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AIA Diversity and Inclusion > Tools for Firms > Diversity and the Bottom Line

Diversity and the Bottom Line
By Armando Gallardo, AIA
AIA Board Diversity Council

Although much of what diversity attempts to accomplish is difficult to measure, observations indicate a clearly visible change in the complexion of firms and companies. In addition, changes most often refer to more openness in discussing issues around diversity, more self-expression in the workplace, participation in networking groups, better management practices and behaviors, and role modeling from the top of the organization. The general opinion of companies that have provided strong diversity programs is that diversity in its people at all levels from managing executives to entry level employees provides a better understanding of its clients, and customer needs. Thus they are able to better deliver their products and services. The most difficult task for companies seems to be the ability to provide a tangible tool to measure how diversity has affected their bottom line. The success of some of these blue chip companies notes that their success is reflected in the diversity of their teams.

Although many US companies boast diversity programs, unlike PepsiCo, few companies can say that it has provided a tangible business advantage to their bottom line. PepsiCo refers to its diversity and inclusion program as their “talent sustainability” program. They have created and instilled a Global Diversity and Inclusion Governance Council composed of internal and external thought leaders and co-chaired by their Chairman and Chief Diversity Officer. Their Council is focused on raising the bar on diversity and inclusion capabilities and creating a sustainable and differentiated competitive advantage for PepsiCo.

The idea that a commitment to a strong diversity and inclusion mission provides the company a “competitive business advantage” is intrinsic to PepsiCo’s business and corporate mission statement. They not only include this mission within the United States but it is incorporated within the company world-wide. Their theory is that this program allows them to attract and recruit the most talented people which ultimately affect the bottom line.

PepsiCo U.S. Diversity Inclusion Statistics Year-End 2007

 

Total

Women

%

Minority

%

Board of Directors*

10

3

30

3

30

Senior Executives**

28

3

11

12

43

Executives (U.S.A.)

2,326

763

33

470

20

All Managers (U.S.)

10,862

4,037

37

3,003

28

All Employees (U.S.)***

58,532

15,125

26

17,936

31

At year-end 2007 we had approximately 185,000 associates worldwide.

*Our Board of Directors.
**Includes PepsiCo Executive Committee members listed here
***Includes full-time employees only.

Diversity News Journal selected the top 10 winners of the annual International Innovation in diversity Awards of which PepsiCo was select the number one company; others include GM, New York Life and Entergy, reflecting a broad array of industries moving this mission to the forefront.

The financial industry has taken a similar approach to diversification. Their trade institute, SIFMA (Securities Industry and Financial Markets Association) provides its members (Credit Suisse First Boston etc.) with support in developing diversity within their industry. They provide examples and references to metrics (EEO, Affirmative Action) means of measuring diversity and its impact to an organization, there by helping provide a framework for establishing a strategic approach to diversifying their company. There are no guarantees to increase in productivity due to diversification; however, some companies have made diversity objectives accountable for 20-25% of management bonuses and incentives.

Construction companies seem to be ahead of the curve regarding putting a Diversity program in place. Turner Construction notes that diversity and inclusion in their company facilitates the exchange of new perspectives and ideas ultimately providing the best solution for their clients. Their premise is that when all employees feel they can achieve their full potential, quality and productivity thrives. In addition Turner is very proactive about getting involved in their community…their client’s communities. Turner instituted the YouthForce program in 1989 to guide youth, especially minority youth toward careers in the construction industry.

As a member of the service industry, design firms recognize that their greatest assets are their people. The bottom line is that if your people are successful, and productive, your firm’s bottom will be reflective of financial success.

References:

http://www.sifma.org/services/hrdiversity/html/measurement.html

http://www.pepsico.com/Purpose/Diversity-and-Inclusion/Articles/Profiles-In-Diversity-Journal.htm

http://www.pepsico.com/Purpose/Sustainability/Sustainability-Report/Talent-Sustainability.html

http://careers.tcco.com/lifeatturner/Environment_Diversity.htm

 

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