Winning Strategy
It’s good for business: SPE board promotes broad outreach by industry to attract more underrepresented groups
The SPE has formed a Diversity, Equity and Inclusion (DEI) Advisory Board to promote these values and related educational and mentoring initiatives within the plastics industry.
The rationale in creating the board is the realization that most managers and executives in the industry are white, male and middle-aged or older, a profile that’s typical for U.S. businesses. The DEI Advisory Board seeks to generate awareness among SPE members and other companies and organizations throughout the industry about the benefits that diverse, inclusive and equitable working environments provide, and in the process give greater opportunities and input in decision-making to women, people of color, ethnic, cultural and sexual minorities, and other underrepresented groups.
There are many benefits to DEI strategies. Research indicates that businesses with a commitment to DEI achieve greater product innovation, higher market share, improved cash flow and increased profitability than those without such programs, or which lag in their implementation.
When it comes to finding and recruiting students and other young workers to select plastics as a career, mentoring individuals from diverse groups will help cultivate a new generation of talent that brings the advantages of different life experiences and broad perspectives to their jobs and, in time, contribute to the creativity and innovation that businesses throughout the plastics chain need to remain competitive and profitable.
Studies show that young workers are not only increasingly diverse ethnically, racially, culturally and in other ways, but prefer to work at companies that embrace DEI principles. Research by Deloitte finds that 74 percent of millennial workers (those born from 1981 to 1996) believe companies that promote diversity, equity and inclusion are more innovative than those without such initiatives or which have less commitment—or none at all—to them. Statistics from the U.S. Census Bureau, moreover, find that 56 percent of the 87 million millennials in the U.S. are white compared with 72 percent of the 76 million Baby Boomers (born 1946 to 1964)—a compelling example of the shift that’s underway in racial demographics.
A survey released in July by Glassdoor for Employers finds that 76 percent of jobseekers and employees say that a diverse workforce is an important factor to consider when evaluating which companies to work for or job offers. “This means that, whether or not your company is interested in increasing its diversity, most candidates are nevertheless evaluating diversity when they research your company and during the interview process,” the survey authors write.
Glassdoor adds that “a diverse workforce is particularly important to underrepresented groups: Nearly a third of employees and job seekers would not apply to a company where there is a lack of diversity among its work force. This figure is significantly higher for black job seekers and employees (41 percent) when compared to white job seekers and employees (30 percent) and is also higher among LGBTQ job seekers and employees (41 percent) when compared to non-LGBTQ job seekers and employees (32 percent). So, whether hiring for diversity or not,” the authors advise, “diversity should be something taken into account when evaluating [the] entire recruiting process.”
Clearly, of all the investments that companies make to grow their businesses and prosper, the most important is the people they hire, especially when confronted with periodic labor shortages, loss of institutional memory though retirements, or a periodic and seeming dearth of qualified candidates. If companies develop the ability to recruit young workers as well as seasoned professionals from a broad range of backgrounds and give them ample support and opportunities to contribute meaningfully to business development, evidence gathered by research shows that the returns on investment will be significant and long-lasting.
There is another reason for adopting or expanding diversity programs: many companies are committing to releasing annual diversity numbers about employment. Companies that haven’t made such a commitment might find that some customers will ask about their hiring practices and may require evidence of diversity goals as a prerequisite for new or ongoing business, especially when products and services in consumer or government sectors are involved.
An Ongoing Mission
SPE’s Executive Board promoted the formation of the DEI Advisory Board. The Executive Board recognized that SPE leaders have historically been predominantly white, later-career males. Women, people of color and others from diverse backgrounds are generally underrepresented in the plastics industry. To address this issue, which impacts groups not represented at the leadership table, it was necessary to invite others with personal passion for, and business acumen about, the tenets of DEI.
The Advisory Board has 14 members, each of whom brings various levels of experience in DEI programs to the position (see sidebar for names, company affiliations and titles).
