During a recent interview with KRBD radio, Young “accidentally” used a racial slur when referring to the Latinos who used to work on his family’s farm.

“My father had a ranch. We used to hire 50 or 60 wetbacks … to pick tomatoes. You know, it takes two people to pick the same tomatoes now. It’s all done by machine,” said Young.

Young immediately was slammed by both the media and his fellow GOP members for the racist comment, but it wasn’t until Speaker of the House John A. Boehner demanded that Young apologize that any sign of remorse was issued. A full three days later, Young finally said: “I apologize for the insensitive term I used. …There was no malice in my heart or intent to offend; it was a poor choice of words.” Young noted it was a term used back when he was growing up and, as such, he did not consider the term’s present-day connotations.

It’s an excuse—not a heartfelt apology that conveys a sense of sincerity or mindfulness, which the GOP needs to convey.

Diversity and cultural competence have become key differentiators in political success. During the 2012 presidential race, 71 percent of Latinos voted for President Obama, and Latinos comprised 10 percent of the total electorate for the first time.

Is the GOP for Whites Only? Young’s gaffe is a classic example of yet another “we don’t get it moment,” says Mike Allen, Chief White House Correspondent for Politico. Last year, gaffes by Republican candidates such as Todd Akin and Richard Mourdock, along with racist voter laws, negatively impacted voter opinions. And Young’s slur “gives critics and people who are skeptical of the party a new reason to say it hasn’t changed.”

What will it take for a turnaround in the Republican Party? Jason Johnson, who debated the issue on a CNN panel, had this to say in his column on Politic365.com:

One of the problems that the Republican Party has about race issues is that the party is full of non-repentant bigots who want to treat racism like it’s an outlier and exceptional instead of the basic thought process of many, many (all too many) Americans. Earlier today I was on CNN with Amy Holmes from the Blaze (Glenn Beck TV) and she responded with the typical talking points of the GOP: “Joe Biden says racist things too,” “Other Democrats have said racist things,” etc., etc. Trying to place blame on all sides does not solve the GOP’s major electoral and reputational problem. All Republicans, white people, conservatives and Southerners are not racists. In fact, the majority of these groups are not necessarily racist. However, the GOP refuses to take responsibility for its own bad press and would rather say that the media is blowing things out of proportion, unfairly targeting its members (instead of Democrats) or that Blacks and Latinos are too sensitive. All of these outfits and fashion flips rather than cleaning up their act.

The biggest issue for Johnson? The level of comfort with which Young said “wetback,” he writes, is representative of the “casual simple ‘it’s a fact’ bigotry that is churned out every day in the halls of power, where denying someone a job, acceptance into a college or a promotion is not the result of some large diabolical plot, it’s just how large portions of white people have done things in America for years and continue to do.”

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“White men in the diversity and inclusion space are much more focused on product over process … but there is no silver bullet,” explained PricewaterhouseCoopers’ Chris Brassell, Director, National Office of Diversity, at DiversityInc’s White Men & Diversity event.

Brassell detailed how PwC takes a straightforward, top-to-bottom approach toward diversity management that allows its diversity leaders to effectively build support and understanding for diversity management among white, male leaders in each of the 20 markets it serves. “We need people to understand what it is, and what it isn’t,” said Brassell. “We want to make this a conversation about listening. This is not punitive.”

PricewaterhouseCoopers (PwC) is No. 1 in the 2012 DiversityInc Top 50.

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Daniel Ayala, head of Wells Fargo’s Global Remittance Services, spoke to DiversityInc CEO Luke Visconti about how cultural competence allows his company to better serve underrepresented groups. Wells Fargo is No. 33 in the DiversityInc Top 50.

Luke Visconti: How has cultural competence enabled Wells Fargo to help its customers succeed financially? 

Daniel Ayala: Cultural competence is a key element of being able to effectively execute a business strategy in today’s corporate world. Eighty percent of the consumer market growth in the last two or three years has been driven by diverse segments. When you look at the long-term implications that number is amplified because minorities are going to be the majority, so having cultural context and understanding the segment well allow us not only to perform the way we perform historically but really project ourselves into the future.

Visconti: What are the greatest differences among the financial habits of Latinos, Asians and whites, especially in the area of consumer remittances? 

Ayala: At the end of the day, consumer remittances is really people taking care of other people, so it’s as simple as a father sending money to his siblings and/or potentially to his kids and providing that day-to-day support. So it’s really not different from one segment to the other. One key thing about remittances on the international side is it goes beyond educational support. In some cases, people in the U.S. that come from Latin America and Asia are supporting families, extended families for their lifetime, so in those cases sending money to those families overseas is a key financial activity that they perform month after month.

Visconti: Can you talk about any specific cultural differences that you weren’t aware of but found out through your good work and were able to put to good use for serving your customers? 

Ayala: When you look at different ethnic groups you always look for the differences. But what I found is the immigrant experience has a lot of commonalities: First you need to establish yourself, then you need to make ends meet for yourself, and then your primary focus is to take care of your family back home.

There is one key theme that cuts across all immigrant segments no matter where they come from, and it’s the principle that hard work pays. And when it pays, they take care of their own. That’s a very unique thing about the immigrant segment. When you hear the stories about people leaving everything behind and in some cases not even speaking the language and surviving through all those challenges, it’s a great story of success, and you still hear about people being able to live the American dream through that.

