Diageo on inclusion and diversity for all

The business environment combined with where you are in the world can be dynamic and complex. Because of this, many businesses have inclusion, diversity and equity (IDE) high on their boardroom agenda. Ultimately, it is what we do under pressure, when we have to make the toughest decisions, that really matters.

It’s a challenge that has long occupied FTSE 10 company Diageo, a global leader in beverage alcohol. Leading the charge is Caroline Rhodes — Cabs as she’s known — who oversees Diageo’s global Inclusion and Diversity agenda. With over 25 years of Diageo experience, she’s seen Diageo’s I&D strategy evolve significantly over those years.

Diageo’s I&D journey kickstarted in 2015 when former-CEO, Sir Ivan Menezes, along with his all-male executive team, recognised the need and the positive impact better gender representation across the business would have – not just for business performance, but because it was the right thing to focus on. From the female whisky entrepreneurs of the eighteenth-century, women have always played a critical role in shaping the success of Diageo, with the company acknowledging that they had to achieve better gender balance across the business.

By 2020, Diageo expanded its I&D priorities to include a focus globally on ethnicity as well, a decision validated by the movement ignited by the murder of George Floyd in Minneapolis. That same year, Diageo formalised its commitment to environmental, social and corporate governance (ESG) through ‘Society 2030: Spirit of Progress’, a 10-year action plan that set bold goals to shape a more diverse and successful long-term business and society.

“We must recognise our impact as a big business on communities and society, and the role we can play in advocating for and championing change,” says Cabs. Among its many activities, Diageo supports skills development for hospitality workers and provides education to cereal farmers. And, working with Unsteretoype Alliance and Creative Equals, the company seeks to eliminate harmful stereotyping of consumers in media and advertising content and backs more inclusive marketing strategies.

Internally, there have been changes over time too. CEO Debra Crew, appointed in June 2023, is supported by a female chief financial officer and a female chief marketing officer, with 70% of the Board and 44% of leadership positions at Diageo now held by women. The goal is for the latter to be 50% by 2030, with Diageo also making progress in ethnic representation with the company already at 43% of its 45% 2030 ethnic leadership representation goal.

Key takeaway: Recognise the impact big business can have on championing inclusion and diversity, not only internally, but in the communities and societies they touch.

Working with clients, Senda Kavindele, director of ESG, Inclusion, Diversity and Equity at KPMG, highlights the challenge of sustaining commitment to IDE.

While progress is being made by many, Senda notes that some organisations, especially those that reaffirmed their commitment to IDE in the wake of George Floyd’s murder, have backpedalled. They’ve begun to favour tick-box compliance over meaningful IDE action. Certain businesses have deprioritised IDE altogether. Others focus on some underrepresented populations at the expense of others. “Some marginalised groups slip out of the IDE net, which impacts morale and creates a sense of exclusion,” she explains. She adds “In our experience, we have found that shaping inclusive practices for one minority group has been a catalyst of change for all”.

Cabs, meanwhile, acknowledges that I&D initiatives can generate cynicism about their impact on the bottom line. However, the Diageo experience demonstrates that effective strategies can bridge the divide and make I&D part of business as usual. She encourages leaders to:

• Understand the different experiences that diverse backgrounds, education, gender, ethnicity, age, LGBTQ+ and disability can offer, as well as recognising the potential for I&D to drive engagement, retain talent, foster innovation, and be good for business
  
  

• Be culturally sensitive. The same strategy won’t work in every market, and it’s important to remember that local legislations and cultural contexts mean it may not always be possible to implement change. In 2020, Diageo created a global I&D framework, which serves as a playbook for markets to tailor their I&D strategies, locally, to their unique circumstances and environments
   

• Set goals, both globally and locally. What gets measured, gets done
   

• Stick to what you started. Stand behind your I&D policies and guidelines and embed them into the business. It takes time
   

• Understand that I&D is not just HR’s job - it’s everyone’s responsibility
   

• Find allies in leadership positions to champion I&D as a strategic imperative and ensure it’s an accountability felt by all
   

• Measure inclusivity not by strategies or initiatives but by the lived experiences of others. Listen to what your people say, learn what needs to be done differently and take action

Key takeaway: Overcome cynicism towards IDE by implementing inclusive strategies, fostering accountability and adapting initiatives to local contexts. Listen; learn; act.

To gauge progress on IDE, businesses must measure diversity. But data collection presents challenges. It’s a complex and sensitive path to navigate.

Diageo has rolled out a confidential global people system. It captures baseline characteristics, while providing anonymity and comfort to users. The business works in partnership with its legal team to determine the types of questions it can and cannot ask in different markets. In some countries, data around sexual orientation, ethnicity and disability may not be shared, which means different fields within the system must be deactivated to comply with local legislation.

It's important that employees understand why their data is collected and how it will be used. As Cabs says: “Data is crucial but it must be done in the right way, with assurances that their identities will be kept private.”

Key takeaway: When capturing disclosure data, be alert to changing legislation and mindful of employee sensitivities.

Ten years from now, the IDE landscape will look very different. Senda points to Africa becoming the next booming talent source. “By 2035, more young Africans will enter the workforce each year than the rest of the world combined,” she says. “Businesses must not only widen and extend opportunities for black heritage talent but tap into their substantial spending power — already an estimated £300 billion per year in the UK*. Connecting with diverse employees, consumers, and society at large, will require many companies to seriously rethink their existing commitment to IDE and how they deliver it.”

For Cabs, there is no such thing as a quick fix to managing an increasingly diverse workforce. “You need people with you who are advocates for inclusivity, passionate about I&D, and ready for the challenge. Because this is going to run and run.”

* https://www.vogue.co.uk/arts-and-lifestyle/article/lydia-amoah-black-pound-report-day