Case Study of General Mills: Diversity and Inclusion

Diversity is increasingly becoming a serious HR issue for companies in the 21st century marketplace. Organizations have been forced to develop strategies for increasing the representation of minority groups and making their workplaces more favorable for them. General Mills was recently named one of the most inclusive companies in the world. This text examines the company's diversity program with the aim of determining what it does differently from competitors and what the possible weak spots are.

General Mills: Diversity and Inclusion

Diversity is one of the major HR issues that companies have been forced to deal with to gain competitive advantage. Companies with effective diversity and inclusion strategies are generally perceived as being more favorable workplaces than those with ineffective programs. General Mills was recently named one of the 50 most inclusive workplaces by DiversityInc. This text examines the company's diversity program with the aim of identifying what it does differently from other companies, whether there are any areas that need improvement, and the positive elements that upcoming companies could emulate to gain competitive advantage in their respective industries. It explores among other things, the strategies that the company uses to implement its diversity and inclusion program, the specific areas to which it pays emphasis, and how it designs its organizational structure to facilitate strategy implementation. Although diversity and inclusion are the main focus areas for this paper, it also does a lot to cover other areas including the company's growth and marketing strategies, corporate strategies and so on. I recognize that these too play a role in the company's continued success; and if this paper is geared at giving insight to upcoming entrepreneurs on General Mills' success strategies, then it will need to present more of a wholesome approach.

Company Overview

General Mills is America's leading producer of packaged foods, dealing in a wide range of breakfast cereal, prepared mixes, snack foods, and flour (General Mills Company Overview Report, 2014). Some of its popular brands include Wheaties, Trix, Chex, and Cheerios in the breakfast cereal category; Hamburger Helper, Betty Crocker, and Bisquick in the mixes category; and Nature Valley Granola, Pop-Secret Popcorn, and Yoplait Yogurt in the snack category (General Mills Company Overview Report, 2014). Headquartered in Minneapolis, Minnesota, the company grew from a simple flour mill in the 1860s into one of the world's largest companies, serving more than 90 countries worldwide. Much of its global activity stems from two joint ventures -- Snack Ventures Europe, a venture with PepsiCo where GM enjoys a 40.5% stake, and Cereal Partners Worldwide, where it enjoys 50-50 percentage ownership with Nestle. Not only does it have a diverse customer base, GM also maintains a diverse workforce by recruiting talent from different communities and cultural backgrounds as a way to foster innovation and ensure that the food choices and ideas brought to the table can effectively address the unique and specific needs of its diverse customer base (General Mills, 2015). The company's diversity strategy focuses not only on the primary areas of sexual orientation, race, gender, and religion, but also on the cultural aspects, which include communication style, beliefs, and preferences (General Mills Diversity and Inclusion Segment, 2015). Its inclusion program is pegged on the core values of developing, respecting, and investing in employees. Thus far, it has been successful, but as market dynamics change and the intensity of competition increases, the company will need to identify and address the weak points of its diversity strategy in order to cement its position in the market.

History and Growth

GM began to trade publicly in the NYSE in 1928 under the leadership of James Ford; however, even before that, its founder Cadwallader Washburn had shown great interest in the concept of diversity and being accommodative of people from different cultures (Funding Service, 2001). In the very early years of the company's formation, for instance, Washburn sought the services of a French engineer to boost the competitive position of the newly-formed flour milling company by upgrading the production processes and improving the quality of produced floor (Funding Service, 2001). Reports indicate that with this, the company's flour became the best flour available in the American market (Funding Services, 2001).

Upon assuming control of the company from his father, James Ford continued the strategy of diversity, spearheaded by the founder from the onset - only that this time, the diversification focused more on the product range and the company's geographic presence. He began by consolidating the company with twenty-seven other milling companies in different parts of the country, and had, within five months in office, made GM the world's largest flour-milling company (Funding Services, 2001).

