diversity & inclusion the new business · pdf filediversity & inclusion the new...

Diversity & InclusionThe New Business Imperative

Tonie LeatherberryPrincipal, Deloitte Consulting LLP

November 16, 2012

Monday, April 8, 13

Copyright © 2012 Deloitte Development LLC. All rights reserved.2

Diversity is a Fact. Inclusion is a Choice

INCLUSIONmeans behaviors, policies, and practices that allow all stakeholders to achieve their full potential

DIVERSITY is a

collective mixture of

individuals, cultures,

and organizational

expertise

Diversity includes everyone.

Source: The Changing Consumer and the Workforce Imperative, Network of Executive and Deloitte, 2011

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“The business case has been demonstrated quite thoroughly. When you’ve got over one-third of this country as people of color, a diverse workforce benefits in terms of connection and creativity. Whether Latino, African American, Asian – regardless of the group – it is hard to form a brand relationship unless you have people that come from those cultures and ethnicities that can connect.”

— Don Knauss, Chairman and CEO, The Clorox Company

Source: Knauss, Don. Chairman and CEO, The Clorox Company. Interviewed by Deloitte employee via telephone, 19 March 2010.

Diversity is More Than Just a Buzzword

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Diversity Has Many Layers

Identity

Function

Role

Credentials

Level

Tenure

RegionWorkExperience

IndustrySpecialization

ServiceLine

ImmigrationStatus

Socio-Economic

Status

Education

ThinkingStyle

GeographicLocation

FamilyStatus

WorkingStyle

Class

Language

Appearance

ValuesAge Race/

Ethnicity

Religion

Mental/PhysicalAbility

GenderSexual/

Orientation

Personal Cultural Organizational

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The Marketplace & Workplace Are Changing

Beginning in 2011, > 50% of children younger than the age of one were minorities1

By 2025 > 50% of the US population may be multicultural1

By 2042, minority groups may be the new majority1

Going forward, 85% of the US’ population growth may come from ethnic groups of color2

Only 3% of the world’s future population growth may come from the developed world1

By 2014, the global earning power of women is expected to overshadow the growth in the gross domestic product of China and India — combined3

93% of Fortune 500 companies say that diversity is an important business drive4

1. Source: Burgos, David and Ola Mobolade. Marketing to the New Majority: Strategies for a Diverse World. New York: Palgrave Macmillan, 2011.2. Source: U.S. Census Bureau, ‘‘Annual Estimates of the Population by Race, Hispanic Origin, Sex and Age for the United States: April 1, 2000 to July 1, 2008 (NC-

EST2008-04)’’ (released May 14, 2009).3. Source: Jeffrey Matthew Humphreys. The Multicultural Economy 2008 (Athens, Ga.: Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2008).4. Source: Tudor, P. “Adding Value with Diversity: What Business Leaders Need to Know.” American Institute for Managing Diversity. 2007.

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http://www.census.gov/popest/national/asrh/NC-EST2008-asrh.html

http://www.census.gov/popest/national/asrh/NC-EST2008-asrh.html


1990 Buying Power

2014 Buying Power

(Projected)% Increase (1990-2014)

African American

$318 billion

$1.1 trillion1 246%

Hispanic $212 billion

$1.3 trillion1 513%

Asian American

$117 billion

$696.5 billion1 495%

Native American

$19.7 billion

$82.7 billion1 320%

White $3.8 trillion

$13.1 trillion1 245%

LGBT Not avail. $835 billion2

Understanding the cultural diversity of

your consumer base is important to capturing

market share

Minority Groups Have Unprecedented Buying Power

1. Source: The Multicultural Economy 2009, Selig Center for Economic for Economic Growth2. Source: The Buying Power of Gay Men and Lesbians 2008, Witek Combs Communications

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1. Source: http://www.huffingtonpost.co.uk/2012/11/14/eu-mandatory-quotas-proposals-scrapped-in-favour-of-softer-approach_n_2128296.html:2. Source: http://ddp-ext.worldbank.org/ext/DDPQQ/member.do?method=getMembers&userid=1&queryId=189 3. Source: Catalyst, The Bottom Line: Corporate Performance and Women's Representation on Boards (2007)

Diversity & Global Markets

Women are increasingly crucial European governments mandates for board

positions are currently being debated1

In a majority of countries, women represent > 50% of college degrees2

Companies with more women directors, significantly outperform companies with the lowest percentages of women directors3

Growth strategies for emerging markets (BRIC and MIST): Invest in localized R&D

Utilize local ingredient and rituals

Understand local distribution/consumption patterns

Build local affinity communities

Work with local businesses & political forces

France

40%

Italy 33%

Belgium 33%

The Netherlands 30%

Norway 40%

Spain

40%

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Age is Yet Another Component of Diversity

