Case Study “ WE HAVE A diversity problem.

”
Alex Pelletier, the CEO of
along with sales to Asian distrib-
utors, which had risen in recent

What Does Juno, a Toronto-based toy

company, nodded his acknowl-
years to meet the demand for
Western entertainment. It was a

Diversity Mean edgment. He knew that Stuart

Landry, his chairman, wasn’t
critical role, and the plan was to
find someone with experience
in a Global berating him for a problem they
were already working to fix—
in the region and the potential
to grow the business who could
Organization? Stuart just wanted to discuss it
over lunch before the board met
eventually succeed John and
take his board seat. Ideally the
the following week. person would also diversify
by David S. Lee One big agenda item would Juno’s leadership ranks—which,
be Alex’s decision on a key hire to Alex’s chagrin, were still
for Juno’s Asia operations. The mostly white and male.
HBR’s fictionalized case studies present problems person would be the second- Like many other CEOs, Alex
faced by leaders in real companies and offer solutions
in-command, reporting to the had in recent years committed
from experts. This one is based on the HBS Case
Study “Diversity in a Global Context: Making the Right
head of the unit, John Chang, publicly to supporting diversity,
Hire to Lead Asia” (case no. HK1301-PDF-ENG), by and would help oversee Juno’s equity, and inclusion initiatives
David S. Lee, which is available at [Link]. mainland-China manufacturing internally and racial justice

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May–June 2022 Illustrations by ANUJ SHRESTHA
 the Asia team, based in Hong
Kong, all came from the region,
they skewed heavily male.
“So let’s talk about the Asia
role,” Stuart continued. “Jackie
Experience
says that you and John have two
outstanding candidates.”
“I definitely feel good about
the options,” Alex said. “We’ve an expert in toy manufacturing
met with both of them several and distribution. Catherine
times over the past three months, had been pursued by several of Case Study
and to be honest, I’m quite torn.” Juno’s competitors but hadn’t yet Classroom
In fact, the choice had been been persuaded to go in-house Notes
keeping him up at night. From anywhere. Alex was honored that
its start as a small Canadian toy she was considering this role, and 1. What role
might affinity
maker 10 years earlier, Juno had he thought that getting her would
bias—the ten-
become a multinational leader be a big win.3 dency of people
in its sector, with Asia driving its Catherine hadn’t lived in to like others
future in terms of both produc- China or elsewhere in Asia for who are similar
tion and sales.2 This hire would an extended period. But she’d to them—have
played in the
assume most of the operational visited family in mainland China
lack of diversity
responsibilities so that John and Hong Kong during school at Juno?
could focus on spearheading breaks, and after she’d started
growth, but the newcomer would working, she’d taken business 2. In 2020 global
be another public face for Juno trips to the region every quarter revenues for
the toy industry
in the region and, as John’s likely or so. Through her consulting
exceeded
successor, would be scrutinized— work she’d developed a network $94 billion.
certainly by the company’s in Asia, primarily in Hong Kong,
directors and employees, and where her firm had an office. 3. Globally, the
potentially by DEI watchdogs, She told Alex that she’d been Asia-Pacific
region has the
investors, and consumers. The watching Juno’s performance
lowest represen-
problem was that Alex couldn’t before and after its IPO, in tation of women
efforts externally. He’d spent quite figure out what qualified as 2019, which had been small but in senior man-
much of 2020 both dealing with diversity for Juno in Asia. established the company as an agement roles, at
pandemic-related supply-chain Clearly eager to help, Stuart important industry player. He 27%. The global
average is 29%.
delays and store closures and said, “Tell me about them.” was impressed with her knowl-
hammering out the company’s edge of their peer companies and
4. Given how
diversity policies and plans. her experience supporting one of much business
He and Jackie Paquette, Juno’s CATHERINE WU them in the kind of expansion he is conducted in
CHRO, had launched programs Ethnically Chinese, Catherine wanted to see over the next five English through-
focused on hiring, training, was born and raised in the United years. She’d led many of her firm’s out the world,
how critical is
community support, and States by her parents, who had larger projects and according
it that an expat
organizational culture, and by immigrated to New Jersey from to her references was adept at leader be fluent
altering their promotion criteria Shenzhen as graduate stu- managing teams of people from in the local
and broadening their recruit- dents. After earning a degree in different parts of the world. language?
ment outreach, they’d increased economics from Princeton, she Alex had few concerns about
diversity at headquarters. But joined a prestigious consulting Catherine’s suitability for the
that had yet to trickle up to the firm, where one of her most job; his one hesitation involved
leadership team or the board.1 successful engagements was her language skills.4 She spoke
John Chang was the only board with a global toy company. She Mandarin with her family but
member of color. And although soon developed a reputation as not consistently in a business