Visconti: I can’t imagine what could be more relieving to somebody who is struggling to establish themselves than to know they have security, that the money that they are sending home, which in lot of cases is keeping people alive, is getting there safely and at a reasonable cost. 

Ayala: Absolutely. When you humanize that and you understand that the $300 transaction going from Oxnard, California, let’s say, to San Salvador, El Salvador, is going from a grandparent for his grandson’s birthday, and that money is going to be used to buy the bicycle and to pay for the birthday party, you understand how important that transaction is to that individual in Oxnard and how important it is to the family receiving that money. You can’t be late, it needs to be delivered on time and needs to be a positive experience for both sides. That’s the business we are in, and that’s why it’s important to understand who it is that you are really serving and for what purpose.

The post Wells Fargo: Cultural Competence Builds Global Remittance Business appeared first on DiversityInc.

Question:
I’ve joined a new company. All of my coworkers are white. I find it very difficult to build a working relationships with them. I often wonder is it my race (black). Do you think whites feel afraid to communicate with blacks on a professional level? In many cases I feel I can’t be myself in order to fit in with the culture of the department.  One of the coworkers just said “Hi” to me for the first time. I usually say “Hi” to the person first, but I never hear a response from this person. Is there something wrong with this picture?

Answer:
I would say yes, there is “something wrong with this picture,” and yes, many whites are afraid (apprehensive/intimidated) to communicate with blacks on a professional basis.

But this isn’t the case in every workplace. Please consider where you’re working and if you can improve that situation. Is there a potential mentor you can reach out to?

Part of white culture in some workplaces is to be cold to everyone. I’ve yet to experience another culture where this is true. In my opinion, this is another good reason to work in a diverse environment.

Luke Visconti’s Ask the White Guy column is a top draw on DiversityInc.com. Visconti, the founder and CEO of DiversityInc, is a nationally recognized leader in diversity management. In his popular column, readers who ask Visconti tough questions about race/culture, religion, gender, sexual orientation, disability and age can expect smart, direct and disarmingly frank answers.

The post Are Whites Afraid to Communicate With Blacks at Work? appeared first on DiversityInc.

Tyson, the current President and Chief Operating Officer, was interviewed by DiversityInc CEO Luke Visconti the day he was named to the position. To hear audio of the interview, click on the audio players below. Tyson also spoke at our diversity event, emphasizing the organization’s emphasis on cultural competency and an inclusive workplace.

Cultural competence in healthcare is a hallmark of both Kaiser Permanente and Tyson’s personal priorities. “Our mission is to continue to become better educated and increase our competency in understanding the nuances of how we care for a diverse population,” he told DiversityInc. “The Institute for Culturally Competent Care is a training ground. … It’s a metaphor for where the brain trust is to help the rest of the organization better understand how to care for diverse populations.”

In addressing corporate leaders who are selecting a health-insurance provider, he noted that the commitment to diversity is critical. “Your employees will see themselves in the walls of Kaiser Permanente. We are a diverse organization, taking care of diverse people,” he said.

Where Are All the Black CEOs? 

Kaiser Permanente, No. 3 on The 2012 DiversityInc Top 50 Companies for Diversity list, is not in the Fortune 500 since it is a nonprofit. However, the naming of a Black person to lead this major organization is a significant step. Currently, only 1.2 percent of Fortune 500 companies have Black CEOs, compared with 4 percent of the DiversityInc Top 50.

Kaiser Permanente’s Next CEO: Why Healthcare Reform, Cultural Competence Are Financial Decisions

Tyson noted Halvorson’s legacy of creating the most diverse top of the organization in the DiversityInc Top 50. “My job is to build on that and leverage the great strength of the diversity as we continue to deal with very complex problems in this country and the healthcare system,” he said.

Tyson is chairman of the board of directors of The Executive Leadership Council, which works to improve Black representation in senior levels across Fortune 500 and equivalent organizations. He emphasized the need for diversity from all underrepresented groups at the tops of organizations. He also is on the board of the American Heart Association.

Increasing Engagement and Motivation

Tyson discussed his long career at Kaiser, saying: “I’ve been afforded over the 28 years wonderful experiences in multiple roles. … At the end of the day, what has kept me here is that I believe in the mission, in high-quality affordable care.”

He added: “It’s all about creating an environment where the people bring their best thinking forward and are respected and recognized for that. The benefit is to have a highly motivated staff coming to work every day, taking care of our 9 million plus members.”

New CEO: Kaiser Permanente’s Innovation, Affordability Delivers Economic Advantage

The decision to name Tyson came after an exhaustive search. “The full board of directors underwent an extensive internal and external search process, meeting regularly to consider a number of highly qualified candidates, to identify the next leader of Kaiser Permanente,” said Kim Kaiser, board member and chairman of the search committee. “The board’s decision to offer this position to Mr. Tyson is a testament to Kaiser Permanente’s robust internal succession-planning process. During Mr. Tyson’s 28 years at Kaiser Permanente, he has demonstrated excellent leadership and vision for this organization, uniquely qualifying him to serve as our next chairman and CEO.”