The board chair is Elizabeth Anne Gardner, a senior chemist and materials engineer at Jabil, a global manufacturing services company based in St. Petersburg, Fla. In a statement released by SPE announcing formation of the board, she said: “It is vital for SPE’s membership to know our commitment to DEI principles and to understand that we have created an Advisory Board to help the Society, its stakeholders and the plastics industry as a whole embrace our goals of fostering diversity and inclusivity. By providing the necessary tools and resources, we strongly believe we can achieve these goals.”
Another board member, Patrick Farrey, chief executive officer of SPE, said in a statement that DEI is “the right thing to do” and good for businesses that commit to these principles. SPE, he noted, has been addressing sexual and gender-based issues to make certain that those who work in STEM industries do so in a safe and welcoming environment. SPE was, in fact, a founding member of the Societies Consortium on Sexual Harassment in STEMM, which is based in Washington, D.C. Prioritizing the needs of all individuals should be an essential objective for the plastics industry, Farrey added. “SPE is striving to create an environment in which everyone feels respected and valued, and has equal opportunities to develop, advance and be heard.”
The Advisory Board is SPE’s latest effort at promoting diversity and inclusion in the industry. Another initiative, the SPE Foundation, has long supported the development of plastics professionals by funding educational programs, grants and scholarships that emphasize science, engineering, sustainability and manufacturing, as well as providing inclusive opportunities for students around the world.
While the Foundation highlights educational programs for students aged eight to 18, its ambitions extend beyond science and technology. “Our work in the Foundation is to showcase opportunities to students … through educational programs,” said Eve Vitale, chief executive of the Foundation. “But our programs aren’t just focused on engineering and polymer science. We take a holistic approach that is aimed at building a more diverse, equitable and inclusive workforce for all individuals in the whole plastics industry value chain.”
Findings and Facts
There are many studies conducted by consultants and others whose data support the idea that companies with vigorous diversity, inclusion and equity programs become market leaders by fully embracing these principles.
One recent, widely cited study by McKinsey titled “Diversity Wins: How Inclusion Matters,” states plainly that “the business case [for diversity] remains robust but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.”
This study, published on May 19, 2020, is the third in a series of similar reports, the first two being released in 2015 and 2018. Each report comprises data that were gathered in the previous year: 2014 for 2015, 2017 for 2018, and 2019 for the current one.
The sum of McKinsey’s findings in 2020, which like the 2018 report includes global analysis, is that the “most diverse companies are now more likely than ever to outperform less diverse peers on profitability.” For example, “companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile—up from 21 percent in 2017 and 15 percent in 2014.” (The 2015 report comprised company data from the U.S. and U.K.) That’s a significant 19 percent increase in profitability from 2017 to 2019, and a surge of almost 67 percent from 2014 to 2019.
And that’s not all. The report adds that the greater the gender diversity on executive teams, the higher is the likelihood of performance. “Companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn these companies were more likely to outperform those with even fewer women executives, or none at all,” the report’s authors write. “A substantial differential likelihood of outperformance—48 percent—separates the most from the least gender-diverse companies.”
In the analysis of ethnic and cultural diversity, the profitability gains were even higher. In 2019, McKinsey research found that companies in the top quartile outperformed those in the fourth quartile by 36 percent in profitability, up from 33 percent in 2017 and 35 percent in 2014. “The likelihood of outperformance continues to be higher for diversity in ethnicity than for gender,” the authors write.
Diversity Issues Persist
Nevertheless, McKinsey finds that progress in gender, racial and ethnic diversity is slower than expected. “More than a third of the companies in our data set still have no women at all on their executive teams. This lack of material progress is evident across all industries and in most countries. Similarly, the representation of ethnic minorities on U.K. and U.S. executive teams stood at only 13 percent in 2019, up from just 7 percent in 2014. For our global data set, this proportion was 14 percent in 2019, up from 12 percent in 2017.”
