Diversity. Equity. Inclusion. Seldom have three words been packed with so much potential, yet also mired in controversy. They can be bounced around like political footballs; serve as HR “to-do” boxes aimed at maintaining a status quo; or be harbingers of real change that accelerate the success of the people, companies and industries who understand that there’s a business case to be made for DEI and widen their strategic planning accordingly.

“Diversity is real. Diverse people do things differently. Diverse means we often live differently; have different priorities; eat differently; raise our kids differently; dress differently; wear our hair differently; we even worship differently,” John Fleming, a consistent advocate of the direct selling industry with a storied, decades-long career at Avon, who also helped build Direct Selling News (DSN) as its one-time Publisher and Editor-in-Chief, explained.

Fleming’s wide-angle perspective on DEI comes from decades spent in executive board rooms, where his thinking and performance track record supplied valuable input on strategic planning and problem-solving. But he’s well aware that undercurrents existed, as typically the only African-American in the room and a looming temptation for HR to check a few “diversity” boxes.

“I passed on many invitations to be part of committees and special task forces when I knew or surmised that the real objective was to try to check a few boxes without disturbing the status quo,” Fleming said.

So, Fleming comes at DEI with a uniquely informed perspective—one encompassing his life’s work within the direct selling industry, as well as one formulated in the potential and eager anticipation of its future.

It’s with the future in mind that DSN—supported by Fleming’s expertise—rethinks DEI and pushes its evolution from a one-dimensional HR-driven program to a multi-dimensional business growth strategy. This is the first in a series of articles we’ve entitled, The Business Case for Diversity, Equity and Inclusion.

Our hope is that readers use this as a primer to better understand DEI; sort out the state of DEI in their companies; and expand their thinking about its potential in helping them meet strategic goals.

Subsequent articles in this series will feature case studies of direct selling companies who have adopted DEI as a business growth strategy. We want to look in-depth at their decision making, action plans and results. If your company is actively participating in a multi-dimensional DEI business growth strategy and would like to share with our readers, please reach out to DSN Publisher, Patricia White.

The Multi-Dimensional Potential of DEI

Often, DEI falls under the auspices of HR. It is here where programs are established to foster a welcoming work environment for under-represented groups, while simultaneously protecting the company by eliminating bias and unfair discrimination in the workplace that could constitute a violation of law.

And while those efforts are vital to employee, cultural and corporate growth as well as maintaining proper legal standing, Fleming believes DEI holds even greater potential when considered as a multi-dimensional business strategy. The business case for DEI lives not in the one-dimensional HR world, but rather in the realm of market growth potential, strategic business acquisition, customer/representative targeting and results-oriented communication, all of which drive profitability.

Going Global or Staying Home

Going global has long been the steppingstone of choice by direct selling companies seeking to make leaps forward in market growth. And it’s no wonder looking at the World Bank’s 2022 Top 15 GDP list.

To make a successful run at any international market takes commitment to research and fostering in-depth understanding of economic and cultural landscapes very different than the United States.

“It has always been interesting for me to observe that when we decide to go global for strategic growth reasons, we are actually committing to DEI. Yet, we may not be as committed when we manage the same enterprise locally,” Fleming said.

Fleming’s point is that there is intrinsic value in companies parsing out and capitalizing on the strengths and potential we have here at home when it comes to DEI. No country outpaces the US in terms of GDP, standing at $20.89 trillion. And our segmented annual purchasing power of ethnic- and age-based groups mirrors the GDPs of entire countries.

“The United States is the most diverse marketplace in the world. However, many businesses go global to access talent pools, reach new markets and hopefully activate new growth opportunities,” Fleming said.

He believes there are cost-effective growth opportunities right here at home—driven by the same DEI principles now used by companies in international expansion—without the challenges faced when going global.

“Theoretically, a new company could build a successful enterprise targeting any one of the consumer segments. Some of the segments are as large as other countries, and they are all within the borders of the United States of America,” Fleming said.

Evolving Business Growth through DEI

How then might a company take effective steps toward a multi-dimensional DEI business growth strategy here at home? The first step in making a business case for DEI is knowledge.

Fleming vividly remembers a mandatory course called “Finance for Non-Finance Managers” during his years at Avon. “It helped to change my thinking from the more emotional, optimistic mindset to a more strategic mindset.”

