Diversity a Successful Business Strategy for General Mills

(MoneyWatch)  Working Mother magazine just announced its annual list of Best Companies for Multicultural Women, and General Mills was in the top five. It was also the company's sixth consecutive year on the list.

I've interviewed diversity consultants in the past, and they've expressed frustration with companies, saying too many business leaders see diversity initiatives as a way to avoid discrimination lawsuits rather than as a way to get an edge over competitors, be more innovative and reap higher profits.

Furthermore, a lot of companies take steps to hire more women and minorities but without looking at whether the company culture accommodates different backgrounds and communication styles and creates an environment in which different employees can successfully work together.

General Mills, I was guessing, probably didn't fall into that category. As Stuffed author Hank Cardello told me a couple of days ago, when he complimented General Mills on its healthier product initiatives, former CEO Steve Sanger replied, "It's just good business."

And it's the same with diversity. According to the company's own statement on the issue, diversity is "a key business strategy."

Diverse teams create more and better solutions. Diversity helps us stay ahead of our competitors through growth and innovation.

General Mills has apparently been thinking this way for a long time. A bit of Google digging turned up a pretty remarkable speech from Sanger from way back in 1997. He talked about the flawed assumptions the company initially made about diversity and how it learned from its mistakes. For example:

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.

In addition to General Mills, the Working Mother list also included PepsiCo, Kraft Foods, Procter & Gamble and Wal-Mart.

And PepsiCo shows similar thinking to General Mills on its website: "Diversity isn't just the right thing to do. It's the right thing to do for our business."