Kaiser Permanente’s succession planning will be featured in our diversity web seminar on succession planning, which will include best practices from IBM and CVS Caremark as well, on Dec. 4.

“The board made an excellent choice,” said Halvorson.

“Bernard has done an extremely good job as President and COO of Kaiser Permanente, and I am confident he will continue to perform at the same level as Chairman and CEO.”

Tyson has been President and COO for almost two years. Previously, he was Executive Vice President of Health Plan and Hospital Operations for Kaiser as well as Senior Vice President and COO for the organization’s regions outside of California.

He has a bachelor’s degree in Health Services Management and an MBA in Health Care Administration and Management from Golden Gate University in San Francisco. He also earned an advanced leadership certificate from Harvard University.

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We honoring companies in six areas we have noted in the past three years—Community Development, Talent Pipeline, Working Families, Global Cultural Competence, Resource Groups and Diversity-Management Progress—plus one new area: Supplier Diversity. View previous DiversityInc Special Award winners.

These companies demonstrate through their data and their documented achievements measurable results that positively impact both their business goals and their employee/community populations.

Additionally, Dr. Cornel West spoke at the Special Awards dinner. Dr. West is the author of Race Matters and Democracy Matters and is a professor of Philosophy and Christian Practice at Union Theological Seminary in the City of New York.

2012 DiversityInc Top Company for Global Cultural Competence

Ernst & Young
No. 6 on the DiversityInc Top 50 list
Accepting Award: Steve Howe Jr., Area Managing Partner – Americas

As a truly global company, Ernst & Young understands how crucial the understanding and respect of local cultures is, while staying true to the values of inclusion so core to this company. Cultural-competence and harassment/discrimination training are emphasized throughout the organization, as is talent identification and development for underrepresented groups, particularly women globally.

James Turley, chairman and CEO, told DiversityInc last year that it’s best to tailor a company’s initiatives by geography so diversity strategies remain central to local customs and beliefs. Once established, diversity leaders can then look to incrementally push the boundaries.

Ernst & Young has global resource groups for professional women, LGBT employees and Black professionals in several countries. The groups have executive sponsors and meet during the workday.

Ernst & Young is a founding member of WEConnect International, a corporate-led nonprofit that helps to empower women business owners to succeed in global markets. The firm is working with WEConnect on development of a national certification process for women-owned businesses in India, while its employees in Canada and the United Kingdom are actively involved with WEConnect.

2012 DiversityInc Top Company for Community Development

Wells Fargo
No. 33 on the DiversityInc Top 50 list 
Accepted Award: Michelle Lee, Executive Vice President, Northeast Regional President

“Wells Fargo is only as strong as the communities we serve,” the financial-services company states. The company’s commitment to the Black, Latino, Asian, American Indian and LGBT communities is remarkable for the depth of its efforts to reach suppliers, youth and low-income people. Sixty-five percent of the executives in the top two levels of the company sit on the board of a multicultural nonprofit. Some examples of its philanthropy:

• In 2008, Wells Fargo achieved its goal to lend $1 billion to Black-owned small businesses and extended the goal to $2 billion by 2018.
• In 2010, Wells Fargo provided $61.1 million in grants to nonprofits focused on community development in distressed communities, including affordable housing, homeownership counseling, financial education, workforce development and job creation.
• The company has an online financial-literacy program in English and Spanish and teams with local Latino organizations to host free, bilingual programs on money management.
• Wells Fargo is a founding sponsor of the Asian & Pacific Islander American Scholarship Fund. Since 2004, the bank has given $500,000 for scholarships for college-bound students from underrepresented Asian and Pacific Islander communities interested in pursuing careers in banking and financial services.
• In 2010, Wells Fargo invested $219 million in 19,000 nonprofits nationwide.

2012 DiversityInc Top Company for Working Families

Eli Lilly and Company
No. 29 on the DiversityInc Top 50 list
Accepted Award: John Lechleiter, Chairman, President & CEO

This company has become a model of workplace flexibility for its employees. As Lechleiter stated: “Lilly recognizes the critical importance of work-life integration tools to address the diverse needs, expectations, lifestyles and work styles of employees allowing them to be the most effective.” Globally, Lilly offers a number of programs, varying by location, to assist employees in maintaining work/life flexibility. These include flexible work arrangements, personal leaves, onsite health services/fitness centers, onsite childcare, campus credit unions and dry cleaners, and family-support programs.

Flexibility is a productivity tool that allows for adaptation of how, when and where work is completed. Supervisors discuss with their employees the needs of the individual and the work group, as well as the types of flexible work arrangements that are appropriate for a particular position. For employees, flexible work schedules are about lower stress levels, better health, a stronger focus on work while working and greater trust—all leading to loyalty, inspiration and innovation. For Lilly, flexibility is about being able to recruit and retain the best talent in a competitive marketplace, preparing for the changing environment and reducing the cost structure related to absenteeism, and healthcare—all leading to improved levels of engagement, which drives productivity.

2012 DiversityInc Top Company for Diversity-Management Progress

Kellogg Company
No. 49 on the DiversityInc Top 50 list
Accepted Award: John Bryant, President & CEO

Kellogg’s progress in all four areas we measure in diversity management has been considerable in the past year and shows every indication of sustainable forward motion. This progress put Kellogg on the DiversityInc Top 50 list this year, in the highly competitive consumer-packaged-goods industry.

