Why Luxury Fashion Brands Need Chief Diversity Officers

Last month, Teddy Quinlivan took to Instagram to announce that she was the face of Chanel Beauty — making her the first openly transgender model to work for the luxury French house. “This was one of those triumphant-cry moments for me,” she wrote. “My whole life has been a fight. … I am deeply humbled and proud to represent my community.”

Across social media and elsewhere, the reaction was astounding as praise and admiration for both parties — Chanel and Quinlivan — poured in. The news came just over a month after Chanel named its first-ever global head of diversity and inclusion: Fiona Pargeter, who had previously assumed the same role at Swiss bank UBS for Europe, the Middle East and Africa. She was hired, Chanel said in a statement, to “help evolve our existing Diversity & Inclusion approach and continue supporting our momentum on these topics. This recruitment is a sign of our commitment to D&I and its importance to the house.”

It’s unclear whether the partnership with Quinlivan was the work of Pargeter or if these moves were unrelated to one another — but it’s hard not to connect the two. And, for what it’s worth, both signal Chanel’s promise to be more inclusive.

“I think it would make sense that [Pargeter’s appointment] had an impact. I do think that once you have people who are focusing on the opportunities in the diverse space, that’s how you find them,” said Todd Sears, former chief diversity officer for Credit Suisse and the founder of Out Leadership, a global business network that advocates for LGBTQ equality. “[Teddy Quinlivan] gave Chanel great branding, great marketing and a great story to tell. It sent a message to employees and the marketplace that they’re LGBT-friendly. That one thing had 10 pieces of ROI for the company. That wasn’t a warm, fuzzy HR thing; that was a very smart business decision.”

Chanel certainly isn’t alone in banking on diversity. A couple of weeks after Pargeter’s appointment, Gucci named Renée E. Tirado its global head of diversity, equity and inclusion. She will report directly to the CEO — likely a key indicator of Tirado’s importance to the overall direction and strategy of the company. In addition to that hire, Gucci also formed the Changemakers Council (of which Harlem native and storied designer Dapper Dan is a member), which aims to make lasting social impact.

Earlier this year, Burberry joined the fray when it announced new diversity and inclusion initiatives, while Prada launched a diversity council with Ava DuVernay and Theaster Gates as co-chairs. Fast-fashion retailers and athletic brands, too, have also felt the pressure: H&M installed Annie Wu as its global leader of diversity and inclusiveness last year; and in 2018 as well, Nike named Kellie Leonard as its first chief diversity and inclusion officer.

This influx of new diversity and inclusion positions at legacy houses is certainly noteworthy, but the role itself isn’t new. Sears says it can be traced to the 1980s, pointing to IBM as the first company to conceptualize the position.

“Chief diversity officers have been around for years. Every Wall Street bank has a CDO for 20-plus years; most law firms have a CDO or a partner in charge of diversity for at least 10, if not 15 years,” Sears said. “The fashion industry is late to the game.”

He believes there are two main reasons that explain the industry’s delayed acceptance of chief diversity positions. The first centers around the fact that many fashion firms have been late to recognize the powerful business opportunities related to more thoughtful diversity. The second is that, for many organizations, D&I efforts are birthed from a fear of falling out of favor or concern over backlash — and those fears only recently came closer to reality for fashion players.

“Fashion either did not focus on an opportunity or they have been lucky enough to escape the threat or risk thus far,” Sears said. “For a lot of companies, it does take a crisis — missteps with products or issues with employees or their leaders — to create action. That is an absolute catalyst for action and it’s not unique to fashion.”

On that note, the companies that have led the recent hiring wave of chief diversity officers are the very ones that have had to navigate controversial diversity missteps. Gucci, for example, came under fire in May for selling an $800 “Indy Full Turban” that resembles a religious article of clothing for Sikhs and for bringing to market in February an $890 balaclava sweater that, to many, conjured blackface iconography. Prada’s Otto character also sparked backlash in December 2018, due to what some deemed its likeness to blackface. And at Burberry, there was an outcry when designer Riccardo Tisci sent out a model at the fall ’19 show wearing a hoodie with a drawstring that resembled a noose around the neck. Chanel, too, has been guilty of inadvertently offending some consumers, though those infractions did not occur in the last year; for example, a Chanel Couture dress in 1994 was embroidered with sacred messages from the Koran.

Gucci’s balaclava knit-top black sweater.

“Fashion brands have always been insulated. They have had the license to be more provocative,” said Kathy Ventura, partner at executive search firm Caldwell. “By [hiring CDOs], they’re making a statement to customers: We’re correcting this; we’re paying attention. The second statement is to their own workforce: We care about this.”

Social media, too, has only accelerated the glaring need for diversity positions, shedding light on out-of-touch messaging or practices and forcing companies to take a long, hard look at themselves. “Everyone hears about everything now,” Ventura continued. “And if the CEO doesn’t get it, then they better get someone who’s yelling in their ear. They should be looking for talent who can be the voice of the consumer, people who have a new attitude about gender, LGBT and racial equality.”

One of the biggest mistakes companies can make in this regard is hiring a diversity lead who’s simply a face — or worse, to fill a gender or racial quota — rather than someone who is able to impact decisions or effect change. Doing so, Sears explains, can make such hires feel tokenized and, ultimately, can “set them up to fail.”

Another pitfall, experts suggest, is if the position is relegated to human resources.

“HR doesn’t have a business obligation. A good CDO should have a connection to business opportunities, to clients, to marketing and to employee engagement, and all of those things sit outside of HR,” Sears said. “In organizations that have a profit and loss — if you bring in revenue, then you have power in the organization. Being a CDO requires an influence model: You have to be able to influence change.”

Experts agree: A successful chief diversity officer not only thoroughly understands the business but also has the respect of his or her peers, reports to the CEO and is directly connected to the senior leaders.

Sears points to his own background as a fitting example: Having worked as both an investment banker and a private banker, he understood the inner workings of the business before leading the diversity strategy at Merrill Lynch and then becoming the CDO for Credit Suisse.

“You have to be able to sit down with people who are different, get them to understand each other and guide them to see change as an opportunity — and ultimately, prove the ROI,” Sears explained. “These fashion brands are not nonprofit [organizations], and for-profit companies only like to do what’s in their long-term best interest. So a good CDO should be able to demonstrate how diversity and inclusion does exactly that.”

Shawn Outler has a similar track record: Before her promotion to Macy’s chief diversity officer in October 2018, she cultivated a decade’s worth of experience. She joined the retailer in 2006 and not only has she held executive roles in buying, food services and product development, but she also helmed the company’s multicultural business advancement initiative.

While consumers may not be able to name a company’s CDO, they can see the impact of that executive’s influence, like recognizing that Chanel was an ally to the LGBTQ community when the brand tapped Quinlivan to star in its beauty campaign. When business values are aligned, experts say, that drives sales — in much the same way that Nike sales spiked after the Colin Kaepernick ad.

In the end, it’s all about staying ahead. “There is all kinds of research that shows diverse teams create more innovative outcomes,” Sears said. “Creativity is the name of the game in fashion, so the more diversity you have, the more likely someone will come up with the next big thing, and that’s what companies want.”

Even so, there are still many luxury goods companies without diversity-focused leadership. But Sears believes that it’s only a matter of time before other businesses follow the lead of their peers who are prioritizing D&I.

“It’s a real brand risk if brands don’t create chief diversity roles. We’re going through a generational transition right now, and it’s going to be rough for companies that don’t get it,” Ventura said. The silver lining? “This is an awakening and when businesses make mistakes, everyone learns.”

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