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Diversity A Proven Key To Business Success

Diversity Jonathan Mayes
Jonathan Mayes

Last updated on November 16th, 2016 at 03:04 pm

The Illuminators held a breakfast board meeting during the recent California Grocers Association (CGA) Strategic Conference in Palm Springs. At the breakfast, the speaker covered a topic that was eye opening, befitting its morning time frame.

Albertsons Cos.’ Jonathan Mayes spoke on the importance of diversity within organizations. He is SVP of public affairs, government relations, philanthropy, sustainability and diversity affairs for Albertsons, so diversity is part of his everyday work.

Mayes dove into the topic with a very personal story from his law school days—a story he said he had never told publicly before.

It was the mid-1980s, and he was a student at Willamette University College of Law in Salem, Oregon. He and his wife, Varetta, decided they wanted to settle in the San Francisco Bay Area, so he arranged to have a summer job at a law firm in Oakland. His wife would remain in Salem for the summer. Their neighbor in Salem learned that Mayes had the summer job in Oakland but needed a place to stay. His mother lived in Oakland and had a huge house, he told Mayes; it would be perfect for him to rent a room from her. So Mayes spoke with the mother on the phone a couple of times, and it was all arranged, with her telling him, “You sound like such a nice young man.”

Mayes drove 12-plus hours to Oakland on a Sunday to start his job Monday morning.

“I get to her front door, I knock on the door and her son-in-law is there to greet me. He says, ‘Jonathan, hi, welcome.’ Then the door swings open and the mom is there at the dining room table with some of her kids and in-laws. I had never in my life seen a smile turn upside down to a frown faster than that day. I could feel—it was palpable—a chill from that area of the room right in my direction,” said Mayes.

The son-in-law apologized for his mother-in-law when they were driving to find the law office where he would be working, but long story short, she let him stay two nights, telling him he had to find somewhere else to live. The woman, who was white, said her neighbors would think he was a burglar, even though he pointed out to her that he would leave the house dressed in coat and tie and carrying a briefcase.

“My wife called that morning (after his first night there) and said, ‘So, how are things going?’ I didn’t want to call and talk to her ’til I had figured things out, but like all of you, I hope, you’re honest with your spouse and I told her how things were going. My wife is super-cool; tough as nails…she doesn’t really cry that much, but she started crying…I knew right then everything I could possibly do in the world to be nice to this person wasn’t enough. The reality is that, unfortunately, things like this, although maybe not so overt, happen all the time.

“I want to talk about diversity and why diversity in the workplace matters, and more importantly, what we all can do about it,” Mayes said.

The problem, which has been going on for generations, he said, is that “people like to hire people who look like and talk like them.”

But the world is changing—“seismically,” as he describes it. Three states in the U.S. already have minority majorities: New Mexico, Hawaii and California.

“What that means is the majority of people who live there are ethnically diverse,” Mayes pointed out.

In 1970, the Hispanic population in California was 12 percent; by 1990 that had doubled; and by 2015, they became officially the largest ethnic group in California. Nationally, the Latino population has grown 57 percent since 2000.

Mayes said his former boss at Safeway, Steve Burd, was “a big guy for diversity.” And there is data to back up the wisdom of that stance.

Mayes cited a McKinsey & Co. demographic study that looked at 36 publicly traded companies in a range of industries.

In the grocery industry, companies in the top 25 percent for racial/ethnic diversity were 35 percent more likely to have financial returns above what was expected.

“In other words, they performed better, and it’s measurable, it’s not anecdotal,” Mayes said.

Companies in the top quartile in gender diversity were 15 percent more successful, and companies in the bottom quartile for gender diversity, ethnicity and race, are statistically less likely to achieve above-average financial returns, Mayes said of the McKinsey study.

Another finding: For every 10 percent increase in racial and ethnic diversity on the senior executive team, EBITDA rose nearly 1 percent.

“It benefits the bottom line, but there’s some other good news,” Mayes said. “By having a more diverse work force, it fosters a more creative and innovative workplace. This is the way to adapt to our changing nation. A diverse workforce can capture a greater share of the consumer market. It helps businesses more effectively market to consumers from different racial and ethnic backgrounds, women and others.

“If you want to know who your customers are, find those people in your company who look like your customers, who think like your customers, who talk and act like your customers,” Mayes added. “We know this anecdotally, but it’s kind of like we know we should eat vegetables every day or that we should eat fruits more. To know it is one thing; to do it is another thing altogether. Some companies are doing an OK job; the majority of them are not where they need to be.”

In fact, he said that in 2015, 97 percent of U.S. public companies did not have ethnic diversity in the senior executive level that matched the makeup of their workforce.

Mayes offered some steps companies can take to improve their diversity:

• “Look at your talent pipeline. Look at people in your company who you believe have potential. Look at them; be intentional. This doesn’t happen by accident. Be intentional. Make a decision, make a commitment, be intentional, have a plan.”

• “Actively consider how you can attract, develop, mentor, sponsor and retain this next generation of workers. It doesn’t happen by accident; it happens by a decision.”

• “Be evangelistic. By that, I mean tell others in your organization that they’re missing out on opportunities for business growth if they’re not doing what we’re talking about. If they’re not looking for other folks who maybe look like those demographics and who look differently from them…Be evangelistic; don’t keep it to yourself.”

• “Look at your own personal neighborhood. Pick up some Kawasaki people, pick up some Indians (referring to the fact that Harley Davidson people typically hang out with other Harley people). Expand your network, explore ways to champion someone who merits that support. I’m not saying choose the first person; I’m saying look at those with potential to excel. And focus on those people. Just pick one.”

• “Assess where your organization is now. Where are you now in your senior-most ranks? Take a snapshot and ask yourself is that good enough? Is that where we want to be? Ask yourself that every year.”

“It’s not only the right thing to do, but it can also enhance the effectiveness and the future of your company or organization,” Mayes said.

“So let me close by commending the Illuminators by taking on this important initiative,” he said. “I want to thank you…for this opportunity to talk about something that frankly, I don’t talk about publicly very much. But I thank you for the opportunity to, and I thank you for listening and I thank you for deciding that you’re going to apply it to your organizations.”

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