A closer look at the figures reveals that for the U.S. and U.K. companies surveyed in McKinsey’s original 2014 data set, the representation of women on executive teams increased to 20 percent in 2019 from 15 percent in 2014, a respectable 33 percent gain. However, in the global data set starting in 2017, “gender diversity moved up just one percentage point—to 15 percent, from 14—in 2019.”
As these findings show, there are demonstrable benefits for companies in gender diversity, yet the low number of women on executive teams persists. Also of concern is limited progress in hiring members of ethnic, racial, cultural and other minorities.
One way of looking at the benefits that diverse hires and leadership bring is through the lens of inherent and acquired diversity. Inherent diversity represents traits an individual is born with—gender, race, ethnicity and sexual orientation, for example. Acquired diversity involves traits an individual gains from life experience, which can include study or work in foreign countries, interacting with different types of people on a job or even living in a multiethnic neighborhood. The combination of these two types of diversity is referred to as 2-D diversity.
A study on diversity published in 2013 by the Harvard Business Review (HBR) focused on companies whose leaders possessed 2-D diversity, which in this case was defined as having at least three inherent and three acquired diversity traits. The findings generally confirmed what other researchers found in their studies: diversity improves innovation, product development, market share and profitability. “Companies with 2-D diversity out-innovate and outperform others,” researchers concluded.
The authors of the report noted that “Employees at these companies are 45 percent likelier to report that their firm’s market share grew over the previous year and 70 percent likelier to report that the firm captured a new market.” The authors explained this by observing that 2-D diversity promotes innovation by fostering an environment where “outside-the-box” thinking is encouraged and, importantly, heard and supported by managers and executive leadership. “When minorities form a critical mass and leaders value differences, all employees can find senior people to go to bat for compelling ideas and can persuade those in charge of budgets to deploy resources to develop those ideas,” they wrote.
Perhaps not surprisingly in light of the challenges of inclusion and diversity, 78 percent of respondents said they work at companies that lack 2-D diversity in leadership. Without diverse leadership, the survey authors stated that women are 20 percent less likely than straight white men to win endorsement for their ideas; people of color are 24 percent less likely; and LGBTQ employees are 21 percent less likely. “This costs their companies crucial market opportunities,” the authors noted, “because inherently diverse contributors understand the unmet needs in under-leveraged markets. We’ve found that when at least one member of a team has traits in common with the end user, the entire team better understands that user. A team with a member who shares a client’s ethnicity is 152 percent likelier than another team to understand that client.”
The study went on to identify six behaviors that unlock innovation across the board:
- Ensuring that everyone is heard.
- Making it safe to propose novel ideas.
- Giving team members decision-making authority.
- Sharing credit for success.
- Providing actionable feedback, and
- Implementing feedback from the team.
Moreover, “leaders who give diverse voices equal airtime are nearly twice as likely as others to unleash value-driving insights, and employees in a ‘speak up’ culture are 3.5 times as likely to contribute their full innovative potential.”
Visions and Objectives
Members of the DEI Advisory Board interviewed for this report are enthusiastic about the role that they and SPE will play in increasing the industry’s awareness of and commitment to more diverse and inclusive work environments. While the board members represent a range of businesses, from materials producers to processors, all share common views regarding the value of DEI initiatives, no matter where in the plastics value chain companies operate. All believe the time is right for companies to make diversity, equity and inclusion a necessary part of strategic growth plans.
“This [DEI] board is not something that’s existed before [in the plastics industry]. I think the industry is getting more attuned to [the idea of diversity],” says Allison Lin, senior vice president of sustainability and market development at Westfall Technik Inc., a Las Vegas-based processor specializing in medical plastics and consumer packaged goods. (For an interview with Westfall Technik CEO and founder Brian Jones, see April Plastics Engineering, pp. 38 to 42.)
