Diversity 2.0

JON SPRINGER

At Delhaize Group, diversity is more about competition than compliance. By weaving a message of diversity and inclusion into all of its efforts and into each of its local banners, the Belgium-based retailer is turning itself into a better place to work, a more valuable contributor to its local trade areas and, ultimately, a faster-growing and more profitable entity.

Led by a chief executive who's passionate about the business benefits of a diverse workforce, and structured to share its best local practices throughout the organization, Delhaize Group is the recipient of SN's annual Champion of Diversity award.

Delhaize's efforts in diversity — and its challenges — differ by region. In Florida, the new Sweetbay banner is working to shed the decidedly unenlightened legacy of the former Kash n' Karry banner while taking advantage of business opportunities inherent in some of the most diverse ethnic markets in the U.S. Diversity at Food Lion in the Southeast is reflected in inspired store formats designed to appeal to particular customer constituencies, as well as in subtle merchandising changes that reflect a more intimate understanding of their customers. And in New England, a long-standing commitment to diversity at Hannaford Bros. — including a re-imagination of the traditional food retail career path — has made its stores the preferred shopping venue for various customer groups and among the most attractive employers in the industry.

Eric Watson, vice president of talent acquisition at Food Lion, also heads the division's diversity efforts; as in all divisions at Delhaize, officials take on diversity duties in addition to their other jobs. Watson described diversity as a “straightforward process” at Food Lion, where leaders committed to the cause have made diversity central to the retailer's business plan.

“Our business case for diversity is very straightforward,” Watson said. “We look where the opportunities are for us to increase our profitability and improve the process of selling groceries. That has to do with the diversity of our customer base, the diversity of our workforce and the diversity of the markets we work in.”

Attention to the vast array of customers and their changing needs has sparked Food Lion in recent years to create two distinct new store banners — the upscale and convenience-focused Bloom and the discount banner Bottom Dollar. In addition, Food Lion has identified some 13 different clusters of customers to whom it can position its stores, and which inform the company's outreach efforts.

“What's important is that after you recognize there's a diverse customer base, you've got to create an environment in the store that's comfortable and inclusive,” Watson explained. “You have got to make sure the shopping experience is one that makes people feel, ‘I am included. I can find the things I want. I get treated well. This store reflects who I am.’”

Concurrently, Food Lion works to ensure the experience for its employees sparks similar feelings of inclusion, Watson said. This helps the business by reducing turnover and also by attracting a diverse field of employees.

“We've been able to create what I call an employee value proposition, or an associate brand, that helps attract people from different backgrounds and different areas of diversity — people with disabilities, sexual orientations and ethnicities — who want to work for us,” Watson said.

“Where the old model of diversity was compliance-based — it was, ‘Here's what you do and this is the consequence’ — to be successful in diversity today, you have to look at where you want to be and what steps you need to take to get there,” Watson added. “It's about creating an attractive space that people want to come to.”

Watson believes that educating employees, while useful, is insufficient by itself to properly sustain diversity, or even to retain a diverse workforce. What's crucial, he said, is first to create a culture where diversity is embraced every day.

“We have a statement around here that goes, ‘Bring your whole selves to work.’ We want people to see this as a place where they can come and be successful,” he said. “Culture comes before demographics in a successful strategy.”

He said Food Lion today is “increasing its ability to work in a more inclusive environment,” while looking into better understanding generational diversity, which will help the stores serve an aging Baby Boomer population while attracting workers from Generation Y.

“There is no destination in this work — it's a journey, just like business,” Watson said. “You can't get to a point and say, ‘We're done.’ We have to continue to increase the business success of this organization by having a diverse workplace in which people feel comfortable.”

CULTURE SHIFT AT KASH N' KARRY

The change from Kash n' Karry to Sweetbay involved considerably more than changing the signs out front and the merchandise inside. For Mike Vail, changing the company's culture was probably the hardest — and most important — transformation.

“When I came down here from Hannaford in 2001, my view of Kash n' Karry was that they had a strong case to get into diversity,” said Vail, senior vice president of operations at Sweetbay, who also oversees diversity at the retailer. “They had not been investing at all in diversity, and a lot of people were in what I'd call an unaware state. They were good people, but they had not had the benefit of a strong diversity training program and an inclusive organization.”

