A profitable perspective on diversity

In the journey towards a more equal workforce, valuing diversity has proven to be profitable, especially with respect to female consumers.


I force a smile across my lips every time an executive refers to me as a “diversity candidate”. After all, when I join a company, I want to add more than colour and estrogen. I want to add value. It’s not that I don’t appreciate the underlying motivation, but diversity has a history rooted in controversy.

Diversity in the United States is the product of battles my parents waged a generation ago. Thanks to them, I have an opportunity to realise my full potential – less hindered by my race and gender. And as a communications director at the Renault-Nissan Alliance, a Franco-Japanese cross-cultural combination, being an American even renders me a minority.

Nearly 50 years ago, when my mother considered her career aspirations, she would not have imagined the opportunities afforded to me both in the US and abroad. And while I am grateful for the progress that has been made, it is not enough to be satisfied with the achievements of the past. Each generation is compelled to go further and demand more of the world in which they are born. That’s why the commitment to diversity should evolve into a desire to value perspectives.

To understand the need for this shift, let’s first examine the origins of diversity. In the US, diversity is the successor of affirmative action – a set of policies developed to discourage discrimination in employment. The term “affirmative action” was first used in an executive order signed by President John F. Kennedy in 1961. In 1965, President Lyndon Johnson required government employers to take “affirmative action” to “hire without regard to race, religion and national origin.” In 1967, gender was added to the anti-discrimination list. These policies were enacted at the height of the American Civil Rights movement.

Consequently, for many Americans, affirmative action conjures up images of racial strife. Today, the term still stirs deep-seated anger because it is often perceived as a form of legalised discrimination. But without it, America may have never had its first black Fortune 500 chief executive officer or appointed its first female supreme court justice. In America, affirmative action was a controversial but necessary step to dismantle long-held traditions of racial and gender bias. Today, more than 50 years after its introduction, women and people of colour have made tremendous progress. If affirmative action was America’s vehicle for racial and gender equality, diversity was its wheels.

About 25 years ago, diversity began to supplant affirmative action. This evolution represented a positive shift in the social and political attitudes towards achieving greater racial and gender equality in the US. Corporations started recruiting more diversity candidates and enjoyed the social and political benefits of this cultural transformation. After all, diversity did not imply racial or gender quotas like its predecessor. By the 2000s, affirmative action was out and diversity was in.

Addressing the divide

When I consider my own career in Washington, DC, and now in Paris, I realise that American culture is preoccupied with speed. It is this need for speed that enables America to deconstruct and reconstruct new social norms relatively quickly. Consider this: black slaves gained freedom in 1865. The Voting Rights Act of 1965 that prohibits racial discrimination in voting was passed 100 years later (note: black men had the legal right to vote soon after the Civil War but in practice it was prohibited in the American South.) 43 years after the Act, America elected its first black president.

I concede that America is a young country, but in 143 years, for any member of a racial minority once legally designated “property” to rise to head of state is a remarkable accomplishment. Similarly, women secured the right to vote in 1920. Today, people discuss which woman will secure the Democratic nomination for president of the United States.

But despite all of this progress, there are only seven blacks serving as chairman or chief executive officers of Fortune 500 companies. Women make up only five per cent of Fortune 500 chief executive officers. They account for only 24 per cent of senior management positions around the world – these numbers are fairly consistent across Asia, Europe, Latin America and North America. American women earn about 80 cents to every dollar a man earns. In Europe, women make on average about 84 cents compared to men. Globally, women earn three-quarters as much as men – this is true even with the same level of education and in the same occupation. So, why hasn’t the rise of diversity alone closed the gender or minority gap? The reason: companies cannot reap the full value of a diverse workforce through hiring alone.

While diversity is regarded more positively than affirmative action, it is still stained with the residue of its forbearer. It can still be perceived as an attempt to correct past wrongs. But to survive and prosper, businesses will have to turn their eyes towards the future.

Globally, women account for about 70 per cent of all consumer spending. In the US alone, women contribute more than seven trillion dollars in consumer spending annually. With this much economic might, corporate leaders cannot afford to ignore female customers.

And despite the recent slowdown in the BRICS economies, most economists agree that the majority of world economic growth in the coming years will come from emerging markets; therefore, people of colour cannot be ignored either. Corporate leaders would do well to see women and minorities as more than diversity in the room. They should discover their added value to core business functions, not just support ones. Until more women and minorities are prepared and promoted to lead key functions, they will never achieve the same level of responsibilities or compensation as their male counterparts.

According to IMF managing director Christine LaGarde, Fortune 500 companies with the best records of promoting women are shown to be 18 to 69 per cent more profitable than the median firm in their area. With the rise of social media and the 24-hour news cycle, markets are more dynamic and businesses have to be more responsive. Real agility comes from a company’s ability to gather and leverage its most relevant perspectives to inform and execute decisions.

