Developing a Diversity and Inclusion Strategy
This presentation covers how to develop a diversity strategy from scratch leveraging best practices and key learnings from select organizations.
The session leader will share some of the learnings and landmines to take into account in starting or re-starting your DE&I strategy. Participants will hear about real-life experiences from a diverse slate of organizations. Leveraging those experiences, the session leader will share how his current company has started it's DE&I journey.
- New Tactics in DE&I
- Key perspectives and ideas based DE&I initiatives from select organizations
- Find out how "Traditional HR" derails DE&I initiatives and how to re-frame your HR strategy
Hi, my name is Mark Wilson. I’m the Corporate Head of Human Resources for United Dairy Farmers. I’d like to welcome you to What So What Now What, a Diversity Equity Inclusion Journey.
In our session today, I’ll first provide an overview of United Dairy Farmers, so I’ll tell you a little bit more about our company. Then, I’ll jump into some various perspectives from a DE&I point of view. Next, we’ll talk about how we leverage those perspectives to create our roadmap from a diversity, equity, and inclusion perspective. I wanted to share also a quote that you see here from the book Workforce 2000, a couple of reasons I included this quote. First, the focus on individualizing your approach. We’ll talk about how there are some traditional things from an HR perspective that we do that would need to change for our DE&I efforts to be successful. The other thing that I wanted to note is that you’ll notice that this book was published in 1991. We’ve been working on corporate efforts related to diversity, equity, and inclusion for quite some time. The title of the session “What So What Now What” really gets to what are some things that we need to do differently as relates to diversity, equity, and inclusion?
First, let me show you a little bit of history on United Dairy Farmers, tell you a little bit about our company. We’re a family-owned private company headquartered in Cincinnati, Ohio. We just celebrated our 80th anniversary earlier this year. The founding of our company goes back to a pretty well-known name in the Cincinnati area, Carl Linder Sr. and his wife, Edith, had four children. Carl Jr., Robert, Rich, and Dorothy. His idea was to create a cash and carry store for milk and other dairy products. You go back to that time in our history, milk was delivered directly to the home, but it was done so on credit, so people would pay weekly, they would pay monthly for him. Carl’s idea of not having to worry about distribution, not extending credit, he cut the price in half for milk and other products in the store. On May 8, 1940, with six employees, he opened up the first store. Their first day sales were $8.28, so not a lot by today’s standards, but the idea and concept for UDF was born. Fast forward to today, we have 3,200 Associates, and we do close to about a billion dollars in revenue on an annual basis.
The pictures I’ve selected here really kind of represent the diversity of our different business lines, so let me walk through each one of them. The biggest part of our business is our convenience store operation. We operate over 175 stores in the greater tri-state area, tri state being Ohio, Indiana, and Kentucky. Basically, our stores are very well-known for the hand up ice cream and cones that we’ve been selling for over 80 years. You can always come into any of our stores 24 hours a day, and get a shake, a malt, hand up cone, etc. We still do all of our own ice cream manufacturing. In addition to our 80 years of history as relates to ice cream manufacturing, we almost have one year under our belt of our bakery operations. Last year, we opened up our first bakery. We have the capability to do about 40 million donuts in terms of overall production in any year. We sell those donuts currently through our convenience stores. At EDF, it’s not the freshman 15, we usually call EDF 20. Between our doughnuts and between ice cream, you really haven’t tasted perfection until you’ve tried our homemade brand ice cream with your favorite selection of donuts as well. In addition to selling our ice cream in our retail stores, we also wholesale our ice cream. We sell in two major grocery chains like Kroger, Meijer, Walmart, and Fresh Market.
In addition, we also have our own fuel business. We do all of our own fuel transportation for our convenience stores. We also sell our fuel to various companies, municipalities, school districts, etc. We’re a classically vertically integrated organization. We do all of our own warehousing and logistics. In addition to just warehousing and all the logistics behind our products, we also have an operation called CCI, which stands for Cold Chain Integrity, which basically is a third party cold storage business. Within this business, we count on Kroger, Aldi, Taco Bell Cook Foods, KFC, as some of our current customers. Basically, if you have any type of cold storage needs within our facility, basically the largest certified cold storage chain in the tri-state area. Last but not least, also at our facilities, our warehouse location, we make and manufacture our own ice that we sell in our convenience stores. We also sell that ice to other different types of companies and entities. For example, we’re the official ice of the Cincinnati Reds as well as for the Cincinnati Airport. That’s our business in a nutshell.
