Diversifying Company Leadership
Progress has been made, but not enough. Ironically, the key may be getting more white males involved.
Stop a second and think about the executive leadership in your office. If that leadership largely consists of white, middle-aged males, you’re not alone. There may be a black man in the White House and a Latina on the Supreme Court, but, in many ways, C-level offices in corporate America still look like something out of the 1950s.
While some in the suite may see efforts to promote women and minorities as threatening, surprising new methods of defining diversity could ease their concerns. Tracy Brown, a Dallas-based diversity consultant, says there’s something to embracing the variety of life experiences that exist in a white, male-dominated group.
“You could have an entire board that is all-white, all-male, and all baby boomers, and there will still be diversity there. We have to be careful about assuming” automatically that there isn’t, Brown says. “Who on the board has a family with a disability; who has a biracial grandchild? We see that they are white and male, but they have to be more visible about the ways they experience or represent diversity.
“At the same time, there needs to be a strategy for organizations that, as vacancies occur, leaders source, attract, and secure more visible diversity,” she says. “Most consultants fail to tap into the diversity of white men.”
The latent diversity of white males notwithstanding, the actual representation of minorities and women in chief executive positions is not encouraging. In 2008, a study found only seven Asian, seven Latino/Hispanic, and five black CEOs in the Fortune 500 companies. Twelve were women.
Such lack of minority representation isn’t confined to big companies. According to the 2008 Equal Employment Opportunity Commission’s aggregate report for Texas, of the 58,020 people classified as executive or senior-level officials and managers, just 14,726 were women (a little over 25 percent), and 8,360 were minorities. Only 2,736—or less than 5 percent of the total executive population—were women of color.
Texas lags behind the national average in promoting women to the executive suite, but it’s about on par in terms of minorities. In the U.S. in 2008, close to 30 percent of people in senior-level positions were women, and 12 percent of executives were an ethnic minority.
Role of the CEO
Given the dominance of white men in positions of workplace authority, any move toward increasing the presence of women and minorities on boards and in corner offices will have to originate with them, experts believe.
“Our expectation is for our leaders to set the tone and to behave in a way that is consistent with diversity and inclusion,” says Terry Howard, Texas Instruments’ diversity and inclusion director. “At TI, we have been quite fortunate in that regard. I’d put our senior leadership against anyone in diversity. We have great leaders here.”
Dallas-based TI, which has four women on its board—one of whom is a minority—has made great strides in transforming its leadership diversity. But many companies aren’t as advanced. Some CEOs are still grasping at straws to figure out what it takes to recruit and retain a diverse group of employees.
Angeles Valenciano, vice president of business development for the not-for-profit Texas Diversity Council, says much of the responsibility for successful diversity infrastructure rests on the CEO.
“One of the things that comes up constantly is, if the CEO is not involved in the diversity effort, it fails. Or it takes an extraordinarily long time to get on its way,” Valenciano says. “We look at Texas and know we have so many Fortune 1000 companies headquartered here. But you look at research and see how many women are on board of directors-level and in the C-suite, and there’s a big gap.”
Valenciano, who was in charge of global diversity for JPMorgan Chase before joining the Texas Diversity Council, says the lack of women in professional leadership roles is troubling.
“We women make up half the work force, if not more, and I’m sure those numbers will shift. Why is it, then, that we don’t have women leaders?” she says. “I personally believe it is a lack of opportunity … and a preconceived notion that women are not leaders yet: We cry, we don’t take criticism well, we get pregnant and leave the work force.”
Valenciano and others at the diversity council hold regular symposia and seminars to dispel myths about women and minorities. But many argue that real change will come only when more women and minorities are established in positions of power.
Nancy Brown, CEO of the Dallas-based American Heart Association, is an outspoken diversity advocate. The nonprofit produces an annual diversity report that highlights its corporate achievements in diversity and outlines potential problems the group faces, all aiming to “build a more culturally competent organization.”
“It is certainly one of my highest priorities—to attract and retain a diverse work force,” Brown says. “It’s important because a diverse work force brings diverse ideas. For us, this is what we live and breathe.”
As the organization’s first female chief executive officer, Brown attributes some of her success to the association’s efforts to promote women and minorities.
“I worked for the American Heart Association in progressively responsible positions. Being good at what I do has helped, but there is no question that the AHA has been progressive” in diversity initiatives, Brown says. “The American Heart Association is very proud to have its first woman CEO, and I take that responsibility seriously.”
Brown inherited a successful model for in-house diversity from M. Cass Wheeler, the AHA’s retired CEO. Brown now chairs the CEO Diversity Advisory Cabinet, a group focused on gender, ethnicity, sexual orientation, age, and disability issues that has grown to include 25 employees appointed by their respective executive vice presidents to two-year terms.
“We are not an organization that thinks we have all the answers, even though we have a diverse work force,” Brown says. “We have a great balance of talented people who bring their expertise, but we cannot be successful in achieving our mission and goals if our work force does not reflect the community we serve. To us, it’s a no-brainer.”
Tomorrow’s Work Force
While predominantly white executive teams are still common, changing demographics mean it’s a situation that’s unlikely to continue. A 2009 census report projected that the country’s Asian and Hispanic populations are expected to double by 2050.
In the 2000 census, 32 percent of Texans categorized themselves as Hispanic or Latino; in Dallas County, that group represented more than 660,000 of the total population of 2.2 million. “White alone” came in at 44 percent, or 983,000 in Dallas County. If everything goes according to current corporate diversity goals, the employee makeup in companies is likely to change accordingly.
