COMMITMENT TO DIVERSITY STARTS AT THE TOP, RETAILERS SAY

David Orgel

WHITE SULPHUR SPRINGS, W.Va. -- Wal-Mart Stores is underscoring its commitment to diversity initiatives and increasingly trumpeting these efforts to counter critics, said Pat Curran, senior vice president, operations.

Curran, speaking at the Grocery Manufacturers of America's Executive Conference here, outlined a list of corporate programs that she said demonstrates the giant retailer's leadership in diversity. She spoke as part of a retailer panel, which included Kathy Herbert, executive vice president, human resources, Albertsons; Dawn Hudson, president and chief executive officer, Pepsi-Cola North America; and Regenia Stein, vice president, strategic accounts and category management, Miller Brewing Co. The panel moderator was Joan Toth, executive director of Network of Executive Women.

"Wal-Mart is under attack regarding diversity, the environment and other things," Curran said. "When you're the largest company, you get hit. We have always done the right thing. But in the past we let our actions speak for themselves. Now we have to go out and tell our own story."

The company instituted an office of diversity last year to help lead and monitor its efforts, she said. "All of the officers are held accountable for placement goals," she explained. Failure to achieve diversity goals last year meant an individual lost 7.5% of their bonus, and this year the amount was raised to 15%, she said.

The diversity push is led by H. Lee Scott Jr., president and CEO, who holds roundtables with groups of associates to discuss the issue, she said.

Wal-Mart management is required to take classes that address the subject of minority and female associates. "We hold managers accountable, right down to the assistant manager level," she said. "We talk about inclusion. We bring it to the grass-roots level."

Wal-Mart also operates resource groups and a mentoring program and learns best practices from other parts of its global organization.

Albertsons' diversity efforts are also driven from the top of that organization, Herbert emphasized. The company has achieved recognition in corporate America for its high percentage of women on the board of directors. "Human resources doesn't drive diversity; we all make it a priority," she said. "This is a key initiative for [Chairman, President and CEO] Larry Johnston."

Some 35 affinity groups support the varied ethnicities, races and genders of Albertsons' associates and help with recruiting efforts, she said.

Pepsi's Hudson said Chairman and CEO Steve Reinemund refers to diversity as a business imperative. "We make sure we're winning market share in diverse communities," she said. "We want to hire and retain people of diverse backgrounds with different perspectives. We believe it's a competitive advantage for the company."

Pepsi's program is tied to bonuses and supported by affinity groups, she said.

Hudson said she tries to make sure the organization pays attention to all groups of associates, including those who don't necessarily tout their own accomplishments. "Latino women don't stand up for themselves as much," she said as an example. Miller's Stein said it is exciting for a company to have a wide mix of associates with different opinions and backgrounds. She emphasized that diversity programs help companies reach out to women, who are the major customers of food retailers. "Women as purchasers also bring men along on products," she said.

Asked if diversity programs are sustainable for the long term, Curran said that eventually the practice will be part of the fiber of organizations. "But we must tie it to compensation, evaluation and other practices or else it won't be sustainable," she said.

Hudson said it will be a long time before diversity is displaced at the top of corporate agendas. "We must keep it at the top of everyone's list," she said. "We must make sure it doesn't get stale."

Herbert quipped that a company will know it has succeeded with diversity "when the vice president of diversity gets to work herself out of a job," but added, "We're a long way from that."