CEO Commitment

Strategies include:

• CEOs personally holding executives accountable for diversity results (supplier diversity included)
• Meeting with resource groups
• Chairing the executive diversity council

Human Capital

We measure race/ethnicity and gender representation of the workforce and management in this section. Strategies include:

• Top levels contain a small number of people, so year-to-year improvements in representation are very beneficial.

Corporate Communications

Companies that rise in the DiversityInc Top 50 make the most year-to-year improvements in this section. Strategies include:

• Mentoring and resource-group participation are critical areas. Companies that rose in the ranking from one year ago averaged increases in mentoring and resource-group participation of 21 percent and 27 percent, respectively. Companies that dropped in the ranking saw average declines in mentoring and resource-group participation of 24 percent and 32 percent, respectively.
• The availability of mentoring and resource-groups company-wide, and having measurable goals and executive participation in each program.
• The percentage of total philanthropy allocated to multicultural groups is also important

Supplier Diversity

• Companies rank higher as procurement spend with Tier I and II women and minority-business enterprises increases.

–Shane Nelson, Director of Benchmarking, DiversityInc

The post Ask DiversityInc: What Makes a Company Rise in the DiversityInc Top 50? appeared first on DiversityInc.

During this 90-minute web seminar, Joanne McDonough, PricewaterhouseCoopers’ former Office of Diversity Director, and Debbie Storey, AT&T’s Senior Vice President of Talent Development and Chief Diversity Officer, explain how integrating diversity management into every facet of a business can increase market share and business innovation. PwC rose to No. 1 on the 2012 DiversityInc Top 50 list, up from No. 3 in 2011 and No. 6 in 2010. AT&T (No. 4) has maintained a ranking in the top five since 2009, rising from No. 22 in 2008.

Data from our survey show that excellence in diversity management is directly correlated to five best practices:

1. Linking compensation to diversity management.
2. Having diversity councils with rotational positions.
3. Establishing cross-cultural mentoring programs with senior-management participation.
4. Using resource groups for recruitment and understanding the marketplace.
5. Increasing supplier-diversity spend.

During the web seminar, you will learn:

• How PwC’s diversity-department structure is set up to achieve maximum effectiveness.
• How the Candid Conversation Series enhanced cultural dexterity at PwC with all employees.
• The business advantage in adopting LGBT tax-equalization benefits for employees.
• The innovative types of resource groups AT&T is launching that directly tie into its business process.
• How AT&T was able to increase its spend with diverse suppliers by 31 percent in one year.

This 90-minute web seminar is available to DiversityIncBestPractices.com subscribers. Please log in to watch the presentation and download the slides.

Not a subscriber? Buy this web seminar now, or request subscriber information and pricing for DiversityIncBestPractices.com.

The post Best Practices From DiversityInc Top 50: How to be on Top of the List appeared first on DiversityInc.

We asked Jim Norman of Kraft Foods, No. 7 in the 2012 DiversityInc Top 50; Raymond Arroyo of Aetna, No. 24; and David Casey of CVS Caremark, one of DiversityInc’s 25 Noteworthy Companies, for their views on the DiversityInc Top 50 process. We came away with the three main areas in diversity management that they cite as having received value from the process.

If you would like to participate in the DiversityInc Top 50 survey for diversity management, click here for more information.

• They use the survey to create an overall diversity blueprint and determine areas of focus for their diversity management  

Jim Norman of Kraft: The survey can be used by a chief diversity officer as a strategic tool to create conversations with partners in the organization that he or she has not had or has been dying to have, and to put some parameters around what “best in class” looks like. It’s work that you’re doing for yourself and the organization to get better and to monitor your progress each and every year. 

Raymond Arroyo of Aetna: We have quarterly reports that mimic the DiversityInc Top 50 methodology so that we know whether we are making progress against the goals. This relates to the methods DiversityInc is going to measure, and the survey tells us that. We get all the data around new hires, retention and promotions.

David Casey of CVS Caremark: When I sent the CEO Commitment section to our head of communications (she’s kind of the CEO’s keeper), she started scratching her head, saying, “Wow, these are really the things we should be having them focus on.” It’s another way for me to get best-practice information out there in front of different parts of the business. 

• The survey captures trends and best practices across various organizations that become the standard for diversity management

David Casey of CVS Caremark: What does the Top 50 really mean? It gives you a data point. It gives you a data set. It’s one thing to go into your board or to your CEO and say, “X percent of our workforce is people of color or women, and we’ve spent this much on supplier diversity,” but unless you give them an anchor and some kind of relative sense of what that means, it doesn’t work, and that’s what DiversityInc provides.

