When a company realizes that a domestic diversity and inclusion (D&I) strategy is not sufficient to address its global business environment, what’s the best way to proceed?
When Sharon Orlopp stepped into the chief diversity officer role at Walmart in 2011, her responsibilities included both domestic and global. It was the first time the company had incorporated global diversity issues into its diversity strategy.
How to begin?
Orlopp clearly saw that she and her team needed to educate themselves. If they were to develop a truly global diversity strategy, they would need relevant D&I information about each country in which Walmart did business. The questions came quickly. What are the diversity concerns in these countries, and if there are concerns, how are they being addressed? Within this context, what kinds of programs might be relevant and welcomed in each country? To answer these questions, they would need specific diversity, cultural and legal information about each country.
It soon became apparent to Orlopp that this kind of information was not immediately available. They would have to build a customized information base if they were to increase their knowledge and understanding of diversity and inclusion in the countries the company did business. Before long the project gained its name, the Global Diversity Benchmark/Best Practice Study.
Building the Benchmark/Best Practice Study
What made sense to Orlopp was to have information about each country’s history and evolution. This meant learning about differences in its each country’s population and the current state of those differences, whether the country was working on rectifying any discriminatory or exclusionary practices. In other words, had it passed legislation to protect any population groups?
In the end, Orlopp and her team decided upon four key categories of information for the study of each country:
1. History and Culture: This part would provide a historical and cultural understanding of the diverse groups within each country, including any challenges to inclusion that existed with regard to these groups and why.
2. Demographics: This part would focus on the make-up of the population: ethnic, racial and gender break downs, the average age, the average literacy rates, education levels, economic distinctions, religious affiliations, languages spoken and labor force statistics. The demographic information might allow a comparative framework among the countries to see which countries were similar or not.
3. Legislation: This part would focus on any laws passed to protect various population groups, such as laws protecting women, or lesbian, gay, bisexual, transgender individuals, or people with disabilities. From a public policy perspective, what had each country done to address any disparity of treatment or conditions of inequality within its population?
4. Best Practices: Knowing that other large multinational companies operated in these countries as well, a review of literature might identify diversity and inclusion practices these companies had used. The goal was to identify lessons learned by other companies in crafting their global diversity strategies. How might they have responded to specific diversity dynamics in particular countries? The plan included follow-up telephone calls with diversity leaders in these companies to gain first hand any additional insights.
Once the categories of information were clear, it was decided to focus on 14 countries on four continents: Latin America, Asia, Europe and South Africa. The next step was to figure out who could conduct this global benchmarking and best practice study.
Orlopp went to a trusted and long-time consultant to Walmart, Kay Iwata of K. Iwata Associates, a nationally recognized, diversity consulting firm. Iwata contributed to developing the approach to the study and brought in researchers and writers, Dr. Carlos Gil and Barbara Deane from the GilDeane Group to fill out her team. It was decided that the deliverables for the benchmark/best practice study would take the form of individual country briefs, each consisting of about 15 pages.
Audiences for the briefs
Walmart’s senior leaders and HR leaders would comprise the first level audience. The briefs would serve as the basis for creating a common understanding of the diversity issues and dynamics country-by-country. From this common understanding, the leaders would craft the global diversity strategy.
A second-level audience was also envisioned: Walmart executives and staff preparing to travel and work internationally. Briefs would be available on an as needed basis as executives and staff took on international assignments and used the briefs as part of their preparation protocol.
Some of the information was surprising!
As the briefs began to come in, Orlopp reviewed them, and was surprised at some of the information. The biggest surprise was the variability of the average age of the populations between certain countries; for example, Guatemala’s average age is 20 years while Japan’s is 44.8 years. Other countries had an average age of approximately 25 years (such as Costa Rica, Nicaragua). “It’s interesting to think about the average age in a country and the needs of its population,” notes Orlopp. “This helps us develop our recruiting, retention, and development talent strategies. It also provides insight into product assortment needs.”
Poverty rates were another surprise. For example, Orlopp indicated it was sobering to discover that countries such as Guatemala, Honduras, and South Africa all report half or more of their populations live below the poverty line. Because Walmart strives to serve the underserved, she believes their focus on low prices enables customers in these countries to live better.
