact the inclusion are to their company’s performance, more than
bottom line. seven in 10 said it was “very important.” 33
• Customer loyalty increases because diverse consumers
feel more comfortable doing business with companies
that employ people from their communities.30
• Companies with a diverse workforce become employers
“A diverse workforce leads to
of choice, strengthening their ability to hire and retain better insights into consumers
top talent. “Organizations that promote and achieve and customers so that companies
a diverse workplace will attract and retain quality
employees and increase consumer loyalty,” according
can develop the right kind of
to the “Best Practices in Achieving Workforce Diversity programs and products that meet
Benchmarking Study.”31 their needs.” 34
— Joan Chow, chief marketing officer, ConAgra Foods
12
13. Women leaders and their impact
The top rank of American corporate leadership remains
– overwhelmingly – the domain of white men. While
nearly two of three people in the workforce are female
or persons of color, diverse workers have yet to break
into the executive suite in numbers that come close to
reflecting their size.35
The increase of women corporate officers in Fortune
500 companies over the past decade – from 11.2% in
1998 to 16.4% in 2005 to 15.7% in 2008 – is slow at
best. At current rates, it would take 40 years for the
number of female corporate officers to achieve parity
with their male counterparts.36
The picture is only a bit brighter at Fortune 500 retail
organizations, where women comprise 18.5% of
corporate officers.37 This disparity not only has societal
implications, it represents a missed opportunity for
organizations in all sectors. Separate studies conducted
by Catalyst38 and Pepperdine University39 confirm a
correlation between companies with more women
in senior management positions and stronger
financial performance.
Executive perspectives on diversity in the retail and consumer products industries 13
14. Building diverse work teams
Organizational diversity must be woven into the very fabric Recruiting and retention
of enterprises if they are to succeed going forward. As it Concerted efforts and outside-the-box thinking are
becomes increasingly vital for companies to connect with needed to recruit, retain, and engage diverse talent.
emerging consumer segments, diversity and inclusion Target Corporation has created a diversity identity by
cannot be relegated to a human resources responsibility, participating in diversity recruiting events, hiring qualified
but must become part of an overarching business strategy. talent, and moving talent up within the company. The
“The Office of Diversity should not build stand-alone retailer recruits on historically diverse campuses and
‘programs,’ ” said Cole Brown, chief diversity officer, at diversity recruiting events, including the annual
Wal-Mart Stores, Inc. “We must instead leverage our conferences organized by the National Black MBA
approaches into sustainable structures that change the Association, National Society of Hispanic MBAs, Out &
way that people think about diversity. Diversity is critical Equal, and more. Target engages diverse leaders from
to our broader, fundamental goal of maintaining a across the company to attend these recruiting events so
competitive workforce, which requires maximizing the that candidates “are able to see employees that look like
potential and value of all our associate base, including them and get first-hand information about a company
their diversity of thought, experience, and perspective.” 40 where they can grow.” 41 Ultimately what makes a
difference, according to Tracey Burton, the organization’s
To fully capitalize on the opportunities of a diverse former director of diversity, “is the fact that at the heart of
workforce, the very concept of diversity must be our company are the diverse perspectives and backgrounds
reexamined. While the term has been limited to race, of our more than 350,000 team members.” 42
gender, and ethnicity, successful leaders will need
to expand the definition of diversity to include such Setting specific targets is critical to recruiting diverse
variables as age, sexual orientation, language, geography, talent. Measurable goals create accountability, telegraph
education, and physical ability. the seriousness of the initiative, unambiguously define its
scope, allow for the celebration of measurable successes,
Creating a truly diverse and inclusive workplace will, and clearly illuminate any need for reassessment or
for many companies, mean a shift in corporate culture improvement. Some companies have several diversity
requiring the full commitment of top management. Diverse recruiters dedicated solely to recruiting multicultural talent.
talent – in all its varieties – must be actively sought out, This targeted effort maximizes effectiveness and welcomes
nurtured, and given a voice at all levels of the organization. a broad range of potential employees.
“To attract diverse talent, you need a plan for diversity and people
who are accountable to carry out that plan. You can’t say, ‘We’re
going to try harder.’ You need accountability and specific plans to
make it happen.” 43
— Rebecca Sanders, vice president, consumer insights, Brookshire Grocery Company
14
15. Recruiting diverse workers is one thing; keeping them is Nurturing diverse talent
another. “Many leading [diversity] practices have focused There are a number of approaches that have been
on bringing those who are different in the door,” writes successful in providing for and retaining diverse talent.
