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How the $286 billion luxury empire LVMH reinvented its diversity strategy

  • The luxury-goods empire LVMH is revamping its diversity strategy.
  • The company recently brought on its first head of diversity and inclusion in North America. Gena Smith, the head of global and executive recruitment, led the search and hired Corey Smith for the role.
  • Smith says it's important that all employees know about D&I initiatives and how they can help. That's why LVMH prioritizes internal communications.
  • Racial inequity persists in retail and in the luxury market. Companies require systemic, long-term changes to combat such biases.
  • Visit Business Insider's homepage for more stories.

In 2012, LVMH — the world's largest luxury-goods conglomerate, with 75 brands including Louis Vuitton, Dom Pérignon, and Sephora — conducted a survey of its employees across North America.

One finding was concerning. Employees reported that they weren't sure the organization prioritized diversity and inclusion in human resources or in its overall business strategy.

And yet: LVMH's leadership team had already been working on several programs around diversity and inclusion, including a 2007 initiative, called EllesVMH, to increase the representation of women in senior leadership.

This, to Gena Smith, was a clue.

"We said, right away, we know that we need to be more communicative," the company's senior vice president of human resources and head of global and executive recruitment told Business Insider.

"We need to share with people what we're doing," said Smith, who joined LVMH nearly 10 years ago.

But retooling talent management and workplace culture at centuries-old brands is, to the say the least, a challenge.

Business savvy and a long-term perspective make an effective diversity-and-inclusion leader

The business-to-business software company ZoomInfo estimates there's been a 113% increase in executives with D&I titles since 2015, Business Insider's Marguerite Ward reported in July — but every organization is looking for a unique skill set.

In September, LVMH — which has a market capitalization of $286 billion and generated $59 billion in revenue in 2019 — hired its first head of diversity and inclusion for North America, Corey Smith, who had previously led the same function at Major League Baseball. Gena Smith, who steered the search, told Business Insider she was impressed by his willingness to focus on what LVMH could achieve in the long term and by how he saw D&I as part of the company's overall business strategy.

Perhaps most important, Corey Smith indicated he wouldn't grow impatient if it took a while to see the results of new programs. LVMH, after all, has roots in the 16th century. Overhauling outdated systems won't happen overnight.

"I wouldn't want someone to come in and be frustrated because we're talking about, 'What are we going to build over 10 years?'" Gena Smith said. "We want to have actions and successes in the short term, but we have the ability to build something really impactful over the long period."

In a statement to WWD, Corey Smith said he looked forward to building "on the foundation they have in place in order to ensure that the group continues to be an inclusive, forward-thinking, and desirable place to work and that we can use the power of our brands to effect change."

The way Cassi Pittman Claytor, an assistant professor of sociology at Case Western University, sees it, cultivating a diverse workforce and customer base is more important than ever.

"It's not even a matter of addressing your own organizational issues," she said, noting that much of Generation Z is nonwhite. "It's about being prepared for the future," she added, "the future workers and the future consumer."

Racial inequity persists in the retail industry

Diversity data for the luxury industry is generally hard to come by because many companies keep that information private. Recently, that's started to change.

Over the summer, Sharon Chuter (a former LVMH employee) launched the Pull up for Change campaign to encourage beauty brands to be more transparent about diversity within their organizations. Sephora, an LVMH brand, disclosed that its leadership was 6% Black. In June, WWD released an article that found LVMH did not have a single nonwhite executive in its C-suite or on its board.

When Business Insider followed up about those stats, LVMH said in a statement that the company's priority was to create "an inclusive and desirable place to work" for all employees regardless of background. The statement went on, saying "the commitment to creating opportunity and supporting a diverse workforce is an integral component of the LVMH vision." It also pointed to the hiring of Corey Smith as someone who would build on current programs and push equity through the organization.

Lack of diversity is a long-running issue in the retail world.

For example, a 2015 report by the liberal think tank Demos and the NAACP found that Black and Latino retail workers were typically funneled into lower-paying roles like cashiers. According to the report, some 88% of retail managers were white, compared with 5% Asian, 6% Black, and 8% Latino (the report said the percentages didn't add up to 100 because multiple racial groups contained workers who identified as Hispanic).

Nonwhite consumers, meanwhile, are often ignored or treated with suspicion in high-end stores.

Addressing these problems isn't just a matter of holding a diversity training day, said Pittman Claytor, whose research focuses on middle-class Black people. She's working with Sephora for a study on racial bias in retail environments.

D&I "needs to be part of a larger, systemic approach," Pittman Claytor said.

Rebooting in progress

For LVMH, Gena Smith said success in DEI required "constant measurement." When LVMH set a goal of increasing the number of female leaders, for example, the company kept careful records of who was hired and promoted each year.

In the past few years, LVMH has broadened its focus from gender equity to all forms of diversity and inclusion, Smith said. In North America, 64% of LVMH employees identify as nonwhite and 12% identify as Black. Women make up 45% of LVMH's leadership team.

New processes have been introduced: To encourage employee participation in D&I initiatives, LVMH posts an annual callout for ideas. The staff members with the most compelling submissions work with mentors to incubate those ideas and, eventually, deploy them in the company. LVMH has hosted "listening sessions," including a panel discussion in which women at the company described obstacles they'd encountered in their careers.

LVMH also partners with the nonprofit Runway of Dreams to create space for people with disabilities in the luxury industry. And leadership is working with historically Black colleges and universities to identify talent that isn't typically tapped for careers in the luxury market.

Beyond raw data, progress happens when all employees prioritize D&I in their own job responsibilities, whether they're a sales associate or a manager at corporate headquarters. Smith said the goal was "embedding that in the culture of the organization and the way we work."

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