Nevertheless, she still sees “a severe lack of diversity in plastics” and a need to “develop an environment that is inclusive and brings more people to leadership roles. I am a woman, and Asian, and you rarely see both in industry.” And while Lin says she has advanced in management at Westfall Technik, generally, “there is a glass ceiling in business for women of Asian descent.”
Lin believes that for many companies, especially those in consumer-related businesses, market influences will influence their diversity programs and thus recruitment and hiring goals. “Customers expect diversity” from business, as well as social consciousness as evidenced by the emphasis on sustainability and preference for sustainable materials in products, she remarks.
When it comes to instituting or expanding a DEI program, companies can take many approaches. There are numerous steps in the process, from establishing interviewing and hiring practices to appointing mentors, creating an inclusive environment and even drafting procedures for employee retention. What’s fundamental, she says, is “understanding where you are today and where you want to go. Look within.”
Seeing the Unseen
Sherrika Sanders has been involved with DEI programs since at least 2006, when she was at Dow Chemical Co. She is currently senior technical engineer at Manner Polymers of McKinney, Texas, one of the largest flexible PVC compounders in the U.S.
A plastics veteran of 25 years, she explains why she joined the Advisory Board. “I saw an opportunity to expand the work I’ve done in the DEI space. Plastics is a white male-dominated industry. [The board] will make DEI issues more visible and help increase hires [of underrepresented people] in the plastics space.”
Sanders says that one goal she wants to achieve is abolishing the myth of why women of her educational and professional achievement are underrepresented in business. “I have a PhD and am an African American woman. I know others like me,” she remarks. “It’s false to assume there is nobody [qualified] available. It’s important for me to be around as an example for future generations, and important that we all be part of the innovation and greatness in America.”
For Sanders, “DEI’s mission in any business is simply a commitment to building a welcoming workplace to people of all backgrounds—not just by the human resources department, but by people who make decisions in the workspace.” Some complaints she’s heard from members of underrepresented groups over the years include not feeling welcome in the workplace or in C-suites. Women complain of gender pay inequality and the assumptions that are made about them regarding their commitment to the company because they have families to care for.
One of her earliest experiences with diversity issues was telling. While at Dow, she was attending a National Organization for the Professional Advancement of Black Chemists and Chemical Engineers conference. At a dinner with the group from the company, approximately 10 members were in attendance. As Sanders recalls, Dow’s chief technology officer stopped by and, seeing so few people present, asked why more weren’t there. They replied that this was the total membership at Dow. “He was immediately eager to change that narrative and soon after gave us a generous budget to recruit more minority chemists and chemical engineers.”
This helped develop the BEST program at Dow—Building Engineering and Science Talent. According to information from Dow, BEST seeks to introduce such minority group candidates as African American, Hispanic and Native American U.S. doctoral and postdoctoral scientists to a range of careers in industrial research and other opportunities at the company.
Sanders has seen quite a bit of change in DEI acceptance at the corporate level but says more needs to be done. Leadership particularly must be fully engaged, especially CEOs who, she says, “need to get skin in the game and be educated about what the issues are.”
As much as anything, successful DEI programs need consistent commitment from executive management. “DEI does not necessarily make it to the hearts of leadership,” Sanders says. “One month, a company does well with a DEI program and then the initiative dies out.”
Dow’s experience with and commitment to DEI programs is ingrained in the company’s culture, says Saurav S. Sengupta, principal research scientist in specialty plastics and packaging at Dow and vice chair of the Advisory Board.
“For Dow, inclusion is what we do, and diversity is who we are,” says Sengupta. “Inclusion and diversity are woven into our fabric.”
His experience with the Employee Resource Group at Dow, including the Asian Diversity Network, early in his career gave him “the experience of being a team member in initiatives for diversity and inclusion” and the ability to advise the company in ways that further such goals, he notes. All of which, Sengupta remarks, “gives me the perspective for the SPE Advisory Board.”