Let me talk a little bit about how our diversity and equity inclusion strategy emerged as part of some larger conversations around our strategy within our company. Like a lot of family-owned businesses, basically, when you only have a couple different competitors, you can kind of operate and even thrive without any overarching strategy, etc. Well, I think you all would agree that the competitive landscape has changed significantly. If you think about the future state of where we’re going, it’s not just about the Speedway’s and the Thornton’s of the world, it’s about dollar stores. The Dollar General as well as Dollar Tree have had huge expansion plans for the last couple years. In fact, Dollar General is looking to add about 1000 stores this past year. In addition, it’s not just about the kind of the brick and mortar, it’s also about some of the technology bass player. Amazon falls in that category, Go Puff, Uber Eats, etc. If you think about the pace of change that has caused us to actually kind of accelerate some of our efforts as well.
Keep in mind, it took Radio 38 years to reach 50 million users, it took TV about 13 years to reach 50 million, and took Angry Birds, the game, about 35 days to reach 50 million users. After our 75th anniversary, our CEO really kind of pushed us to create our formal vision and strategy for the company. Our strategy charter, new endeavors around customer segmentation, our wholesale business, fresh foods, warehousing logistics, and of course, our people. In the 4 years since we put our strategy together, we’ve built another facility for our CCI operation expanding by 115,000 square feet. I’ve mentioned the bakery which we introduced. In addition, we built and remodeled almost 20 stores within our footprint. We also have a goal to add anywhere from three to five stores a year as well. In addition to our normal product launches for ice cream and new flavors, we’ve actually opened up a dairy free line as well. Last but not least, from a people perspective, we completed our first ever engagement survey across our associates. We’ve introduced new discounts and new offerings around our benefits in compensation as well, as we kind of start a new beginning as relates to our HR strategy.
Let me talk a little bit about the diversity, equity, and inclusion perspectives that we use to kind of build our strategy. I’ve been fortunate enough to work with a number of different companies. Each one of those companies is at a different place in their journey as relates to diversity, equity, and inclusion. For example, you have certain companies that are considered best practice or you have others like—part of the reason I titled this session, once again, What So What Now What is that, as I mentioned earlier, we’ve been tackling these issues for over 30 years, how much has changed. We still talk about first in our respective industries, for example, Jane Frazier was just named the first female CEO for Citigroup, and that’s the first for the traditional Wall Street banks to have a female CEO. Here we are 30 plus years later from when these corporate efforts around diversity, equity, and inclusion started, and we’re still talking about first. How can we create something that will help us accelerate and also change the outcomes that we’ve seen?
Let me tell you a little bit about some of the best practices and learnings and perspectives that we want to leverage for me to these companies. Let’s talk about the power of compensation. I think all of us now, basically, what gets measured is really kind of what gets paid on. I think the key thing that we started to see when my time at International Paper was that IP had a big focus on improving its safety record, the safety operations at all the manufacturing mills, etc. As part of this, what they decided to do include safety metrics as part of the incentive plans, usually at the mid level manager, and above levels. Over time, what we started to see is we started to see an improvement on the safety metrics of the organization.
We did the same thing from a diversity perspective. We started to include metrics like representation by grade level, targets related to sourcing, they’re also part of the incentive plans. Over time, we started to see improvement on those key diversity metrics. As it relates to sourcing accountability, HR is most often charged with recruiting a diverse pipeline in the organization. One of the things that we did also at International Papers, we put out a goal that said that 50% of our candidate slates have to be minority or female. We couldn’t move forward with a higher unless we were reaching those levels within the organization.
One of the other things that we did, which we thought was pretty unique at the time, is that we introduced a diversity sales initiative as well. I think you’ve probably all encountered a business owner, a P&L owner, etc., looking to cut expenses as much as possible and accentuate their, you know, top line revenue growth. What we did with this initiative that we said that for any minority or female sales person, that operation higher the top of the house, the corporation would pay 50% that person’s first year salary. The focus was that if you could get that person into the organization and get them productive in a faster manner, you were basically getting almost 50% off the typical cost of having somebody come into the organization. We tried to eliminate some of the barriers and excuses that may come up from your typical P&L. owners.
Business plan has to equal your diversity, equity, and inclusion plan. The key thing that I’m seeing here is that too often, DE&I plans can look like kind of fuzzy plans, they don’t really look like business plans too often. The key thing here is how do you have a tie back to your business, and I’ll give you two examples. International Paper, when it rolled out its first diversity effort, I call it the diversity blueprint, and had three components: one around engagement, focusing on development, advancement, recruiting and representation, and training.
