Commentary: Chief diversity officers should be more than figureheads
The Chain Store Age article, "Commentary: Chief diversity officers should be more than figureheads," quoted Russell Reynolds Associates' Kalpana Denzel and John Long on why appointing a chief diversity officer (CDO) may make retailers and their shareholders feel better, but may not lead to desired results. The article is excerpted below.
Russell Reynolds Associates recently charted the prevalence of CDOs among the 50 largest U.S. retailers, based on National Retail Federation data, and compared these findings to our broader study of CDOs across the S&P 500. Overall, we found that retail is meeting or surpassing key benchmarks when it comes to hiring CDOs. To start, 64% of retailers have a CDO, compared with 47% of S&P 500 companies
The high prevalence of experienced CDOs in the retail industry is good news. In a world where many companies still attempt to manage diversity and inclusion (D&I) strategies through general HR oversight – or worse, do not address D&I at all — appointing an executive who is dedicated to D&I shows an above-average commitment to getting it right. And getting D&I right is particularly important for retailers who can touch millions of consumers each day through widely-dispersed workforces across a plethora of channels. Setting the right tone at the top may not completely protect retailers from biased sales associates or tone-deaf marketing campaigns – but without it, there’s almost no chance of avoiding them.
In our experience, setting up a CDO for success starts long before placing an executive in the role. At best-in-class organizations, the CEO and executive leadership team must first agree on a core D&I mandate that clearly links D&I strategy to business strategy. In retail, for example, more diverse management teams are more likely to represent the company’s customer base, giving them early insight into emerging trends and the ability to more effectively navigate customers’ sensibilities and preferences. The Estee Lauder Companies puts this into practical terms on its website: “With consumers in 150 countries, it is essential that we continue to have a diverse workforce that understands local relevance and the changing beauty needs of all our global consumers.”
With consensus on why the CDO role is necessary, the CEO and top leaders cast a wide net to find the executive best suited for the job, targeting the experiences and competencies will help the CDO overcome the specific challenges their organization faces. While most retail CDOs come up through HR roles or D&I specific roles, effective CDOs can come from a variety of career paths, including business roles and communications roles. What’s non-negotiable is that the executive is able to influence change throughout the organization without direct lines of authority.
2018 D&I Pulse offers another perspective on how retailers are faring. The survey, completed by more than 1800 executives across sectors worldwide, asks leaders about their perceptions and experiences of their organizations’ cultures, including commitment to D&I. From the 98 retail and wholesale executives surveyed, we find many of the necessary conditions for CDO success are missing.
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