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.

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.

André Wyss, Novartis Pharmaceuticals Corporation:

“Now more than ever, our customers and patients we serve are counting on us for innovative breakthrough medications for increasingly complex medical needs. These include cancer, multiple sclerosis, chronic obstructive pulmonary disease, heart disease, and many others. The communities in which we work are relying on us. These are our business goals as well as a mission to do good. We also were recognized as a DiversityInc Top 50 company and are committed to doing what’s necessary to attract, retain and motivate the diverse talent we need to succeed now and in the future.”

John Bryant, Kellogg Company:

“The Kellogg Foundation gives away $360 million a year to children’s education and healthcare around the world. So we are very honored—and indebted to our founder—but honored to be part of an organization where so much of what we do goes back to kids in the communities in which we serve.  That’s in our past, but it’s also what we want to make very much true today and in our future. As we look at the Kellogg Company, we have a very special bond with our consumers. Every day around the world, millions of people bring our products into their homes and feed our products to their children. That special bond between us and our consumers, we take incredibly seriously. And our goal is to help us understand our consumers so well that every day we’re in even better position to bring our best to those consumers.”

Michelle Lee, Wells Fargo:

“Reinvestment is an integral part of our culture, and it’s one of the things I enjoy most about my job—giving back to our communities, engaging as a volunteer and serving on nonprofit boards. It’s my responsibility at Wells Fargo as a leader. Last year, we invested over $213 million in 19,000 nonprofit organizations, and 165,000 Wells Fargo team members are involved in community-development activities across the country.”

Steve Howe, Ernst & Young:

 “I can tell you that we truly do believe that inclusiveness is critical. It’s critical to us performing at a consistent, exceptional level all around the globe. It makes us better, more insightful; it helps us solve problems, manage risk and seize opportunities that much better. And we believe that driving multicultural teams is an absolute must.”

John Lechleiter, Eli Lilly and Company:

“Now, since I’m among friends this evening, I have a confession: Early in my tenure as CEO, I made a decision, based on a variety of reasons at the time, to cut back on our flexible work programs. And employee engagement suffered. In fact, when I commissioned a small team to find creative ways to strengthen employee engagement, their first recommendation was to bring flexible schedules back. At least I was smart enough to listen. And I did, and it’s one of the best decisions I’ve made.

Arne Sorenson, Marriott International:

“Marriott’s approach to diversity and inclusion is deeply rooted in our company’s purpose, which is to open doors to a world of opportunity. This includes the opportunity to build a career, the chance to own one of our hotels, or to provide products and services as one of our suppliers. For 85 years, we’ve said, ‘Take care of our associates, and they’ll take care of our guests.’ This core value of putting people first underpins our commitment to diversity, but we also believe that it drives our profitability. Hospitality is by definition a diverse industry. A couple of recent statistics: Obviously, people come from all over the world to visit New York. Last year, 2 million Mexicans came to the United States; 1.5 million Brazilians; over 1 million Chinese—and those numbers from each of those countries are up about 50 percent year-to-date from last year.”

Steve Price, Dell:

“Our purpose is to bring technology solutions to the world that enable people everywhere to grow and thrive. The one thing we know about growing and thriving: No one grows and thrives alone. We all grow and thrive in relationships. That’s why our employee resource groups are so important because this is where people come in from all walks of life and become part of a community. They get connected and become part of a relational community, irrespective of where you come from or what part of the globe you sit on. You can come to this company and you can be your best and you can do your best work.”

Mark Clouse, Kraft Foods:

“The beauty of splitting a company like Kraft into two is that we have two organizations born of the same value of understanding—the power of diversity. Two organizations that understand that, in a world of global connections, our ability to reflect the consumers we serve—and the people and colleagues that work with us—is paramount to our success.”

The post 8 CEOs Whose Inclusive Styles Change Corporate Cultures appeared first on DiversityInc.

Recognizing Results: Diversity-Management Strategies That Worked

We honored companies in eight areas of diversity management:

• Talent Pipeline
• Global Cultural Competence
• Working Families
• Supplier Diversity
• Community Development
• Resource Groups
• Diversity-Management Progress
• Executive Development

Congratulations to our 2012 Special Awards recipients. Read more about how each company demonstrated measurable results that positively impacted both their business goals and their employee engagement at DiversityInc.com/2012specialawards.