The effort starts at the top. President and CEO John Bryant chairs the Executive Diversity & Inclusion Council and has instituted the first linking of diversity-management goals, both quantitative and qualitative, to executive compensation. The council reviews on a quarterly basis the company’s hiring, promotion and turnover activity reports and addresses trends with recommendations and actions.

Bryant and four of his direct reports serve as the executive sponsors of Kellogg’s six resource groups. The company’s resource groups are available to all U.S. employees and are utilized for recruitment, mentoring, talent development, retention, diversity training, marketing and community outreach.

The company’s supplier-diversity program, in existence for more than two decades, has experienced an almost six-fold increase in spending in the last 10 years and now supports more than 200 vendors owned by Blacks, Latinos, Asians, American Indians, women and veterans with disabilities. The company recently added businesses owned by LGBT people to its supplier database and will begin tracking them this year.

2012 DiversityInc Top Company for Talent Pipeline

Novartis Pharmaceuticals Corporation
No. 13 on the DiversityInc Top 50 list
Accepted Award: Andre Wyss, President 

Novartis Pharmaceuticals Corporation understands the need for a diverse workforce and pipeline to senior management, both for cultural competency in its product development and marketing and for the most innovative workplace solutions. The company has been actively donating and volunteering to help youth from underrepresented groups reach their full potential, including direct involvement from its most senior leaders. A few examples:

• Each fall, areas of the business and members of the Diversity & Inclusion Councils and resource groups participate in its Disability Mentoring Day. In 2011, more than 100 employees volunteered to participate in the event focused on disability awareness and career opportunities for more than 50 high-school students and 10 college students/veterans who attended. The keynote address was by Rohan Murphy, a double amputee who became a Division 1 wrestler at Penn State University.
• In April 2011, Novartis Pharmaceuticals Corporation brought nearly 150 students from 32 junior and senior New Jersey high schools to its East Hanover campus for its Annual Multicultural Teen Corporate Mentoring Program. Structured activities included a welcome from André Wyss; panel discussions with eight senior leaders; and a mock product-marketing challenge.

2012 DiversityInc Top Company for Supplier Diversity

Marriott International
No. 21 on the DiversityInc Top 50 list
Accepted Award: Arne Sorenson, President & CEO

Marriott has a long and rich history of creating community wealth by using local minority- and women-owned business enterprises (MBEs and WBEs) to build and service its hotels, especially in urban areas.

Marriott’s Tier I (direct contractor) third-party certified spend is 7.8 percent with MBEs and 9.5 percent with WBEs, more than 25 percent higher than the DiversityInc Top 50 average for MBEs and more than double the DiversityInc Top 50 average for WBEs. Marriott also spends 1 percent of its Tier I procurement with vendors owned by LGBT people, one of the highest percentages we’ve seen.

Supplier diversity is included in RFPs (requests for proposals), procurement-management compensation is tied to supplier-diversity results, and Marriott provides mentoring, financial education and financial assistance in the form of more favorable payment terms to its suppliers from underrepresented groups.

As an example, Marriott partnered with a U.S.-based woman-owned business to help grow her capacity and distribution channels to provide the design, production and fulfillment of training materials for its managed hotels around the world. Marriott also helped her share her expertise with other women-owned businesses.

Marriott has been honored by the Women’s Business Enterprise National Council, the Women Presidents Educational Organization and the U.S. Hispanic Chamber of Commerce for its supplier-diversity efforts.

2012 DiversityInc Top Company for Resource Groups

Dell
No. 26 on the DiversityInc Top 50 list
Accepted Award: Steven Price, Senior Vice President, Human Resources

In the past two years, Dell has placed a major emphasis on increasing employee participation in its resource groups, creating and expanding global groups, and using these groups to further its business.

Dell has seven global resource groups. Three have chapters outside of the United States: WISE (Women in Search of Excellence) in the Asian Pacific Japan region and Europe, the Middle East and Africa; PRIDE (for the LGBT population) in Brazil, and True Ability (Employees or Family Members of Employees with Special Needs/Disabilities) in Brazil.

The groups are available to all U.S. employees. Each group provides a charter of its strategy and mission annually, with a strong value proposition for its members, communities and Dell’s business goals. Programs include a Cross ERG Leadership Series and brown-bag sessions to help members learn software and social-media applications.

Business-relevant uses include:

• GenNext generational group providing feedback into product development and packaging. GenNext offered expertise on the launch of internal social-media vehicles.
• Adelante Latino group developed a process in which Spanish-speaking individuals deliver product briefings to prospective Latin American customers.
• The Asians in Motion group translated materials into languages for customers across Asia.
• The True Ability ERG has been engaged in product development for customers with disabilities.

Top Company for Executive Development
Kraft Foods
No. 7 in the 2012 DiversityInc Top 50
Accepted Award: Mark Clouse, President of the U.S. Snacks Business Unit

Talent development and the use of diversity training, resource groups and mentoring to maximize potential have been priorities for Kraft Foods in recent years—and the results are impressive.