Such a course teaches the essence of the business model and the reasons for its existence. It focuses on how the business grows and the importance of gaining market share in the marketplace. It also teaches people how to think strategically with clarity and purpose, no matter which department is leading a conversation.

The goal, Fleming said, is to develop a keen, company-wide understanding of the financial components necessary to grow a business. It is possible to cultivate a group dynamic and mindset that is mindful of growth, regardless of proximity to sales and marketing efforts.

Who Do You Invite to the Table?

In his experience, Fleming believes there to be three steadfast rules, if not universal laws, direct selling companies should follow when strategizing about new business acquisition.

1/ It is difficult to understand the motivations of women without including women in the conversation.

2/ It is difficult to understand the nuances of ethnic groups and their cultural differences if such representation isn’t included in the conversation.

3/ Pictures and data don’t tell the whole story. Relying on data alone often results in a lack of understanding about diverse groups of people and misunderstandings about DEI and its potential.

An estimated 80 percent of consumers are more likely to buy from brands that tailor experiences to customer preferences, and emotionally connected consumers are two times more valuable than highly satisfied ones.

In the past, direct selling as a channel of distribution, was highly dependent on the field of independent contractors to lead new business acquisition. Grassroots prospecting recruited customers and distributors/consultants primarily from existing field networks.

But today, companies have more options and greater control. They use marketplace research and data to strategize new business acquisition, and then provide intermediaries in the field with the right tools, at the right time and using the right messaging to reach target markets more effectively.

So, who sits around the conference table giving input during new business acquisition strategy sessions makes a big difference.

According to Innovation, Diversity and Market Growth, a white paper put forth by researchers from the Center for Talent Innovation, teams that have one or more members who represent the gender, ethnicity, culture, generational or sexual orientation of a target market are as much as 158 percent more likely to innovate effectively for that end user.

Granted, some geographies are less diverse than others, and therefore have less diverse hiring pools. And the industry has long favored sales and marketing candidates who possess experience related to direct selling. But Fleming posits, neither is an “acceptable rationale for not pursuing diverse talent that might serve to improve every facet of the business model, especially the sales and marketing effort.”

Colleges and universities are in the business of doing this. They recruit raw talent and potential, then proceed to develop those individuals over time. Perhaps the direct selling industry would be better served if it looked at leadership recruitment in the collegiate way—discover, mentor and develop.

“It appears logical that those who represent the various segments might bring new and relevant ideas to the conversations and decision making,” Fleming said.

But as Forbes reported, “Implicit biases are driving certain employees out of leadership positions and resulting in a less diverse workforce, impacting the bottom line.”

According to the American Psychological Association, “Individuals’ perceptions and behaviors can be influenced by the implicit biases they hold, even if they are unaware they hold such biases. Implicit bias is an aspect of implicit social cognition: the phenomenon that perceptions, attitudes and stereotypes can operate prior to conscious intention or endorsement.”

“Throughout the world, we have economies that are built, developed and managed by people who do not look or think exactly the way we do, nor speak our language. They not only survive; they also thrive and compete effectively,” Fleming explained.

Choosing Who and What is Most Important

It is certainly possible to live within and operate a business in the most diverse country in the world without appealing to broader, more diverse audiences. But doing so is not without risk.

Business models without a DEI focus may limit their effectiveness in attracting broader marketplace support that stakeholders and investors expect. They may also hinder the ability of their brand partners and affiliates to expand their independent businesses in a marketplace of opportunity that is now larger than a single individual’s identity—a marketplace that is increasingly built upon numerous authentic voices coming from diverse groups of people.

“We can choose what we do and how we do it more so than our counterparts in any other nation,” Fleming said. “Therefore, we can choose to determine what matters most.”

That applies to not only consumers whose loyalty direct selling companies covet, but also the contemporary decision makers who seek effective strategies to expand available market share segments.

Perhaps, it’s time to re-frame those conversations and ask a new question: What is our effective market share within the segments that are important to us?

“Once we clearly understand the business case for being diverse in the decision-making ranks of the company, the clearer we become about the value to be gained from thinking and planning that offers a diverse perspective. To think, plan and budget effectively, how we attract diverse segments requires representation that understands the targeted segments,” Fleming said.

