Traditionally, it can go one of two ways. If the CEO believes in a strategy, it gets executive-level support and resources. If the CEO doesn’t believe in it, well, good luck.
George Chavel, chief executive officer of food services and facilities management company Sodexo North America, believes that diversity is a strategy, a pillar in business. But it’s not one that came up all of a sudden. The company’s story is like a “Who’s Who” for success milestones. Fortune, Working Mother and others have billed it a best place to work this year. Chavel said women’s advocacy organization Catalyst benchmarked Sodexo in 2012, which resulted in the company receiving the 2012 Catalyst Award, an annual award honoring business initiatives that advance women in the workplace.
It’s rarely a good idea to believe one’s own publicity, and many popular diversity award programs have been criticized for a lack of transparency. But Chavel said it’s not the awards that are attractive, it’s the opportunities to benchmark. “We’re active learners in our diversity and inclusion journey. We’re not experts. It’s about how do we get better.”
With the company for 22 years, Chavel said he’s always considered diversity part of who he is and how he lives his life. He grew up blue collar in Detroit, worked in the family tobacco and candy business, and was part of a diverse community. “I didn’t have a moment where I said this is something that is strategic for the business,” he said. “It just came kind of naturally, personally.”
It’s Not One Thing
Chavel said his biggest diversity moment was not one moment, but a collection of experiences that taught him early what it felt like to be a minority. His junior high and high schools were majority African-American; he said there were always moments when he looked around the room and did not see many white faces.
“I also had moments early in my career where I was the youngest person in the room. In a situation before Sodexo, the board average age was about 70 years old and I was 29 years old. When you walk into a room, into a business situation, a school situation, at the time I didn’t say ‘Wow, this is a diversity moment.’ But as you reflect back it certainly was something that built who I am.”
In his six years as CEO, Chavel agreed that Sodexo has gotten a lot of recognition, “but we don’t read our own press. It really has become a business differentiator and a competitive advantage for us. It is central to everything that we do, and it reflects our workforce, the customers and the clients that we serve.”
Digging to find out what winning combination of diversity programming has contributed to the company’s success reveals no single breakthrough but instead systemic efforts to raise the bar on culture change. “There’s no one single project,” Chavel said. “There’s probably 30 to 50 mini-initiatives within our overall diversity and inclusion journey that are happening every day.”
Tackling the diversity strategy from multiple angles means identifying targets, measuring results and compensating executives accordingly. For instance, in any organization there are bottlenecks in different places. A lack of women and minorities, particularly women in operational or profit and loss roles, is one such bottleneck for Sodexo. It’s also a trend across corporate America, said Rohini Anand, the company’s senior vice president and global chief diversity officer.
“We have really strong representation at the top,” she said. “The board has 38 percent women. Our global executive team has 25 percent women; our top 300 has about 23 percent women. In North America two women have large portfolios of business. But when we look at P&L roles in middle management, that’s what we need to address.”
Strategies identify and target development needs for women and minorities at that level. Anand said post-development, managers will build things onto employee performance plans. There are also mentoring and sponsorship opportunities to advance careers and accelerate development, and leaders consider extenuating factors such as flexible work arrangements or more latticed career opportunities to promote success rates.
“We have multiple scorecards, all designed to help us monitor ourselves in terms of how we’re progressing in our journey,” Chavel said. “We raise the bar on those metrics and those scorecards every year. We also tie a significant portion of components of the scorecards to our senior executives’ incentive and bonus plans.”
Sodexo’s scorecard looks at representation, recruiting, retention, promotion of women and minorities and other qualitative metrics, which Anand said have rigorous methodology and targets behind them. “Those are the metrics that lead to changes in behaviors in leaders.”
The company scorecard is also linked to incentive compensation. Ten to 15 percent of managers’ bonuses and 15 percent of executive teams’ bonuses are linked to the scorecard, and Chavel has guaranteed paying that out regardless of the company’s financial performance. “We’ve kept that commitment for the past 10 years,” Anand said.
And it will continue. Both Chavel and Anand stressed the long-term lens through which diversity and inclusion should be viewed if culture and behaviors are to change and to stick. Also, “the engagement piece is critical,” Anand said. “Engagement leads to enhanced retention and productivity. Our recognition externally is another key barometer, and we look at the impact our D&I leadership has on the brand as well as on client retention and new business development.”
Chavel also said diversity and inclusion should be a part of the company’s identity, its DNA, so that internal and external results complement and co-exist. D&I should not, he said, come off as something just within corporate headquarters.