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May–June 2022 149
 context, and she couldn’t read and decided to double-major in getting things done. He and his
or write Mandarin fluently. John Chinese and business adminis- partner, a Hong Kong native, con-
5. Asia-Pacific had pointed out that she’d have tration with a view to eventually sidered the city home and were
is the second- a team of Chinese nationals who returning to the country that had raising two daughters there.6
largest market could translate when necessary. captured his imagination. Nolan loved his current job,
for toys and
But he acknowledged that it Right after college he but he was excited about Juno’s
games in the
world, and some would highlight her American- accepted a job at a global toy growth potential. Alex wondered,
75% of all toys ness, which might hinder her. company and within three though, whether he could take
are produced in years seized an opportunity to the Asia business to the next
mainland China. relocate to Hong Kong, where level, since his references consid-

6. In 2021
NOLAN BENNETT he split his time between the ered him more of an “operations
expats made Nolan, a white man, was also city and facilities in mainland guy” than a visionary leader.
up about 10% American, having grown up in China.5 That was 15 years ago,
of Hong Kong’s Texas. But he had spent almost and he’d become a huge asset to
population of as much time in Asia as in the his employer. He was one of the CONTEXT MATTERS
7.5 million.
United States. After high school few foreigners in the manufac- “What did Stuart think?” Jackie
7. How should he’d lived in Beijing for two years turing space who was fluent in asked Alex the day after his lunch
a multinational as part of a volunteer program. Mandarin. with the chairman. They were in
company go He’d told Alex that those two Nolan had also built relation- her office at Juno headquarters.
about creating years were both exhilarating and ships. Factory managers and “He asked a lot of questions
a definition of
transformative for him, changing other stakeholders appreciated but didn’t really show his cards,”
diversity that
works across a the course of his life and career. his language capability, cultural Alex said. “I think he gets how
global context? Nolan learned to speak, read, understanding, and trustwor- tough a call this is going to be.
and write Mandarin fluently and thiness. Over time he’d amassed He said the board will take my
immersed himself in the culture. a good amount of social capi- recommendation—but they’re
He returned home to study at tal—what the Chinese refer to as expecting me to prioritize
the University of Texas at Austin guanxi—which was important for diversity.”