Kraft’s Vice President of Diversity Jim Norman and retired executive Wayne Canty presented the company’s JumpStart program at our winter Innovation Fest! The initiative helps new managers, especially those from underrepresented groups, understand the corporate culture and the subtle signals of bias that can derail a career. For the video and presentation of this innovation, go to www.DiversityInc.com/innovationfest.

As the company undergoes a split this year into two separate entities, the resource groups and talent-development initiatives will be even more critical to its ability to connect with its increasingly multicultural consumer base.

Essential to that connection are its 10 resource groups, which are available to all U.S. employees, including hourly workers. The groups are used for recruitment, engagement, talent development, leadership training, marketplace research/connections, and diversity training. Resource-group members serve as facilitators for Kraft’s “The Power of Differences” internal training.

The groups’ success is measured through increased referral/rate of hires of people from traditionally underrepresented groups, retention of talent from those demographics, and increased promotion rates.

Almost three-quarters of its managers are involved in its formal mentoring program, which includes group mentoring, mentoring for new hires and traditional one-on-one mentoring. Seventy percent of the mentoring pairs are cross-cultural.

–Barbara Frankel

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Click the images below to download a PDF, or click these links to expand the view: Hispanic Heritage Timeline and Hispanic Heritage Fact & Figures

The post Hispanic Heritage Month: Facts & Figures for Diversity & Inclusion appeared first on DiversityInc.

Egea explained during a DiversityInc event how Prudential’s 2011 acquisitions of AIG Star and AIG Edison insurance companies forced Prudential to adopt a global-diversity mindset as “more than 50 percent of employees now speak Japanese.”

He credited the company’s emphasis on cultural competence with its success in forming common goals/connections with its new Japanese businesses and developing internal messaging that stays true to the core corporate culture and company values on an international scale. (Prudential Financial is No. 9 in the 2012 DiversityInc Top 50.)

The audience of corporate diversity leaders and executives was able to ask Egea questions on global diversity, contribute their best practices for cultural competence and diversity-awareness training and share their real-life success stories.

Executives from Deloitte, Monsanto, Novartis Pharmaceuticals Corporation, WellPoint and Kaiser Permanente discussed how a culturally competent workplace can help talent development—and productivity—flourish.

Global Diversity: Best Practices for Cultural Competence

• Build understanding and respect for cultural competence
• Ensure senior leaders are culturally competent
• Leverage resource groups to on-board international hires
• Have a consistent way to assess talent development
• Identify implicit biases, both internally and externally
• Use training and education to increase diversity awareness/sensitivity

Click to read the full Are You Culturally Savvy Enough to Profit in a Global Market? article, available to subscribers at DiversityIncBestPractices.com.

Not a subscriber? Request subscriber information and pricing for DiversityIncBestPractices.com.

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Diversity-management case studies provide companies with insights into their competitors’ strategies. There is always volatility on The DiversityInc Top 50 Companies for Diversity list as the competitive set increases and improves in diversity management—and, simultaneously, as other companies lessen their commitment. When there is a major swing of more than 10 spots, it is usually attributable to a significant change in circumstances (e.g., a merger or a new CEO) or to a dramatic improvement or reduction in tracking or implementation of initiatives.

Consider these facts:

• 20 companies moved up this year; 24 declined
• 3 companies moved on to the list from DiversityInc’s 25 Noteworthy Companies list
• 2 companies made the list for the first time; 1 was participating for the first time

With competition increasing (participation, including the number of companies that completed the entire survey, is up 11 percent), our questions evolve each year to reflect cutting-edge diversity-management techniques and metrics to evaluate them. For example, this year we put more emphasis on resource-group and mentoring participation and the concurrent results demonstrated by the demographics of the top three levels of the organization. Watch our diversity web seminar on resource groups and our diversity web seminar on mentoring for best practices in these areas.

Here are case studies of four companies in two industries: consumer-packaged goods and financial services. In each industry, we look at one company that went up significantly and one that declined.

Case Study No. 1: Consumer-Packaged-Goods Company That Rose

Contributing factors:

• Visible CEO support; accountability for results
• Dramatically improved metrics/tracking
• Increased utilization of resource groups

Company A is a large, decentralized global consumer-packaged-goods business, with a wide variety of products and customers. The company has been on the DiversityInc Top 50 list multiple times but has had trouble moving into the upper echelon.

This year, the company made significant strides for three reasons: It reassessed the manner in which it tracked key diversity-management metrics of mentoring and resource-group participation, multicultural philanthropy and first promotions into management; it better assessed and communicated the CEO’s deep commitment to diversity; and the racial/gender diversity at the top three levels of the company improved.

IT STARTS AT THE TOP

The CEO has been a vocal proponent of diversity for years, but much of what he said and did wasn’t captured or directly connected to diversity management. In the past two years, the company’s leaders have become much more cognizant of the need to link their leader’s support more visibly, both internally and externally. He talks frequently about the nexus of diversity and global innovation, and this of late has become a hallmark of the company’s messaging. This essential point is also now included in the company’s simple and direct mission statement.