Emerging markets are the best example of where industries that value perspectives are most likely to prosper in the future. More women than men are now entering the labour force in these emerging markets, helping to fuel growth. In relative terms, women are more economically active in China and Russia than in the US, while in Mexico and Brazil they are entering the labour force faster than in the US.

And women in these markets are rising faster and higher than their counterparts in the US and Europe. According to the Women in Business report by Grant Thornton, the proportion of senior management positions held by women across the BRICS countries (Brazil, Russia, India, China and South Africa) exceeds 30 per cent, in contrast to about 20 per cent in the G7 group of industrialised nations. And across the BRICS, the percentage of companies with women in senior roles has risen from 61 per cent to 82 per cent in the last year. The report also provides striking statistics such as: in China more than 60 per cent of chief financial officers are women. And in Turkey, women make up 12 per cent of all chief executive officers.

Given these trends, it is clear that women and people of colour will wield a great deal more economic power over the next decades. The question is: are today’s corporate leaders ready for it?

Women’s workforce

Industry leaders who are identifying, preparing and promoting women and minorities to lead core functions now will enjoy a decisive advantage in the next 10 to 15 years when their competitors are playing catch up. Sowing these seeds of change will take years, even decades, to reap the benefits. Corporations will need to do more than groom a few diversity candidates for leadership; they must create the fertile ground from which these kinds of candidate can grow and succeed.

At the Renault-Nissan Alliance, valuing different perspectives and closing the gender gap has been the right thing to do for our customers for more than 15 years. Today, women are considered influencers on 80 per cent of all new-car purchases. That means they either buy the vehicle outright or have “veto power” on a man’s purchase in four out of five new-car purchases globally.

And in the US, the world’s second -largest auto market, women account for 53 per cent of all automotive purchases, according to a report by the American Marketing Association. But according to the same report, 74 per cent of women say that they are misunderstood by automakers.

At the Renault-Nissan Alliance, our chairman and chief executive officer, Carlos Ghosn, became an early and vocal champion of the value of different perspectives. He’s been an advocate of hiring and promoting women and minorities throughout Renault and Nissan since 1999, when the Alliance was founded.

Nissan’s home market, Japan, has enjoyed incremental increases of female participation in the workforce for years. In fact, according to the World Bank, Japanese women have almost the same rate of labour force participation as France (48 per cent of Japanese women work, compared to 51 per cent of French women). But only a small minority of Japan’s working women enjoys leadership roles, and the pay gap is one of the largest in the industrial world. That is why we applaud Prime Minister Abe’s initiative to require all companies with more than 300 employees to set numerical targets for women in management positions.

Today, the Alliance has two of the highest-ranking women in the auto industry: Marie-Francoise Damesin and Mouna Sepehri. But it is not enough to have women at the top. Mr Ghosn has set unprecedented targets for increasing female managers throughout the Alliance.

Last quarter, Nissan announced that women accounted for 10.6 per cent of Nissan’s manager-level positions globally in 2013, up from 10.3 per cent in 2012. In Japan, women at Nissan accounted for 7.1 per cent of such positions, up from 6.8 per cent in the previous year. Nissan aims to raise that figure to 10 per cent by 2017, in line with its ratio globally.

At Renault, women accounted for 18.4 per cent of manager-level positions globally in 2013, up from 17 per cent in the previous year. Women accounted for 19.3 per cent of the company’s 2,000 global key positions, up from 17 per cent in 2012.

Adding value

While our numbers are better than the industry average, we are far from closing the gender gap. But it remains one of our top priorities. To hit our goal of 10 per cent female managers at Nissan, we have created professional development and mentorship programmes for women, we have implemented a work-from-home initiative and expanded our employee child-care facilities. Today, Nissan operates one of the largest corporate daycare facilities in Japan.

Nissan is now an industry benchmark in Japan; there, our percentage of women managers is more than double the national average for large manufacturers.

Renault has integrated women at the engineering and design level. For the first time in the Alliance, we created a product team for the Renault Captur evenly split between men and women. Half of the team dedicated to the crossover’s engineering, design, marketing and sales were women, the highest for any Renault car. Captur is now Europe’s most popular compact crossover. Further proof that when you value perspectives – especially female ones – you achieve better results.

As an American woman working in a multinational, multilingual, male-dominated enterprise, I am proud to be a part of two companies that value me not only for my perspective but also for the value that I bring to the table.


Image: www.thinkstock.com

Dana W. White

Before taking on her current role as director of policy and strategic communications at the Renault-Nissan Alliance in September 2012, Dana W. White was a professional staffer on the US Senate Armed Services Committee and joined the McCain presidential campaign as a foreign policy adviser in 2008. Previously, she was a writer at the Wall Street Journal and served as the cultural page editor of the Asia edition. In 2003, she was appointed country director for Taiwan in the US Department of Defense and was awarded the Medal of Exceptional Service. Dana was the director of the Washington Roundtable for Asia-Pacific Press at the Heritage Foundation, a publicist for the Fox News Channel and began her career as a press secretary for the US House Republican Conference.