Interview with Dr. Leena Pundt Otto Group Diversity Management a Catalyst for Economic Success The Otto Group is a pioneer in the implementation of sustained diversity management. Yet diversity is not an end in itself. 42 Detecon Management Report blue 2014
D MR: What is diversity management, and why is it necessary for companies to be concerned with this subject? Dr. Pundt: The objective of diversity management is to create a culture of appreciation of diversity which all of the employees at the Otto Group live by. In concrete terms, we are speaking of a sustained form of personnel management oriented to the phases of people s lives as well as our desire to uncover and utilize potential. At the Otto Group, the concept of diversity has a far broader interpretation than might be assumed from the subject of women s quotas as it has been discussed in the media for some time. In addition to the focus group of Women and Men, the Otto Group has prioritized the topics of Young and Old, Different Nationalities, and People with Handicaps as a response to general social developments. Diversity in these sectors means eliminating barriers by creating flexibility in the general conditions promoting the reconciliation of job and family, for instance. Paving the way for executives, both male and female, to return to their careers after an extended period of parental leave or the creation of good career prospects and changes for older employees also falls under this heading. The overriding goal is to create equality of opportunity for all of these people regardless of their background situations. Emphasis should always be on the possibility of personal development and equal opportunity instead of the advancement of minorities. Naturally, from the corporate perspective we hope that personal diversity will result in commercial success and sustained competitiveness. Mixed teams, for example, are more productive and innovative in the sense of high-performing teams. Moreover, diversity has an impact on the attractiveness of a company as an employer. The labor market is more and more heavily weighted in favor of employees, and a company s appreciation of all employees independently of any surface characteristics and its supportive orientation to potential are factors of increasingly greater value for job applicants. Obviously there are economic interests behind our efforts at diversity management; it is not an end in itself. DMR: To what degree does diversity management supplement traditional personnel management? Dr. Pundt: Traditional personnel management also encompasses the definition of the focal points of personnel policies and consequently the orientation of personnel strategy to future challenges. In this sense, we approached the subject of diversity throughout the Group with the goal of improving our capability of handling demographic changes and more effectively uncovering internal potential. While it is certainly possible to view diversity management as an expansion of traditional personnel management, it should not be restricted to this role. We perform a function which affects all of the members of the Otto Group, and our objective is to implement a diversity strategy throughout the entire corporation, to guide member companies as they identify major fields of action, and to advise them during the development of concrete measures based on the fields which have been identified. So it would be wrong to classify this general, interdisciplinary, and consulting function extending across all organizational boundaries strictly under the heading of personnel management. Although the subject of diversity management is handled by the HR department at the Otto Group, it is seen more as a business topic rather than a matter strictly for HR. Sandra Widmaier, our group HR director, reports directly to CEO Hans-Otto Schrader, who has given a high priority to the subject and has openly spoken out in favor of its sustained implementation. Owing to the decentralized nature of the Otto Group and its many independent and widely differing business divisions and group companies including Sport Scheck, Hermes Group, and various financial services in addition to the well-known multichannel mail order retailer OTTO diversity management sees itself as a central in-house advisory service and subject driver and does not seek to exercise its authority on the basis of a top-down order from the Management Board. Experience has proved that convincing the decentralized enterprises' of the necessity of active diversity management tailored to their specific needs by presenting plenty of persuasive arguments and implementing the activities within established structures and processes is much more likely to lead to the desired success. From the perspective of central diversity management, flexible adaptation of topics and continuous consultation with the business units are indispensable. The first step in the sense of a successful stakeholder management strategy is to address the key disseminators and subject drivers who are already convinced of the value of the approach and then gradually to persuade other stakeholders to jump on the bandwagon. Readily available instruments to accomplish this include the designation of need-oriented lighthouse projects and the launch of relevant topics, followed by the internal communication of these success stories. We have achieved this goal by ensuring that internal best practices became visible. 43 Detecon Management Report blue 2014
44 Detecon Management Report blue 2014 Dr. Leena Pundt initially established group-wide diversity management at the Otto Group three years ago. Her goal at that time: to improve the corporation s capability of handling demographic changes. She has been guiding the group s diversity strategy ever since. The Otto Group s diversity program sees itself as a holistic and sustained form of personnel management oriented to potential. A general framework of conditions has been created with the aim of offering equal opportunities to all employees regardless of sex, age, origin, or physical condition. Primary activities have included the establishment and development of Otto Group Senior Experts Consultancy GmbH as a new member company of the Otto Group in 2012 and the development and guidance of the group-wide network of female executives in 2013.
