How Eight CEOs Are Making Diversity Happen (Really)

Creating a multiracial workforce can be challenging, time-consuming—and, let’s face it—deeply uncomfortable for many CEOs. But that doesn’t mean it can’t be done.
Genesys CEO Tony Bates

Following the murder of George Floyd last May, a tragedy that touched off months of protests and civil unrest, Tony Bates, CEO of call center technology solutions company Genesys, found himself in a place similar to thousands of corporate leaders. He knew he wanted to reach out to employees—who numbered 5,500 across 70 locations around the world—in a personal, companywide email letting everyone know he took this seriously and that the company was looking at its own diversity practices to determine what additional measures could be taken.

But as he sat down to write it, he recalls, “there was a level of anxiety for me, about the right words to pick. Am I going to offend someone? Am I pushing my own agenda? I really had to think about, how is this going to land on people? How are they going to absorb it?”

In the end, he found the words, and Eric Thomas, who would eventually become the company’s first global diversity, equity and inclusion officer, told him he was so grateful that someone at the CEO level was validating the issue and was willing to take a stand. “He told me he shared it with his family, and they cried over it,” says Bates. “I realized in that moment that it’s really important not to shy away from this topic.”

He followed that with a town hall that he calls “a watershed moment for the company.” Four employees from different racial backgrounds, including Thomas, were invited to share their stories about how they dealt with racial injustice growing up. “I realized this was a moment to listen, not a moment for me to be prescriptive from the top,” he says. “The balance I think CEOs have to strike is you have to be brave and courageous enough. but realizing that in this area, you are out of your comfort zone. You don’t have all the answers. But you can set the stage.

“And then,” he adds, “as a leader, you look at the data—and the data clearly said we were not diverse enough.”

Genesys is hardly alone, of course. While it’s impossible to track exact numbers across all U.S. companies, in August a USA Today analysis of the 50 biggest public companies, which arguably have the most formal and well-funded D&I programs, revealed that of the 279 top executives listed in proxy statements, only five were Black—and that included two who have recently retired.

But while many CEOs have earnestly been trying to move the needle on diversity, the reality is that it is often tough to budge. “Diversity’s really hard—and inclusion is harder,” says Johnny Taylor, CEO of the Society for Human Resource Professionals and a regular contributor to Chief Executive (see “Eliminating the Empathy Deficit”).

‘It’s the Right Thing to Do’ Is Not Enough

One of the biggest reasons these kinds of efforts fail is because management teams have not really figured out why they need diversity in their organization. Avoiding a lawsuit or being canceled on Twitter may be a legitimate goal, but it’s not enough to energize a companywide diversity initiative and make it successful. Nor will it be enough to say, simply, “It’s the right thing to do.”

“That is just not motivating language that’s going to get your average CEO out of bed in the morning,” says Michael Bach, founder and CEO of the Canadian Centre for Diversity and Inclusion. “The right thing to do is to make money. And if you can make money while doing something like supplier diversity, then it sticks.”

For diversity initiatives to have any hope of success, management has to go deeper into the strategic purpose for it, says Dr. Tiffany Jana, a diversity consulting practitioner with TMI Consulting. “Like, how does this organization get better when we have more representative diversity across our employee base? How will it serve us? If you can’t answer those questions, I would prefer you not embark on the journey.”

Otis Worldwide CEO Judy Marks

At Otis Elevator, the motivation is not so much taking a stand on a social issue as employee safety; if employees working in the field, operating heavy machinery at great heights, feel emotionally unsafe, they may become dangerously distracted. “We’re in the life safety business,” says president and CEO Judy Marks. “We need their ‘whole self’ there so they can go home every night.”

This past year, Marks launched a new initiative, titled, “Our Commitment to Change,” which lays out numerous actions Otis will take to ensure that all 69,000 employees feel “welcome, safe and heard.” The multi-pronged approach will include an independent review of hiring, compensation and other business practices to uncover and eliminate biases; accelerating anti-racism, unconscious bias and inclusion learning at all levels of the company; and creating a new advisory group to build in transparency and accountability. “This will be far broader than a CEO ‘call to action,’” says Marks. “There has to be a vision at the top and support from the top, but there has to be grassroots buy-in as well. And then we have to hold our entire leadership and management team accountable.”

For many B2C companies, the motivation includes needing a workforce that reflects the market in order to design products that meet their needs. Kristin Groos Richmond, CEO and co-founder of Revolution Foods, which provides access to healthy, affordable meals to students and families, did an analysis and came up with some clear reasons why diversity needed to be a focus.