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 “Of course they are!” Jackie “Exactly,” Jackie said. “Plus this point many times, especially
said. “That’s a huge priority for it would signal to our employees regarding the Asia division,
all of us. But what does it mean in that DEI is a priority. And we which was 70% male. They both 8. In a 2021
the context of this decision?” know representation matters. If knew that in executive ranks it Coqual survey
They’d been going back and Catherine did end up succeeding was all too common for the only only 43% of
respondents in
forth about this for a while now John, she’d increase diversity on woman to be, like Jackie, in a
China said that
and kept flip-flopping. John, our board. But, to John’s point, support role such as HR. race is part of
however, had declared a pref- this hire will be working in China, “Women are the ones buying how they define
erence. He conceded that both not Canada. Nolan may not be a our toys for their children,” Alex their ethnicity.
candidates were well qualified member of an underrepresented Other factors
mused. “Of course, Nolan is the
they cited in-
but liked that Nolan would bring group here at headquarters, but one with kids…” He stood and
clude country of
diversity to his all-Asian team. he is in Asia. He says he’s often started pacing. “I’m reminding birth, language,
“Right,” said Alex. “That’s the only non-Chinese person in myself that this is a good problem and religion.
what John keeps driving home. meetings and at factories.”8 to have. We’ve got two extremely
If we looked at our company as Alex nodded. “And Nolan’s strong candidates, and either one 9. The pandemic
led to greater
a whole, we’d hire Catherine—a work experience and perspective can help us meet our goals.” Juno
demand in the
woman of color—for noticeable are different from mine or yours had just logged the best quarter industry, with
diversity that would show up in or John’s or anyone else’s on the in its history, and he wanted that U.S. toy sales
our metrics and in the executive executive team. Catherine seems success to continue.9 increasing by
photos on our website.” They had more aligned in her thinking with “They bring diversity in dif­ 16% and China
toy sales by 2.6%
talked before about the difficulty the rest of us.” ferent ways,” Jackie said, point-
in 2020.
of accurately measuring diversity: “But we can’t forget that Cath- ing to the DEI statement pinned
For example, only some observ- erine would bring an American to her wall. Alex glanced at it,
ers considered sexual orienta- perspective to an Asian team,” remembering the hours they’d
tion as well as race and gender Jackie replied. “And being a spent poring over the wording.
identity, so Alex’s being gay often woman also brings a different They’d outlined important and
didn’t count.7 viewpoint.” They’d discussed lofty goals, but it was challenging

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May–June 2022 151
Experience

to convert them into concrete

guidance, especially for decisions
like this one.
“As two Canadians,” Jackie
said, “I worry that we’re seeing this
through a specific lens. How would
you feel about appointing another
white man to such a senior role?”

GETTING IT RIGHT
The following week, on the way
to dinner with the board, Alex
looked out his taxi window at
the Toronto skyline and thought
about his dilemma. He felt a deep
sense of responsibility—to Juno’s
employees, shareholders, and
customers—to get it right.
Jackie’s question rang in his
ear. If he chose Nolan, he might
Whom should Alex
seem to be going back on his DEI recommend that Juno hire?
promises. At HQ, Nolan did not
represent diversity. Catherine The experts respond.
would be a woman of color in
Juno’s leadership pipeline and international business is conducted in
presumably on the board. But a DAISY AUGER- English, I suspect that it wouldn’t be all
directorship was at least five years DOMINGUEZ, the chief that much of an issue. And Catherine’s
off and depended on her being an people officer for VICE Chinese-American heritage is a huge
able successor to John. Media, is the author of asset, because existing employees,
Alex would have to make his Inclusion Revolution. customers, and other stakeholders who
recommendation first thing at the share her background—not to mention
quarterly board meeting the next future hires—would be able to see them-
morning. Which candidate was If Alex and his board want to selves reflected in the leadership ranks.
the right person for the job at this meet their goals for diversity Although Nolan might provide diversity
moment?
now and in the future, they in that specific location, he would still
be another white man at the senior
should hire Catherine. level. Catherine, by contrast, would be
DAVID S. LEE, a principal lec-
She is a proven leader who understands a visible break from precedent, some-
­­
turer at the University of Hong
the Asian market and has a connection one who could eventually bring much-
Kong Business School, teaches,
researches, and advises on topics to the region. needed gender and ethnic diversity to
related to ethics, governance, and I get the concern about her limited the board. And gender is one lens that
fintech. language skills, but given that most applies everywhere—from Canada to