Andrés Tapia in The Inclusion Paradox: The Obama Era Many companies have created employee resource
and the Transformation of Global Diversity. “Many of groups (ERGs) or business resource groups (BRGs) as a
these efforts have been quite successful, and companies way of providing networking, support, and professional
have achieved diversity – the mix. But in many places, the development opportunities to diverse talent. In addition
mix is not working well. We end up with diversity without to building leadership skills, such groups help employees
inclusion. Here diversity’s promise – that greater diversity feel less isolated by connecting them to others with whom
leads to greater innovation and profitability – dies.” 44 they have something in common.
Diverse employees often have different motivations, Mentoring programs are another way of cultivating
attitudes, and lifestyles than the white males who multicultural employees. By exposing associates to
still dominate the executive level (“C-suite”) of most executive leaders early in their careers, mentoring
organizations. This disconnect leads some women and programs provide powerful support, presenting role
persons of color to feel they don’t fit in. Traditional models, and giving diverse individuals a champion in
methods of retaining talent must be made germane to the organization. Succession planning, at all levels of
the needs and values of diverse populations. Thoughtful the organization, is also critical to ensuring growth
succession planning, strong career development opportunities for diverse talent.
opportunities, employee support, and mentoring are
some of the strategies companies are using to retain In many instances, the paths that led current leaders to
multicultural talent. the top will not work with today’s diverse talent. Mike
Vail, president and chief operating officer of Sweetbay
Such engagement and development is key to retaining top Supermarkets, recognized the limitations for women
employees. Companies must identify diverse high-potential to become store managers at Sweetbay, based on the
talent early and put them on a career track commensurate career-pathing structures that were in place. He explains,
with their potential. Without such support, companies will “The store manager position in the retail industry can be
be unlikely to retain these valuable future leaders. somewhat demanding, inflexible, and sometimes even
physically challenging. As I began to do work within
Executive perspectives on diversity in the retail and consumer products industries 15
16. the area of diversity, I saw this firsthand and we started Using diversity to innovate
making immediate changes. Traditionally, women would Although the original aim of ERGs and other affinity groups
hold positions within service departments (i.e. bakery, deli, was to support diverse employees, they can also offer
front end, etc.) with limited paths to growth. At Sweetbay other, more direct benefits. By tapping the innate cultural
today, aspiring store managers can complete a customized experiences of a diverse workforce, companies may make
career path that exposes them to all required aspects of use of ERGs to develop new products and services or bring
management, but in a manner that doesn't discriminate together diverse task forces to generate solutions around
against any biases. We've seen great improvement with major business issues.
diversity among our store managers as well as in mid- to
senior-level management positions. I'm proud of the work There are many examples of profitable products and
we've begun.” 45 solutions coming out of such groups. At the Campbell
Soup Company, Select Harvest was successfully developed
With all such retention programs, it is important to by women employees for women consumers.47 In another
measure results by keeping track of cost savings and worthy example, ConAgra Foods reached out to their
productivity increases. Metrics provide an objective Asian ERG for input into a popular new line of Healthy
evaluation of movement made and miles to go. Dr. Rohini Choice Steamers.48
Anand, Sodexo’s senior vice president and global chief
diversity officer, reports that for each dollar spent on her
company’s mentoring program, they see a return of
$2 in cost savings, increased productivity, engagement,
and retention.46
16
17. Driving diversity: A checklist
… Start at the top. Ensure your senior executives are on … Mentor them. Create one-on-one mentoring
board. No real change can come without support from relationships between senior management and high-
a company’s leadership. potential diverse talent. The support and counsel of
… Create accountability. Hold leaders accountable by seasoned executives provides a way to develop future
tying compensation to meeting specific diversity goals. leaders by giving them access to the critical intangibles
Linking diversity to the performance management of corporate success.
process underscores the company’s commitment to … Support your ERGs. Employee resource groups
the initiative. allow people with something in common to apply
… Think cultural change. Incorporate a diversity their shared experience to another thing they have in
strategy into your overall corporate strategy and common – your company. ERGs foster networking,
business process. Take a holistic approach rather boost morale, and build a culture of inclusiveness.
than looking at D&I as an isolated effort. Embrace … Harness your ERGs. Capitalize on the unique
individuality over conformity and acknowledge the perspectives of diverse employee groups to propel
value of multiculturalism versus the “melting pot” your business forward. ERGs and diverse teams have
mindset. been used with great success to innovate and problem
… Plan to succeed. To shape a company’s future solve around both internal and external business
leadership, it is important that underrepresented issues.
employee groups be included in succession planning … Target diverse suppliers. Expand the culture of
efforts at all levels of the organization. Develop diversity in your organization by setting goals for using
and employ consistent processes to ensure the diverse suppliers. As with employees, vendors who
effectiveness of these efforts. can offer diverse viewpoints provide a competitive
… Set targets. Create a plan that includes unambiguous advantage to your company.
goals for recruiting, retaining, and promoting diverse … Act local. Be aware of the specific consumer
talent. Be specific about methods and metrics. segments you are serving at the individual-store level.