Jim Norman of Kraft: I know there could be criticism around any survey, and people get confused about why they’re doing it or why they would be involved. We have strategic plans. They’re about creating a better organization. The survey, then, is a tool for me to mark progress against a journey I’m already committed to. It holds me accountable. It’s a very usable tool. It asks questions that are critical to driving the kind of deep, sustainable organization change that I need to drive.

• The survey forces companies to track important data and understand how the results affect diversity management

Raymond Arroyo of Aetna: The survey asks the questions in a very, very specific way that every single time requires us to look at the data in a very sophisticated way. I love the stuff about human capital because it’s something that we should be doing ourselves anyway.

David Casey of CVS Caremark: Before the DiversityInc Top 50, there were not a lot of robust, true surveys or measurement tools for diversity management. There was just a lot of affirmative action and EEO recognitions and awards. DiversityInc’s Top 50 is by far the most robust analysis of what a company does in diversity management.

About the DiversityInc Top 50

The survey measures four key areas of diversity management: CEO Commitment, Human Capital, Corporate and Organizational Communications, and Supplier Diversity. Participation is free, and companies that do business with DiversityInc have no advantage. Each company that completes the survey receives a free report card assessing its diversity-management performance overall and in those four areas.

For background on the history of the DiversityInc Top 50, click here. For more information on our upcoming diversity-management event, click here.

Note: Since this article was written, Raymond has taken a new role as the head of Alternative Distribution, Aetna.

The post Diversity Management: Top 3 Reasons to Participate in the DiversityInc Top 50 appeared first on DiversityInc.

Now in its 11th year, the CEI is a credible, fact-based assessment of corporate commitment to LGBT workplace issues. This year, 688 companies participated, including 293 of the Fortune 500 companies. The HRC toughened its criteria last year, assessing four areas: equality of benefits for same-sex partners and spouses; transgender benefits; organizational competency (training, resource groups); and public commitment to the LGBT community.

“HRC has long rejected the idea that LGBT people should have to depend exclusively on the ballot box to guarantee equal protections in the workplace, and our corporate allies have surged well ahead of lagging legislation to afford these crucial workplace protections,” the organization stated.

Companies that score 100 percent receive a Best Places to Work for LGBT Equality designation from the HRC. Fortune 500 companies had an average score of 81, with 110 of the 293 (37.5 percent) receiving a perfect score. By comparison, DiversityInc Top 50 companies had an average score of 96.8, with a total of 38 (76 percent) receiving a perfect score compared with 28 (56 percent) last year.

What Sets DiversityInc Top 50 Companies Apart 

Looking at the criteria of the HRC, the DiversityInc Top 50 companies do better on every front compared with the Fortune 500.

• Have same-sex domestic-partner healthcare benefits: 100% vs. 62%
• Prohibit discrimination based on sexual orientation: 100% vs. 88%
• Prohibit discrimination based on gender identity: 96% vs. 57%
• Have LGBT resource groups: 96% vs. 83%
• Offer organizational cultural-competency practices such as training with measurable results: 100% vs. 42%
• Have public commitment to LGBT issues (recruitment, marketing, philanthropy): 100% vs. 48%

All of the companies on the DiversityInc Top 10 Companies for LGBT Employees received 100 percent CEI ratings.

Here is a list of the 38 companies in the DiversityInc Top 50 that received a 100 percent CEI rating:

PricewaterhouseCoopers (No. 1 in the DiversityInc Top 50)
Sodexo (No. 2)
Kaiser Permanente (No. 3)
AT&T (No. 4)
Ernst & Young (No. 6)
Kraft Foods (No. 7)
Deloitte (No. 8)
Prudential Financial (No. 9)
Johnson & Johnson (No. 11)
Accenture (No. 12)
Novartis Pharmaceuticals Corporation (No. 13)
American Express (No. 14)
MasterCard Worldwide (No. 15)
Merck & Co. (No. 16)
IBM (No. 17)
Cummins (No. 18)
KPMG (No. 22)
Aetna (No. 24)
Dell (No. 26)
Automatic Data Processing (No. 27)
General Mills (No. 28)
Eli Lilly and Company (No. 29)
Target (No. 30)
Bank of America (No. 31)
Starwood Hotels & Resorts Worldwide (No. 32)
Wells Fargo (No. 33)
Booz Allen Hamilton (No. 36)
Medtronic (No. 38)
Verizon Communications (No. 39)
Time Warner (No. 40)
Toyota Motor North America (No. 41)
Monsanto (No. 44)
Chrysler Group (No. 45)
The Coca-Cola Company (No. 46)
Capital One (No. 47)
Lockheed Martin (No. 48)
Kellogg Company (No. 49)
MetLife (No. 50)

The post CEI Index: Twice As Many Top 50 Companies Have 100% Ratings vs. Fortune 500 appeared first on DiversityInc.

Results will be announced on April 23, 2013, at our DiversityInc Top 50 Announcement Event. Click here to attend.