Partly as a result, Vail explained, the retailer suffered from market share erosion and was the defendant in a class action lawsuit from female employees (since settled). “We had a very Caucasian, male-dominated workforce, not only at the corporate office but also in the stores,” he explained. “Down here in Tampa, with such high levels of African American and Hispanic men and women, that was not where it needed to be.

“It was not because of high levels of racism or bigotry, but a lack of understanding of how to interact with different cultures and make good climates for people from different cultures,” Vail said. “We were also not competing with other organizations for talent. It was creating business problems and organizational liabilities. I don't want to paint too bad a picture, but a hostile workplace was something we were concerned about.”

To get diversity going at Sweetbay, officials took up training in 2002 and 2003 and launched a business case for diversity, along with the program to revamp the retail chain, in 2004.

“We began to treat diversity not as something we treated from a limited-liability standpoint, but as something we could use to beef up the talent in the organization and help accelerate the sales and market share growth we needed to have,” he said.

Sweetbay remade its workforce by targeting women, African American and Hispanic candidates to fill various midlevel positions and provided what Vail called “tremendous support” to keep them in the franchise. These efforts were guided by outside help from Great Island Consulting, a Portland, Maine-based human resources firm.

It also hired a cartoonist to help graphically depict the “journey” Sweetbay is making toward diversity. This journey depicts six conditions ranging from “Toxic” — defined as destructive attitudes toward diversity — and proceeding to Unaware, Aware, Practicing, Integrating and, finally, Leveraging. These are illustrated as aisles of a store, Vail said.

Sweetbay's commitment to diversity has forced it to make some difficult decisions, including standing behind a “zero-tolerance” policy regarding harassment, said Vail. This has resulted in the termination of “five or six” otherwise high-performing store managers, he said.

“In the past, this [harassment] may have gotten them a hand-slap or a performance notation, but their contributions to the bottom line in many cases would earn them a pass,” Vail said. “But we've taken a hard line.”

The journey has provided some learning experiences, Vail added. For example, when Sweetbay opened a store in a blighted section of St. Petersburg, Fla., in 2004, it was not enough just to hire local residents to staff the store.

“We had hired a number of folks from the community; we opened our prototypical store there in terms of the pricing and offering, but it opened at 50% of the pro forma sales,” Vail recounted. “We had to get out into the community and the churches and talk about what we were doing — the kind of grassroots thing that corporate supermarkets don't do. We had to take a very hard look at the prices and products we had there and changed the pricing and availability in a major way, based on what people in the community wanted and what they were willing to pay for it.”

By adjusting merchandising and selection at the store, sales rebounded within six months and remain strong, Vail said.

“It's a great example of leveraging what we didn't know before, embracing our people, and offering a different experience at that store than at others in the chain,” he said. “Our brand has to be elastic enough to be successful in ethnic areas. Part of that is price, promotion and selection, and a huge part is people.”

Sweetbay's trade area along Florida's Gulf Coast exposes the retailer to a variety of customer bases, noted Pam Heath, director of pharmacy operations. Leveraging a culture based on diversity helps reach those customers, build sales and profits, and in turn it helps Sweetbay find and retain employees, she said. This provides a competitive advantage in the war to find good employees, especially in such competitive fields as pharmacy.

“We go from Naples to Gainesville, from colleges to retirees and everything in between,” Heath said. “In pharmacy, we have built a business case for diversity, which we exhibit in hiring and recruiting,” she said. “My people like that. They say this was a place where they would feel comfortable, and accepted. Pharmacists are one of the most trusted professionals, so you want them to be in a position where they are comfortable.”

'WE WILL GET PAID BACK 10 TIMES'

Heavy snow is falling on the December morning when Beth Newlands Campbell is reached by phone to discuss diversity efforts at Hannaford Bros., Delhaize's Scarborough, Maine-based division. And as often the case, that means there are kids around.

“There are a lot of people who feel their schedule is flexible enough to work from home today. And those who have decided to come to work have taken their kids with them,” Newlands Campbell explained. “I barely think about that anymore, but I would guess that's not something that happens at a lot of other companies.”

Diversity — what Newlands Campbell defined as “mutual respect of all people” — has been a long-standing distinction at Hannaford and shows itself not so much in the makeup of its stores, but in the fact that the cafeteria has a supply of high chairs, and there's a room devoted especially for nursing mothers.

