Executive Summary

Diversity Strategy At General Mills
Translating Goals Into Action

Stephen W. Sanger
Chairman & CEO of General Mills, Incorporated

August 1997

Diversity is not unlike any other business challenge. The more you work on it, the more you learn.

We originally thought that workforce diversity was a recruiting issue. If we just recruit diversity we’ll be fine.

That’s what we thought.

What we learned is that workforce diversity is primarily a development issue.

Let me use our marketing organization as an example, five years ago, our practice was to hire three people in the hope one of them would advance to the manager level within a few years. The two who didn’t advance would typically leave. It was up or out. Our approach was not so much to develop talent as to identify it.

But the unspoken expectation was that two-thirds of our new hires would fail. In too many cases, that included a disproportionate number of the minority employees we had worked so hard to recruit. The diversity we had achieved at the entry level was not resulting in diversity higher up in our organization.

Today, we hire fewer potential managers and screen them more carefully. But once hired, we operate with the expectation that every one of them will succeed.

We instituted Individual Development Planning for each employee. We established formal mentoring programs. Where we once took pride in treating everyone the same, but in reality expected only a few to succeed, we now view every employee as unique, but expect all to advance, grow and contribute to our success.

We believe this philosophy — treating every employee as a unique blend of talents and development needs, but maintaining the highest possible expectations for all — is the key to building and maintaining a diverse and competitively superior workforce.

We originally thought consumer diversity was primarily a language issue. Our cereals, we felt, are equally attractive to white kids, black kids, Asian kids, Hispanic kids — assuming that we can communicate with them. This led us to utilize Spanish language advertising as early as 1981.

But again, while language is an issue, we learned it isn’t the only issue.

The fact is, people respond to messages that appeal directly to them, that acknowledge their uniqueness and reach them where they live.

We currently use two Hispanic-owned agencies to develop advertising and promotional programs targeting Hispanic consumers. We work with two African American agencies developing advertising and promotions effective with black consumers. And it’s paying off. We recently began airing a Honey Nut Cheerios commercial, developed by one of those agencies, that increased sales over 50 percent among African American consumers in Chicago alone.

The third area where diversity is important is among suppliers. We also look to our suppliers for ideas. If you believe diversity drives innovation, then you’d better make sure your suppliers are diverse. We do.

We are a company that likes to set goals, and measure our progress against them. Some people shy away from goals when you’re addressing diversity. Some call them quotas. We don’t.

We recruit at graduate business schools where student bodies are about 6 percent minority. Our goal is to recruit at least 20 percent minorities from these schools and we have done so for the last decade. Our goal is to have 25 percent of our domestic sales from African American and Hispanic consumers by the year 2000, up from 18 percent today. Our goal is to double our purchases from minority-owned business from $30 million in 1995 to $60 million in 1997, then to double it again by the year 2000. So far, we’re right on track. We believe setting clear, ambitious goals has been critical to our progress in addressing diversity.

Finally, we believe that good diversity practices are also good business practices. Effective marketing to Hispanics and African Americans is not a diversity initiative, it’s a business building initiative. Our supplier diversity efforts are strengthening our overall supplier base.

Perhaps the biggest reason we so aggressively pursue a diverse mix of backgrounds and viewpoints in our workforce, in our marketing and among our suppliers... is that diverse viewpoints produce innovation. I am absolutely convinced that a team of people encompassing different life experiences and different points of view will consistently "out-innovate" a very homogeneous team. And innovation is the force that drives our business.

These are some of the things we’ve learned in our twenty-plus years of working on diversity at General Mills. Our progress has not always been as steady as we like. But I can feel us gaining momentum every day. And we must — because it’s important to our business. ¨

This Executive Summary is an abstract of the speech Mr. Sanger gave March 6, 1997 at the 9^th Annual Multi-Cultural Forum.

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