2012 DiversityInc Top Company for Talent Pipeline

Novartis Pharmaceuticals Corporation
No. 13 in the DiversityInc Top 50
Accepting Award: André Wyss, President

“I believe [our Disability Mentoring Day, Multi-Cultural Teen Corporate Mentoring Program and Suburban Cultural Educational Enrichment Program] provide an overview of our commitment to participating in and supporting meaningful programs at the intersection of community-based outreach, philanthropy and education. They say it takes a village to raise a child. We believe that NPC has an important role to play in that responsibility.”

Novartis 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. >> Read more

2012 DiversityInc Top Company for Global Cultural Competence

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

“Global cultural competence—for us, it’s critical. It helps us seize opportunities all that much better, and we believe that driving multicultural teams is a must. Diverse teams need that inclusion ‘glue’ to hold them together. We pride ourselves on true globalization and delivering high-performance teams, as well as exceptional customer service. All three require inclusion. We set a tone at the top. … It’s a business imperative.

As a truly global company, Ernst & Young knows 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. >> Read more

2012 DiversityInc Top Company for Working Families

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

“Helping employees integrate work and life is more important than ever as we look for ways to continuously improve productivity. … Early in my tenure as CEO, I made a decision to cut back on our flexible work programs, and our employee engagement suffered. [Bringing those programs] back is one of the best decisions I’ve made.”

This company has become a model of workplace flexibility for its employees. 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. >> Read more

2012 DiversityInc Top Company for Supplier Diversity

Marriott International
No. 21 in the DiversityInc Top 50
Accepting Award: Arne Sorenson, President & CEO

“Diversity and inclusion is deeply rooted in our company’s purpose. It includes opportunities to build a career, own one of our hotels or do business with us as a supplier. … We are very proud of our partnerships. They have made us successful and, in turn, we enjoy watching these businesses grow and investing in their communities. In 2011, these suppliers totaled 17 percent of our total spend, and we will continue to reach higher.”

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. >> Read more

2012 DiversityInc Top Company for Community Development

Wells Fargo
No. 33 in the DiversityInc Top 50 
Accepting Award: Michelle Lee, Executive Vice President, Northeast Regional President

“Reinvestment is an integral part of our culture, and it’s one of the things I enjoy most about my job—giving back to our communities, engaging as a volunteer and serving on nonprofit boards. It’s my responsibility at Wells Fargo as a leader. Last year, we invested over $213 million in 19,000 nonprofit organizations, and 165,000 Wells Fargo team members are involved in community-development activities across the country.”

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. >> Read more

2012 DiversityInc Top Company for Resource Groups

Dell
No. 26 in the DiversityInc Top 50
Accepting Award: Steven Price, Senior Vice President, Human Resources

“I’m really proud of the work our company has been doing around diversity and inclusion because it’s authentic. It’s core to who we are as a company. Our purpose is to bring technology solutions around the world that help everyone. No one grows and thrives alone; we all need relationships. That’s why our resource groups are so important … to develop a sense of community.”

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. >> Read more

2012 DiversityInc Top Company for Diversity-Management Progress

Kellogg Company
No. 49 in the DiversityInc Top 50
Accepting Award: John Bryant, President & CEO

“As we look at the Kellogg Company we have a very special bond with our consumers: Every day people bring our products into their homes and feed their children. Our goal is to help us understand our consumers so well that every day we’re in an even better position to bring our best to those consumers. And to do that, we need not just a diverse organization, but an environment which is inclusive, where the ideas of that organization can come into our products, so we can create even better products for our consumers.”

Kellogg’s progress in all four areas of diversity management that we measure has been considerable in the past year and shows every indication of being sustainable. This progress put Kellogg on the DiversityInc Top 50 list this year. >> Read more

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

“One of the hallmarks of Kraft is a belief in healthy dissatisfaction. The world in which we live changes on a daily basis: If you stop moving forward, you’ll find yourself behind. … Any program of diversity that’s built into a company needs to understand that it starts from day one and travels with those individuals throughout their career. The representation of the collegues working with us will reflect all of the countries working with us.”

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. Following a recent split into two separate entities, the resource groups and talent-development initiatives will be even more critical to the companies’ ability to connect with its increasingly multicultural consumer base. >> Read more

The post 2012 Special Awards: What Makes These 8 Companies Best at Diversity Management? appeared first on DiversityInc.

