Organization DE+I practices are relevant to the retail industry, just as all other industries. The words “Diversity”, “Inclusion”, and “Equity” have been floated around by organizations, in some capacity, with increasing exposure in the last few years. Sentiments around social issues have been exacerbated by the efficiency of social media and concentrated into people’s lives throughout the first completely global lockdown in recent history. This rather potent combination of circumstances has left many companies, including retail organizations, scrambling for answers and quickly trying to identify a plan of action. Creating an organizational understanding of the issues rooted in the movements for social change and equity in the retail workplace requires the nurturing of an internal culture that champions and embodies the principles of Diversity, Equity & Inclusion.
True diversity should encompass both inherent and acquired traits. For example, race and gender are inherent traits that you are born with. If you take diversity a step further, job experience, workplace tenure and areas of expertise are acquired traits that should be considered when building a diversity framework. Like diversity, equity goes beyond equality. Equity is looking at the fairness and justice of processes and ultimately outcomes. Equity typically comes up in the context of compensation and talent management. While pay equity is critical, providing equitable opportunities for training and development, as well as in recruiting processes is also critical to providing an equitable workplace.
Lastly, inclusion is not just inviting people into rooms and spaces to meet a quota. Inclusion is ensuring that all employees feel valued, heard, and respected in the workplace. It supports the idea that employees have their own autonomy and ownership of their roles and development within the organization, and that the things that make them different are celebrated and not simply tolerated. Inclusion is one of the more difficult aspects of DE+I to correct, because it is a feeling and subjective.
Why are Organizational DE+I Practices Relevant to the Retail Industry?
Due to the “experience economy” businesses no longer simply transact with customers, they interact with them using specifically curated experiences digitally, physically, and via virtually every possible hybridization of the two. The experience economy is driven by organizations understanding the public pulse through every avenue possible, leveraging emotions ranging from nostalgia to patriotism. Every byte of data contributes to the elaborately constructed and actively managed public persona for something as abstract and inanimate as a brand. And, as many retailers employ people across the country and with widely ranging demographics, incorporating organizational DE+I practices are extremely relevant to the retail industry.
Organizations that interact with customers, and have their brand closely connected to the shopping experience, are the ones with the most at stake. The socially conscious, highly informed shopper adds another layer of complexity to the branding mechanism of any retail brand. Given the nature of the challenge, how can it be addressed? For decades, retailers have monetized public sentiment by crafting brand identities, giving life to these brands. If they want to continue to exist in the “experience economy” in the same capacity, they need be as socially conscious as the very population they are trying to mimic and address.
Focusing on the 4 A’s of DE+I
There are 4 steps required to begin a sustainable transformation of organizational DE+I practices. The simplest way to remember these steps is to remember the 4 A’s:
- Awareness: How do I know something needs to be done
- Action: What specifically should I do?
- Authority: Who should do it?
- Accountability: How do I make sure it gets done?
Organizations have been making commendable strides in each of these areas. Contexts vary but the intent remains consistent.
Similar to the drivers of organizational change, awareness is contingent on the layered understanding of external factors, internal factors, and the balance between the two. Retail-based businesses have been relatively more adept than most at gauging public perceptions. By embedding themselves quite intimately in the public sphere, retailers are well positioned to gather information and data. Managing, reporting, and leveraging that data to create actionable insights requires an investment of time and resources.
Proactively creating data-driven awareness of the external social landscape is important but not as crucial as fostering a culture that is representative of the change it aims to execute. More and more public companies are publishing annual diversity reports, and Forbes is providing rankings by organizational DE+I practices – customers are extremely aware and retailers must be, too.