Product-wise, the company ventured into the production of packaged consumer foods to cater for the growing postwar demand for the same among urban dwellers. Bisquick, the company's first baking mix, was introduced in 1931, before Kix and Cheerioats were launched as the company's first ready-to-eat breakfast cereals in 1937 and 1941 respectively (Funding Services, 2001). By 1946, the latter had grown to become the number one cereal in America.

Riding on its success in the consumer product market, the company, at the height of the Second World War, diversified its commodity range even further by venturing into the production of dehydrated foods and animal feed formulas as well as the manufacture of bags, medicinal alcohol, and war equipment for the navy.

Edwin Rawlins, an outsider, was appointed president of the company in 1959, a move that was taken to symbolize the company's commitment to diversity. With this, the company not only ventured into the new snack foods category, but also diversified its consumer base into the European market. To cement its global presence in the consumer products industry, GM formed joint ventures with Europe-based PepsiCo and Nestle; and diversified its range of operations to include restaurants and specialty retailing.

By 1977, the company was operating internationally, with a diversified business range that included specialty retailing, fashion, games and toys, restaurants, and food processing. In the 1980s, most of these were dropped, and the company chose to refocus on food. Today, GM operates in over 90 countries with a highly-diversified food product range, and an equally-diverse employee base

Analysis of GM's Diversity and Inclusion Program

GM's diversity and inclusion program is well-captured in two of its key public icons -- the corporate mission, which emphasizes the concept of nourishing lives, making life richer, easier, and healthier for consumers in different cultures (GM Diversity Brochure, 2012); and the corporate website, which does a lot to symbolize the intensity of gender and cultural diversity among employees and top management officials. At GM, diversity is not only a value, but a business strategy for attracting and retaining top talent (GM Diversity Brochure, 2012). Unlike most established companies, which focus only on the primary elements of diversity such as sexual orientation, race, gender, and culture, GM's diversity and inclusion program focuses on the cultural aspects as well, which include communication styles, beliefs, preferences, and values. According to Ken Powell, the company's Chairman and Chief Executive Officer, this all-round approach to diversity makes GM a "better employer, a better supplier… and a better world citizen" (GM Diversity Brochure, 2012). The company fosters inclusion by listening to the voices of employees, respecting their views, and investing in their personal and professional development (I-Sight Inc., 2013). The company maintains strong affinity networks and diversity councils for mentoring employees from different cultures, and increasing their awareness of issues surrounding diversity and inclusion. It relies on these very networks, which also symbolize its culturally-rich workforce composition, to instill a culture of respect and inclusion among employees (GM Diversity Brochure, 2011). These affinity networks include:

The South Asian-American Network

The Middle-East and North Africa Network

Hispanic Network

Black Champion Network

Betty's Family (LGBT) Network

The Asian Heritage Network

The American Indian Council

Women-in-leadership

Multiple function and division-specific diversity and inclusion councils

The company understands the varying needs and styles of its workforce, and runs a variety of employee initiatives and programs to tend to the same, and to consequently maintain high levels of job satisfaction. These include workplace wellness programs that have been recognized as best-in-class; employee benefits including eldercare and childcare resources, domestic partner coverage and adoption and parenting benefits; and workplace flexibility options that give employees the power to define when, where, and how work gets done (GM Diversity Brochure, 2011). These flexibility options include flexible user-shared environment (FUSE), everyday flexibility, extended time off, and flexible work arrangements (GM Diversity Brochure, 2011).

Based on its comprehensive diversity program, GM has been named among the top-100 best places to work, and also among the i) best companies for working mothers by the Working Mother Magazine; ii) best companies for multicultural women; iii) best places for LGBT employees by the Human Rights Campaign; iv) best companies for diversity by DiversityInc; and v) best companies for Latinas by the Latina Style Magazine (GM Diversity Brochure, 2011).

This focus on employees as a way of appreciating diversity is the strong point of the company's diversity program; however, it also is the source of its number one threat - focusing too much on keeping employees happy and satisfied could easily be misunderstood as a desperate attempt to retain the best talent; if the power given to employees is not curtailed, it could create breeding grounds for laxity (Johnson, 2005). Moreover, despite stating its commitment to diversity in its mission statement and severally on its corporate website, GM does not give as much attention to the disability aspect -- the images presented on its corporate website do little to symbolize its commitment to include persons with disabilities in its workforce.