The CEO of this company is on the board of three multicultural nonprofits, and almost a third of the executives in the top two levels of the organization also sit on boards of multicultural nonprofits. In addition, this CEO meets with resource-group members at least quarterly. This CEO chairs the diversity council and holds senior executives directly responsible for results, with a significant portion of their bonus linked to diversity metrics. The council also sets company-wide goals, which are also linked to executive compensation.

In addition, this company has a very diverse board of directors, with good female representation as well as representation from Blacks, Latinos and Asians. As it seeks to understand the complex U.S. and global marketplaces, these strategic leaders from diverse backgrounds are even more crucial.

The representation in the top three levels of the organization has increased in both gender and racial/ethnic diversity in the past two years, showing that the talent-development and engagement efforts are paying off.

DOESN’T COUNT IF IT ISN’T TRACKED

This company demonstrates one of the clearest cases we’ve ever seen of an organization doing great work that no one was properly tracking in a consistent manner. The resource groups, which are used for recruitment, talent development and leadership training, have been instrumental in driving new business ideas for products directly relevant to underrepresented groups. However, until our discussions with the company this year, it did not institute a means of assessing how many employees were actually members of each group. Without the metrics to understand its participation and the result on engagement, retention and promotions, the company was not fully able to make the case to senior management for increased support for these groups. Watch our diversity web seminar on diversity metrics for best practices in tracking diversity goals.

Secondly, the company until this year was unable to measure its level of management participation in formal, cross-cultural mentoring. Many companies, especially larger ones, tell us they can’t track mentoring because they have so many kinds and so much “informal mentoring.” We ask them to measure participation of formal mentoring because that can be directly linked to business results.

Thirdly, the company had never been able to track the percentage of its philanthropic donations allocated to multicultural charities, which actually exceed the industry average by more than 15 percent. With new tracking tools in place, Company A was able to connect the dots both in our survey and publicly, telling communities exactly how much it supports them and raising loyalty of current and future employees, as well as consumers.

Recommendations for this company:

• Use resource groups to improve promotions into first management jobs. The company has improved its tracking of this key metric but still has some gaps for which resource groups can help identify reasons why people from underrepresented groups don’t seek to move into management.
• Use resource groups more formally for market research. This company surveys employees often about consumer trends/products but has never taken advantage of the formal groups to seek innovative marketplace solutions. Now that group membership is being tracked, the groups can contribute more directly to field work.
• Link mentee promotions to mentor compensation. Now that the company has a handle on who is in mentoring relationships, the next step is to tie mentee success to the mentor’s performance evaluation.

Case Study No. 2: Consumer-Packaged-Goods Company That Fell

Contributing factors:

• Top level all-white
• Lower percentage of resource-group participation
• Lower percentage of mentoring participation
• CEO doesn’t chair diversity council

Company B has been a mainstay in the DiversityInc Top 50 but has not dedicated the resources its competitors have to internal development and community outreach. The consumer-packaged-goods industry is one of the two most competitive industries we see for talent from underrepresented groups and, correspondingly, for multicultural customers. (The other industry is consulting.)

This company fell off the list because of several factors we put increased emphasis on that directly correlate to measurable results: resource-group participation, mentoring participation and demographics of senior executives.

NO REPRESENTATION, NO PROGRESS

This company is all white in the top level (CEOs and direct reports). The next two levels of management have some racial/ethnic diversity but considerably less than the other CPGs on the list. Five years ago, all of Company B’s competitors had pretty much the same white top demographics, but the top CPGs have instituted formal, cross-cultural mentoring, resource-group leader training and mandating diversity in their succession planning, resulting in increased diversity at the top levels.

Our research has shown that increased management participation in mentoring is the most significant factor in driving diversity to the top of the organization. We have been told repeatedly by people from underrepresented groups (and organizational research supports this) that the personal relationship, especially with senior executives, provides invaluable guidance to the corporate culture and individual plans for success. The data directly shows that when the percentage of managers in mentoring rises, racial/ethnic/gender representation in the top levels goes up. Company B does have a formal mentoring program, but the percentage of managers involved dropped significantly this year.

This company also lacks the accountability for results that we see in several of its industry competitors, especially in recent years. Almost all of the top CPG companies on the DiversityInc Top 50 list have their CEO chairing the executive diversity council, and they increasingly link executive compensation to company-wide goals that the council sets. Often, those goals are tied to increasing representational diversity, especially at the top levels. For more on top-level commitment and accountability, read CEO Commitment: Why Visibility & Accountability Matter.

At Company B, the diversity council is chaired by the head of diversity, who is only at the director level. The council does not link executive compensation to its goals.

INVESTING IN MARKETPLACE CONNECTIONS

For consumer-facing companies, understanding an increasingly multicultural marketplace is vital to sustainable business success, especially when it comes to product development and placement. While all of the other leading CPG companies have multicultural-marketing departments, this company does not.

Increasingly, top CPGs use their resource groups for market research and to take advantage of diverse views to create innovative solutions to reaching customers. Company B’s percentage of employees participating in its resource groups is one-third of what it was last year, while its competitors have dramatically increased their percentages. Our data shows direct correlations between resource-group participation and human-capital results, with companies with lower participation having less diversity in promotions into management, promotions within management, and demographics of the senior levels of management. For innovative diversity solutions, watch our diversity web seminar on innovation and watch the presentations from DiversityInc’s first Innovation Fest!.

