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Accountability, open hiring, practical tools — this is the future of DEI

Diversity, equity and inclusion have been hot topics within retail industry conversations for the last few years, but for many businesses, it’s a challenge to successfully roll out – and even for those that have transformed their organisations, it’s an ongoing journey. 

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During the recent World Retail Congress in Barcelona, retail leaders from around the globe discussed what true DEI looks like in a panel featuring Victoria’s Secret chief diversity officer Lydia Smith; Steve Baggi, CEO and founder of KulturaLab; Joseph D Kenner, CEO and president at Greyston Bakery; and Chrystelle Chevalier-Gagnon from law firm McCarthy Tétrault. It was hosted by National Retail Association deputy CEO, Lindsay Carroll. 

Here are some of the key insights.

Victoria’s Secret: A transformation from the inside out

From featuring almost solely thin, white supermodels in its controversial runway shows to now undergoing major change “from the inside out”, Victoria’s Secret chief diversity officer Lydia Smith discussed the US lingerie giant’s DEI transformation. 

Source: Victoria’s Secret

“One of the things we did for the first time last year was introduce DEI goals for all leaders. That meant everyone at the VP level or above was responsible for actually having a goal specifically tied to DEI. It wasn’t just the HR team’s job or the DEI team’s job, but all our leaders. Then we expanded upon that this year and cascaded it to everyone’s roles in the organisation,” said Smith. 

“That culture of accountability is allowing us to see impact and be able to track tangible results.”

Since the Black Lives Matter movement gained momentum in 2020, plenty of businesses jumped on the bandwagon and made large donations at that moment in time. But according to Smith, true community engagement needs to go beyond just writing a check. 

At Victoria’s Secret, the inclusion resource groups identified which community organisations they would like to engage and from there, the groups “owned” the programming and partnership throughout the year. 

“It’s not writing a check. It’s mentorship, volunteering and actually engaging with the community. Your ‘say do’ ratio is the number one thing in authenticity. It’s what helps a brand authentic,” said Smith.

Diversity on the frontline?

In recent years, major brands like Nike, Levi’s and Sephora have made significant commitments towards improving diversity, equity and inclusion. 

However, according to a study conducted by KulturaLab, there seems to be a disconnect between the increased diversity in marketing campaigns and who is actually working on the frontline of those businesses. 

“When we spoke to the frontline, 48 percent of that sample group had experienced hurtful comments or racial abuse in the workforce, 55 percent didn’t feel a sense of belonging within the organisation, 38 percent were actively thinking about leaving their roles. The [DEI] work that’s going on isn’t having the effect that organisations are hoping it will,” said Steve Baggi, CEO and founder of KulturaLab.

“Diversity is one thing, but how do we make everyone feel connected to their organisation and feel safe to bring their best selves to work? For retailers, it’s difficult, with lots of different employees and different locations and with high levels of part-time staff, it makes things even more complicated.”

It’s one thing for the C-suite to talk about their vision for diversity, but that needs to be backed by practical tools for their teams. Employers need to put more work into training their managers to help them create a safe space and to also demonstrate the right behaviours so team members feel they have someone they can trust.

“It’s not easy. Organisations have to help those managers. It’s not something people are naturally equipped to do. A lot of the effort has to be around how we help our managers to help better conversations and engage with employees in different ways, even if representation takes a while to catch up,” said Baggi. 

Opening up hiring opportunities

In 1982, a former Buddhist monk called Bernie Glassman pioneered an employment practice known as open hiring when he launched his own business, Greyston Bakery (which is also known for manufacturing the choc chips in Ben & Jerry’s ice-cream). 

Open hiring is where people from all backgrounds are encouraged to apply and are employed on a first-in, first hired basis – no questions are asked and there is no need for resumes, interviews, background checks or references. These people may have come from refugee backgrounds, experienced homelessness or simply have no experience in the workplace. 

In recent years, major retailers like Ikea, Amazon, Pepsico and The Body Shop have all embraced open hiring with great success. 

“Everyone’s dealing with this labour shortage and there are millions of folks on the sidelines who want to work. We believe open hiring is a great solution to addressing that. We don’t want to be unique, we want to share our model with our organisations,” said Joseph D Kenner, CEO and president at Greyston Bakery. 

“We look at DEI not as a program or add-on, it’s part of how we do business. We were founded on giving people hope through jobs and it’s embedded within the DNA of our organisation.”

Tracking the success of DEI initiatives

Sometimes it can be difficult to measure the success of DEI initiatives, especially when genuine representation can take time within a business. However, it’s important to regularly keep an eye on its progress throughout the year through various measures, advised Smith, who was previously chief diversity officer at US department store Kohl’s before joining Victoria’s Secret. 

“I think you have to measure it, whether it’s through a score card or an annual report, and then check in with the data regularly. But it’s important to have qualitative and quantitative tracking measurements around the work, so you’re looking at numbers every so often and being intentional around the things you want to do to help improve,” she suggested. 

“It’s not so much about setting targets – that can sometimes create some adverse actions – but it’s more about keeping a focus on the numbers. Are you moving in the right direction and can you track it back to specific actions you’re taking?”

Don’t hold back on DEI

Cancel culture is real and consumers are not afraid to call-out virtue signalling when they see it, scaring off some retail businesses from even beginning their DEI journey. 

“What’s holding organisations back is fear of not saying the right thing or not getting it right or not having the perfect plan that unfolds into 20 prongs with different phases. It’s transparency that’s key, I think. It’s internal and external to the business. If you have transparency, it creates trust and loyalty and if you have loyalty, then your customers will come back and it will be easier to retain employees,” said Chevalier-Gagnon.

“How do you achieve this? It’s difficult, but it’s through being very open about where you’re at… and presenting a very open, transparent and truthful situation as to where you are on that journey.”

Here’s what the future of DEI looks like

As years have gone by, gender diversity has improved (although in many cases, there is still a long way to go) but for Smith, the next stage of DEI will further explore other marginalised communities and find ways to offer them a seat at the table. 

“The next evolution is adding different dimensions of diversity and continuing to talk about different dimensions. It’s not just race and gender, it’s gender identity, size inclusivity and people with disabilities. As we see the work evolve, the conversation will evolve as we talk about more marginalised groups,” she said.  

“As far as equity and inclusion go, we’re hearing more about wellbeing and belonging, we’re getting better at defining what inclusion is and identifying tangible ways to measure it, so we can track whether inclusion is getting better. As we continue to make more progress, we’ll have better ways to measure and report on that.”

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Overall, the future of DEI looks promising, as major retailers realise the business benefits of embracing a more inclusive approach and are now looking for practical ways to include commonly overlooked communities, whether that’s their customers or team members. 

About the Author

Matt Newell is the founder and chief executive officer of The General Store, which specialises in retail strategy and innovation and works with retailers in Australia like Rebel, Freedom Furniture, BBQs Galore and Salvos Stores.