SWOT Analysis (Diversity & Inclusion)

Strengths

i) Enjoys a strong reputation for diversity and inclusion, and has been mentioned severally as one of the most inclusive companies in the world

ii) Named the 20th most inclusive company in the world by DiversityInc

iii) A very strong reputation for employee treatment, benefits, and initiatives

iv) Enjoys scale and scope economies from its international presence and broad commodity range; and this gives it sufficient resources for conducting research on how to improve its diversity and inclusion strategies

v) Strong recognition as a philanthropic and socially-responsible company; named by Forbes Magazine as the most reputable company in 2012

Weaknesses

i) Marketing controversies that cast doubt on the company's commitment to diversity. A perfect example is the 2012 controversial advertisement for Yoplait Yogurt, which brought the company under intense criticism for portraying women as being more predisposed to making wrong food choices than men. I have included the link to the controversial ad in the references section of this text.

ii) There is no outward display of the company's commitment to hiring persons with disabilities

iii) The company's diversity and inclusion program, which focuses on keeping employees appeased, could lead to laxity and underperformance

Opportunities

i) The company could expand its inclusion program for individuals with disability above that of its rivals

ii) The company could develop substitute low-cost alternative products for low-income consumers

Threats

i) The country's increased focus on the inclusion of LGBT individuals casts doubt on the sustainability of the company's current diversity program

ii) The lack of a strategic affirmative action program that, for instance, sets a specific number of spots for minorities at different levels of the organization, could be taken as a point of weakness by competitors

Given that the threat posed by new entrants is negligible, GM can be expected to remain a competitive force in the food-processing industry. Nonetheless, the company could cement its competitive position by among other things, upgrading its diversity and inclusion programs to be able to respond effectively to emerging threats, while at the same time capitalizing on the strengths and opportunities (Hill & Jones, 2009). With the kind of competition the company faces, just mentioning that it is an equal opportunity/affirmative action employer in its publicly-advertised positions is not enough; there is need to institute a quota system that sets aside a specific number of spots at each level of the organization for minority employees. There is no evidence of any such program from the company's website and diversity reports. Moreover, the company needs to increase the attention it pays to the inclusion of persons with disabilities and LGBT individuals because as long as there is no evidence to indicate the same in its public platforms, them any internal efforts may well be deemed non-existent.

Corporate Strategy

The strategic strength behind GM's continued success lies in its strong marketing plan and corporate focus. The corporate focus is manifested through the company's mission and vision statements, as well as its corporate goals and objectives.

Goals and Objectives

GM's strategic goals and objectives are clearly depicted in its corporate mission, which emphasizes the concept of nourishing lives, making life richer, easier, and healthier for consumers in different cultures (GM Diversity Brochure, 2012). Its goals are structured around five core areas -- health, environment, sourcing, workplace, and community. Guided by the core values of doing the right thing all the time, innovating in every aspect, building great brands, developing and investing in employees, and striving for consistently superior performance, GM strives to:

i) Provide people with nutritious and convenient food choices that will drive them to lead healthier and more nourishing lives.

ii) Continually reduce its environmental footprint by reducing resource usage and increasing ingredient sustainability.

iii) Sustainably source raw materials to protect and conserve the national environment upon which the company relies.

iv) Work together with other stakeholders to make the community a better place by strengthening communities, improving education, and advancing nutrition wellness

v) Foster a diverse and inclusive workplace that respects and invests in employees to make them future leaders. The company maintains its commitment to building a strong workplace culture and maintaining a safe workplace that allows employees to effectively carry out the mission of nourishing lives. People of color and women currently make up 36% and 21% of the company's board of directors, and 20% and 40% of the total U.S.-based workforce (General Mills -- the Workplace Segment of the 'Responsibility Section, 2015).

