When we published our List of the “30 Best Companies for Diversity” in July, we learned that as much as corporate America touts the importance of diversity in business, many companies are still uncertain about how to maximize the benefits of a more creative and strategic workforce to enhance their bottom lines. They are unsure about how changing U.S. demographics as well as emerging global markets will impact how they market goods and services.
We’ve learned that even those with a “good” record in diversity still struggle with implementation. Ask Marcel T. Thomas, the 43-year-old chief executive of GE Aviation Materials, who is skeptical of General Electric Co.’s reportedly strong track record in diversity. An employee since 2001, Thomas is suing GE, claiming the company engaged in discriminatory practices against African Americans, underpaid black managers denied them promotions, and retaliated against them when they objected.
General Electric did not make BLACK ENTERPRISE’s “30 Best Companies for Diversity,” but 17 of the companies on our list have been the target of discrimination lawsuits within the last two years. In fact, lawsuits, complaints, and frustrations — on both sides of the table–are a result of the many challenges experts suggest will be ongoing as corporate America struggles to manage issues surrounding gender, race, and culture. “We have to remember that a corporation is actually a microcosm of society,” explains Essie Calhoun, vice president, chief diversity officer, and director of community affairs for Eastman Kodak Co. “So, what we are attempting to do when we come together to work is what, in the United States and globally, has not been successful and what society has not achieved.”
Recently, BE hosted a Chief Diversity Officers Roundtable at our New York headquarters. We did this to give our readers an inside look at how corporate diversity programs work, from the leaders responsible for their execution and implementation. Calhoun and several other senior-level diversity executives came together for a candid discussion of the challenges and benefits of developing a diversity program that serves the business agenda of an organization and embraces all associates of the company. Those in attendance included Kedrick Adkins, CDO and country managing director for Accenture; Emmanuel Bailey, vice president and CDO of Fannie Mae Corp.; Andre Goodlett, senior director of diversity for the Hershey Co.; Pat Harris, CDO at McDonald’s Corp.; and Charlyn Jarrells Porter, senior vice president and CDO for Wal-Mart. All of the companies represented by these executives participated in BE’s most recent diversity survey. Three of the companies — McDonald’s, Eastman Kodak, and Wal-Mart — made our diversity list.
Although each company has had unique experiences with diversity and inclusion, these corporate diversity leaders agree that there are several components necessary in taking diversity beyond “the right thing to do” and making it integral to the operational culture of a corporation. They include having support from the CEO, incorporating diversity into the business plan of the company, getting all employees to understand the business imperative of diversity, measuring accountability, developing a viable pipeline of talent, and promoting inclusion so that all employees feel important in an organization. The following discussion provides valuable benchmarks for what your employer should be doing to not just talk the talk, but walk the walk.
THE BUCK STOPS with the CEO
Why it’s important: The CEO and chairman are the visionaries and strategic leaders of an organization. They set the agenda for what plans get implemented. “Whenever you see your CEO and hear him talking about diversity,” explains Charlyn Jarrells Porter, “it sends a very clear message, very quickly, to everyone about what the priorities are.” The chairman and CEO are also responsible for changing the organization’s culture, which sets the tone for how business is executed. As a result, says Bailey, organizational culture and diversity are inextricably connected.
Challenge: Many CEOs talk about the importance of diversity, but in a survey of 1,700 human resources executives, only 30% of their companies had diversity officers who reported directly to the CEO, according to Novations/J.Howard & Associates, a Boston-based global consulting firm.
Solutions: The CEO must be committed to direct engagement and leadership in the restructuring and implementation of diversity goals. In 2004, Calhoun says, then-Eastman Kodak CEO Dan Carp decided to have the chief diversity officer report directly to him instead of the chief administrative officer. “I think that kind of positioning says how relevant we’ve proven ourselves to be.”
Harris reports that at McDonald’s, CEO Jim Skinner and other leaders in the organization regularly meet with employee networks and affinity groups representing workers of diverse ethnicities, genders, and lifestyles. “We have roundtables with the affinity group leaders and with our president and CEO so that they can share what their particular groups are talking about and raise issues that might come up.”
IF IT’S NOT MEASURED, IT DOESN’T COUNT
Why it’s important: “The vision is important, but the vision alone doesn’t do it,” says Hershey Co.’s Goodlett. To be effective not just as a business initiative but as a business operation, diversity has to be applied and measured against goals and objectives like every other business function of the company.
Challenges: “There are a lot of organizations that go through the process, talk about it, and describe what they would like to have happen,” explains Adkins. “But to truly focus on outcomes-related to recruitment, promotion, retention, attrition, the number of minorities and women at the senior executive level-at some point, you have to demonstrate that you’ve actually made some progress.”
Solutions: According to Adkins, the results they’ve seen at Accenture are a result of focusing on metrics; targets; objectives; and “taking diversity and inclusion and transitioning it to a function similar to how we look at operations, finance, and H.R. and giving it the same kind of visibility and important impact.”
