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Why Sales Force Diversity is the New Normal

By Jan Fletcher

Diversity initiatives may have started with hiring, but now encompass supply chains, sales teams, and are even drilling down into networks.

Some firms are recognizing the bottom-line benefits to these strategic initiatives to increase diversity in these other human resource channels. Henry Ford Health System, in Detroit, Mich., acknowledges on the firm’s website, that “customers increase when they can see people serving them that understand their unique needs.” The firm says these measures impact product development, too, as “diverse teams develop products that better serve the customer.”

Diversity Reverberates

This recognition is not new. A disregard of the importance of promoting diversity among a firm’s sales force can reverberate throughout a company’s culture, and sometimes creates unexpected consequences from a public relations standpoint. In 2009, Marketing Week, a United Kingdom publication, reported that L’Oreal denied allegations a year earlier that the company had “whitened” the skin of Beyonce, a singer, for a company’s ad. This allegation came after the company in 2007, “was found guilty of employing an all-white recruitment policy for its shampoo sales teams,” according to Marketing Week.

Researchers in 2006, in a report detailed in Science Letter, (August 15, 2006) examined the strategies of several of the largest pharmaceutical companies in the U.S., including Pfizer, Eli Lilly, Wyeth, Aventis and Roche, in their efforts to market to minority physicians.

A key finding from the report found those efforts to build relationships “with physicians who either belong to a targeted ethnic group or who have an appropriate patient base is considered a key part of the total marketing strategy.

“Companies tend to identify a population with a therapeutic need and develop campaigns directed at all the population segments. Building relationships with physicians who either belong to a targeted ethnic group or who have an appropriate patient base is considered a key part of the total marketing strategy.”

That strategy includes, according to the report, providing “physicians with language-specific and culture-specific educational and marketing resources to share with patients.”

In the September 2004 issue [PDF] of the Harvard Business Review, David A. Thomas, a professor of organizational behavior and human resource management at Harvard Business School in Boston, cited the experience of IBM, and how the company grasped the relevance of bringing diversity into the marketing sector of the company.

“When most of us think of Lou Gerstner and the turnaround of IBM, we see a great business story,” said Thomas. However, he credits Gerstner’s 1995 effort at launching a diversity task-force initiative that “made diversity a market-based issue.” Gerstner said, “it’s about understanding our markets, which are diverse and multicultural.”

Vendor and Supply Chain Diversity

One tactic Thomas proposed was to partner with the corporation’s vendors “to provide much-needed sales and service support to small and midsize businesses, a niche well populated with minority and female buyers.”

Companies are realizing that providing support for diversity in all levels of the marketing and delivery supply chain benefits the bottom line, and is a profitable strategy over the long-term.

In the article, “Initiative supports diversity, drives efficiency: Kraft Foods will request both up- and down-stream vendors to attain sustainable social, economic, and environmental objectives,” published in Adhesives & Sealants Industry Magazine, it was reported that “the consumer packaged goods industry is buzzing with news of a major commitment by Kraft Foods to support minority-owned suppliers. This commitment is based on a far-reaching joint initiative by Adhesives Systems Inc. (ASI), Henkel, and Kraft. Kraft Foods has committed to source the majority of the adhesives used to package its food products in North America from minority-owned and operated adhesive manufacturer ASI and global adhesive technologies provider Henkel.”

This move is unique, according to the article, because “it is expected to enhance efficiency within Kraft Foods’ supply chain,” resulting in significant “procurement and production efficiencies” – specifically, Kraft Foods’ desire to reduce supply-chain complexity by up to 70 percent.

George Hill, the Chairman and CEO of ASI, said the two separate companies with individual portfolios and unique research and development efforts were “a perfect marriage,” and are collaborating to achieve a synergistic effect, according to the article. The alliance will also bring an estimate seven-figure investment to the Detroit Metropolitan area, a community in which minorities have suffered from a labor surplus, says Hill.

Julia Brown, Senior V.P. of procurement at Kraft Foods, said the company remains committed to ensuring a diverse workforce and supplier base, as well as delivering value to shareholders.

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