Table 1 below summarizes these strategic goals to determine how they help the company maintain a competitive advantage.

Table 1: GM's Sources of Competitive Advantage

Operational Pillars

Consumer education

Operational efficiency

Innovation

Respect for, and development of employees

A diverse employee base, which fosters innovation through diverse ideas and opinions

Growth Drivers

Innovation and diversification

Consumer health

Building great brands

Out-of-home operations

Competitive Advantage

Strong product portfolio

Strong R&D capability

Strong geographical presence

Strong reputation

Unmatched attitudes towards cultural differences

These are the strategies that GM uses to gain competitive advantage over its competitors. The company's strong and popular brands are used to create competitive barriers that make it difficult for other companies to eat into its market share. These strong brands form the basis of the company's marketing strategy -- brand loyalty among consumers is a key feature of the food processing industry. GM, therefore, structures its marketing strategy to specifically woo that niche of quality-sensitive consumers who would be willing to sacrifice that extra coin for a higher-quality product. Unlike most of its competitors - such as Nestle and Kellogg, GM does not peg its marketing strategy on the aspect of affordability; rather, it supports its brands based on the aspect of quality. It relies on the continued quality of its products to not only woo prospective customers, but also maintain brand loyalty among existing ones (University of Oregon Investment Group, 2008).

Growth Strategy

Product, geographical, and employee diversification have been the key strategies for business growth in General Mills right since its formation. In its growth plan for FY 2012, for instance, GM announced its plan to cement its market position by expanding its product range in five global categories -- wholesome yogurt and snack bars, convenient meals, super-premium ice cream, and ready-to-eat cereal -- and launching 70 new products (Yahoo Finance, 2012). According to the company's global responsibility report for year 2013, most of this expansion is driven by the growing numbers of health-conscious consumers, and consequently, the growing global interest in healthy food choices, which calls for the production of packaged foods with more fiber, vegetables, and fruits, and less fat content (GM Global Responsibility Report, 2013; Yahoo Finance, 2012; Gunsbury, 2012).

Geographically, the company has strengthened its position through merging with, and acquiring smaller companies both at home and in promising international markets. In 2013, the company announced its intention to expand into the emerging markets of Brazil, China, and India (Yahoo Finance, 2012). It ventured into the Brazilian market by acquiring Yoki Alimentos, one of Latin America's largest food companies, in 2014. Mergers and acquisitions have also been a key strategy for growth in the domestic market. In its most recent domestic acquisition, GM acquired California-based Annie's Inc. For around $820 million (Kennedy, 2014). The company's chief operating officer, Jeff Harmening, expresses that their acquisition of Annie's is geared at increasing their presence in the branded natural and organic foods category (Kennedy, 2014).

Despite the fact that mergers and acquisitions are a fundamental part of GM's growth strategy, and one of the key ways through which it gains competitive advantage over competitors, the company has not had the smoothest of runs in its implementation of the same. Often times, GM's acquisition strategy has been challenged on antitrust grounds. In the 1970s, for instance, GM was one of three companies caught up in an antitrust suit filed by the Federal Trade Commission for allegedly i) monopolizing the ready-to-eat cereal market; ii) restraining competition in order to increase industry profitability; and iii) colluding with supermarkets and other large retailers to make it unprofitable for new entrants to thrive in the industry (Ahmad, n.d.). Although the complaint was thrown out in the 1980s, it had cost the company a lot in both financial resources and lost managerial time. More recently, in 1993, the company was caught up in another antitrust complaint against its planned acquisition of food giant Nabisco. It had to drop the same to evade the potential legal costs that would come with such an acquisition. All the same, these legal battles cost the company huge chunks of financial resources, taint its reputation, and impact negatively on its ability to compete effectively.

Besides mergers and acquisitions, GM also depends on joint ventures to conquer new markets. Currently, much of the company's global activity stems from two joint ventures -- Snack Ventures Europe, a venture with PepsiCo, where GM enjoys a 40.5% stake, and Cereal Partners Worldwide, where it enjoys 50-50 percentage ownership with Nestle. It is expected that more of such ventures will be established in the coming years as the company increases its presence in new markets.

