Is Front-Line Diversity in Retail Enough?
It’s important for retailers to strive for diversity among salespeople, but what about in the C-suite?
Retailers understand that the demographics of customers are changing and in many cases, front line store personnel reflect the changing face of the consumer. But what about diversity in the leadership ranks? Is it worth the effort to break down gender, race and ethnic barriers in the corner offices too?
Here’s the debate.
Diversity in leadership matters.
Tone at the top refers to skin-color too.
|One of every three consumers in the U.S. today is a person of color and one in two is a woman. They are our customers. If our leadership team doesn’t reflect this growing shift, we’ll struggle to compete.||Which means two out of three consumers are not people of color. Let’s worry about this some other day.|
|The pool we draw workers from is changing, too. Leadership diversity is a powerful tool for recruiting top talent from the ranks of women and minorities.||Our recruiting engine works just fine. We don’t have any trouble recruiting people to serve customers – not with today’s unemployment rates.|
|Companies that have diverse leadership teams outperform their competitors in terms of creativity, innovation and the bottom line.||Creativity is over-rated. We’re focused on getting the right products in the right place at the right time. Retail isn’t brain surgery.|
Diversity in leadership isn't worth the trouble.
If customers can’t see it, it doesn't count.
|Diversity is nice to have, but we really don’t need another HR project right now. We have our hands full just keeping up.||This is not another HR project – it’s a business imperative. The multicultural consumer is the mainstream consumer. Diverse leadership has to be part of our culture.|
|Let’s just go with the flow. Demographics will evolve and so will we. No action required.||If we sit back and wait, we lose ground in the biggest battle of all – the battle for top talent.|
|This sounds a lot like a quota system. We don’t need that anywhere in our organization, especially in the C-suite.||This isn’t about quotas, it’s about profits. We can let new markets pass us by, or we can get serious about changes happening all around us—and turn them into a competitive advantage.|
Alison Paul, Vice Chairman and U.S. Retail Leader, Principal, Deloitte Consulting LLP
I have a lot of empathy for retail executives who want to increase diversity within their leadership teams. They’re struggling to find the right women and minorities to bring into the C-suite and with good reason. The war for talent is real. The executive ranks of women and people of color have been hit hard by the recession.
That said, there’s no question that diversity at the top is a powerful asset for achieving and sustaining diversity on the front lines. No matter how high the unemployment rate, top talent is always in demand, especially among women, African Americans and Hispanics.
This doesn’t mean retailers should lose focus on diversity in their stores and showrooms. Not at all. But if you think it makes sense to hire salespeople who can connect with buyers of different genders and ethnic backgrounds, the same rationale applies to managers and executives at every level of your organization.
The business case for diversity in executive leadership is clear. For retailers striving to meet the needs of today’s ever-evolving customer base, fostering a more diverse organization is not only the right thing to do; it’s also the profitable thing to do. The combined contributions of different genders and backgrounds can generate better insights, improve customer and employee loyalty and strengthen your hand in recruiting. It’s a virtuous cycle: more diversity at the top paves the way for more diversity at the bottom – and that’s what it takes to connect with today’s fastest-growing customer segments.
Diversity at the top pays off in two ways. It expands your ability to attract customers from growing segments of the U.S. population and it improves the value proposition you can offer your employees. The right approach to diversity is bottom-up and top-down.
A view from the HR Department
Thomas McElroy, Principal, Deloitte Consulting LLP
The HR function has been leading the way on diversity for years. But a lot of HR executives I talk to these days are wondering if the same old diversity programs are doing the job – especially at the executive level. They’re right to be concerned. Because while those programs continue to be important, in most cases they’re not enough to make diversity a keystone of the executive team in retail.
Just look at the Diversity Inc lists of top companies for executives and you’ll find that retailers are only starting to make inroads. And in retail, there’s a good argument that executive-level diversity is even more important, for some of the reasons outlined by Alison above. So what should HR leaders in retail be doing about it? Nothing short of fundamentally changing how executives approach diversity. That big job starts by making it a business imperative. And in business, you don’t implement an important new imperative by throwing more programs at it. You put it on the C-suite agenda.
Join the Debates
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