Fast forward to my career at Fifth Third, we had a very similar blocker or foundation, but it had one component that was missing from the IPL plan, it’s an important one. We have recruiting representation. We had a component around engagement and education. We also had a talent development, which is really kind of having a diversity lens and our talent management process. One thing that we had and included was a customer diversity portion. This is not just what I would call CRA, which is Community and Reinvestment Act type of lending. This is more around unbanked, underbanked, so segmentation or their business plan. So key thing there in terms of not just having a kind of the traditional HR plan, but having a tie back to the business.
Great segue into our next one, the [inaudible] conversation. I’m always a big believer and I tried [inaudible] versus HR, technically a big difference. We first realization, we tried to incorporate some business cases to make it more of a business related training initiative versus just a traditional HR initiative. What we’re able to find is some really good examples within the organization that were great examples of the impact of diversity. Let me share those with you. It just so happened that one of the divisions within International Paper at the time did the packaging for Nike golf balls. This was right around the time that Tiger Woods did sign an endorsement deal with Nike, and Tiger Woods has been credited with bringing more people to the sport, more attention, more people of color, more females into the sport itself. As Nike’s revenue went up, and their sales went up, our revenues went up as well. In fact, in 1996, Nike’s revenue jumped from about 6.4 billion to 9.1 billion in one year. I’m sure that’s not all attributable just to Tiger Woods. Long story short, as their revenue started to grow up, as they started to kind of see more diversity in terms of their customers, we saw our revenue go up.
Another example. It just so happened that one IP division actually did the packaging for DVDs and video games,and there was a company at the time called Take Two Interactive. They had a small title called Grand Theft Auto Vice City. Basically, that sold about 8.5 million copies in the first 3 months and almost 18 million copies in the full year. We just do the math in about $50 to $60 per pop, that’s almost about $618 million in revenue. If you think about it, the diversity angle is is that diversity is not just a domain of teenage boys anymore. Over the time periods that you’ve kind of looked at the users of video games, it’s skewed higher in terms of age. It’s also become more diverse terms of females, not just the traditional domain of male gamers anymore.
Last but not least, at the time, we also had a partnership with Dell computer. Dell had a big focus on basically reaching out to the Hispanic market, trying to get more revenue from Hispanic customers. As their efforts started to help their overall revenues, that of course, helped us from a packaging solutions that we were selling to them. These are examples where you’re able to include in the training, and really a lot of our operational leaders kind of have that “Aha!” moment of how diversity really can drive the bottom line for their business.
Let me talk about BRGs, and beware of BRGs—Business Resource Groups. First and foremost, I’m a big supporter of Business Resource Groups. I think the key thing is that they just need to be set up correctly. Too often, sometimes BRGs don’t communicate within groups, so it’s almost like going back into high school or college where you just have white people that are just sitting around at their own table with no interaction between the groups. Also, BRGs should play an important role in helping the business basically sell its products, market, etc. I’ll give you a couple of examples of why this can be really important.
You may remember, about a year ago, H&M rolled out a monkey sweater that they were selling online, and they had a black boy as the model. Gucci had a black box with a sweater that resemble blackface, basically, that they had put out as well. There was overwhelming negative backlash to each of these products. My whole point is, is that if you had a Business Resource Group that had input into the marketing or product development, those probably would have never have happened. There would have been somebody in the room saying, “Hey, have you thought about this from this perspective?” That really kind of gets to the power of diversity as well. Once again, I believe that BRGs, if they’re set up correctly, can be value added for the organization. The key thing is they should have a tie back to the business, and there should be some interaction between the groups as well.
Who is your customer and personalization? Now, I really learned these concepts at my time at Dunnhumby and 8451. Dunnhumby was considered one of the leaders as relates to the pathway to personalization. Really kind of where they started is that they did really kind of deep personas and customer segmentation. For example, based on shopper data, they were able to kind of identify shoppers on a go. Those that are coming into a retailer and just picking up something that can be warmed up quickly at home, that would be an example of them. They also picked up the health conscious consumer. Those that were buying kind of healthy, trying to live a fitness based lifestyle. You have so many different personas that were out there.
To a person, when I kind of started to kind of talk about how we could do more personalization within our company from an HR perspective, we started coming back to this conversation around, do you do customer segmentations or you really just kind of personalize the experience? To a person, they said, to personalize the experience. Part of the reason why was, is really the customer segmentation sometimes are too broad. We talk about this, if you think about the conversations that we have millennials, generation X, Y, and Z in the workplace, we use these broad personas of each group, but oftentimes, we lose the focus on who is our core customer ,and really being able to personalize the benefits to them.