It is precisely what direct selling companies do when opening international markets. “Why would we ever think that we can operate differently locally, if we are intent upon growing market share?” Fleming asked.

Share Your DEI Success Story

We’d love to hear how your company adopts a progressive, growth-oriented approach to DEI. Please contact our Publisher Patricia White at pwhite@directsellingnews.com. You could see your company’s story featured in a future article in DSN.

From the January/February 2024 issue of Direct Selling News magazine.

The post The Business Case for Diversity, Equity & Inclusion first appeared on Direct Selling News.

DEI has been a key strategy for the company as it has grown across almost 40 markets and a guide for how it will operate amid that expansion. Mary Kay enhances understanding through employee training, maintaining supplier diversity and inclusive procurement, demanding action and ensuring diversity among its representation and leadership. 

The company’s belief in the increased representation of women is seen in action through its own workplace. At Mary Kay, more than half of the company’s executive team are women, and 38% are BIPOC. Of the company’s global workforce, 62% are women, and 60% of the leadership positions in the company’s Top 10 Markets are held by women. 

“Mary Kay has operated with an intention to challenge the status quo since its inception, opening doors for women and diverse groups since 1963,” said Julia A. Simon, Mary Kay Chief Legal and Chief Diversity & Inclusion Officer. “We believe the private sector has a fundamental role to play in bringing about social change. Through our corporate actions, we are committed to advancing diversity and ensuring inclusivity in our company. We recognize the fight for equality stretches beyond our walls which is why we champion efforts in communities we touch around the globe.” 

External partnerships are also integral to the company’s DEI initiatives, and the company supports community efforts to address gender-based violence, strengthen women’s leadership, promote equitable education opportunities, strengthen entrepreneurial opportunities for women and address bias in emerging technologies. Mary Kay has partnered with the Congressional Black Caucus Foundation’s National Racial Equity Initiative for Social Justice, the Society of Cosmetic Chemists, the UN Trust Fund to End Violence against Women, The Nature Conservancy and the International Women’s Forum to make sure that DEI are represented through action. 

“For Mary Kay, Diversity, Equity and Inclusion are not just words—they are how we are able to deliver on our purpose to enrich women’s lives around the world,” the company wrote in a statement. “Through our corporate efforts to achieve our DEI commitments and by partnering with change-makers around the world to address gender and racial injustices, we are taking action and ensuring transformative change in our company, across our business partners and in the communities we serve.” 

The post Mary Kay Celebrates Global Diversity Awareness Month with Commitment to Real, Sustainable Change  first appeared on Direct Selling News.

DID YOU KNOW that black buying power within the United States has now reached $1.5 trillion? By 2024, that number is going to grow to $1.8 trillion—a number that is larger than the GDP for Mexico.

Did you know that the Hispanic buying power for Hispanic Americans is $1.4 trillion, or roughly the GDP for Australia?

Did you know that the buying power for Asian Americans is currently $1.2 trillion and expected to grow to $1.4 trillion in the next few years?

How much of this buying power are you leveraging every single day?

Statements Versus Standards

As you assess your team’s current state, consider a Washington Post article released this year entitled Corporate America’s $50 Billion Promise. When you look at the breakdown of how this $50 billion was allocated, only $71 million went to organizations focused on criminal justice reform.

I mention that because the bigger question is, why are we here again? It’s not to say Corporate America didn’t step up, but there’s a difference between pressure and practice. You cannot pledge your way out of systemic racism. While the companies in this pledge made a statement, it was not a standard.

Everyone wants a seat at the table. When you invite people to the table, you aren’t just offering equality, you’re offering racial equity. This is about giving a hand up, not just a handout—which, it turns out, is not only the right thing to do, it’s good business.

A Trillion-Dollar Opportunity

So, who is currently incorporating effective racial equity initiatives into their business strategy? Let’s look at some examples.

• Salesforce decided they would create ventures that will invest $100 million in marginalized communities to help those businesses level-up and have a seat at the table. Salesforce has also gone on record to say that by 2023, they will increase their leadership ranks by 50 percent as it relates to people of color being directors and vice presidents in their organization. They are intentionally impacting communities that have been marginalized and disenfranchised.
• McDonald’s announced they will not only continue to invest $1 billion in black suppliers, but also that they understand it is not enough to have two board members who are black and two women on their board. Over the next few years, they have plans to increase diversity within their executive ranks by 25 percent.
• Nike’s CEO has gone on record saying that Nike would not be the company it is today if it had not had the support of black Americans and the black population around the world.