Sodexo touches more than 7,000 client locations and nearly 130,000 employees. Chavel described Sodexo employees as guests in those locations. “We don’t own the places that we’re in. We’re actively co-existing in a client organization. What if a client is disconnected from diversity? How does that impact our teams? We have that happen all the time. The real heavy lifting is tying this to the business model. That’s what makes us different.”
You Need Understanding
Sometimes tying diversity to an organization’s business model isn’t the first challenge. Cedric Thurman, senior vice president and former chief diversity officer for global real estate firm Jones Lang LaSalle, said he had to explain to his then boss and Americas CEO Peter Roberts that diversity was more of a representation thing. The real value came from being inclusive, and one has to be intentional to get inclusion to happen. That requires communication, and diversity executives need CEO support.
Thurman said once he and Roberts had a better understanding of what diversity and inclusion were and could do for the business, they were a good team. And because the two had positioned D&I as a business concern, Thurman said he was able to get things done without playing “the Peter Roberts card.”
“One of the things that he specifically said was if that’s what you rely on, people will only do things if you play the card,” Thurman said. “Where there were more challenging conversations to be had with different leadership teams I would consult with him in advance. But I didn’t have to invoke his name to get things done.”
Any time Roberts addressed the organization, there were D&I messages woven into his talk, and he wasn’t speaking directly about diversity and inclusion. “I didn’t want it to feel like something in addition to,” Thurman said. “It was embedded in his conversation around business strategy.”
Sodexo operates under a similar strategy. Chavel works closely with Anand. “Rohini will tell you that one of the pillars that continues to drive our success within diversity has been our overall commitment, an overall partnership with senior leaders in the organization led by me,” Chavel said.
Chavel is general counsel for Sodexo’s Diversity Leadership Council, which includes Anand, the head of HR and some other business leaders. His position at the head of diversity efforts is what is often necessary to create sustainable value from D&I strategy.
“At Sodexo we have a strategy that addresses the marketplace around the customer, the client and leveraging D&I as a business differentiator as well as the workplace issues around making the culture more into representation. George gets it. He understands it,” Anand said.
Chavel said he also understands there is more they all need to learn. “Rohini and I talk about the process of getting to where we are because we want to keep learning, practicing. A lot of organizations fall into the trap of what’s the next new exciting, sizzling thing about diversity and inclusion,” he said. “The reality is you keep practicing the strong commitments and pillars that you’ve created. It’s not a project that we have a bunch of talking points on; it’s just what we do every day.”
Diversity is part of Sodexo’s core brand promise, Anand said. Clients ask for its expertise not only in food or facilities management but in how to advance their own diversity journeys and engage an organization in culture change. “I think the business case for us is pretty obvious,” Anand said. “We provide food, facilities — it may be a bunch of different services that we provide. We want to add value to whatever their C-suite issues are. If their C-suite issue is diversity and inclusion, that’s one of the areas where we help because we’ve done it, we’ve lived it, and we’re business partners. It’s how we add value to our clients. It’s part of who we are.”
That identity means the company is able to monetize its diversity strategy by building on core business. For example, if as a result of a D&I intervention, the company acquires a new contract for food or facilities management, Anand said that is one way to generate revenue. “Our leadership in D&I helps us to both retain clients and to grow the business.”
It Just Makes Sense
Sodexo touches about 75 million customers each day. Anand said many household and business purchasing decisions are made by women and by communities of color. Hiring or developing the right talent to come up with solutions for clients, to understand their needs and devise ways to target those needs affects customer service, innovation and differentiation. To sustain momentum, advance and meet client and marketplace demands requires CEO support.
“It’s about commitment at the top,” Anand said. “We know that diversity and inclusion is a key management challenge, and those that do it well will be the ones that are successful.”
Sodexo has demonstrated that diversity and inclusion savvy does lead to higher engagement scores. At a time when the engagement scores for most of corporate America declined, Anand said Sodexo’s increased, and the greatest increases came from women and people of color.
“All of our strategies have business metrics behind them, and we continually recalibrate to the needs of the organization, whether it’s through the scorecard or the initiatives that we have, and George is very much part of driving the strategies, holding the teams accountable and is extremely engaged, very comfortable with the topic.
Anand said she’s been through three CEOs in her 11 years with the company. Each envisioned a strategy for diversity and positioned her for success. “George has also grown that commitment,” she said.
“George’s focus is on excellence in execution. It’s around let’s not do the next sort of jazzy, snazzy, snappy new thing around D&I; let’s get better at what we’re doing and really go narrow and deep into some of the bottlenecks and address them.”