… Measure results. Track progress toward achieving The needs and preferences of local consumers should
diversity goals as a means of discovering which efforts inform not only the products you carry, but also your
have been most effective. Revisit and update the plan marketing decisions and the nature of the shopping
at predetermined intervals to improve effectiveness. experience itself.
… Focus on recruiting. Assign recruiters to secure … Keep an eye on the bottom line. Measure the
talent from underrepresented groups. Participate in impact of diversity and inclusion efforts by quantifying
trade fairs, professional organizations, and industry- their impact on such factors as return on investment,
wide diversity networks. sales, market share, and employee turnover.
… Spot the stars. Identify high-potential diverse talent
early to engage and groom them for advancement.
Create customized career tracks relevant to their needs
and interests, and provide training and development
opportunities to ensure their success.
Executive perspectives on diversity in the retail and consumer products industries 17
18. Supplier diversity programs DiversityInc's “Top 10 Companies for Supplier Diversity,” a
As diverse employees bring new ideas to an organization, list of firms across industries, spend an average of 22.7%
diverse suppliers contribute insights at yet another point in of their procurement budgets with Tier I minority- and
the supply chain. As certification for minority- and women- women-owned suppliers (main contractors). The “Top 50
owned vendors has become standardized and measured, Companies for Supplier Diversity” spend 9.7%. Nationally,
the validity and usage of these vendors has been on the firms spend just 2%.51
rise, even in tough economic times.
Those most dedicated to seeking supplier diversity link
In 2008, Wal-mart’s direct spending with minority- and procurement management compensation directly to
women-owned businesses was more than $6 billion, cost savings and efficiencies. Some hold Tier I suppliers
with second-tier spending totaling more than $2 billion. accountable by making Tier II supplier diversity mandatory.
This represented a growth of more than 25% over the Other best practices include looking abroad for suppliers;
previous year.49 including LGBT suppliers and small business owners in
supplier diversity strategies; and making a commitment
McDonald’s currently spends more than half of its to develop diverse suppliers through community events,
procurement for Tier I contractors with minority-owned training, educational programs, and financial support.52
businesses (MBE) and about one-third on women-owned
businesses (WBE). In addition, McDonald's provides
financial assistance for its suppliers and carefully tracks
metrics on supplier diversity.50
“A particular business wasn’t doing as well as we wanted. Typically,
we would only ask for compliance from our suppliers, with limited
collaboration. But in this situation, we brought them in to ideate
relative to this issue. Diversity is as much about everyone having a voice
as it is around women and people of color. We have to find a way to
extend the dialogue beyond the norm.” 53
— Regenia Stein, vice president, business performance, industry development and communications, Kraft Foods
18
19. The magic of metrics
Creating a culturally competent organization means Implementing supplier diversity programs 54
holding leaders accountable for results. Diversity must 1. Define the business case.
be aligned with overall corporate strategy and business 2. Set clear goals.
process. Relevant metrics must be integrated throughout 3. Track spending.
the organization so that employees are working toward 4. Require second-tier supplier diversity.
achieving specific diversity goals. Many of the executives 5. Develop a corporate commitment statement.
we interviewed suggested that leadership bonuses 6. Grow strategic partnerships.
should ultimately contain a diversity goal, whether it’s 7. Make supplier diversity part of procurement.
recruiting, retention or development of employees. Clearly, 8. Support ongoing development of diverse suppliers.
these executives believe making diversity a part of the 9. Offer mentoring.
performance management process ensures there 10. Provide financial assistance.
can be no misunderstanding about the seriousness 11. Recognize and reward participating minority-
of the initiative. and women-owned business enterprise
(MWBE) suppliers.
12. Host trade fairs for MWBEs.
13. Provide technical and managerial assistance
to MWBEs.