Growth in U.S. Age Groups1

Businesses should meet the needs of an aging

US population while also targeting younger

generations who are the consumers and

employees of tomorrow

1. Source: US Census Bureau2. Source: U.S. Bureau of Labor Statistics

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So What Can Inclusion Do For Your Business?Deloitte’s Enterprise Value Map™ helps to frame the business case for Diversity and Inclusion

Attract and retain top talent Provide leadership

development opportunities

Provide mentoring relationships

Reinforce culture of meritocracy

Increase productivity through improved morale

Address costs associated with recruitment, training, and retention

Reduce workforce costs resulting from employee relations/litigation/settlements/turnover

Increase efficacy of the existing initiative, programs, and communications

Leverage diverse ideas to develop innovative market-relevant product and service ideas

Identify new market segments and opportunities

Sell more effectively to growing diverse markets

Mirror the changing complexion of customers and customer organizations to more effectively compete

Leverage marketplace recognition and eminence to attract new business

Improve public, shareholder and investor perceptions

Strengthen corporate social responsibility reputation

Enhance brand image through strength of culture and eminence of people

Shareholder Value

OperatingMargin

SG&A COGS

AssetEfficiency

PP&E Inventory AR/AP

RevenueGrowth

Volume Price Realization

Expectations

Co. Strengths

Ext. Factors

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The Corporate Pyramid Model inhibits the flexibility to attract future workers and consumers

The Bridge Model connects consumers to a business’ leadership via a more engaged workforce and more transparent flow of information

The Anchors: Consumers and Leadership, which depend on each other & hold the structure together

The Deck: Workforce, supporting the bridge with a sense of purpose

The Beams: Communication and information networks, fostering a multi-dimensional dialogue

FIT Has Proposed Three New Models for Inclusion

Cultural fusion is already apparent in food, fashion and music

Fusion can be incorporated into beauty using three elements

Combined, these allow brands to:

- Connect with diverse customers

- Spur inspiring product concepts

- Build an emotional connection

The Bridge1 The Bonding Helix2 Beauty Fusion3

Indigenous Ingredients

Sensorial Experience

BeautyRituals

The growing diversity of the world’s consumers means brands must engage in 1-on-1 conversations

Today’s consumers are unique and have power to influence others

Brands must build relationships that include loyalty and influence

Six Bonds of the Helix:

- Consider

- Evaluate

- Buy

- Re-Evaluate

- Loyalty

- Influence

This is only possible using digital fingerprints and technology to create customized digital content

1. Source: Diversity and Global Leadership: The Bridge 2012, Fashion Institute of Technology2. Source: Diversity and Global Marketing: The Bonding Helix 2012, Fashion Institute of Technology3. Source: Diversity and Global Product Development: Beauty Fusion2012, Fashion Institute of Technology

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Leading Companies Leverage Diversity for Innovation

“Diversity brings innovation and relevance. I think the greatest benefit we have found is that diversity drives innovation. People from different backgrounds engaged in thoughtful debate leads to groundbreaking

solutions. When you have a team that is engaged and reflective of your consumer base, you can better understand, anticipate,

and meet the needs of your guests.”

— Tracey Burton, former director of diversity, Target Corporation

Source: Burton, Tracey. Former director of diversity at Target Corporation. Interview by Deloitte employee via telephone, 5 May 2010

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Beauty is a Profitable Industry

Beauty Manufacturing(2011 at-a-glance)1

Beauty Fragrance and Cosmetics Stores

(2011 at-a-glance)2

While industry revenue dipped in 2009 (by only .1%) for the first time in five years due to weakened worldwide economy, things turned around in 2010 and 2011

Revenue in 2012 is estimated to grow by 2.2% to $54.9B (making the annual growth rate over five years 1.3%)1

1. Source: IBISWorld Industry Report; Cosmetic & Beauty Products Manufacturing in the US, March 20122. Source: IBISWorld Industry Report: Cosmetic & Fragrance Stores in the US, March 2012

Statistics Snapshot

Statistics Snapshot

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“The popularity of the ‘white, blonde and blue-eyed’ look has been declining for some time.” — Geoffrey Jones, HBS professor & author of Beauty Imagined

Cosmetics companies are adapting to growing markets such as China and Latin America, expected to overtake North America within four years1

