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Diversity: Better Business—Not Just the Right Thing to Do

6 minute read | April 2016
Angela Talton
Angela Talton, chief diversity officer, Nielsen

At Nielsen, we work to leverage diversity to provide superior results for our clients.

When most people think of the word diversity, they think of visible differences—race, gender, disabilities, age and so on. This is a narrow definition of diversity that obscures much of it from view, just as the majority of an iceberg sits invisible below the waterline. At Nielsen, our definition of diversity takes a broader view, encompassing far more than what you see. It is our breadth of skills, experiences and cultural backgrounds that make each of us unique—and so make our contributions unique, too.

If we are to realize this vision of diversity, it cannot just be about having a seat at the table, so you may be counted. It’s about having a voice at the table, so you may make an impact. I’d like to share just a few examples of what can happen when you leverage the power of diversity to provide superior results.

We recently invited P&G, GE, Cintas and other companies to join us in Cincinnati at one of Nielsen’s Diverse Intelligence Series events. With the goal of continuing and deepening the dialogue, P&G then invited us to their “Day of Sharing,” also attended by various retailers and brands. At the event, P&G described how it followed a recommendation from its African-American Employee Resource Group (ERG) that the company create hair products specifically to appeal to African-American women, who over-index in this category. Members of the group had examined the product category to identify exactly what African-American women were looking for in hair products and recognized a developing trend towards “natural” products. The ERG convinced P&G to engage the R&D department, and the company created successful new product lines, including Pantene Truly Natural and Truly Relaxed. For P&G, this was a clear case of an ERG driving business impact with a quantifiable ROI.

This kind of opportunity will become visible to companies only if they listen harder to those in their company who understand the needs and wants of the diverse communities to which they belong. But this is still what I call Diversity 1.0: profiting by meeting the needs of a particular diverse community.

What we might call Diversity 2.0 is represented by the Sriracha craze. Sriracha, the brand name for a condiment thought to have originated in Thailand,[1] sits in the consumer-packaged-goods hot-sauce category, which is significantly shaped by multicultural influences. The product’s maker, Huy Fong Foods, is private, so precise sales figures are hard to come by, but it is estimated that the company sold $80 million worth of the “rooster sauce” in 2014. In addition, Heinz makes Sriracha ketchup, as do Frito-Lay, Subway, Jack in the Box and others, thus expanding the market to more than $600 million in the same year—a 650% increase in revenue over Huy Fong’s numbers.

Consider this—75% of Millennials say they want more flavor in their foods, but only about 40% of Millennials are multicultural. And only a tiny portion of those are Thai. No large multinational corporation would have seen a serious profit opportunity in commercializing an obscure Thai sauce. And in fact, the Sriracha we know in America was created by Vietnamese-American, David Tran, who started Huy Fong Foods in 1980. It’s surely an “only in America” story that a Thai sauce became an enormous success because of the efforts of a Vietnamese man who immigrated to America by way of China. The American government had granted David Tran asylum after he reached Hong Kong when he fled Vietnam in 1978 on the Taiwanese freighter Huey Fong, for which his company was named.

Sriracha proves the economic value of diversity to the broader American economy. But if we think of cultural products as going beyond tangible goods, then my last example might well be Diversity 3.0.

Currently, on Broadway, there is a musical that is sold out every night. Tickets are selling for between two and four times face value. The musical is Hamilton. In it, the story of Alexander Hamilton, the American Revolution, and the emergence of the U.S. economic system is told through songs featuring the genres of hip-hop, rap, R&B, and Tin Pan Alley—that is, music with a wide range of multicultural influences, as well as some more traditionally associated with Broadway musicals. The show is certainly an unlikely treatment of Alexander Hamilton, a founding father of the U.S., chief staff aide to General George Washington, one of the most influential interpreters and promoters of the U.S. Constitution, and the founder of the nation’s financial system, among many, many other distinctions. Hamilton himself was an extraordinarily unlikely candidate for these roles. He was born out of wedlock in the Caribbean to his mother and her second husband, a fact that led to his being denied education in a Church of England school and to his mother’s possessions being seized by her first husband upon her death—all of which would appear to have provided Hamilton with a very weak starting point for greatness.

For our purposes, however, the significant facts about the diversity of the musical Hamilton are that it was written by Lin-Manuel Miranda, a Hispanic-American living in New York and that he chose to use hip-hop in the play because he saw that genre as the only musical form that could accommodate the fact that “Hamilton spoke in paragraphs.”[2] Rap, notes Miranda, “has more words per measure than any other musical genre.” Furthermore, Hamilton uses a majority African-American and Latino cast in order “to connect America then with America now.”

Hamilton is currently grossing $1.3 million weekly, just behind The Lion King. It was honored this Feb. 15, 2016, by becoming one of only eight Broadway musicals to perform at the GRAMMYs, where it won the award for Best Musical Theater Album. I saw the show on Dec. 16, 2015, and the audience that night was less ethnically diverse than the performers. Hamilton has indubitably crossed over, having become a financial and cultural phenomenon, precisely because its audience knows no boundaries.

Hamilton is an example of the kind of success available to companies everywhere whose managers understand that they need to listen to innovative ideas wherever they come from. After all, creativity is generally understood to come from the combination of ideas from different cultures or disciplines, so it is highly likely to come from members of diverse groups working in the American mainstream. All credit, of course, goes to the musical genius of Lin-Manuel Miranda who has provided a powerful demonstration of the fact that the more America can open itself up to the contributions of diversity, the more Hamiltons we will see in all walks of American life.

[1] Sriracha—made from a paste of chili peppers, distilled vinegar, garlic, sugar and salt—is apparently named after the coastal city of Si Racha, in Chonburi Province of eastern Thailand, where this type of condiment may have been first produced for dishes served at local seafood restaurants.

[2] Full disclosure: Lin-Manuel Miranda is the son of Luis Miranda, a leading member of Nielsen’s own Hispanic-Latino External Advisory Council.