14. Emphasize importance of second-tier MWBEs.
“Executive compensation attached to results seems to be most
effective. [Reaching diversity goals] may not be a cool thing until
the compensation is attached…then it works.” 55
— Teresa Chipps, vice president of marketing, Northern Region, Supervalu
Executive perspectives on diversity in the retail and consumer products industries 19
20. The path forward
Diversity and inclusion was once about doing right in the “The best strategies establish cultural competency as a
workplace; it is now about doing well in the marketplace. requirement for all leaders,” said Trudy Bourgeois, CEO
Examples of commercial successes of companies that have and founder of The Center for Workforce Excellence. “And
embraced multiculturalism are becoming commonplace. then we have to say either you get on board or leave
Clorox, for instance, breathed new life into its Kingsford the organization. We have to get that serious, because if
brand by insightfully courting the Hispanic market, while we say it’s a business imperative we have to treat it like
PepsiCo listened to its Hispanic affinity group and scored any other competency.” 57 What distinguishes the truly
big with its Hispanic Heritage line. inclusive organization from the merely diverse one is the
way it listens to the different voices within its ranks. At
Superficial attempts at creating diversity and inclusion successful companies, diversity of thought is not merely
will not succeed. “I’m all for celebrations and for you accommodated, but sought out, respected, and integrated
recognizing the heritage of our groups, but don’t confuse into every aspect of the business. Until an organization
that for the real thing,” said author Andres Tapia, who changes its culture and incorporates D&I into its corporate
is chief diversity officer/emerging workforce solutions DNA, diversity may be relegated to mere window dressing.
leader for Aon Hewitt. “You have to create processes and
policies and procedures that are truly inclusive in taking To succeed tomorrow, industry leaders must be outspoken
into account the fact that I have a different world view and determined champions of diversity and inclusion
and that doesn’t mean I eat arroz con pollo – it means today. Too often diversity and inclusion is viewed in
that I’m very communal, very relational, able to do work isolation. Survival depends on organizations seeing
that gives me meaning. Because I’m more holistic, I don’t diversity and inclusion in its proper context as the critical
compartmentalize as much between home and faith component of reaching today’s consumers.
and work. If you really want to be inclusive, create a
culture that allows for various cultures to work within Diversity in your workforce and inclusion in your decision
the system.” 56 making is the most powerful lever to move the mosaic of
markets that comprise today’s retail landscape. It takes
True inclusion will stem from an understanding of the commitment, skill and, most of all, leadership, to build the
bottom-line business opportunity it represents and will culturally competent organizations that will dominant the
involve a comprehensive organizational shift. Ultimately, retail and consumer products industries of the future.
success will rest on senior leaders’ commitment to creating
a diverse and inclusive culture, their ability to communicate
that vision throughout the organization and their
willingness to hold employees accountable for reaching
its goals.
“This issue is a life-and-death situation. Retail
companies that don’t realize that the world and
workforce have changed are not going to survive and
companies that do will survive and thrive.” 58
— Andrés Tapia, chief diversity officer/emerging workforce solutions leader, Aon Hewitt
20
21. How inclusive is your organization?
Check your organization’s level of inclusiveness by 5. Infuse meaningful baseline accountability into the
asking yourself these questions: organization. Move beyond rewarding employees for
• Does our culture enable behavioral diversity? results via bonuses. Instead, set the expectation that
• Do we effectively access talent throughout our leaders are responsible for creating a diverse team as a
organization? condition of employment.
• What market/business metrics are we looking to impact 6. Measure results by the bottom-line metrics you would
and how will diversity help? use for any business imperative, such as leveraging
• Is diversity a business process or simply a departmental diverse perspectives that result in profitable products,
function? increase market share, drive new sales, etc.
7. Charge C-suite executives with leading by example.
Then take these steps toward achieving an inclusive Involve them in sponsoring top diverse talent
corporate culture: identified in the succession planning process.
1. Weave diversity into the organization’s strategic 8. Leverage the board of directors to broaden
plan. Build it into departmental and functional plans benchmarking efforts.
and into the development plans of leadership and 9. Focus on multicultural marketing as a mainstream
line managers. Link diversity strategy with corporate opportunity and support it with appropriate budget
strategy, inclusive culture with corporate culture. and manpower.
2. Fully employ diversity as a tool in the company’s 10. Establish consumer insights as a cross-functional
decision-making process to bring multiple perspectives manager requirement.
to making choices and solving problems related to 11. Closely examine the state of collaborative vendor
both internal and external business matters. relationships to support customization, consumer
3. Make leaders knowledgeable about the changing insights, and representation of diversity on the
consumer. Call out cultural competency as an essential respective teams.
leadership pillar. Require leaders of the organization 12. Create partnerships/consortiums to share leading
to demonstrate this as they would any other critical practices and develop solutions to diversity issues
success competency. within the industry.