Moreover, the members of the group are required to make a binding commitment to a topic and to define their own auditable targets which HR Controlling monitors accordingly. DMR: Diversity management is often mentioned in the same breath with corporate social responsibility. Where do you see the connections? Dr. Pundt: Long-term subjects oriented to employees have played a major role in the tradition of the family-owned business Otto ever since the days of its founding. Diversity and sustainability are joined by profitability and innovation to comprise the four keystones of our mission. Within the Otto Group, it is self-evident that these subjects are of tremendous importance, and we do not separate them from one another. Diversity management cooperates closely with the Cultural Development Department, which is responsible for the subject of corporate social responsibility and the realization of the corporate vision and its four pillars of profitability, innovation, diversity, and sustainability through the planning and conduct of appropriate projects. The Otto Group s diversity management also contributes to these pillars and is firmly anchored in the corporate mission and overall strategy of the group. DMR: Philanthropy is one element of corporate social responsibility. Does a company show itself to be a humanitarian through its diversity management? Dr. Pundt: Assuming responsibility for more than 53,000 employees means more to the Otto Group than just securing jobs. The group offers employees at 123 group companies in more than 20 countries an inspiring environment in which they can be creative, develop innovative ideas, and exploit their personal potential. In other words, the group-wide diversity management at the Otto Group meets its responsibilities by creating a general framework offering employees equal opportunity regardless of sex, age, origin, or physical condition. An employer s responsibility includes reasonable compensation as well; the Otto Group pays all of its employees in accordance with the pay scales of applicable collective bargaining agreements. The corporation monitors the compensation paid in supplier countries to ensure compliance with minimum wage regulations. DMR: What opportunities do you see in the employment of silver workers in addition to the other focus groups, including the viewpoint of these workers themselves? Dr. Pundt: One major focal point of our diversity management is the focus group Young and Old. The member companies have different ways of approaching this subject. Specific measures in health management are offered to maintain employees performance capability over their lifetime as more and more of them become older. Some of the group members like Witt offer special seminars to older employees; Baur targets the hiring of applicants over the age of 50. In addition, in May 2012, we founded the Senior Experts Consultancy which can draw on a pool of retirees for specialists to cover short-term bottlenecks clearly focusing on the professional and social skills of former employees who have retired. A mandatory requirement is that these people have retired and, from this position, utilize their networks and knowledge to ensure the transfer of knowledge as they collaborate with younger colleagues. As the name suggests, the Senior Experts Consultancy is not limited to providing managers. Specialists and workers with lower qualifications, but knowledge specific to the company, are very much in demand. For example, IT experts can be of assistance during the replacement of a company s tailored system which they themselves helped to implement in the first place. The determination of the general conditions as well as of the content issues of these project assignments is completely flexible and individual. Former employees who are now retired often enjoy the feeling that they are still needed and are delighted to have the opportunity to earn a supplement to their pensions. For the company s part, we benefit from their wealth of experience and performance standards, especially since they are usually able to do the work without requiring any time for prior instruction. DMR: What goals have been defined for the other focus groups mentioned previously, and how can they be operationalized concretely? Dr. Pundt: As I have already explained, concrete actions are not initiated centrally, so the operationalization of the goals varies widely among the group members. The focus group Women and Men takes a special approach in addressing young female executives by conducting crossmentoring programs with experienced female managers within the scope of a group-wide initiative of the Otto Group Academy. Another example is the internal network of top female managers 45 Detecon Management Report blue 2014
known as the Power of Diversity, which meets regularly to drive forward the subject of women in management positions. The important subject of reconciliation of job and family is addressed by numerous actions such as the contact programs for employees on parental leave at Baur, Schwab, and Unito, various support services for child care or ad hoc care in emergency situations, and care during school holidays. Many of the group companies offer parent-child workplaces or models for flexible working hours as well as VPN access enabling work to be done independently of location. Various nationalities are supported by an Otto Group expat/ inpat program, which specifically assigns employees to foreign subsidiaries or integrates foreign colleagues in this country for a limited time, promoting intercultural exchange and the internationality of the group. We have a corporate integration management and