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China. Increasing the representation of culture and immersing herself in it, but
women in the leadership ranks should YUTING WANG is the
the initial disconnect will be hard for
be a clear priority for Juno. head of people and her to overcome. Nolan, on the other
We know John’s view, but I’d sug­-­ culture for Hong Kong hand, gets China. He has put tremen-
gest that Alex and Jackie arrange for a and Macau at Roche. dous effort into learning the language
few other regional leaders to meet with and has spent a total of 17 years with feet
both candidates. I took that approach on the ground in the region. It’s obvious
when recently hiring team members in to me that he would have a better
Asia-Pacific and the Middle East. Local If Juno’s goal is to win in chance of success in the role.
employees described how disconnected Asia—or, more precisely, in That is no doubt part of the reason
they’d felt from decisions made at
headquarters, so it was important to get
mainland China—my advice why John is in favor of hiring Nolan,
though adding diversity to his Asia
their buy-in before making the final call. is to hire Nolan. team is his main consideration. Alex
I believe that we earned their trust and I understand why Alex is reluctant and Jackie should pay attention to
loyalty as a result. to appoint another white man, given his opinion.
Another way to decide between two the difficulty Juno has with diversity. They should also remember that
equally qualified candidates is to go But in my personal view, Nolan is the diversity involves much more than visi-
back to the criteria you established for better choice. ble differences such as gender and race.
the role and hold yourself accountable This dilemma will most likely feel Educational background, professional
to them. Ideally, Juno has a struc- familiar to anyone who is currently knowledge, personality type, thinking
tured hiring process in place, and my working in human resources in the style, and life experience are factors as
informed guess is that Catherine has Asia-Pacific region. Whereas multina- well, and Nolan’s profile suggests that
more of the attributes necessary for tional companies used to fill their high- he would be able to serve as a bridge
success in the role than Nolan does. level positions in China with expatriates between the Chinese team and head-
Adhering to the criteria will prevent who had expertise in product and quarters, helping to translate issues for
Alex, Jackie, John, and the board from branding but didn’t speak the language both sides.
letting bias creep in and falling back or understand the culture and had no That said, Juno’s leaders still need to
on what they know. experience in the market, times have address the lack of diversity at the com-
Finally, if Catherine is hired, Alex, most certainly changed. Now it’s gener- pany as a whole, especially as it relates
Jackie, and the board need to commit ally understood that local knowledge is to gender—an issue that cuts across
to doing what it takes to set her up for crucial to effectively managing Chinese regions. Given the underrepresentation
success. That includes having candid employees and attracting Chinese of women at senior levels, they should
conversations about what it means for consumers. take immediate and concrete action,
a Chinese-American woman to fill this Recently, at a global company where such as inviting some women of color to
role and what it will take for the organi- a friend of mine works, an ethnically become independent board directors.
zation to accept and embrace her as Chinese woman who was born in They should also work on improving
a leader. The interview process will have America and had never lived in China their systems and processes so that they
given them ideas about areas in which was hired to lead its business in that have a sustainable plan for hiring and
she can and should grow, including lan- country. The decision was tough and promoting more women.
guage skills and cultural understanding. came after the company had passed Alex is lucky to have a choice
What will they do to ensure that she is over several local candidates. But the between two great candidates. From
welcomed, supported, and respected as woman departed within two years. She my perspective, Nolan would be best
a new leader? had been hampered by her inability to suited to the Asia role, and Alex can
Equity is not just about hiring people speak proper Mandarin or to relate to easily make that case to the board and
from underrepresented groups. It’s her team and external partners. The the rest of the organization. Perhaps,
also about creating a sense of inclusion company ended up replacing her with as the company seeks to become more
and belonging for them and reducing someone internal. diverse, there will be another, better,
barriers so that they thrive in the jobs That is the risk I see with choosing spot for Catherine.
you’ve put them in. That’s how Cather- Catherine. I believe that she’s talented HBR Reprint R2203M
ine—and future Catherines—will make and smart enough to recognize the Reprint Case only R2203X
a difference at Juno. importance of embracing the Chinese Reprint Commentary only R2203Z

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