4. Build a scorecard to assess performance in recruiting, 13. Continuously benchmark against the “best in class” in
retaining, developing, and advancing a diverse team. the industry to identify gaps and see where you stand
versus your competitors.
Executive perspectives on diversity in the retail and consumer products industries 21
22. Endnotes
1. Knauss, Don. Chairman and CEO, The Clorox Company. Interviewed by Deloitte employee via telephone, 19 March 2010.
2. U.S. Census Bureau, ‘‘Annual Estimates of the Population by Race, Hispanic Origin, Sex and Age for the United States: April 1, 2000 to July 1,
2008 (NC-EST2008-04)’’ (released May 14, 2009). Web. <http://www.census.gov/popest/national/asrh/NC-EST2008-asrh.html>.
3. White, James. President and CEO of Jamba Juice. Interview by Deloitte employee, 16-18 March 2010.
4. Humphreys, Jeffrey Matthew. The Multicultural Economy 2008. [Athens, Ga.]: Selig Center for Economic Growth, Terry College of Business,
University of Georgia, 2008. Print.
5. Knauss, Don. Chairman and CEO, The Clorox Company. Interviewed by Deloitte employee via telephone, 19 March 2010.
6. Dillon, Dave. "Closing Keynote Address,” Executive Leaders Forum 2010. Dallas, Texas, 14 July 2010. Web. <newonline.org>.
7. Vail, Mike. President and COO of Sweetbay Supermarket. Interviewed by Deloitte employee via telephone, 13 April 2010.
8. “The Woman-Led Economy,” U.S. Women's Chamber of Commerce, June 2010. Web. <http://www.uswcc.org/>.
9. “Marketing to Women Conference Fast Facts.” 25 Aug. 2010. Web. <http://www.m2w.biz/fast_facts.php>.
10. "Women in Their Digital Domain, Ogilvy & Mather, 25 Aug. 2010. Web. <http://www.ogilvy.com/On-Our-Minds/Articles/digital_divas.aspx>.
11. "Men Buy, Women Shop: The Sexes Have Different Priorities When Walking Down the Aisles." Knowledge@Wharton. 28 Nov. 2007. Web.
<http://knowledge.wharton.upenn.edu/article.cfm?articleid=1848>.
12. Humphreys, Jeffrey Matthew. The Multicultural Economy 2008. [Athens, Ga.]: Selig Center for Economic Growth, Terry College of Business,
University of Georgia, 2008. Print.
13. Ibid.
14. "Consumer Expenditure Survey 2008." U.S. Bureau of Labor Statistics, March 2010. Web. <http://www.bls.gov/cex/csxann08.pdf>.
15. Humphreys, Jeffrey Matthew. The Multicultural Economy 2008. [Athens, Ga.]: Selig Center for Economic Growth, Terry College of Business,
University of Georgia, 2008. Print.
16. Ibid.
17. Ibid.
18. American FactFinder. American Community Survey. 25 Aug. 2010. Web. <http://factfinder.census.gov>
19. Casey, David. Vice president and diversity officer for CVS Caremark, Inc. interviewed by Deloitte employee, 18 May 2010.
20. Humphreys, Jeffrey Matthew. The Multicultural Economy 2008. [Athens, Ga.]: Selig Center for Economic Growth, Terry College of Business,
University of Georgia, 2008. Print.
21. Smikle, Ken. The Buying Power of Black America. Chicago, IL: Target Market News, 2008. Print.
22. Witeck, Bob. "America's Gay 2010 Buying Power Projected at $743 Billion." Echelon Magazine. 20 July 2010. Web. <echelon magazine.com>.
23. Lucin, Stephen J. "Gay Community, Mainstream Advertising.” Echelon Magazine. 3 March 2010. Web. <echelonmagazine.com>
24. Giordano, Donna. President of QFC (Quality Food Centers, Kroger), 8 Sept. 2010. E-mail.
25. Witeck-Combs and Packaged Facts. America's Gay 2010 Buying Power Projected at $743 Billion. Witeck Combs Communications. 20 July 2010.
Web. <witeckcombs.com>.
26. LGBT Demographics and Media Coverage for PlanetOut (LGBT). Wikinvest – Investing Simplified. 25 Aug. 2010. Web. <http://www.wikinvest.
com/stock/PlanetOut_%28LGBT%29/Lgbt_Demographics_Media_Coverage>.