decentralized collaboration with local integration services so that people with handicaps can be integrated more smoothly. Hermes also offers a vibrating alarm system for employees with hearing difficulties and Unito has cooperative ventures with a social organization in its call center operations. Ultimately, there must be the assurance that any measures encouraging heterogeneity are a good fit to the corporate culture of the specific company. DMR: To what extent do you make use of controlling instruments to quantify the success of your diversity management, i.e., diversity controlling. Dr. Pundt: I can state unequivocally that our diversity controlling represents a successful step forward. As part of our sustained process guidance, we appraise the success of each specific action in terms of its goal and can initiate new measures. Moreover, we have developed a group-wide toolbox for HR officers in the member companies; it shows concrete diversity actions related to various fields of action for the aforementioned focus groups. Specific actions carried out in one company can become models for other companies within the group, which helps to utilize synergy effects more precisely and, an added benefit, to retain future personnel. Since 2011, a diversity controlling function established especially for this purpose has carried out a group-wide survey once a year, which asks about company-specific diversity targets. As I mentioned earlier, these targets are developed in consultation with the subsidiaries and guided by diversity management until they have been achieved. They range from increasing the proportion of women in positions at certain levels of the hierarchy to implementation of home office concepts to a more extensive internationalization of the workforce. One important success factor is the deliberate rejection of prefabricated all-in-one solutions, collecting instead companyspecific information and figures so that concepts of a precise fit can be used as an aid when responding to concrete fields of action of each company s own definition. The decisive element for securing unrestricted access to figures and other companyspecific information is that the advising body itself comes from the organization and that there is a superior diversity controlling unit. DMR: What are the risks during the realization of a diversity strategy? Dr. Pundt: Our experience has been that a process-oriented approach is successful. We integrate diversity topics into existing processes of the group. The long-term objective is the establishment of a corporate culture which values and promotes diversity at all levels. For example, some of the modules used as part of the management development training are supplemented by diversity elements as a way to sensitize executives to this important subject. Our measures are decentralized and designed to have long-term effect. In our view, taking only a short-term perspective for actions related to a topic of such sustained nature would be nonsense. The companies in the Otto Group differ in part significantly from one another in their orientation, both strategically and with respect to business fields. This variety is a significant component contributing to the economic success of the corporate group. Group-wide diversity management must of course give due regard to these differences so that the specific goals in each case can be set up with the required variation. A company such as Witt-Weiden located in Upper Palatinate, for example, faces completely different challenges in personnel policies than Bonprix in Hamburg or Sport Scheck in Munich. 46 Detecon Management Report blue 2014
DMR: What roles do the current general political conditions play here? Dr. Pundt: German businesses will have no choice but to achieve better balance in the distribution of positions among men and women at the higher levels of the hierarchies. The political world sees the necessity of this and is calling for it to be realized. Women are among the best educated people in our country why should we allow this potential to lie fallow? Regrettably, there are still barriers in many places which discourage women from seeking executive positions at the higher levels of management. It is not only an issue of part-time work, but is also related to the management culture which is lived by. We specifically link up young female executives with experienced women in the group so that we can secure a chain of succession all the way to the Management Board over the long term. Emphasis here is on sharing experiences and individual fostering of careers for talented women within the corporate group. It is absolutely essential to bundle activities, to develop and implement diversity objectives in the sense of a group-wide personnel strategy in response to general social developments, demographic changes, and the shortage of specialists. All of these measures help to utilize synergy effects more precisely and, an added benefit, to retain future personnel. DMR: Where do you personally see diversity management of tomorrow, and not only with respect to sexual orientation, age, origin, and sex? Dr. Pundt: The goal must be to turn diversity into such a given that we no longer talk about it and explicit diversity management is no longer needed because normal management includes diversity as a matter of course. A genuine transformation of culture resulting in the appreciation of diversity at all levels can ultimately lead the way to the development of diversity into an unquestioned component of the working world of tomorrow. The interview was made by Marc Wagner, Partner, and Paul Geuting, Consultant. 47 Detecon Management Report blue 2014