Measurement also provides a way to make management accountable to goals and objectives, says Fannie Mae’s Bailey. “I’m fond of repeating a statement from our former chairman, Jim Johnson, who says, ‘What gets measured gets managed.’ ” Bailey says Fannie Mae evaluates its managers partly on their effectiveness in coaching and developing diverse employees. All the companies represented at the roundtable tie compensation to executing and meeting diversity goals. For example, at Wal-Mart, “If officers have not achieved their diversity goal, they lose 15% of their incentive bonus,” says Jarrells Porter.
THE EMPLOYEES HAVE TO GET IT
Why it’s important: The business case is critical, stresses Adkins, because it takes diversity beyond numbers, beyond a body count, which is important in getting managers and staff to see more than just race and gender. It helps them appreciate the benefit of diverse talent.
Solutions: “I can identify situations where we have won work, as a consulting organization, that can be attributed to the diversity in our team, not just in terms of the faces and the colors and genders but the creativity that emanates from that diverse team,” Adkins explains.
Because of the sensitivity around issues of gender, race, and culture, evaluating diversity in a business context can also redirect management styles to be more effective and results-driven. Bailey explains: “If you are not comfortable dealing with
certain ethnic groups on your team, then the real issue is not about diversity. The real issue is your failing as a manager from an accountability standpoint, and how we are delineating what our expectations of you are as a manager.”
IS THERE A SUCCESSION STRATEGY?
Why it’s important: An important criteria by which we chose our “30 Best Companies for Diversity” was the area of senior management representation, which in an organization speaks not only to recruitment and retention but also the development of talent. “Until you get the diversity program connected to the succession–planning process, which is the lifeblood of how talent moves through the organization,” says Bailey, “you’re not going to be successful.” Many of the executives on the roundtable discussed the importance of creating a viable pipeline that extends far enough into the organization to acquire a “critical mass of folks,” says Goodlett.
Challenges: Too many companies have only token representatives of a diverse group. The whole concept of pipeline, Goodlett explains, eliminates token candidates. “The [current] thought process is, if I lose one I’ve got to bring another one in.” The other concern is tracking results. “If you’re not tracking that people are moving up in the organization, you won’t get the result,” says Calhoun.
Solutions: Goodlett and many of the other CDOs agreed that having a robust pipeline supports a range of diverse candidates, even if one or two leave the organization. The two highest-level executives for McDonald’s U.S. business are minorities: president Ralph Alvarez, a Hispanic, and COO Don Thompson, an African American. Harris says this is the result of a competency-based model in developing diverse talent for their pipeline.
Fannie Mae selects candidates by first identifying the core competencies needed to meet the goals of the organization within five years. “We are very clear and very structured about how we train those individuals, and then we track their progress,” says Bailey.
NOT JUST DIVERSITY, BUT INCLUSION
Why it’s important: As a work environment becomes more diverse, it becomes increasingly necessary for everyone in the organization to feel like an important and contributing member. Calhoun says it requires an organization to build a diversity competency. “I believe it is even more critical, the more diverse we become,” she explains, “because we then have to take all of these different people that we put in the workforce together and make sure now that we really do have teamwork.”
Challenges: In many companies, there is the perception that the business emphasis has become consumed with supporting minorities, which has left some feeling alienated in the workforce. “We had some backlash from white males last year,” explains Jarrells Porter, “because to them, it really seemed like we were focusing primarily on minorities and women.”
Solutions: Many organizations provide forums to discuss the concerns of those who may feel alienated by diversity efforts. “We have a white male forum that is facilitated by white males, and it provides them with an opportunity to talk about what diversity and inclusion means in a comfortable setting, where they are not intimidated by women or people of color who might say, ‘You’re racist’ or ‘You’re sexist,'” says Harris. “That helps because when they say ‘Well, we are not included,’ we say ‘Well, yes you are.'”
The participants did admit that for all their efforts, they and their companies are indeed on a journey to overcome the challenges and fine-tune their diversity agenda. They also agreed that diversity is everybody’s responsibility. “In a culture of accountability,” says Goodlett, “I am as accountable for my interactions with my boss as my boss is accountable for his interactions with me.” It is incumbent upon individual employees to seek out opportunities, investigating the companies that are serious about measurable track records on diversity. Career advancement, however, is also determined by how effectively candidates can build their communications vehicle within their company and industry. And by how well the match competencies with those required by their organization.
It will also be imperative for African Americans to build alliances and a business network of diverse contacts here and internationally as companies expand into emerging regions. Globalization, U.S. population shifts, and the bottom-line demands of business and industry will continue to drive and formulate how diversity and inclusion become a profitable tool for progressive organizations. Companies concerned about diversity conduct business well, taking their cues from the marketplace. “We have to continually change and evolve what we do to stay relevant,”says Adkins, “so that we can support our businesses and support the objective.” As a result, the corporate environment will indeed become more competitive, but it will also provide tremendous opportunities for African Americans and other minorities who are also flexible and able to stay relevant.