That really is a great segue in traditional HR derails DE&I. If I go back to the quote, that this is almost 30 years of age around individualizing approach, we’re starting to see this kind of percolate within our HR teams around focusing on the employee experience, but this is also where traditional HR derail some of them. When I say traditional HR, the traditional way of thinking about HR is kind of this one size fits all approach. It’s more about a policy approach, compliance approach, etc. Diversity at its core, it’s about differences and leveraging those differences. You can see how those two are very counterintuitive. If we want to really kind of move to personalization, we have to get out of that one size fits all paradigm, and we really need to start talking about customizing experience. We also have to get more involved in some of the things that are kind of those long standing laws around HR. If you think about risk, think about the IRS, for example. Why should our 401k earnings be capped at 19,500 when Social Security is only going to be able to pay out about 79 of the expected benefit by 2035? How do we get all, once again, that one size fits all approach, because sometimes that’s actually derailing our efforts around diversity, equity, and inclusion. We can’t have an inclusive environment with a one size fits all approach.
One of the other things that I was able to learn in my time at Dunnhumby and 8451, is really how do you start with the data. Within our organization at UDF, we actually, for the first time, shared some diversity statistics within our population. We found out that, for example, the majority of our workforce is female, and actually 60% of our retail store workforce is female, and then we started to kind of start to look at policies and specifically, what are the things that are having positive or maybe even negative impacts as it relates to our population? That allowed us to kind of take away some key learnings as well as some policy changes that we made specific to our leave of absence process. Majority of our workforce is female. We need to make sure that we have a leave of absence process, which stereotypically and traditionally, sometimes falls on the female. If you think about maternity leave, things like that. We had to start to relook at some of the things that we are doing in terms of our current practices.
Last but not least, what so what now what. I know many companies have had various responses to what happened this past summer as it relates to the death of George Floyd. The social justice issues have really kind of created a new perspective as it relates to diversity, equity, and inclusion. So what so what now what was really just kind of my personal response to what can we do differently? Don’t get me wrong, a lot of companies talked about what they want to do internally as relates to improving the diversity of the workforce. They talked about how they were going to contribute dollars to various organizations, not for profits that kind of focused in this space. To me, my response to that is that we’ve done that before, we’ve done some of those things before, what can we do differently? My suggestion is how do we really unleash the intellectual capital that we have in our organization to help solve some of the systemic racism that we’re seeing in our communities? It really kind of goes back to the Business Roundtable last year. So last year, the Business Roundtable made the conscious decision to remove the word “shareholder” and replace it with “stakeholder”. I would see the social justice issues that we’re talking about as kind of being the first walk the talk moment related to that.
The key thing is, there were 181 companies that signed off on this new focus on the stakeholder versus shareholder. If you unleash the intellectual capital of those organizations, that’s easily over a million employees across those organizations. If they were to do outreach in their communities, I’m sure we would see significant progress as it relates to diversity, equity, and inclusion efforts, if you were to partner with your communities, whether it be politicians, police, all the different pieces that kind of make up the community, but we have so much intellectual capital that we sometimes, we just kind of write a track and then we hand it over without offering the support that’s needed. That’s where what so what now what comes in—just kind of my personal view of what we can do differently really around DE&I.
Leveraging those perspectives, let’s talk a little bit about the roadmap that we created at United Dairy Farmers. What I’ll share here, and I won’t spend too much time on it, because I really want to get to the roadmap pieces, is this is our overall HR strategy. If I go back to when we first kind of put together an overall corporate strategy for the organization, we also put together a corresponding HR strategy. The thing I would focus here is kind of the roadmaps that you see identified in our level one, which is kind of being a focus on brilliant at the basics. The roadmap sections that we put together, including diversity, equity, and inclusion, around learning and development, recruiting, total rewards, performance management. What these are is almost a replication of what you’re seeing here specific to each one of those fun functional areas. Within the engagement, we have a level one of where we are today, level two, and level three of where we want to go. We put those together for each of the different kind of key roadmap areas within our organization.
Kind of replicating this, there was one other input that I thought was important to include around our DE&I roadmap, and that’s actually on this slide. This is something that I learned, and was shared with me almost 20 years ago from my time at International Paper and Expert X. It’s a great one pager that really kind of describes a continuum as it relates to diversity, equity, and inclusion. If you think about it, this continuum is really kind of representative of what’s happened to diversity over the last 30 plus years. If you think about it, and I saw this, specifically, in my time at Nine West and USU, level one maturity often has diversity efforts kind of located in your legal compliance areas. For example, when I was at Nine West, our diversity efforts were kind of led out of our affirmative action office. Once again, more of that legal compliance point of view. As we saw diversity evolve, and with a big focus on recruiting that diverse pipeline, we saw it move into that level to maturity with focus on people and engagement. If you think about it, you start just kind of seeing the recruiting pipeline, the diverse candidates, etc. kind of merge in that level two.