Responses to external variables are likely going to be tracked back to how the underlying principles are championed internally. Understanding the organization’s DE+I climate is absolutely critical to any developmental work. An organization may spend valuable resources on workshops to improve social awareness among the staff, not knowing that the already socially aware staff feels like investment is needed to improve DE+I in recruiting. Clarkston Consulting recently conducted surveys at a beverage company, collecting data to build executive awareness of how the staff felt about the organization’s DE+I practices and what they believed was needed. As IDI (Intercultural Developmental Inventory) certified administrators, we were able to ask targeted questions to gather meaningful and relevant data. Clarkston’s analytics practice leveraged the Insights to Actions platform to analyze that data and provide the business with critical insights about the organizations current climate and how to identify the best courses of action in the future.
After building foundational awareness internally, it is time to develop an actionable strategy for execution. Given that companies in the top quartile for diversity in staff are 36% more likely to outperform their less diverse competitors, the opportunity cost of inaction could make a critical difference in a competitive landscape. In addition to the business case, the central position of brands warrants it being a social responsibility too. Retailers’ actions have been mixed, providing learnings from both ends of the spectrum. Morrisons grocery stores found that their autistic customers had a very challenging experience in their stores due to the music and general noise. Partnering with the National Autistic Society, they created quiet hours, specifically for those customers and received a very positive response. On the other end of the spectrum, Anthropologie collected data to develop their ‘ideal customer’. Understanding customer demographics is fairly standard but what they did to those who didn’t meet that standard is not. The action in response to those findings was having store employees follow certain customers around the store – disproportionately targeting people of color. Moschino did the same, labelling Black shoppers as “Serena’s”, and following them in stores in a similar fashion. Assessing the information that the ‘Awareness’ stage brings through a biased lens can skew the actions unconsciously. Thus, furthering the case for nurturing a holistic mindset internally before taking action.
For many people, the word authority is synonymous with authoritarian, rather than authoritative. The former evokes feelings of condescension, while the latter suggests trusted expertise. To successfully implement a sustainable DE+I strategy, leadership must exemplify the latter and lead with actions and conviction. To demonstrate expertise in DE+I, it is critical to treat initiatives like all other business initiatives when it comes to tracking, performance, and accountability. L’Oréal provides an outstanding example of how executive DE+I commitment delivered with authority can reverberate throughout the entire organizational ecosystem. Their organizational DE+I practices are monitored and tracked by their Global Diversity & Inclusion Advisory Board. To ensure that they are not blindsided by a biased lens or groupthink, 50% of the board is made up of external members including academics, social entrepreneurs, and activists among others. By providing clear direction, L’Oréal has tackled issues ranging from Ageism to enabling suppliers to hire people with disabilities.
What doesn’t get measured doesn’t get managed. Treating DE+I like all other business initiatives will help drive the success of your action plan. Make sure that there are metrics and teams in place to review the plan on a consistent basis. The outcomes of these reviews should be incorporated into CSR and annual reporting. The feedback from these reviews can ultimately help inform future of your organization, so effective tracking is key. The best way organizations have maintained a strict sense of accountability is by being transparent. Publishing annual reports strictly pertaining to DE+I. Target provides a great example among retailers who have adopted the trend. Publishing findings essentially creates benchmarks to measure progress by and also to measure the success that investments in DE+I can have. Target goes a step further and formalizes those benchmarks by creating a 2025 goal and annual milestones that measure progress towards that goal.
For the most part, retailers have been making strides towards a more diverse, equitable and inclusive future. There is no single blueprint as to what works and what doesn’t. Especially for retail, where brands have to keep up with the evolution of ideas and public thinking, it is important for companies to innovate and invest in DE+I.
The most sustainable execution for retailers will require them to look inward and champion the ideals they aim to represent. Then, build on that mentality with as much pertinent information from their ecosystem as possible and use it to drive actions that are actively tracked against progress towards a long-term vision. It’s quite easy to summarize in a few sentences what would be a lifelong pursuit. However, it is a very rewarding process, one that Clarkston Consulting has been privileged to be a part of at numerous clients. Let us guide you along the path to a more diverse, equitable and inclusive future.
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