A successful diversity initiative led to an unintended consequence at Walmart
A Bloomberg article on Walmart tells the story of an unintended consequence that arose as a result of the retailer’s commitment to greater gender diversity.
Walmart, in 2009, faced a glaring disparity between the percentage of women it had in leadership positions compared to the female representation of its total workforce, according to Bloomberg. Twenty-seven percent of senior roles were filled by women, while half of its overall employees were female.
The retailer made a concerted effort to bring more women into leadership positions at the store and corporate levels. Women now represent 45.71 percent of Walmart’s management and 30.59 percent of its officer positions, according to the retailer’s 2021 fiscal midyear “Culture, Diversity & Inclusion Report.”
One unintended consequence of Walmart’s push, according to Bloomberg, was that the percentage of Blacks in leadership roles has declined in recent years. Today, 20.69 percent of the company’s workforce is Black, with 11.64 percent in management and 6.85 percent in officer roles.
The death of George Floyd at the hands of police officers in Minneapolis earlier this year opened the eyes of many Americans to racial inequality in the U.S., and Walmart was among the corporate citizens to respond. The retailer and its non-profit Walmart Foundation pledged in June to provide $100 million over five years to the Center on Racial Equality. The organization will use the funds to conduct research, advocacy and other efforts to support groups serving Black communities. The Center will also provide counsel to Walmart about ways it can better understand racial bias and structural racism within the U.S.
Walmart is not the only major chain that has pledged itself to greater racial diversity in response to nationwide protests in cities and towns that call for an end to discrimination and abuses of power by law enforcement. Gap, Target and others have made public commitments to promote racial diversity. Others, such as Sephora, have pledged to carry more products from Black-owned businesses.
A Pew survey released last week found that 55 percent of Americans support the Black Lives Matter movement, with 29 percent supporting it strongly. These figures are down from a few months ago as President Trump and conservative media outlets have tried to portray violence and looting as widespread. Ninety-three percent of BLM protests over the summer were peaceful, according to the nonprofit Armed Conflict Location and Event Data Project.
- Walmart Took Its Eye Off Black Managers While Women Advanced – Bloomberg
- Diversity, Equity and Inclusion – Walmart
- What is Walmart doing to promote a diverse workplace? – Walmart
- Will diversity pledges be followed by results? – RetailWire
- Target touts diversity gains, pledges to hire more Black employees – RetailWire
- Sephora commits 15 percent of its shelf space to black-owned brands – RetailWire
- Support for Black Lives Matter has decreased since June but remains strong among Black Americans – Pew Research Center
- Over 90 percent of protests were peaceful, report shows – The Hill
- What white people need to know – RetailWire
DISCUSSION QUESTIONS: How can large retail organizations achieve diversity objectives without unintended negative consequences? Do you think there is a link between reaching gender and racial goals and achieving greater diversity of thought within businesses?
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16 Comments on "A successful diversity initiative led to an unintended consequence at Walmart"
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Managing Director, GlobalData
This shows how a one-dimensional focus on diversity, even if well-intentioned, can create issues. There is no easy fix to this, but I think having a diverse candidate pool from which to pick management hires is very important. How can this be accomplished? Ensuring there are equal opportunities and encouragement for all internal workers is one. Making sure jobs are advertised widely and where a variety of different people can see them is another. Outreach to younger people in school and college to explain career options and choices is sensible. In short, a variety of activities are needed to ensure diversity and fairness in hiring.
Principal, Cathy Hotka & Associates
The more diverse a company’s leadership team is, the better it will understand its customers. Walmart has put a lot of effort into developing its workforce and mentoring them into leadership roles, with very favorable results.
Senior Vice President, Dechert-Hampe (retired)
The Law of Unintended Consequences is as inescapable as the mythical Irish guardian of lousy luck ” Murphy.” Pushing on an object, whether the water-filled balloon used in our high school physics class or a society, will cause it to bulge somewhere else. Typically somewhere completely unexpected. That doesn’t mean we shouldn’t try to improve. But it does mean that leadership must be mindful of the inevitable and actively watch for the unexpected symptoms when they initiate change. Preparing the organization by admitting that you know things unexpected will happen during major change is even better. Ask for the organization’s help in identifying them and be proactive in mitigation if you can. Easier said than done of course.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Independent Board Member, Investor and Startup Advisor
Managers become focused on single metric KPIs because they are easier to measure and compensate. Unfortunately, organizations, like life, are messy and do not adhere to neat PowerPoint slides and traffic light status reports. Organizations need to define diversity, or whatever comes next, thoughtfully and robustly so that the entire picture is understood and the various outcome scenarios are anticipated. Specific to diversity, one can address age, race, ethnicity, gender, work experience, and even mindset, among others. The higher the variability in a company to the board of directors, the more superior the performance will be, all else being equal.
President, Global Collaborations, Inc.
Diversity does not mean choosing one underrepresented group and working to include that group to the exclusion of other groups. This is not a one-dimensional problem so solving the problem does not happen with a one-dimensional solution.
Board Advisor, Light Line Delivery
Systems thinking is underrated.
Retail Industry Thought Leader
Founder, CEO, Black Monk Consulting
Sales Development Manager
Your point about geography is very appropriate in this context. Fayetteville is a lovely university burg with some nice features and a progressive spirit — but it is by no means a major city and its airport (while charming) is not a hub. It’s a company town, not one that you’re going to want to put roots into and not one where your relatives live. And it’s surrounded for several hundred miles, unfortunately, by a lot of people who really don’t want Black, Hispanic, or Asian folks moving in, especially if they’re being paid well. If you moved your family to rural Arkansas, would you feel safe letting your Black son drive to high school?
Founder, CEO, Black Monk Consulting
In today’s America? Absolutely not.
CFO, Weisner Steel
Correlation isn’t causation, and I really don’t see any explanation why increasing the percentage of women caused a decline in other percentages; maybe there was a reason — lack of college black females with advanced degrees? But it’s not explained here.
More generally though, I would say the answer is likely to be “no.” A goal simply pulled out of the air to satisfy some interest group is unlikely to be successful … satisfying several such goals is almost certainly going to fail.
Contributing Editor, RetailWire; Founder and CEO, Vision First
WMT successfully addressed one aspect of diversity and learned that it’s a multi-dimensional problem that requires wide-ranging change. They can take what they learned promoting women, broaden the scope to include more categories of diversity and use metrics to understand how the overall profile of their workforce changes over time.
Chief Marketing Officer, PerimeterX
There is a growing body of evidence that diversity drives improved business performance. While this effort at Walmart had negative unintended consequences, it should be commended. And Walmart should be challenged to pay attention to the supply chain of talent ready for management and executive roles. By continuously developing talent across the diversity spectrum — sponsoring college programs, scholarships, internships and mentorship — businesses will increase representation and be less likely to have forward movement with one group mean regression for another.
Chief Data Officer, CaringBridge
I often speak to clients about the law of unexpected consequences — “there are ALWAYS unexpected consequences.” No matter how committed an organization is, change is bumpy, uneven and not always moving forward. But if an organization stays true to their mission and values, progress will be made nonetheless. The unexpected consequences that come from increased transparency is feedback and engagement — both positive and negative.
The benefits of increasing diversity are numerous — with one of the greatest being bringing diversity of thought and perspectives. Something is always lost when a company does not look like their customers. Insight from a more diverse workforce will pay for years to come….