Ducks in a Row: Greed Hiring is Good
by Miki Saxon
Way back in 2007 I described what I call the number one best motivator.
Over the years, I’ve found vested self-interest (VSI) to be not only the most powerful people motivator around (…) And the idea must have merit when you consider that a Sudanese cell phone billionaire is using it to incentivize African heads of State to act responsibly.
So, instead of hiring for diversity and the social good, why not hire for greed, pure and simple.
You won’t even need to rationalize your decision, since the data makes it a no-brainer.
Researchers from the Massachusetts Institute of Technology and George Washington University calculated that going from an all-male or all-female team to one with equal representation of men and women correlated with a revenue gain of 41%.
41%! That ain’t chicken feed.
Moreover, the phenomenon is global.
A study of 1,000 companies across 12 countries by McKinsey & Co. showed that those in the top quartile for gender diversity were 21% more likely to have above-average profitability than companies at the bottom of the pile. If companies had a greater balance in ethnicities at work, they would on average perform 33% better than those that don’t. Other studies that McKinsey did in previous years (paywall) yielded similar conclusions.
It seems obvious that women would understand women customers better than men do, but if you doubt it Home Depot is an excellent case study.
Trish Mueller joined HD and became CMO a few years later. She recognized that the data collection showing most purchasers were male was incorrect and the company set out to disversify their market.
In 2013, the Home Depot’s core executive team had a strategy meeting about how the brand could appeal to more customers and markets—like women—and expand their product range. There were two women executives in the room: Mueller and Cara Kinzey (Senior Vice President, Technology). Trish and Cara suggested that the brand’s product range should be as wide as its name. Home Depot included the word “home,” after all, and could expand into product categories like cookware, small appliances, and kitchen accessories.
“Cara and I came at it from a women’s perspective,” Trish says, “without it being that overt.”
They decided to test their ideas on the next Black Friday sale.
They gave their merchants a broad mandate: “If it’s something you can conceive of using in your home, let’s have a conversation about it.”
Some of the home appliances and cookware options they tested proved so successful that they’re now kept long-term inside every store. The Home Depot also had some rather unexpected hits during their Black Friday sales, like a giant fluffy teddy bear that sold for $29.99. “Who would’ve ever thought to see that at Home Depot?,” Mueller says. “But we were sold out in ten minutes, the first year we carried them.”
But is the effort paying off consistently beyond Black Friday?
Unlike smaller rival Lowe’s, Home Depot isn’t aggressively adding to its store base. In fact, it has opened just one new location in the U.S. market since 2013. Yet the retailer is beating Lowe’s in overall revenue growth thanks to its stronger customer traffic.
Would HD have had the savvy to go after the women’s market without Mueller’s and Kinzey’s viewpoint? Unlikely for guys who thought pink power tools were the answer.
Has it translated to more diverse hiring? It has in Canada (I couldn’t find US stats).
So, for all you guys who have no time for moral imperatives, turn your VSI up to high and do it for greed.
Image credit: Pexels and MotleyFool
March 26th, 2018 at 9:48 am
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