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

The post Diversity Management: 2012 DiversityInc Special Awards 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.

The goal of the DiversityInc Top 50 is to create an evolving and accurate database of successful diversity-management best practices and their ensuing results measured in human-capital and procurement demographics. The methodology of the DiversityInc Top 50 has always been transparent and publicly available on DiversityInc.com and DiversityIncBestPractices.com and in DiversityInc magazine.

There are more than 300 fact-based questions in four areas of diversity management: CEO Commitment, Human Capital, Corporate and Organizational Communications, and Supplier Diversity. There is no fee to participate, and all companies that complete the survey receive a free report card assessing their performance overall versus all competitors and in the four areas we measure. Companies do not receive any special treatment for doing business with DiversityInc.

To participate, a company must have at least 1,000 employees. We measure “participation” as starting the process to fill out the survey. Last year, we had 587 participants, up 11 percent from the previous year. We also had 12 percent more companies fill out the entire survey.

We do not publicize the names of companies that participate and don’t make the list as we have no desire to embarrass or coerce any company.

Why the Rankings Matter

Over the years, companies have told us repeatedly that a spot on the list helps them attract and retain top talent (from all groups, including white men) and demonstrate their diversity commitment to customers, suppliers and investors. Several companies, including Sodexo, Kraft Foods and all of the Big Four (PricewaterhouseCoopers, Ernst & Young, Deloitte and KPMG), have given us specific examples of sales they have made because of their known diversity leadership as the differentiating factor with their competition.

PricewaterhouseCoopers, the No. 1 company this year, has made the DiversityInc evaluation a key part of its diversity-management strategy for more than a decade. U.S. Chairman and Senior Partner Bob Moritz, who has spoken at our events and attended the last one during the day to take notes on other speakers, said this: “At PwC, we’re investing in inclusion so we can deliver quality, value and innovative solutions to the companies and stakeholders we serve and so we can create sustainable growth for our future.”

The support for the credibility of the list comes not only from “diversity professionals” but from senior line executives and CEOs at many of the companies on the list. More than 20 CEOs have spoken at our diversity events, all of them discussing the importance of diversity and the value of the DiversityInc Top 50 to their company’s success. This includes the CEOs of Procter & Gamble, AT&T, Sodexo, PricewaterhouseCoopers, Ernst & Young, Deloitte, KPMG, CSX, Prudential Financial, Novartis Pharmaceuticals Corporation, Marriott International, Aetna, Cox Communications and Rockwell Collins.

Here are some observations about the value of The DiversityInc Top 50 Companies for Diversity list:

1. The survey creates universal data-based definitions of diversity and inclusion best practices and a fact-based methodology for tracking and evaluating them. The metrics are analyzed each year to ensure they are current and that an increasing proportion of companies are using them. We also directly correlate data results (measured in human-capital demographics) with best practices to establish their relevance. David Casey, vice president, Workforce Strategies, and chief diversity officer of CVS Caremark, told us this: “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.”
2. The many CEOs we’ve interviewed (including the CEOs of Wells Fargo, Eli Lilly, jcpenney, Toyota Financial Services, KeyCorp and Ameren) all refer to diversity and inclusion specifically as a business driver. They use the DiversityInc Top 50 as the method of quantifying those business goals. Randall Stephenson, chairman, CEO and president of AT&T, said this: “Diversity is a key success driver at AT&T. We work hard to build a strong talent pipeline that includes the rich mix of backgrounds and cultures that make up the communities we serve. When we do that, we’re more responsive, we’re more innovative, and our growth prospects are greatly improved.”
3. Our methodology has evolved, but the four areas we measure (CEO Commitment, Human Capital, Supplier Diversity and Communications) have been consistent for a decade, and we feel confident that the changes we make are evolutionary. The rankings can absolutely be trended. DiversityInc does have separate, fee-based benchmarking and consulting practices, but business conducted with our company does not factor into DiversityInc Top 50 rankings at all—it is an editorial process. Several companies in the DiversityInc Top 50 do no (or insignificant) business with us, and companies, such as Cummins and General Mills, actually went up in their rank. We do factor in the one survey we consider objective: the Human Rights Campaign’s Corporate Equality Index. No company can earn a spot in the DiversityInc Top 50 if they don’t offer same-sex domestic-partner health benefits. Companies that received less than an 80 percent CEI score last year had points deducted from their DiversityInc Top 50 score.
4. While DiversityInc does not disclose the exact weightings we give each question, we are transparent in which areas are important, and we also produce a detailed FAQ with the survey each year explaining exactly what each question means and how it is to be answered. Jim Norman, vice president of Diversity at Kraft Foods, said this: “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.”
5. There have been questions raised about whether companies ranked on the list actually use the data-collection measures we cite. We do validate through spot checking the way the companies collect the data. For the past two years, DiversityInc has asked the chief diversity officer to sign off on the validity of the data and the data collection. Next year, the CEO, chief operating officer, chief legal officer or chief human-resources officer also will have to sign off on the data.
6. We have great volatility on the list, with new companies participating and making the list every year, including some that are new to this type of process. In 2012, two companies made the list for the first time: Lockheed Martin, a first-time participant, and Medtronic, which had participated before but hadn’t earned a spot previously.
7. The DiversityInc Top 50 was created and has been run for 12 years with the objectivity and transparency top of mind. When companies submit surveys, their data is checked for accuracy. After that point, they are placed into a computer database where their names are hidden so they may be evaluated based only on their responses, with no subjectivity involved.
8. The only people at DiversityInc who have access to the data are CEO Luke Visconti, Senior Vice President and Executive Editor Barbara Frankel, Associate Vice President of Benchmarking C. Craig Jackson, Director of Benchmarking Shane Nelson, and Data Analysis Director Amber Aboshihata. All are long-time employees of DiversityInc.
9. DiversityInc fully discloses the separation between its editorial products, including the DiversityInc Top 50 survey, and its fee-based products, including the benchmarking and consulting practices. DiversityInc events are editorial products. Company customers or event sponsors do not receive preferential treatment to speak. At our event last April, 12 corporate leaders spoke on panels. Of the 12, eight were not sponsors of the event.
10. As a private company, DiversityInc does not have a board of directors. Our books are fully audited, however, and we are willing to discuss our survey methodology with interested outside sources.
11. DiversityInc is fully transparent about its own demographics and data. For more information on that, please see www.DiversityInc.com/aboutus.
12. Criticisms of rankings will always exist, especially by those that don’t rank well. DiversityInc has endeavored to set the standard, be objective and empirical in all data collection, and be transparent about the methodology.

David Casey of CVS Caremark summed it up: “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.”

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This game-changing strategy allowed 20 companies to move up in rank on The 2012 DiversityInc Top 50 Companies for Diversity list, which was announcd at the DiversityInc Top 50 awards dinner on April 24. Additionally, three companies moved onto the list from DiversityInc’s 25 Noteworthy Companies list and two companies made the list for the first time.

More than 300 chief diversity officers and senior-level managers—representing 110 companies from 24 industries—attended the 10 sessions over two days.

Winning the War for Talent: Best Practices in Mentoring, Recruitment and Promoting Women

These four learning sessions featured seven speakers including three CEOs who spoke directly to current trends in diversity management. The sessions highlighted the need for accountability in leadership and firm CEO commitment to drive diversity in talent development and recruitment throughout an organization.

Watch the full videos of each session, which include:

A keynote address by Mark Wagar, president and CEO of Empire BlueCross BlueShield, on the importance of diversity leadership at the senior level >> Watch the video

Beth Mooney, chairman and CEO of KeyCorp, discussing mentoring/sponsorship and how women can dispel stereotypes to rise to the highest levels of male-dominated organizations >> Watch the video

A presentation about how to find and nurture global talent by Maritza Montiel, deputy CEO and vice chairman of Deloitte >> Watch the video

An interactive panel on the best strategies for developing female talent, featuring Jodi Davidson, Sodexo; Jim Norman, Kraft Foods; Rhonda Crichlow, Novartis Pharmaceuticals Corporation; and Karyn Twaronite, Ernst & Young >> Watch the video

Building Cultural Competence for Global Diversity and Inclusion

Day two of the event offered three learning sessions and two interactive panels, featuring one CEO and 14 senior executive speakers. The sessions focused on trends in global diversity and how to maximize talent on a global scale with innovations in diversity management.