Sengupta, like other board members, is fully committed to DEI and the benefits it brings to companies. At Dow, these initiatives improved the company’s “acquisition of talent, workforce development, progress in all relevant metrics and inclusive culture.”
There are, he concedes, challenges in promoting DEI initiatives within the industry. “But I don’t think the challenges are insurmountable. It’s a change in mindset, culture and way of thinking, but it’s change for the better.”
Apostle of Diversity
Cathy Nestrick is a passionate advocate for DEI—one might even describe her as an apostle of diversity, equity and inclusion. She is a DEI leader, co-founder (with attorney Deborah Pollack-Milgate) of the Parity Podcast, described as a community for individuals working toward a more equitable workplace, and founder and former director of the DEI initiative at packaging giant Berry Global of Evansville, Ind.
Nestrick’s commitment to DEI will be reflected in her work on the Advisory Board. “I am passionate about moving the plastics industry toward greater diversity, equity and inclusion,” she says. “SPE is well positioned to lead the way.”
Her observations about the benefits that DEI programs bring to business parallels research findings. “Businesses with more diverse workforces outperform those without them by large margins. For companies that want to compete and grow, embracing DEI as a strategy is an absolute business imperative,” she says.
Nestrick adds that “diverse boards of directors and workforces outperform their peers because of the broad perspectives, ideas and innovation fueled by greater diversity. Additionally, surveys show that employees want to see diversity in their organizations, and are more likely to stay longer, reducing turnover costs, when they are members of more diverse teams,” she remarks. “Many consumers are beginning to demand that the brands they purchase better represent the demographics of the overall community, not only within the brand companies but also within their supply chains. Finally, inclusion is powerful. Employees want a sense of inclusion and belonging at work, and they will be drawn to and stay longer with those organizations which foster an inclusive culture.”
Nestrick has seen positive changes in the acceptance by business of DEI principles in the past 10 years. At the same time, there is much to be done. She advises that “Everyone within an organization can and should play a role in DEI, whether as a member of an underrepresented community or an ally. Leaders and allies have the power to transform not only their organizations but the lives of their workforce.”
Recalling her experience at Berry Global, she says companies that want to create or expand DEI programs need buy-in by their CEOs, chief human resources officers and other executive leaders. When introducing the initiative to the workforce, Nestrick says, make sure they understand that the strategy is for everyone. It is, additionally, important to introduce the concept of allies early. “Allies are people who provide support to their peers who are members of underrepresented communities even if they themselves are not. As an example, I have many male allies supporting me, and as a white female, I am an ally to others who are members of underrepresented communities,” she explains.
“The plastics industry has so many opportunities to reach out to women, people who are members of the BIPOC (black, indigenous and people of color) or LGBTQA+ communities and people with disabilities,” Nestrick says. “These groups are not well represented within the industry today, and that is where the opportunity arises. Businesses should be deliberate about hiring from these communities, particularly in leadership roles—but don’t forget about the pipeline—so that their presence is well-recognized within the organization.”
Plastics has much ground to cover when it comes to DEI programs, and much to gain. Nestrick says that by defining and embracing good practices in DEI initiatives, companies can speed return on investment. How best to develop good practices? Referring to her podcast, she counsels “most experts believe that it will take us 100 years to reach gender parity, and rather than be disheartened by this data point, we decided to do something about it. Through our podcast, we share information and stories so that women and our allies can work together to accelerate change.”
Conclusion
“People are becoming more accepting of this school of thought,” says Brian L. Gibson, a retired industry veteran whose background includes experience in chemical, converting, injection molding and manufacturing companies. “The board was formed because people recognize the importance of this concept in industry. Are there still people who need to be convinced? I think yes. There is greater acceptance of this concept, but still work to do.”
Despite the challenges of promoting the DEI agenda, Gibson believes the board will make a difference in the industry. “We need to make sure that leaders realize that this is the right thing to do and that there is a business case to be made for listening to the voices of inclusion,” he says.