executive compensation tied to
diversity and 92 percent ensure their
management’s compensation is tied
to diversity efforts.
Core Values
CEOs who believe diversity management to be a business imperative
link it to their personal and professional values. For example, in 1999,
when PepsiCo, No. 4 on The 2005
DiversityInc Top 50 Companies for
Diversity list, spun off Pepsi
Bottling Group (PBG), No. 14 on
The 2005 DiversityInc Top 50
Companies for Diversity list, one of
the first focal points was infusing
diversity-management practices into
the company’s strategic plan.
“From our business strategy to
our business model to how we went
to market to our annual plan—one
of the things I felt passionate about
was making sure diversity was visible on the general managers’ agendas,” Eric Foss, president of PBG,
“[He said that] every person in
the company is evaluated against
[IKON’s] core values, and then he
added … diversity as a core value,”
says Beth Sexton, senior vice president for human resources and diversity council chair at IKON. “Right
there and then it was clear to people
that this matters.”
Espe was communicating what
he thought was important to
IKON’s survival. He wanted all
employees to use inclusive thought
processes when developing the company’s services and products. He
communicated that desire by linking the company’s core values to
diversity. IKON is No. 30 on The
2005 DiversityInc Top 50
Companies for Diversity list.
Communication
A CEO’s methods of communication are very revealing. PepsiCo’s
CEO Steve Reinemund, who told
DiversityInc last year that about 1
“At the end of the day, if you
don’t talk about both, if you don’t
believe [that diversity is good for
business and is also the right thing
to do], it’s too hard and you won’t
stay with it, and you won’t be successful if there’s no business case as
well,” Reinemund told DiversityInc.
Reinemund communicated those
beliefs when he gave employees the
green light to draw inspiration from
their own cultures. Products that
resulted include Lay’s Cool
Guacamole chips, Mountain Dew’s
Code Red soda and Lay’s Chile
Limon chips.
When a new CEO comes on
board, everyone wants to know the
direction the CEO will steer the
company. Until the CEO mentions support of a product or program, its future can be endangered. That is the situation Merck
& Co.’s executive director of diver-
sity and work environment,
Deborah Dagit, faced as the com-
pany’s new CEO,
Richard Clark,
took over in May.
Dagit thought
Clark, a 32-year
Merck veteran,
supported Merck’s
diversity-manage-
ment programs,
but they had not
discussed it.
When Clark
took the helm,
Merck was in the
midst of a Food and Drug
Administration (FDA) evaluation
of the COX- 2 class of Vioxx,
Merck’s pain-management product
that many people with arthritis
used. Studies had shown Vioxx
increased a patient’s risk of heart
attacks and stroke. A subsequent
FDA review has, however, green-lighted the drug. The Vioxx story
became fodder for national news
“He hadn’t even been CEO for 24 hours
and in his first employee meeting,
Webcast worldwide, he made clear that
diversity is an important part
of Merck’s strategy.”
Deborah Dagit, Merck & Co.
told DiversityInc earlier this year.
“From day one with the [initial
public offering], we felt it was essential to our business strategy.”
A second example is IKON Office
Solutions’ chairman and CEO,
Matthew Espe, who, upon taking the
helm in 2002, added diversity as a
core value. Espe required that his
executives’ goals include diversity-management targets.
percent of the company’s 8 percent
growth in 2004 could be attributed
to diversity-inspired products, regularly brings up diversity at employee
meetings and conferences and with
Wall Street analysts.
Reinemund, speaking at Stanford
University in 2004, was asked by a
student if he would support diversity management if it were not a benefit to business.