Watch the full videos of each session, which include:

A Q&A with Tom Voss, president, CEO and chairman of Ameren, and DiversityInc CEO Luke Visconti about visibility and accountability >>Watch the video

Attorney Raymond Brown’s discussion about the intersection of corporate outreach in societies that have different views on human rights >>Watch the video

An interactive panel on best practices for establishing and maintaining successful global resource groups with Lisa Mink, Dell; Sarah Siegel, IBM; Eugene Kelly, Colgate-Palmolive; and Jennifer Christie, American Express >> Watch the video

A presentation by Rutgers’ Vice President for Enrollment Management Courtney McAnuff on how to achieve quality, quantity and diversity in recruiting >> Watch the video

An interactive panel on global assignments and how to maximize those experiences for high-potential employees, featuring Linda Clement-Holmes, Procter & Gamble; Patricia Rossman, BASF; Sarah King, Wyndham Vacation Ownership; and Nancy Calderon, KPMG >> Watch the video

The second installment of DiversityInc’s in-depth global research from 17 countries, presented by DiversityInc Senior Vice President and Executive Editor Barbara Frankel, on the meaning of “inclusion” and how different industries compete for global talent >> Watch the video

Visit www.DiversityInc.com/events for more information and to register for our upcoming events and learning sessions.

The post Diversity-Management Best Practices of the DiversityInc Top 50 appeared first on DiversityInc.

PricewaterhouseCoopers was named the No. 1 company. “U.S. Chairman and Senior Partner Bob Moritz has a comprehensive understanding of the business case for diversity and holds his direct reports and managing partners accountable for results,” said DiversityInc CEO Luke Visconti. “Starting eight years ago, PwC decided to have senior partners spend a rotational tour as the chief diversity executive, Maria Castañón Moats being the latest. This is a critical best practice that has propelled PwC to the top. As an example of how strong PwC is, it has a third more women in the top two levels of senior management than the remaining DiversityInc Top 10.”

In a breakthrough year, huge gains in diversity were seen at the senior-most levels. At the CEO level, companies in the DiversityInc Top 50 have twice the percentage of women as the Fortune 500, triple the percentage of Asians and four times the percentages of Blacks and Latinos. There also were significant year-to-year increases in the DiversityInc Top 50. For example:

• 36 percent more Blacks, Latinos and Asians in the top executive level (CEO and direct reports) vs. last year
• 7 percent more women in the top executive level vs. last year
• 15 percent more Blacks, Latinos and Asians on boards of directors vs. last year
• 13 percent more procurement with minority- and women-owned businesses vs. two years ago

“This is a transitional year,” said Visconti. “We were struck by the change of diversity of the CEOs and managing teams of the companies on our list. It’s much different from just five years ago. I see this as being a result of increasing emphasis at the most competitive companies, who link diversity management to creating a nimble and innovative corporate culture.” 

Read From Our Event: Best Practices of the 2012 DiversityInc Top 50 and watch video coverage from all the learning sessions.

For best practices in CEO commitment and increasing diversity in talent development, visit www.DiversityIncBestPractices.com. Also watch our diversity web seminar on innovations in diversity management.

Additionally, DiversityInc recognized the unique achievements of seven companies in Community Development, Talent Pipeline, Working Families, Global Cultural Competence, Resource Groups, Diversity-Management Progress and Supplier Diversity. Read about the companies that won.

Methodology 

A total of 587 companies participated in the 2012 DiversityInc Top 50 competition, up 11 percent from the previous year. Twelve percent more companies were able to answer every question on the 300-field survey, which is divided into four parts: CEO Commitment, Human Capital, Corporate and Organizational Communications, and Supplier Diversity.

The results are determined by statistical analysis. It is an independent editorial process and there is no fee to enter the competition and no requirement to conduct business with DiversityInc.

There has been significant movement on the list this year:

• Twenty companies moved up in rank; 24 moved down; six kept the same ranking
• Three companies moved on to the list from the 25 Noteworthy Companies list last year
• Two companies came back to the list after falling off last year
• Two companies made the list for the first time, one of which was a first-time participant

Surveys are sent out in September to all interested companies that have at least 1,000 employees, with a due date for an online submission of March 1. There is no fee to enter and companies that have business relationships with DiversityInc get no preference. Every company that fills out the survey receives a free report card assessing performance in the four areas measured. Any company interested in participating in 2013 should fill out this DiversityInc survey-request form.

