How Diageo is harnessing the power of a diverse, engaged workforce
If a business went onto Dragons’ Den and declared they were going to ignore the views of 50% of the population, only employ people who looked and thought like them and had no interest in understanding societal changes over time, you would be surprised if they walked away with any investment.
But, for many years, that was how much of the business world approached diversity and inclusion.
Thankfully, an increasing number of businesses are coming to realise that diverse and inclusive practices (D&I) aren’t just the right thing to do; they’re also vital for commercial success. According to McKinsey, companies who embrace diversity are 35% more likely to outperform their competitors.
Global drinks company Diageo is one such company looking to harness the power of a diverse, engaged workforce. Under the leadership of CEO Ivan Menezes, Diageo’s leaders across the company are focusing on delivering against D&I outcomes.
It started with addressing the representation of women in the company’s leadership. In 2010, Deirdre Mahlan (now President of the North American business) was the first woman to be appointed to the executive committee as Chief Financial Officer, disrupting centuries of male-only boardrooms across Diageo’s legacy companies. Fast forward ten years and now women make up around 44% of the board and 40% of the executive committee, which more broadly is a team representing six different nationalities. Women also constitute over 36% of senior management.
“The importance of role models is often overlooked,” said Mairéad Nayager, Chief HR Officer at Diageo who has spearheaded a number of practices and policies to bring about change within the business. “Our women leaders are highly visible and credible businesspeople, who spend time engaging with other women within the organisation to inspire progress.”
But progress with gender representation has not been limited to leadership. The drinks company is running returnships to bring women into STEM roles and they recently hired its first ever female coppersmith (who beats and wields copper sheets into stills for whisky distillation) and the first female coopers (who create oak casks) through an apprenticeship scheme. Today, 50% of the Johnnie Walker blending team are women.
Equalising parental leave has also been a significant step to improving diversity and inclusivity in the business. Diageo set a global minimum standard for maternity and paternity leave, and fully equalised parental leave in the majority of offices around the world so that both men and women can take 6 months’ fully paid leave and up to a year’s parental leave. “We believe that we need to shake up policies and cultural norms around parental leave if true gender equality is going to be achieved in the working world,” said Nayager. “All our colleagues – regardless of gender – should be able to experience the joy of raising a young family, while continuing to thrive at work.”
Nayager added she was heartened to see the number of men taking paid leave and paving the way for others. Diageo’s Global Scotch Ambassador, Ervin Trykowski, is just one such example – he is five months into his six months’ fully paid leave, helping out with his son while his wife runs her own business.
“Some of my friends only had two weeks off work when they became a dad and it just isn’t enough,” Trykowski said. “Diageo’s family leave policy has been game changing for the way we’ve been able to live as a family, and I hope more companies give dads this magical opportunity.”
However, delivering an inclusive and diverse workplace at every level of this business, is not without its challenges - not least because the company operates in a staggering 180 markets. “The level of change we have managed to achieve wasn’t easy, but we knew that we would be a better business if we were truly representative of our consumers,” said Nayager.
Diageo has further recognised it can play a role in affecting change in society. As an organisation with 28,000 employees and over $12bn in revenue, Diageo is in a position to meaningfully encourage suppliers and partners to implement their own D&I initiatives. For example, Chief Marketing Officer, Syl Saller, has written to all of the company’s advertising agencies around the world asking to see statistics on gender diversity and pay gaps. And General Counsel, Siobhán Moriarty, signed an open letter which advocates for in-house counsel and law firms to work together to promote greater diversity and inclusion across the legal sector.
The impact of these policies and initiatives has been profound. In the past year, as part of a global analysis of over 23 countries and 3,500 companies, social enterprise Equileap ranked Diageo number one in its gender equality index, highlighting Diageo’s negligible gender pay gap – and the fact it has a strategy to close any gap should one arise – as well as an innovative paid leave policy and flexible work arrangements. Diageo was also ranked second in the Refinitiv Global Diversity and Inclusion Index and is included in the Bloomberg Gender Equality Index.
“We’ve been able to make progress by combining ambition with action,” said Nayager. “A commitment at the highest levels to make change happen – and the action on the ground to make that vision a reality”.
But, she acknowledges, the job is far from over. “We’re extremely proud of the strides we have made to accelerate gender equality within our business to date but are restless to do more.”