Revolution Foods CEO Kristin Groos Richmond

“All of the communities we serve are highly diverse across a broad range of ethnic, racial, socioeconomic backgrounds, so we recognized pretty quickly that the only way to connect with them and create a respectful product is to…recruit a team that would really reflect the communities we serve nationwide,” she says, noting that diverse employees make up around 66 percent of the company’s nearly 1,500 total, 40 percent of management and 30 percent of executive leadership. “It’s so important to have that diversity at every level of the company,” she says. “I’ve always been a firm believer that the more diverse perspectives you can get around the table, the smarter you’re going to be.”

As proof, many cite a 2018 McKinsey study of 1,000 companies, which found those in the top quartile in ethnic and racial diversity in management were 33 percent more likely to have above-average financial returns, and those in the top quartile for gender diversity were 21 percent more likely. But it wasn’t statistics that convinced CEO Tom Shorma that WCCO Belting needed to be able to recruit from every possible demographic group; it was the manufacturing skills shortage in his small town of Wahpeton, North Dakota. In particular, he needed to appeal to women and to a growing population of new Americans. “We’ve done some unique things that have allowed us to first find great people—whether male, female, whatever race, creed, color—and then to give them all top-to-bottom opportunities for advancement.”

WCCO Belting CEO Tom Shorma

For example, instead of conference room interviews—or as Shorma calls them, “interrogations”—every candidate is taken on an extensive tour of the facilities, given a history of the family-owned company and shown how they might fit in there. “When they walk the floor, they can see that half the workforce is women,” says Shorma.

They then offer financial rewards to employees who recruit people they trust, which has had the intended effect of increasing the number of diverse candidates, says Shorma. They also instituted flexible scheduling, which has helped them attract and retain women, who now account for half of all employees and two-thirds of supervisors.

If you don’t create a culture that respects diversity and gives all employees a voice, then recruitment efforts will be wasted. At Genesys, Bates is focused on bringing diverse groups forward so they can have a platform and voice to educate others. “It sounds like a soft thing, but I think it’s maybe one of the most important things we need to do foundationally, so we’re all in a better place to understand it before we rush to ‘metric this,’ ‘metric that,’ benchmark against someone else. So, we’re on the beginning of a journey, and it’s less around classical benchmarks and more about, how do you want to tap into the culture and the mission and then map that back to success,” he says. “Because you could add X percent of folks but if it’s not a trusted, safe place that recognizes those communities, you’re ultimately gonna spit those folks out.”

How to Measure Progress

Flagstar Bank CEO Alessandro DiNello

Most agree that, for efforts to be successful, measuring progress is a must. But that’s also where things sometimes get touchy because measuring an increase in diversity raises the specter of quotas and culture wars over affirmative action. “Quotas are damaging because then people think there isn’t equality on the other side,” says Alessandro DiNello, CEO of Flagstar Bank. “But there’s almost nothing you can do successfully without measuring what you’re doing.”

Measuring progress on diversity goals is a clear way to show leadership is taking it seriously. One of the things DiNello made a requirement at Flagstar is having a diverse slate of candidates “for every position and especially management-level positions,” he says. “I guarantee that if I don’t say that and my CFO leaves, the list I get will be all White guys—maybe with one White female—because finding a minority candidate, whether Black, Hispanic or other minorities, you just have to work harder to find that person.”

In July, DiNello hired a new HR chief, David Hollis. “I didn’t hire him because he was Black, but in terms of me being sure that my head of HR is going to do everything in his power to facilitate the choices that our hiring managers have—I feel good about that. I feel like maybe we’ll make a little bit more progress more quickly. We’ll see.”

Denny’s CEO John Miller

At Denny’s, the restaurant chain, CEO John Miller measures success first through feedback on the company’s diversity programs, which include unconscious bias trainings and a “Hungry for Education” scholarship program to help combat childhood hunger and provide college scholarships to Black, Hispanic and Asian students. The company has also spent more than $2 billion through its supplier diversity program since it was initiated in 1993. And they do keep track of the numbers: about two-thirds of the total Denny’s workforce is made up of minority groups, including half of all restaurant management-level employees. The board of directors consists of 44 percent minorities and 33% women, and Miller says they are committed to improving those numbers.

To Miller, the most important thing CEOs can do when addressing racism or talking about race is to be authentic. “Being the loudest person in the room means nothing if you don’t have the hard work and proof points to back it up,” he says, adding that the biggest lesson he’s learned is that moving the needle on diversity requires patience and a sustained long-term commitment. “You aren’t going to hit a home run every day. But by consistently hitting singles and doubles day in and day out, you’re going to look around one day and realize you’ve been a part of building something truly special.”