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These case studies are all based on submissions to the 2011 DiversityInc Top 50 survey. They offer valuable lessons, but it’s important to remember that each company’s business goals (and, therefore, its related diversity-management efforts) are unique. The only way to accurately assess a company’s progress and recommend a course of action is to analyze its data points in comparison to other companies.

Companies That Fell

Company A: Consumer-Facing Company

Company A has had reasonable and consistent performance on the list for the past few years but was never a standout. This company has two related issues it needs to address if it wants to stem the decline and compete in an industry where its peers are rapidly accelerating their diversity-management efforts. The two issues are its CEO’s lack of personal involvement with diversity management and a failure to consistently communicate, internally and externally, that diversity is essential to the business.

Let’s first examine the CEO commitment issue. In our 11 years of assessing companies through the DiversityInc Top 50, we have never seen a company improve its diversity-management efforts and, subsequently, its human-capital results without visible CEO commitment. The CEO of this company has made some public statements that indicate a lack of cultural competence for at least one traditionally underrepresented group. What would have helped him and his senior executives understand the consumer ramifications of his action would be more diversity at his top level and more interaction with employee-resource groups. Unfortunately, both are lacking here.

The top level of this company, CEO and direct reports, is all white, and the next two levels down are almost all white. The CEO, therefore, is not being exposed to multicultural viewpoints from his senior managers. The lack of diversity at the top of the company is likely to have a cascading impact on recruitment, retention and talent development, DiversityInc Top 50 data analysis shows. That correlation holds true for this company, where new hires of Blacks and Latinos fell about 7 percent year to year, promotions into first management jobs for Blacks and Latinos fell 22 percent and for women fell 16 percent year to year, and management promotions fell about 14 percent for Blacks and Latinos year to year. What’s particularly significant about this company is that 20 percent of their senior managers come from outside the organization, yet they do not require diversity at all in their executive-recruitment slates. By comparison, the DiversityInc Top 50 average 25 percent of senior managers coming from outside the company, but 90 percent requires diversity in their executive-recruitment slates.

While the CEO of Company A does have a leadership position at a multicultural nonprofit, he has little exposure to employee-resource groups, which would have been essential in helping him overcome the misstep he made. He meets with the groups only once a year, while 44 percent of DiversityInc Top 50 CEOs meet with ERG leaders more than twice a year. Although ERG leaders have rotational spots on the diversity council, this CEO does not chair the council personally, unlike 30 percent of DiversityInc Top 50 CEOs. The council does not set diversity goals (usually demographic percentage increases) for the company, unlike 90 percent of DiversityInc Top 50 executive councils.

His lack of visible support for diversity management carries forward into the company’s communications, both internal and external. The company’s website does not clearly articulate its diversity commitment and, while a message from the CEO does appear after clicking on “diversity,” the information is general and includes almost no detail about employee-resource groups. Internally, the ERGs are predominantly only found at corporate headquarters and their presence is not widespread in remote locations, where hourly workers are predominant. The inclusion of hourly workers in ERGs is a challenge for many retail/consumer-packaged-goods companies, especially since their employment may be more transitional, but innovative solutions are occurring. Some labor-intensive companies have chosen to only include these workers by inviting them to attend non-shift events but not allowing them to be full members of the employee-resource groups. Others have had more success allowing hourly workers who assume leadership positions at employee-resource groups to be excused from shift duties and to be full-fledged group members. There is initial data indicating this also improves promotion and retention rates of these employees.

Recommendations for this company:

• Document to the CEO the benefits of personally chairing the diversity council and using the council to set diversity-management goals (companies that do this increase racial/ethnic/gender diversity, especially at upper ranks, 10 percent on average).
• Increase CEO interaction with ERG leaders to four times a year and ensure these meetings include discussion of corporate culture and customer insights.
• Examine best practices of other organizations to increase ERG membership across the company and make ERGs more central to both human-capital and corporate-communications efforts.

Company B: Skilled Employee Base

This company, which has a large employee population of technically trained employees, fell in ranking this year, largely because of the survey’s increased requirement that companies on the list be strong in all four areas measured: CEO Commitment, Human Capital, Corporate and Organizational Communications, and Supplier Diversity.