Who is at the table making decisions for your company?

The McKinsey Global Institute’s research is saying that in the United States, there is a linear relationship between racial and ethnic diversity and better performance. For every 10 percent increase in racial and ethnic diversity on the senior executive team, McKinsey says earnings before interest and taxes rise 0.8 percent. And in their study of 1,000 organizations in 12 countries, they found that organizations in the top 25 percent when it comes to gender diversity among the executive leadership teams were more likely to outperform on profitability and value creation.

And think about this particular piece of data: The Center for Talent Innovation says teams are 158 percent more likely to understand target consumers when they have at least one member who represents their target’s gender, race, age, sexual orientation or culture.

When you consider those numbers, where does your organization sit right now?

Do you have individuals who have their finger on the pulse of trillions of dollars of buying power?

Racial Equity Role Models

In October 2019, T-Mobile said they didn’t want to just throw dollars at the problem, but rather think long-term how they could grow together and solve racial injustice once and for all. They set aside $25 million and created a memorandum of understanding with organizations like the National Urban League, the National Action Network and the League of United Latin Americans to really look at how they think about talent, culture and brand.

Netflix has invested $100 million in disenfranchised communities and, understanding that it’s not just enough to write a check, they specifically look at putting money into financial institutions in black communities. Dr. Stacy Smith with the University of Southern California Annenberg Inclusion Initiative says, “When you have diversity and inclusion behind the camera, you will have diversity and inclusion in front of the camera.”

I had the opportunity to speak with the team at General Mills this year. The company is headquartered in Minnesota, which has one of the lowest ranked education systems for black Americans in the country. In Minneapolis, the incarceration rate of blacks is 11 times higher than whites and, according to NPR, while 84 percent of whites in Minneapolis own their home, less than 25 percent of blacks do.

In response to these statistics, General Mills looked at whole equity and representation and made the choice to double the representation of black managers, increase minority representation to 25 percent, and double its spending with minority-owned suppliers. Then it partnered with other local brands to create the Minnesota Business Coalition for Racial Equity which specifically focuses on workplace, policy, philanthropy and allyship, and outlines how the group will tackle education, housing, healthcare and internet access. All of these things help individuals level up.

This is the conversation. Equality, yes, but the goal must be equality plus equity.

Your Next Steps

What can you do?

First, it starts with a CEO’s commitment. The Corporate Leadership Council says emotional commitment is four times more important than rational commitment in driving discretionary effort. When the CEO is committed to the goal, the conversation flips from “this is something we have to do” to “this is something we want to do.” That emotional commitment lets the entire organization know this is important.

As leaders consider how to approach these important strategic decisions, the website CEOAction.com can be a powerful resource, providing examples of what 2,000 CEOs from 85 different industries are doing every single day to think about racial equity through a fresh lens.

From there, establish an executive champion who will own the mission and ensure that racial equity does not get pushed to the back burner while also providing accountability for implementation. This champion will keep the organization focused on how talent is attracted, activated and advanced; which policies impact the people you serve; how much purchasing power is spent with diverse businesses who need a seat at the table; and the measurable net impact of your philanthropic initiatives.

People, policy, purchasing power and philanthropy—that’s how we begin addressing racial equity.

Your Bottom Line Is at Stake

Having hard conversations is good business. If we really want to understand how we can make a great impact and take a long-term view of this trillion-dollar opportunity before us, we need to ask how we will lead differently.

McKinsey tells us that companies pay a penalty for a lack of diversity. Organizations in the bottom 25 percent for both gender and cultural diversity were 29 percent less likely to experience profitability above the industry average. Working to create racial equity isn’t just the right thing to do, it’s a proven strategy for developing longevity and success.

Where are you right now in your diversity, equity and inclusion journey?

Simon T. Bailey’s purpose is to spark listeners to lead countries, companies and communities differently. He goes beyond feel-good content to deliver practical strategies, based on 30 years of experience in the hospitality industry, including serving as sales director for Disney Institute, based at Walt Disney World Resort.

From the December 2021 issue of Direct Selling News magazine.

The post The Business Case for Diversity, Equity & Inclusion first appeared on Direct Selling News.