In light of the 2009 census, the Hispanic Association on Corporate Responsibility addressed the expected growth in its corporate inclusion study last year.
“According to the U.S. Census reports, Hispanics will make up about 60 percent of the nation’s population growth between now and 2050, which means that Hispanics will continue to drive the growth of our nation’s labor force in the coming decades,” the HACR said in a letter from its board of directors, including representatives from the U.S. Hispanic Chamber of Commerce and the League of United Latin American Citizens.
“Those corporations who have embraced this reality have engaged the Hispanic consumer and converted them into a loyal customer, thus sustaining their viability in tough times. We all understand that Corporate America’s bottom line is their brand, which translates into profit. However, it’s not enough for a company with a brand to hire Hispanic personnel to capture the Hispanic market. They must also lay the necessary groundwork to make the experience fulfilling, or risk totally losing their market share.”
That market share is nothing to sneeze at, either. A 2009 Selig Center study projected that U.S. Hispanic buying power will top $1.3 trillion by 2014, surpassing the total expected buying power for the state of Texas that year.
“Championing and advocating diversity is an important business priority,” Valenciano of the Texas Diversity Council says. Consider the “$3 trillion in purchasing power that all of these diverse groups bring into the economy. No longer do you need to go abroad to understand that we live and work in a very global marketplace. In my mind, diversity has shifted away from being just the right thing to do to now being the right business thing to do. You’re trying to capture different markets and appeal to their likes. Culturally, that makes a lot of sense.”
Obligation vs. Opportunity
It’s been more than 45 years since the Civil Rights Act and Title VII focused national attention on discrimination in the workplace. But many employers still post the Equal Employment Opportunity poster in their office and leave it at that. People who see diversity as an extension of affirmative action are often missing the big picture, experts say. And a business model that emphasizes “surface diversity”—just meeting a quota and ignoring the quality-of-life issues surrounding workplace diversity—is not going to be as successful as one that incorporates diversity in every aspect of work.
Tracy Brown, who owns a 19-year-old company called Diversity Trends, says she quickly measures a business’ attitude toward the topic by evaluating how the company views its minority representation: “If I’ve asked about the diversity on your board, and you say, ‘Oh, we’re doing really well, we have one black person and one Latino,’ then first let me congratulate you for beginning the process of developing diversity on your board. In your organization, do you see diversity as an issue to be solved, or an opportunity to achieve your mission and your goals?”
In Brown’s opinion, a board that can demonstrate the effectiveness of a minority leader by emphasizing his or her community ties or different viewpoints is far better off than a business that simply dwells on the number of minorities in high positions.
“There are lots of organizations who look at it from a compliance point of view, and they are just looking at the numbers,” says Brown, who worked in HR for a national health care company before starting her business. “The reality is, one person of any ethnic group is just one person, and cannot speak for all of the different perspectives of that racial category or that gender. Getting all the input you need is not going to be resolved by having one person from each category.”
Howard of Texas Instruments, who previously worked as AT&T’s first diversity director, takes a direct approach to the topic. Instead of worrying about the number of minorities and women hired by TI, he strives to keep them engaged once they enter the work force. TI has more than a dozen “affinity” groups—a women’s group, a Japanese group, a Muslim group, a Christian group, a GLBT group—that foster dialogue among those with differing viewpoints and enable new employees to find comfort among people similar to themselves.
This approach has become a powerful recruitment and retention tool, and even helps TI’s bottom line: No need to hire a Korean speaker to translate important documents, when TI’s Korean affinity group will volunteer to do it. When TI employees from other parts of the world come to Dallas, the representative cultural group often plays host.
To communicate among the company’s 27,000 employees globally, Howard sends out regular diversity memos that have been known to ruffle some feathers.
One such memo pointed to the insensitivity of using the phrases, “Let’s Jew the price down;” “That’s so gay;” and “That’s so retarded.” He urged employees to not only refrain from using pejorative terms, but to respond to insensitive comments immediately and directly to the offending speaker.
“I don’t mince words. I believe in hitting tough topics. I am not in the business of making people comfortable,” Howard says. “As long as we have gaps to close, I can’t run away from it. I look at other ways people might be excluded from an organization and ask, ‘What part of you do you mask in the workplace or leave in the parking lot? How much discretion or energy do you spend trying not to be ‘found out’?’ I don’t ignore the traditional categories of race and gender, [but] it is part of the much larger mosaic.”
For businesses struggling with diversity issues, Howard and Brown offer similar counsel: Get in a room with your employees, and roll up your sleeves. Talk to leadership and middle managers and find out what keeps them up at night. Focus on the behavior of employees, not on their beliefs, because beliefs may never change, but behavior can. Strong diversity efforts don’t originate from a PowerPoint presentation, they say, but from one-on-one conversations in the hallway.
“People want an algorithm, but it doesn’t fit that way,” Howard says. “Over time, a strategy starts to emerge.”
Howard, an African-American male, has made it a point to include an often-overlooked group when it comes to diversity discussions: white males. He calls it, “beer summits with white guys.”
“We do all this diversity stuff; what do white guys think about it?” Howard says. “It was eye-opening for me.
“Find the most anti-diversity white guy you can—that needs to be a point of view at the table,” he advises. “Don’t shut anybody out.”