Then, last but not least, at level three, you’ve kind of seen organizations that have created Chief Diversity Officer roles, which is great. One thing I would say about those CDO roles and some of the goals that are incorporated, there’s still too much focus on the internal organization. That’s an important piece because you want the diverse workforce at pieces like that, but they also need to be focused on the products that they’re selling, the services that they’re selling, and being able to go after a diverse population. In my opinion, the CDO should not just be the internal peace, but also the responsibility from a business perspective. I go back to that fifth third example about having revenue goals related to your diversity metrics, that’s an important piece.
Leveraging all these perspectives and this model, we created our roadmap that you see here, and I’ll kind of talk about some of the key details here. First and foremost, level one is kind of where we are today. We’re kind of doing some assessment and kind of continuing to lead compliance. There’s a couple things that are different and unique here that I’ll touch on. First and foremost, in election year, we’ve rolled out some training to our entire population, just worried about the impact of a very divisive election, a very divisive political environment right now, and how that may manifest within our workplace.
Workplace, so one of the things that we introduced to some election politics and workplace training that had a diversity event that went along with it. Some of the other things, one of the things that we’re really kind of trying to be proactive about are around this piece, around associate activism, around our company. If you think about what’s kind of happened over the last couple years, you’ve seen examples where Google has passed on government military contracts based on feedback from their associates. We saw Wayfair being embroiled in the immigration debate, because their associates were upset that they were selling cots and beds to the Immigration Enforcement Services. You’ve seen banks stopping support for prisons or firearm manufacturers. You see black rocks focus on social responsibility.
Long story short, we’re starting to see more cases around the interests of the corporation society, the employees, sometimes coming into direct conflict. How do you effectively manage that [unintelligible] management? Oftentimes, HR is looking to help craft a response, so we wanted to be proactive. One of the things that we’re talking about is how we respond to different types of employee activism that happens in our company.
The other thing, this kind of goes to the suggestion about how do we get our internal intellectual capital involved in community pieces. We’re based in the city of Cincinnati in a city called Norwood. One of the things that was recently published this past summer is that you have a local news organization that kind of did an assessment of the racial makeup of the 45 police departments in our home county, where actually located in Hamilton County. In those findings, they found that 21 departments do not have any African-American officers, 35 have no Asian officers, and 41 have no Hispanic officers. The city of Norwood, where I mentioned is home to UDF, it has never had an African-American officer in its history. We want to change that, and that’s that community involvement piece. We obviously have experience from a recruitment and retention perspective, so we want to partner with the Norwood Police Department to kind of change that. Hopefully, also start discussions around what are the right ways that we can play a role in the community.
Once again, dedicating some of our brainpower to helping solve a community-related issue is an important piece. As you see the different levels, as we kind of go through our roadmap here, you’ll start to notice in level two, that this becomes less about an HR strategy, and more also a focus on a business strategy. You see that focus marketing. That’s the marketing that we do to our customers and our potential customers that may come into our stores or purchase our ice cream, etc. We want to have a focus related to them. We also want to look at new and different business endeavors. We are already a very diverse business, so what are some new and emerging businesses that we’d like to be involved with? If you look at level three, once again, it’s almost 100% focus more on the business side. For example, our level three looks at how do we look at our vendors? We don’t have a procurement group, for example, but how do we look at the diversity of the vendors that work with us? Then, I talked about kind of that personalization. How do we leverage personalization? I’m not getting a broad segment and customer segment an offer, I’m getting a personalized offer related to how I’ve shopped with our organization, or how I would like to shop with our organization. Once again, leveraging those key diversity pieces into kind of those business-related areas is an important piece.
In conclusion, one of the reasons that I joined UDF is that it’s very much a build from an HR perspective. A lot of the things that looked at our table stakes today from an HR perspective are going to be new for our company, and diversity, equity, and inclusion falls in that category. The positive thing is that we’re not having to unwind anything. We’re starting from scratch in terms of the overall conversation, so our experience is a little bit unique. Hopefully, you’re able to learn a couple of things that you’d like to include in your diversity, equity, and inclusion strategy.
I really want to thank you for your time today. I’ve included my email address. Feel free to reach out to me if you have any questions. If you’d like to see the article that I wrote related to What So What Now What, you can also find it on my LinkedIn page. My name is Mark Wilson again. Last but not least, please leave some comments here on the Quartz Network, we’ll be checking those as well to hopefully continue the dialogue and discussion moving forward. Appreciate your time, and wish you the best of luck on your journey related to diversity, equity, inclusion. Thank you.
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