Iwata, too, found some of the information surprising. “We discovered that each country decides the basis for their poverty statistics,” which she says made it more difficult to create comparative analyses. Since governments can control how they decide this information, she says it’s more difficult to have confidence in the validity of the numbers. “We don’t know exactly what goes into the formula for collection of this kind of data by a country’s government,” she adds, “The actual situation may be worse than the statistics made public indicate.”
Iwata was also surprised that literacy rates were not connected to grade levels. “Based on the data sources we used, we don’t know for sure what percentage of children are actually going into high school in a given country,” she observes.
Yet, the literacy rates even as they were presented stimulated Orlopp’s thinking. “The literacy rates helped us think about the education needs of a country’s population and the work of the Walmart Foundation. For instance, in Brazil and India, Walmart offers retail training to the community, which includes reading and math skills.
As for the legislative topic, one of the most difficult questions to answer involved what kind of demographic data could legally be collected about employees in each country. Orlopp worked with Walmart’s legal department who delved deeply into international law to find the answers.
How were the briefs received?
Before the briefs were delivered, Orlopp asked Iwata to create an executive summary in the form of a slide presentation. That turned out to be a challenging task!
“I knew the Walmart culture well enough to know they would want the information crisp and brief, so it required deciding what I could or should include and what to leave out,” says Iwata. She also knew Sharon’s priorities and what she would want included. Iwata says she tried to think like a Walmart executive; she felt they would want a snapshot, a sense of the context for the countries in their region, and what the demographic make-up was. Then it would be important to put the information into the perspective of their customers and their stores. The executive summary slide deck numbered 21 slides—more than the norm for the Walmart culture! The summary was arranged by region and illustrated similarities and differences among the 14 countries.
The executive summary was first presented to Doug McMillan, president and CEO of Walmart International, and Kristin Oliver, SVP of Human Resources for Walmart International. Both were extremely interested in the average age and literacy rates because they saw the relevancy for the company’s talent strategy and product assortments.
Orlopp says that some of the key learnings were about women, the LGBT populations, people with disabilities and the very poor in many of these countries. She found it clear that economic issues are entwined with all of these population groups and have to be a part of any Walmart approach. For example, Orlopp says, “We have to make sure we touch on inclusion from an economic stand point when we design [our] training programs,” noting that this kind of information and its implications for the workplace and D&I are not often taught in the United States. She also indicated that economic status and inclusion need to be considered in how the company treats its customers and its employees. She added that the linkages between poverty and education were helpful and contributed insight to their giving programs. “[There] were lots of data points that informed the strategy,” she says.
Determining the impact
Orlopp says the primary outcome they sought was to educate the senior leaders so that their knowledge and understanding could inform and shape a world-class diversity and inclusion strategy country by country.
As far as measuring the impact of the research, Orlopp says that is a question with which they still struggle. She notes that some of the recommendations, such as those for creating ERGs, or those for people with disabilities, or LGBT, are common across countries. One of the recommendations implemented in all countries was inclusion training, and Orlopp says it was customized to each market.
Although Walmart has taken a few new steps as a result of having the new Benchmark Study, Orlopp acknowledges, “It’s a lot of information to help with the thought process and the strategy design.” Iwata believes in the long term, Walmart will be able to look at the attribution effect—being able to attribute how the information in a country’s brief influenced the D&I strategy in that particular country.
Advice for other companies who seek to build a global diversity knowledge base
Orlopp doesn’t hesitate, “Just be very specific about your needs, in what elements you are most interested, and what you will be using the information for. Be clear about the purpose and how your needs fit into that purpose. She adds that if you are not clear at the outset, you may ask for more data than you need or you may not ask for the correct data.
Looking back, Orlopp acknowledges that it was exciting to engage in this kind of global research project, and she is very proud of the insights that came out of it.
Sharon Orlopp is Chief Diversity Officer for Walmart. She may be reached at Sharon.Orlopp@wal-mart.com or 479-277-7178.
Kay Iwata is president of K. Iwata Associates, Inc. She may be reached at the following: Kay @ kiwata.com or 510-471-7840 or www.kiwata.com