But Beauty Companies Should Adjust To Remain Profitable

1. Source: The Observer: Faces of Change, Zoe Wood, July 2011

Iman –

Credited as the world's first ethnic supermodel

Liya Kebede – The first black model in Estee Lauder's history

Du Juan – Hailed as the first Chinese supermodel

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Brand X Idealist line1

Brand Y “My Black is Beautiful”2

Brand Z , leverages different strategies to sell to all ethnicities3

Leading Brands Already Use Diversity Driven Marketing

1. Source: NYFashionCrit: http://nyfashioncrit.wordpress.com/2011/03/23/estee-lauder-shows-some-diversity-in-its-new-ad-campaign2. Source: Proctor & Gamble:http://www.myblackisbeautiful.com/about/3. Source: Beauty Packaging: Lining Up for the Latino Market: http://www.beautypackaging.com/articles/2009/03/lining-up-for-the-latino-market

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http://nyfashioncrit.wordpress.com/2011/03/23/estee-lauder-shows-some-diversity-in-its-new-ad-campaign





Brand A

Along with Deloitte, sponsor the “Diversity and Performance” Chair at ESSEC1

Solidarity Sourcing Program has helped 14,000 economically vulnerable people find work2

Brand B

Foundation For Woman has raised $175M for breast cancer research, providing detection programs to 17M women in 58 countries3

Signed the CEO Statement of Support for UN’s Women's Empowerment Principles Report4

Leading Brands Embed Inclusion Within Organizations

1. Source: http://leadership-diversity-chair.essec.edu/2. Source: L’Oreal: http://www.loreal-finance.com/eng/news/solidarity-sourcing-825.htm 3. Source: Avon: http://www.avonfoundation.org/causes/our-impact/4. Source: http://www.unglobalcompact.org/Issues/human_rights/equality_means_business.html

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http://leadership-diversity-chair.essec.edu/




http://www.loreal-finance.com/eng/news/solidarity-sourcing-825.htm

http://www.loreal-finance.com/eng/news/solidarity-sourcing-825.htm

http://www.avonfoundation.org/causes/our-impact/






http://www.unglobalcompact.org/Issues/human_rights/equality_means_business.html







The Business Case For Diversity According to Deloitte

https://deloittenet.deloitte.com/About/Bus/Talent/Pages/Diversity.aspx

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Lessons From Our Experience: There Is No Silver Bullet

Inclusion driven as a business case

Leadership commitment from the top

Accountability – what gets measured, gets done

Benefits accrue to the organization

Continue to innovate

Engage non-minorities, men from the beginning

Share leading practices

Continue to innovate by challenging the status quo

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Copyright © 2012 Deloitte Development LLC. All rights reserved.© 2010 Deloitte Touche Tohmatsu

18

Creating the Preferred Workplace Requires Change

Catalyst Research1 suggests that a well-designed strategy, not separate programs, makes all the difference. The strategy should be:

Business-based

Focused on Top Priorities

Integrated into Business Strategy

And Driven By:

Solid Business Case

Senior Leadership Support

Effective Communication

Accountability and Metrics

1. Source: http://www.catalyst.org/

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Leaders Must Be Accountable and Engaged

External Advisory Board(s)

Initiatives that are integrated into marketplace

Multiple benefits to attract/retain people

Education and communication

Surveys to measure results and impact

Incentives based on targets and retention plans

Alliances with higher education

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Deloitte is committed to growing leadership skills at various levels in the organization

Deloitte University (DU) is an embodiment of this commitment to developing its people

Including Managing Principal, Diana O’Brien, Deloitte Consulting LLP and Chief Customer Officer, Pete Sackleh, Deloitte LLP, DU is led by a diverse array of leaders

DU’s commitment to diversity shows, as:

- Younger employees work hand in hand with senior practitioners

- People from all Deloitte’s offices and practices nationwide work together to solve problems

Deloitte University Fosters Values In a Diverse Workplace

3M+Learning hours in FY12 (~1M at DU)

22KProfessionals attended learning and networking

3,500Partner, principal, director visits

~50Client visits; 50 more in the planning stages

Note: Deloitte University statistics provided are aggregate for FY12 and not specific to Deloitte's Retail & Distribution practice only.

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Inclusion Is No Longer About Doing The Right Thing…

Right Thing to Do

Increased Diversity Representation

EEOC Compliance

Diversity Programs

Value

Innovation and Creativity

New Market Penetration

Customer Loyalty

Effective Global and

Cross-Cultural Teaming

Global Leadership

DevelopmentBrand

Reputation

Knowledge Transfer

Employee Satisfaction, Engagement

and Productivity

Acquisition and Retention of Top Talent

Business Enabler

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Disclaimer

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2012 Deloitte Development LLC. All rights reserved.Member of Deloitte Touche Tohmatsu Limited

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