Diversity and Inclusion: Strategy Implementation

GM's diversity and inclusion plan is pegged on five fundamental areas -- equal employment opportunity, supplier diversity, multicultural marketing, veterans, and women empowerment (General Mills -- the Diversity and Inclusion Segment, 2015). The company reiterates its commitment to providing a workplace environment that is free from harassment or discrimination based on gender, sexual orientation, citizenship, disability, marital status, race, religion or any other characteristics protected by the law (General Mills -- the Diversity and Inclusion Segment, 2015). Further, in all its job advertisements, the company maintains that it is an equal opportunity employer, and that minorities are highly encouraged to apply for any positions thereof. However, the company does not give any evidence of there being a distinct and specific regulatory plan to ensure that minorities are indeed equally represented in the hiring processes of the company (Combs & Nadrkami, 2005). For instance, there is no documented evidence of there being a quota system for ensuring that minorities are guaranteed a specific number of positions at different levels of the organization. This is despite the Supreme Court's ruling United Steelworkers v. Weber (1974), which gave private employers the discretion to set numerical quotas for increasing the representation of minority groups (Gould, 2004)

The company's diversity strategy not only focuses on the employee element, but on the supplier element as well. Supplier diversity efforts are spearheaded by the Supplier Diversity Department, which is tasked with supporting the General Mills supplier network through training and networking activities (General Mills -- the Diversity and Inclusion Segment, 2015). Three fundamental pillars support the company's diversity efforts -- i) heart -- the recognition that ensuring supplier diversity is the right thing to do; ii) head -- the recognition that the company's future objectives are tied on its ability to market effectively to a diverse supplier base; and iii) wallet -- the recognition that by keeping its suppliers close to its heart, the company makes itself "accountable for measurable progress in developing diverse supplier relationships" (General Mills Diversity and Inclusion Segment, 2015, n.pag).

The third strategy used to demonstrate diversity at General Mills is multicultural marketing. GM currently stands as one of the leading marketers to the black-American community and Latino communities (General Mills Diversity and Inclusion Segment, 2015). The primary programs under the multicultural marketing are the How Feeding Dreams Work Program and the Que Rica Vida program, which focuses on the marketing of Latino food on diverse channels, including social media (General Mills Diversity and Inclusion Segment, 2015). The latter focuses on spreading word on the tastiness of Latino food to its diverse client base through Snapguide, YouTube, Facebook, Twitter and Pinterest (General Mills Diversity and Inclusion Segment, 2015).

Veteran inclusion is also a key aspect of GM's diversity and inclusion program. It focuses on including veteran employees in the day-to-day decision-making processes of the company as a way of harnessing and retaining their experience and unique skills (General Mills Diversity and Inclusion Segment, 2015). Through the American Corporate Partners' Program, the company offers mentoring programs to veterans and their families to help them transition swiftly to civilian life (General Mills Diversity and Inclusion Segment, 2015). In 2012, the Governor of Minnesota recognized the company's inclusion of veterans in the diversity program by declaring the company a Yellow Ribbon organization (General Mills Diversity and Inclusion Segment, 2015). In the same year, the G.I. also recognized the company's efforts and named it among the Top 100 Military Friendly programs (General Mills, 2015). The veteran affinity program is driven by three core pillars -- service, leadership, and recruiting and retention -- all geared towards harnessing and retaining the unique experiences, skill, and talent of men and women who dedicated their youthful and most productive years to serving their nation in the armed forces (General Mills Veterans Report, 2013). Currently, the company has over 600 veterans in its U.S.-based workforce, and almost 60% of these work as salaried employees in its manufacturing plants (General Mills Veterans Report, 2013). In 2013, it established a veterans club, through which employees "provide outreach and support to veterans and their families through community service projects" (General Mills Veterans Report, 2013, p. 6).