Video Minutes

0:00:00 Don’t Wait Until the Last Minute
0:04:15 Movement on the List
0:07:19 Four Areas of Measurement
0:08:35 Tip: Executive Diversity Councils
0:11:02 Tip: Cross-Cultural Mentoring
0:12:29 Tip: Resource Groups
0:15:16 Tip: Multicultural Philanthropy
0:17:04 2013 Survey Changes
0:18:09 Audience Q&A

Follow these links for more about the competition, a description of the survey methodology and FAQs.

Click here to see the DiversityInc Top 50 for every year since 2001.

The post Tips on How to Do Well on the DiversityInc Top 50 appeared first on DiversityInc.

During this 90-minute web seminar, Joanne McDonough, PricewaterhouseCoopers’ former Office of Diversity Director, and Debbie Storey, AT&T’s Senior Vice President of Talent Development and Chief Diversity Officer, explain how integrating diversity management into every facet of a business can increase market share and business innovation. PwC rose to No. 1 on the 2012 DiversityInc Top 50 list, up from No. 3 in 2011 and No. 6 in 2010. AT&T (No. 4) has maintained a ranking in the top five since 2009, rising from No. 22 in 2008.

Data from our survey show that excellence in diversity management is directly correlated to five best practices:

1. Linking compensation to diversity management.
2. Having diversity councils with rotational positions.
3. Establishing cross-cultural mentoring programs with senior-management participation.
4. Using resource groups for recruitment and understanding the marketplace.
5. Increasing supplier-diversity spend.

During the web seminar, you will learn:

• How PwC’s diversity-department structure is set up to achieve maximum effectiveness.
• How the Candid Conversation Series enhanced cultural dexterity at PwC with all employees.
• The business advantage in adopting LGBT tax-equalization benefits for employees.
• The innovative types of resource groups AT&T is launching that directly tie into its business process.
• How AT&T was able to increase its spend with diverse suppliers by 31 percent in one year.

This 90-minute web seminar is available to DiversityIncBestPractices.com subscribers. Please log in to watch the presentation and download the slides.

Not a subscriber? Buy this web seminar now, or request subscriber information and pricing for DiversityIncBestPractices.com.

The post Best Practices From DiversityInc Top 50: How to Be on Top of the List appeared first on DiversityInc.

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.

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.

Question: How many companies now have CDOs?

Answer:
Of the companies that participate in the DiversityInc Top 50 competition, the percentage of companies that have a “chief diversity officer” (that specific title) has risen from 12 percent five years ago to 30 percent today. However, 96 percent of the DiversityInc Top 50 have a dedicated executive leading diversity efforts, versus 46 percent of the DiversityInc Top 50 companies five years ago. Further, 86 percent of the the DiversityInc Top 50 have diversity leaders with titles at director or above and including “diversity” in their title.

The numbers reflect a trend of increasing corporate interest in diversity management. In 2005, we only had 201 companies participate in the DiversityInc Top 50 process. Last year we had 535 companies participate. We define a participant as a company that asks for and receives a survey; not all of them can fill out the entire survey, but participation has risen an average of 17 percent year-on-year since 2004. To qualify to compete in the DiversityInc Top 50, the only qualification is that your organization has at least 1,000 employees. There are roughly 12,500 for-profit and nonprofit organizations with more than 1,000 employees in the United States.

Participating in the DiversityInc Top 50 competition is free—there’s no connection between being on the list and business conducted with us (we are not pay-to-play) and every organization that fills out enough data receives a free report card. Here’s a link to our FAQ.

Another way of measuring corporate interest is by data mining. We use a contact-management system that has a product to allow us to search a pool of contacts. This year, we pulled a list of 1,800 companies that have more than 1,000 employees and that also have a person who is responsible for diversity. We’ve added them to our database of companies that we invite to participate (once they download the survey, we count them as participants). Please click here if you want to make sure your organization receives an invitation. When we utilized data mining five years ago, only 500 companies had people with “diversity” in their titles.

In conclusion, the trend over the last five years, despite the economic crisis, has been a dramatic increase in the interest of organizations to purposefully manage diversity.

The post How Many Companies Have a Chief Diversity Officer? appeared first on DiversityInc.

DiversityInc Consulting helps clients to recognize their opportunities and implement recommendations. Consulting also includes analyzing all or aspects of a company’s diversity-management program against best practices, making recommendations, and then helping to implement the recommended changes.

For more information, download the diversity consulting PDF.

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The entire process is based on the data we collect and the methodology we use in The DiversityInc Top 50 Companies for Diversity competition. In 2012, the DiversityInc Top 50 had 587 participants, up 11 percent from the previous year.  Our competition is editorially driven, and results are completely independent of business conducted with DiversityInc.

>> View the PDF on diversity benchmarking for more information.

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