“We've worked really hard to have a diverse workforce, even though we operate in one of the least diverse states from an ethnicity standpoint,” Newlands Campbell said. “But it's relatively easy to hire a diverse workforce. What's difficult is keeping a diverse workforce, and that's what makes Hannaford different. What keeps folks here is the culture.”

Newlands Campbell, senior vice president of operations at Hannaford and head of its diversity efforts, takes special pride in a culture at Hannaford designed to make its employees comfortable and happy just being who they are.

“For any woman in this industry, it can be a scary experience to tell your supervisor you're going to have a child,” she said. “That's not what it's like here. It's a moment to celebrate, not just to accept.”

At Hannaford, using diversity to guide recruitment and retention has helped overthrow the traditional supermarket career path, where the fastest young stockers — generally males — tend to earn promotions to managerial roles and continue to ascend in the ranks. “You have a whole culture based on rewarding the fastest stockers,” Newlands Campbell said. “That's really been the only career path in this whole industry.”

At Hannaford, efforts are made to “tap the whole population” for candidates in stores and in the corporate office, with the acquisition of broad skill sets encouraged by promoting workers laterally between departments and store categories. This “diversity of opportunity” provides Hannaford's leaders with a depth of understanding and helps develop a long-term perspective, Newlands Campbell said.

“It's very much about learning the whole business and developing a longer-term perspective here,” she said. “It's not about being the most productive the very next day, but over time, the payoff is huge.”

Allowing workers to take their kids to work when necessary, and offering flexible work schedules that not only allow but also encourage parents to take time off to see school plays, has a similar payback, she said.

“You might say, ‘Well, that's not a very productive day, with kids running around the office,’ but over the longer term it's productive when people are happy and comfortable with their work environment,” Newlands Campbell said. “People feel comfortable enough to do what they have to do and not cheat the clock. We will get paid back 10 times for whatever they chose to do today.”

Hannaford's internal philosophies have external benefits. For example, its reputation as a positive environment for gay and lesbian employees has helped Hannaford become the preferred supermarket for those groups in the community. That reputation is bolstered with product and merchandising selections that appeal to those groups and extends to decisions about where the store directs its charitable donations, Newlands Campbell said.

Hannaford maintains its focus on diversity by having group strategy sessions that include people representing different age groups, ethnicities and lifestyles. A particular focus today is on gaining a better understanding of Generation Y.

“We need to stay connected, to make sure not only that we stay relevant to that group in our shopping place, but also to work for us.”

'It's Unexpected, So We Laugh'

The call for diversity at Delhaize is not dictated from the top, but is encouraged with a smile.

“If diversity was not embraced at the company level, we would have serious worries,” said Nicolas Hollander, executive vice president of human resources and organization development at Delhaize Group's corporate headquarters in Brussels. “But because it is [embraced], the only task left to us is to make sure diversity practices from all our operating companies across the world are lifted to the group level so we raise the visibility for other operating companies that would be interested in developing new approaches.”

According to Hollander, diversity is a long-standing value within Delhaize that came to the forefront as part of the “support structure” style of corporate oversight and best-practices sharing between divisions, as conceived by Pierre Olivier-Beckers when Beckers became chief executive officer in 1999.

“When Pierre took over, Delhaize Group was a conglomerate of companies with financial ties, but no management ties, matrix functions or sharing,” Hollander said. “He set up a support structure, and within that put whatever he valued and thought could help the companies be better, to gain from one another and bring people together. This is helping them to do what some companies call corporate social responsibility, but which for us is a duty.”

One way the corporation shares diversity is though humor, Hollander said. A sense of humor — particularly the ability to laugh at oneself — is itself one of the company's core values, and illustrates how diversity is woven into Delhaize's culture.

In the U.S., Food Lion's Bloom and Bottom Dollar brands have each infused their brands with a knowing sense of humor. Bloom introduced itself with ads showing a pregnant shopping cart and encourages customers, via “The Partridge Family” television theme, to “shop happy!” At Bottom Dollar, employee T-shirts inform shoppers they are “black belts in price chopping.”

The message of diversity in an ad campaign? No joke.

“A sense of humor very often comes when things that have no link at face value come together: It's unexpected, so we laugh,” explained Hollander. “Diversity brings together things, people and actions that otherwise would have little chance to meet. Laughing at yourself is all about knowing yourself, and looking at things that are different and letting them come to you in an unbiased and open way.”