Closing Case:

Using Strategic Goals to Drive Diversity

In 2015, Sodexo came in second on DiversityInc’s list of Top 50 Companies for Diversity. Coming on the heels of #1 finishes in 2010 and 2013 and #2 finishes in 2011, 2012, and 2014, Sodexo’s 2015 ranking made it the only company to make DiversityInc’s top two for six straight years. The company’s press release promised that “sustaining its efforts to engage a diverse workforce and foster an inclusive culture … is essential” to its strategy, adding that Sodexo “has a long commitment to diversity in the workplace.”

Kristoffer Tripplaar/Alamy Stock photo
Strictly speaking, that commitment began in earnest in 2005, when Sodexo, a French-based multinational provider of food and facilities-management services, agreed to pay $80 million to settle a lawsuit filed in 2001 by black employees who charged that they weren’t being promoted at the same rate as white coworkers. After fighting the case all the way to the U.S. Supreme Court, Sodexo (whose American arm is headquartered in Gaithersburg, Maryland) also agreed to implement a more structured hiring program and to set up a monitoring panel partly appointed by the plaintiffs. “We are pleased this case has been resolved,” said U.S. CEO Richard Macedonia. “We are a stronger and better organization as a result of this process.”

“It was a very painful thing for the company,” recalls Dr. Rohini Anand, Global Chief Diversity Officer. Indian-born Anand, whose doctoral degree in Asian Studies from the University of Michigan focused on cross-cultural interactions, was hired in 2003, just over a year after the employee suit had first been filed. A specialist in multicultural issues, she began evaluating the experiences not only of African American employees, but those of Hispanics, Asians, and gays and lesbians. She also instituted a program of metrics to measure the performance of every diversity-related initiative, including a diversity scorecard to align the results of such efforts as promotion and retention with organizational strategy.

By 2005—the year of the class-action settlement—Sodexo had pronounced itself “a leader in diversity,” but the self-congratulations were a little premature. In fact, complaints about promotion practices—and even about incidents violating basic respect and dignity—continued to surface right up to the time that federal oversight over Sodexo employment practices came to an end. Issued in April 2010, a report entitled, “Missing the Mark: Revisiting Sodexo’s Record on Diversity,” charged that, between 2004 and 2009, the number of African American managers had increased by less than 1 percent and that of minority managers as a whole by only 2 percent. Reported one African American employee: “I worked with a chef who would pull down his pants and use the ‘n’ word and had this thing about ‘you people.’ I brought it up with Human Resources, but they said since he was part black, it was okay.”

As suggested, however, by the run of DiversityInc citations from 2010 to 2015, Anand’s efforts may have begun to pay off. Anand likes at least some of the latest scorecard numbers. Today, for example, 10–15 percent of total bonuses for about 16,000 managers is tied to the attainment of diversity-related goals, as is 25 percent of upper-management bonuses. According to former Sodexo North America CEO George Chavel, they were trying to drive change and “not just pointing to those metrics but using them.”

Case Questions

1. Do you think diversity goals should be a part of a company’s strategy? Why or why not?

2. Over the past few decades, a number of firms that were sued for discriminatory employment practices ended up becoming exemplars for promoting diversity. What might explain this pattern?

3. Describe the link between developing strategies for increasing diversity and then implementing those strategies.