Although the CEO of this company is a long-time diversity advocate, his message has been diluted because he has not held senior executives accountable for results and has not put in place a strong chief diversity officer. This is reflected in the lack of alignment between internal and external diversity-management efforts, especially supplier diversity.

This company, like many others, has faced business challenges in recent years because of the sputtering economy and increased global competition. Yet at a time when some competitors are increasing the focus on diversity management as a means of increasing long-term sales, the CEO and senior leadership have diminished their focus. 

Specifically, the percentage of executive bonuses tied to diversity goals was cut in half this year (from 10 percent of bonus compensation to 5 percent), while the number of employees in the diversity department dropped from three to two. What’s even more telling is the role of the chief diversity officer. At 28 percent of DiversityInc Top 50 companies, chief diversity officers now report directly to the CEO. At another 60 percent of the DiversityInc Top 50, the head of diversity is a direct report to a direct report of the CEO. At this company, the head of diversity is down yet another level and does not have a visible role at the company or much access to the CEO and senior leadership.

The results of this can be seen in a decline in human-capital demographics. In the last year, new hires of Blacks at this company declined by 43 percent, while new hires of Latinos fell 50 percent. Promotions into first management jobs fell 33 percent for Latinos, 23 percent for Asians, and 11 percent for women. Promotions within management dropped 52 percent for Latinos and 17 percent for Asians. This drop in diversity-management focus also was illustrated by the lack of management participation in its formal, cross-cultural mentoring program, which was down 90 percent from last year and another 50 percent from the previous year.

The company’s external efforts indicate the overall lack of focus on diversity efforts. Supplier diversity, one of the four areas measured, has never been a strong point of this company’s (or of its industry, for that matter), but the results this year show a diminishment from the previous year. Supplier diversity is a crucial means of building community support, and the data shows a definite correlation between companies with strong supplier-diversity best practices and percentages of procurement allotted to minority- and women-owned suppliers (MBEs and WBEs) and human-capital improvements. 

• View our webinar on best practices for supplier diversity here.

At this company, the trending is in the opposite direction. As the human-capital percentages declined, so did the supplier-diversity metrics. The company had low percentage spend with Tier I (direct contractor) MBEs and WBEs last year and the percentages dropped slightly this year. Last year, the company reported some Tier II (subcontractor) spend with MBEs and WBEs, but this year there was none. Last year, the company answered that it offered mentoring and financial assistance/education to diverse suppliers; this year, it did not. Enhanced questions added this year on certification of specific types of suppliers (i.e., those owned by LGBT people and people/veterans with disabilities) also negatively impacted this company. 

Recommendations for this company:

• Enhance the position of chief diversity officer at least one level and provide more support (even if it’s dotted-line support) and access to senior management to enable the chief diversity officer to bolster metrics/emphasis driving human-capital results. Consider a person who has P&L experience as chief diversity officer; several companies in the DiversityInc Top 50, including several with educated workforces, have gone this route.
• The CEO chairs the diversity council but the council meets infrequently and does not set and measure diversity goals. Increasing the council’s (and the CEO’s) ability to hold executives accountable for diversity goals will communicate the importance of diversity management to the company.
• The company (and the CEO) have not communicated diversity’s long-term importance to their business goals, although they have been increasingly vocal about global corporate social-responsibility efforts. Both on their website and in internal communications, the same coordinated focus on diversity should improve human-capital and supplier-diversity demographics, according to the data trending of other companies that have been in similar situations.

Conclusion

It’s important to note that ranking in the DiversityInc Top 50 is completely separated from companies doing business with DiversityInc, including our benchmarking service. Both the DiversityInc Top 50 competition and the benchmarking service do benefit from our increased ability to fine-tune the questions to create far more separation between companies that excel and companies that merely check off a box. Our investment in more sophisticated software enabled these changes to be implemented. For example, we have asked in recent years what percentage of employees are members of employee-resource groups. But this year, we were able to ask and measure the percentage of employees in each specific group and, more importantly, whether the groups are available consistently through the organization or just at headquarters or a few locations.

What really propels ranking is the decisions at a company that impact its diversity-management efforts and, subsequently, its human-capital results. Those decisions, whether about resources, accountability or visible support, are dependent on the CEO. As you see from these examples, and as our data shows, without the direct involvement of the CEO, sustainable progress doesn’t happen.

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