In addition, the company has a very low percentage of supplier-diversity spend with businesses owned by Blacks, Latinos, Asians, American Indians, women, LGBT people and people with disabilities. Even in an industry not known for its high supplier diversity, this company’s supplier diversity is significantly lower, indicating it is not reaching vendors and community leaders of underrepresented groups.

When looking at this company’s philanthropy to multicultural organizations, it appears to be on par with the other top CPGs. However, this company has less than half the amount of top-tier executives (levels 1–3) sitting on boards of multicultural nonprofits as the average of the top CPGs. So the donations are the same, but the actual involvement, which builds relationships and community support, is much lower.

Recommendations for this company:

• Change diversity-council model to one chaired by CEO, with all direct reports involved. Have council set company-wide human-capital goals linked to senior executive compensation.
• Aggressively increase participation in and utilization of resource groups. Document benefits of taking on leadership roles (increased engagement, promotion). Offer groups recognition/rewards for customer-based solutions, including finding diverse suppliers.
• Connect participation in cross-cultural mentoring to compensation/performance reviews. Increase emphasis on networking, sponsorship and access to senior leaders for high potentials from underrepresented groups.

Case Study No. 3: Financial-Services Company That Rose

Contributing factors:

• Increased accountability (linking bonus to diversity goals)
• Ability to track, report mentoring
• Heightened emphasis on resource groups

Company C has an extremely committed CEO. He chairs the executive diversity council, which meets monthly. This CEO has increased philanthropic efforts to underrepresented communities and has been very visible in his public support of diversity management.

This company has been on the DiversityInc Top 50 list frequently but was not able to break out of the middle of the pack until this year. The difference is its increased ability to hold its executives accountable and to track and improve key best practices, especially mentoring. Read Ask DiversityInc: How Resource Groups, Mentoring and Accountability Drive Engagement for more on the benefits of mentoring.

DIRECT LINK TO COMPENSATION

Although the executive diversity council at this company is very active (and consists of the CEO and direct reports), the company has had difficulty in the past extrapolating how much of senior-executive compensation is actually linked to direct diversity-management results.

This year, the company put in place practices that enabled it to directly measure and reward the senior executives on the council based on individual factors, including sponsorship of a resource group, being a cross-cultural mentor and serving on the board of a multicultural nonprofit, as well as increased diversity in retention, engagement, promotion and procurement in the executive’s area of responsibility.

Company C now has measurable goals directly tied to diversity results at roughly the same average as the DiversityInc Top 50 of 12.2 percent. The bonus plan was approved by the board of directors, and the CEO is signing off on each executive’s diversity bonus. The CEO includes both the quantitative goals stated above as well as a qualitative assessment of the executive’s performance championing diversity throughout the organization.

The company is seeing specific results in its human-capital demographics. While its board and senior management have had relatively good representational diversity, diversity by race/ethnicity and gender in the two levels below the CEO and direct reports in first promotions into management has improved year to year. Relative to its industry, which has racial/ethnic gaps at the top on average, this company has significantly improved its competitive position.

WHAT GETS MEASURED GETS DONE

Company C is a large financial-services company, with business units across the United States and globally. The company has a variety of mentoring programs in place, some formal and some informal. These include group mentoring, reverse mentoring, on-boarding mentoring for new hires, peer mentoring and external mentoring. Until the 2012 DiversityInc Top 50 survey, this company had repeatedly said it was unable to measure the percentage of managers in its formal mentoring program and the percentage in cross-cultural relationships.

DiversityInc has increased the weighting of these percentages in the past two years because of the direct correlation to improved diversity in human-capital results, especially in management levels. Understanding that, and the importance of tracking these results as well as the long-term successes of mentoring in terms of engagement, retention and promotions, Company C determined a year ago that it should implement a better tracking system. The results? The company now reports that at least 30 percent of its managers are involved in the formal mentoring program, which compares with 39.7 percent of the 2012 DiversityInc Top 50 average. Company C believes the actual average across the entire organization will be higher next year as it more effectively collates its mentoring efforts. Read Mentoring Roundtable: How Mentoring Improves Retention, Engagement & Promotions for best practices in mentoring.

The company has also followed best practices established in our benchmarking practice to ascertain how to count resource-group membership and has doubled the percentage of employees who participate in those groups. Like many ethical companies, it was being overly conservative in its initial findings, and without a benchmark, it did not know what the standard was. It has been leveraging the ability to properly assess participation to garner more resources for the groups from senior management.

Recommendations for this company:

• Do not give 100 percent of eligible executives the diversity bonus. A bonus that everyone gets in full (as they did this year) doesn’t have credibility. The bonus should be awarded on a curve.
• Increase metrics to assess resource-group success. Although the company has increased its metrics on resource groups, it still lacks a consistent method of measuring promotions of those in groups versus those not, as well as membership in more than one group.
• Use groups to provide training/on-boarding for new employees. Company C does not have specific training to acclimate new hires, especially from underrepresented communities. Resource groups are critical in improving retention/engagement of new hires, our data shows.