Whatever you decide to measure, you have to first know what your baseline is, says Marks, and at Otis, it was something they’d never gotten a handle on before the new initiative was launched. “We did not have a comprehensive set of metrics, of equity analysis, of really understanding where we are—strengths, gaps, opportunities. So we decided as a leadership team that if we were to just assess this ourselves, it wouldn’t be objective and bias would be natural,” she says.

To solve that, they brought in an independent, external expert, “not a firm, but someone we knew who’s got a passion for D&I and an incredible track record of it to evaluate where we are and help us map out where we need to go so that we can actually realize this vision and develop a formal long-term D&I strategy,” she says. “We’ve given her full access to our repository of data and analytics to examine how we recruit, hire, develop, engage, grow and retain our colleagues.”

Dealing with Implicit Bias

Staying honest about where the company is on diversity is key to keeping unconscious bias at bay. Harvard professor Mahzarin Banaji, author of Blindspot: Hidden Biases of Good People, says that it’s impossible to live in our world and not have cultural, racial and gender biases. In fact, she says, by age three, most children have begun to show biases similar to adults. The way to solve for this? “Admit that [bias is] going to show up and you need to correct for it by just assuming that you are going to be biased,” says Banaji. “Because 80 percent to 90 percent of people show bias on our tests.”

Cardinal Health CEO Mike Kaufmann

Mike Kaufmann, CEO of Cardinal Health, is well aware of that, which is why he reaches out to others to keep him honest. “I surround myself with people I call ‘truth-tellers,’ including some of our employees as well as individuals outside the company,” he says. “These are folks who I know are not going to tell me only what I want to hear. They give me the hard feedback on biases they might see in me and tell me how others are experiencing the choices we’re making in the work setting.”

Kaufmann is working hard to advance diversity in the senior ranks and keeps a close eye on data. Around the world, nearly 40 percent of management-level employees and 51 percent of professionals are women. In the U.S., 25 percent of executives and 23 percent of managers are ethnically diverse. He requires diverse slates for all director and above positions and established a D&I steering council made up of senior leaders from across Cardinal Health who are charged with identifying and discussing barriers to D&I and challenging the status quo. All managers are required to take unconscious bias training.

Last February, before the shutdown, Kaufmann took his leadership team to Montgomery, Alabama, to visit the National Memorial for Peace and Justice and the Legacy Museum that honors thousands of victims of lynchings and slavery. “We left those sites humbled and changed and with a continued commitment to speak out about racial injustice,” he says, adding that each CEO has to determine the best way to build a diverse and inclusive culture that is right for their company. “There’s no one-size-fits-all. You have to thoughtfully create a multi-layered, multi-dimensional program that continues to grow and evolve with your organization.”

All the CEOs interviewed acknowledged the difficulty in addressing racism in the workplace, particularly given how politicized the conversation around inclusion has become. But they also affirmed that CEOs, statistically majority White and male, can’t wait to start talking about race and gender until they feel comfortable—because they likely won’t. “I hear, ‘I don’t want to look foolish,’ ‘I don’t want to say something inappropriate,’ ‘I feel awkward’ or ‘I’m not the right person,’” says executive coach Paul Eccher, CEO of Vaya Group, who works with clients on these issues. All of those are normal feelings, he reminds them, particularly for leaders who are “self-aware enough to know they’ve lived a different life experience, a lot of this doesn’t even make sense to them, and they grew up in a time when it wasn’t talked about.”

You may not feel entitled to make big bold statements about race, he adds, but “you’ve got two ears, one mouth, so set up the venues to listen within your organization.”

Kelley Kronenberg CEO Michael Fichtel

Keep in mind that who you are today, “is a culmination of all your life’s experiences,” says Michael Fichtel, CEO of Florida law firm Kelley Kronenberg. “Certainly, I don’t profess to have grown up in an environment where I can appreciate some of the things that other diverse groups or minorities have experienced. But I can read about it. I can study it. I can speak to people, and I can learn.”

Fichtel says the firm has long made diversity a priority, but this past June decided to formalize it with a new D&I program and a new committee tasked with “seeking out and utilizing employees’ diversity in ways that bring new and richer perspectives to the firm and its clients.”

It is critical to stay humble on this journey, adds Fichtel, and to be prepared to admit mistakes when they happen. “Because you are going to make mistakes. We all know that success doesn’t come without some failures. Any successful CEO running a business knows that he or she has to take risks. So you treat it like you would any other issue in running a business— you take chances and then learn from your mistakes along the way.”

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