27. "The Gay and Lesbian Market in the U.S.: Trends and Opportunities in the LGBT Community," Packaged Facts, 4th Edition.
28. Ibid.
29. Burton, Tracey. Former director of diversity at Target Corporation. Interview by Deloitte employee via telephone, 5 May 2010.
30. "Best Practices in Achieving Workforce Diversity Benchmarking Study." U.S. Department of Commerce and Vice President Al Gore's National
Partnership for Reinventing Government. 2 Sept.2010. Web. <http://govinfo.library.unt.edu/npr/library/workforce-diversity.pdf>.
22
23. 31. Ibid.
32. "Labor Force Data." U.S. Bureau of Labor Statistics. 23 Sept. 2010. Web. <http://www.bls.gov/emp/ep_data_labor_force.htm>.
33. "White Men: Enrolling the Dominant Culture in Diversity and Inclusion." Network of Executive Women. Web. <newonline.org>
34. Chow, Joan. Chief marketing officer for ConAgra Foods. Interviewed by Deloitte employee via telephone, 8 April 2010.
35. "2007 The Bottom Line: Corporate Performance and Women’s Representation on Boards." Catalyst, 2008. 17 Sept. 2010. Web. <catalyst.org>.
36. Ibid.
37. "Best Practices in Achieving Workforce Diversity Benchmarking Study." U.S. Department of Commerce and Vice President Al Gore's National
Partnership for Reinventing Government. 2 Sept. 2010. Web. <http://govinfo.library.unt.edu/npr/library/workforce-diversity.pdf>
38. "2008 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500." Catalyst, 2008. 17 Sept. 2010. Web. <catalyst.org>.
39. Adler, Roy D. Women in the Executive Suite Correlate to High Profits. Pepperdine University. Web. <http://www.csripraktiken.se/wp-content/
uploads/adler_web.pdf>.
40. Brown, Cole. Chief diversity officer, Wal-Mart Stores, Inc. Interviewed by Alison Kenney Paul, Bentonville, Ark. 8 Oct. 2010.
41. Burton, Tracey. Former director of diversity at Target Corporation. Interview by Deloitte employee via telephone, 5 May 2010.
42. Ibid.
43. Sanders, Rebecca. Vice president, consumer insights for Brookshire Grocery Company. Interview by Deloitte employee via telephone, 22 April
2010.
44. Tapia, Andrés. The Inclusion Paradox: The Obama Era and The Transformation of Global Diversity, Hewitt Associates, 2009.
45. Vail, Mike. President and COO of Sweetbay Supermarket. Interviewed by Deloitte employee via telephone, 13 April 2010.
46. Anand, Dr. Rohini. Senior vice president, global chief diversity officer for Sodexo. Interview by Deloitte employee via telephone, 7 May 2010.
47. Oppenheimer, Sherri Eri. "A Look at Campbell Soup Company's Inclusive Culture: PRSA." Public Relations Resources &
Tools for Communications Professionals: PRSA. 03 Oct. 2010. Web. <http://www.prsa.org/Intelligence/Tactics/Articles/
view/8825/101/A_look_at_Campbell_Soup_Company_s_inclusive_cultur>.
48. Chow, Joan. Chief marketing officer for ConAgra Foods. Interviewed by Deloitte employee via telephone, 8 April 2010.
49. Frankel, Barbara. "The DiversityInc Top 10 Companies for Supplier Diversity." Diversityinc.com. 24 March 2010. Web. <diversityinc.com>.
50. Ibid.
51. Ibid.
52. Ibid.
53. Stein, Regenia. Vice president, business performance, industry development and communications for Kraft Foods. Interview by Deloitte
employee, 16-18 March 2010.
54. "Deloitte Best Practices Report developed for MasterCard," Deloitte, 2007.
55. Chipps, Teresa. Vice president of marketing, Northern Region for Supervalu. Interview by Deloitte employee, 16-18 March 2010.
56. Tapia, Andrés. Chief diversity officer/emerging workforce solutions leader, Aon Hewitt. Interview conducted 16-18 March 2010.
57. Bourgeois, Trudy. CEO and founder of The Center for Workforce Excellence. Interview by Deloitte employee via telephone, 30 March 2010.
58. Tapia, Andrés. Chief diversity officer/emerging workforce solutions leader, Aon Hewitt. Interview conducted 16-18 March 2010.
Executive perspectives on diversity in the retail and consumer products industries 23