Case Study No. 4: Financial-Services Company That Fell

Contributing factors:

• Lack of diversity at top
• No longer links bonuses to diversity goals
• No cross-cultural mentoring emphasis

Also a long-time member of the DiversityInc Top 50, Company D is a financial-services company that has been directly impacted by the economic and reputational turmoil occurring in its industry since the housing-boom bust of 2008. The company has undergone several organizational shifts and layoffs, but the diversity leadership has remained constant. However, this year, we note a drop in several key indicators, including linking executive compensation to diversity and senior-leadership demographics.

LACK OF ACCOUNTABILITY

For a company that has been in the public eye for its lack of accountability during the financial crisis, the decision to no longer link executive compensation to diversity results is surprising. Still, that’s what company D did between the 2011 survey and the 2012 survey.

Although the company continues to have an executive diversity council chaired by its CEO, it does not have the council set organization-wide diversity goals or hold the council executives responsible for reaching those goals—which 86 percent of the 2012 DiversityInc Top 50 companies do. As this company has reorganized in general, its efforts to pay bonuses at all have been jeopardized. But companies with deep commitments to diversity see this as crucial. Sodexo, for example, which has been in the top two in the DiversityInc Top 50 for the past three years, has a fund set aside for diversity bonuses that is the only one that is paid regardless of the financial performance of the company. And Sodexo links 25 percent of executive compensation of its senior leaders to diversity goals.

But Company D is not connecting compensation and diversity goals, and its top level of management (CEO and direct reports), which was all white last year but was almost half female, this year continues to be all white and is 10 percent less female. The next two levels of the organization also have little racial/ethnic diversity, a trend that seems to be getting more pronounced in the last three years. Read our Report on Executive Compensation.

MORE CULTURAL COMPETENCY: INTERNAL & EXTERNAL

Company D has been in the public eye for lending practices to lower-income consumers, many of whom are Black and Latino. Yet Company D does not have diversity prominently on its corporate homepage (unlike 82 percent of the DiversityInc Top 50 companies), and it has a lack of cultural-competency training for its mentors, mentees and executive diversity-council members. For best practices in training, read Diversity Training Goes Way Beyond Compliance.

The mentoring connection would be a crucial way for this company to increase its representation at the top. However, only 5 percent of its managers participate in mentoring, it does not have a cross-cultural component, and it has no formal evaluation or metrics associated with mentoring. By contrast, an average of 39.7 percent of DiversityInc Top 50 managers are in formal mentoring, 96 percent have a cross-cultural component and 84 percent have formal evaluations and metrics. All of those have increased significantly over the past six years.

The lack of formal cultural-competence awareness spills over into other areas directly impacting customer relationships. Company D has a very low multicultural-marketing budget—more than 20 percent lower than other companies in its industry, including Company C. A review of its recent public statements shows few mentions of diversity, while its closest competitor, another company in the DiversityInc Top 50, has increasingly tied its business results to diversity in its public messaging.

Company D’s decline on the DiversityInc Top 50 list is a direct result of its leaders’ decision to be less accountable for direct diversity results and to fail to emphasize the connection between diversity management and its increasingly multicultural consumer base.

• Reinstitute direct link between compensation and diversity goals. If no bonuses are paid, make the compensation part of executive evaluations and salaries.
• Include mandatory cultural-competence training for all mentors/mentees, executive-council members and anyone hiring or evaluating managers.
• Work with corporate communications and marketing to include diversity in business messages and to make the importance more prominent on homepage and in social media.

For information on the DiversityInc Top 50 companies, visit www.DiversityInc.com/top50.

–Barbara Frankel

The post Diversity-Management Case Studies Reveal Why Companies Rise & Fall in the DiversityInc Top 50 appeared first on DiversityInc.

Chief Diversity Officer Rohini Anand of Sodexo (No. 2 in the 2012 DiversityInc Top 50) led the discussion at a recent DiversityInc event and explored the challenges companies face in improving female representation at the executive levels. The audience of corporate and diversity leaders was able to ask questions, contribute their best practices for talent development and share firsthand their real-life success stories.

Companies participating included: PricewaterhouseCoopers (No. 1), Procter & Gamble (No. 5), American Express (No. 14), The Coca-Cola Company (No. 46), and BASF and Wyndham Worldwide (both are on DiversityInc’s 25 Noteworthy Companies list). 

In What’s the Biggest Global Diversity Challenge? Female Talent Development, we share their best talent-development strategies and case-study examples that can help improve your pipeline of female talent globally. 

Talent-Development Best Practices for Women:

1. Provide a peer support system for women to help keep your top performers in the workforce
2. Promote diversity and inclusion in the workplace with respect for local laws
3. Gain cultural competence and understanding for local barriers to gender equality
4. Provide opportunities for global assignments to challenge and engage employees
5. Understand special issues facing women with strong family demands and devise culturally competent solutions
6. Adopt flexible workplace practices and educate managers about the value of flexibility
7. Use alumni/networking connections to encourage loyalty from female talent
8. Get senior-level managers on board with gender-intelligence training
9. Assign diversity champions in select countries to promote diversity-and-inclusion initiatives and help reduce gender bias

Read What’s the Biggest Global Diversity Challenge? Female Talent Development on DiversityIncBestPractices.com.

The post What’s the Biggest Global Diversity Challenge? Female Talent Development appeared first on DiversityInc.