Workplace and Supplier Diversity
At its second annual roundtable with chief diversity officers, just before President Obama issued an executive order to rebalance the makeup of a federal workforce in which white men held more than 61 percent of senior-pay positions as recently as fiscal year 2009, The Network Journal got an in-depth look at the state of workplace and supplier diversity at leading corporations in the advertising, banking, insurance and retail industries and in the New York City government’s transportation agency. Below is an excerpt of TNJ’s exclusive conversation with Heide Gardner, of The Interpublic Group of Companies Inc.; Patricia J. Crawford, Wells Fargo & Co.; Tracey Gray-Walker, AXA Equitable Life Insurance Co.; William L. Hawthorne, Macy’s Inc.; and Michael J. Garner, New York City Metropolitan Transportation Authority.
TNJ: What does the ideal diverse company look like from your perspective?
Crawford: The ideal diverse company would be one that mirrors its customers and the communities it serves, and has an environment that will allow team members to feel valued for all of their various characteristics, skills and abilities, and be able to contribute to the company.
Gray-Walker: The only thing I would add to that is, one that has a culture of inclusion, but it allows people to feel valued for the differences they bring, all of the skills they bring to the organization. I would also add one where diversity and inclusion is viewed as a business driver, not just the old world of “the nice thing to do.”
Gardner: For me, the ideal diverse company has three attributes: diversity at all levels and contributing to all functions; all groups perceive fairness in opportunity and access to information and feel like they’re valued participants in their company’s success; and third, the idea that we’re also doing a fair amount of business with local communities and diverse suppliers.
Hawthorne: The ideal diverse company reflects the inclusion of the diverse range of people who comprise our consumer base in all aspects of our business operations. That would include our workforce, our supply chain, marketing operations and also community partnerships. When we reach a point where the level of participation by our diverse constituents is sufficiently visible in those aspects of the business, across the board, at all levels, then for Macy’s, we are at the ideal state.
Garner: The ultimate in an ideal diverse company is where the workforce, from top to bottom, is reflective of the marketplace in which it serves; where the goods and services that are being bought are purchased in an inclusive manner to reflect the market that it’s serving; and third, where the staff and persons in charge of the diversity programs report directly to the chairman and chief executive officer. If effective change is going to occur, it’s going to start from the top.
TNJ: How far is your organization vis à vis that ideal?
Garner: MTA Chairman and Chief Executive Officer Jay H. Walder has set the tone with respect to the hiring and promotion of ethnic minorities and women at MTA Headquarters and has placed them in key strategic positions within the organization. With respect to the ideal organization, we are not there yet, but we’re off to a great start, not only with diversity workforce results, but also in creating various diversity programs that will allow us to go out into the marketplace and recruit minority, women-owned and disadvantaged firms and get them involved with our various procurement opportunities.
Hawthorne: We are pleased with the major progress we have made toward this ideal. We have in place metrics and measurement goals to ensure that we continue down the path of progress at an acceptable rate.
Gardner: I would say that IPG and our advertising and marketing services agencies are well on our way in terms of the quantitative improvements in our diversity and in laying the groundwork for greater inclusion. We’ve seen double-digit improvements for African-Americans and other racial/ethnic minorities in management and we have a strong professional pipeline. We have a required annual board-level review of metrics and our programs. Our Diversity Council is led by Chairman and CEO Michael Roth. The members are the CEOs of our various agencies and the heads of our employee business resource groups. We have formal goals and objectives that are tied to compensation. Diversity and inclusion has become part of our narrative as a company.
Gray-Walker: In the life insurance/
financial services industry, diversity and inclusion has not been moving at the same speed in which it is moving in other industries, but AXA Equitable is moving in the right direction. We’ve been focused on diversity and inclusion as a specific business driver for the past seven or eight years. The new leadership team remains committed and is pushing for diversity and inclusion to become a part of the very fabric of our organization — a business imperative. All of those pieces are really aligning us for long-term success. This is augmented by the continuity of the Diversity Council, the employee resource groups and a cross-organizational collaboration. This is a very old industry, started by middle-aged white men for middle-aged white men. And it’s nice to see diversity building in some of the higher ranks across the industry, as well as within our organization.
Crawford: At Wells Fargo, we consider our diversity and inclusion work as a process of continuous improvement. One-third of our company is diverse, but we know that we need to improve the representation at the senior levels. We place a diversity lens on all of our policies and procedures and we are working closely with our senior leaders in fulfilling on five strategies that were developed and announced by our CEO a couple of years ago. The commitment has been made to do all that we can to represent our communities and our customers and, as a business imperative, it’s required in order for us to be one of the world’s great companies.
TNJ: Given the breadth of diversity and inclusion today, is there pushback, particularly at middle-management level, where being “male and white” traditionally has been a distinct advantage?
Gray-Walker: I don’t see a pushback. I see the need for education and support just to show the value of different aspects. I think the question is developing the talent and bringing the talent along — there’s still more opportunity around achieving greater success there.
Crawford: At Wells Fargo, diversity and inclusion is one of our core values and is included in our “Vision and Values” booklet. We take seriously the responsibility to help all of our team members, including our managers, to understand how to embrace and manage the differences that we have in the company. We want everyone to feel empowered and to be full partners. To do this, we offer training and development opportunities. It is important that the environment we develop fosters an acceptance and a feeling of appreciation for all of the differences and various characteristics that our 275,000 team members may bring to the table.
Hawthorne: Our conversations about diversity and inclusion stem from the realities of the marketplaces we serve. The fact of the matter is, we serve some of the most diverse markets in this country. When we consider the demographic and spending-power shifts that are unfolding in these markets, as business leaders it is critically important to leverage diverse perspectives in the decision-making process. Such diversity of thought places us in the best position to most effectively serve and satisfy the shopping needs of the diverse range of customers we service. So when we contextualize the objectives of our diversity and inclusion strategy in terms of sales growth, customer loyalty, brand and reputation enhancement, many of the contentious issues that may result in pushback are diminished because employees see the business relevance of insuring that, from top to bottom, we are reflecting the group of people who significantly contribute to the success of our business.
Garner: There always will be push-back with respect to various stakeholders. That’s why it is vital that the staffs who are in charge of these diversity programs report directly either to the board or to the chairman and CEO in order to minimize the pushback. For example, we have a $24 billion capital program in which we are building various capital construction projects. The project manager has only one goal in mind and that is to make sure that that project is finished, safely, timely and on budget. In our role, we care about who is working on that site and the number of subcontracts that will be awarded to minority, women-owned and disadvantaged businesses. Since I’m reporting directly to the chairman and CEO, it empowers my staff and me to ensure that we are building our projects in a very inclusive manner and that the diversity goals that we established on that project will be achieved.
Gardner: Since we are a global company, we have to have a global point of view that provides for the local nuances. Looking at diversity broadly has largely been embraced because everyone can identify with some dimension of diversity and everyone understands that they, too, will benefit from inclusion. I think that we’ve stayed on message and we’ve integrated in everything we do the point of view that one measure of successful inclusion is the level of diversity. And there is no perception of conflict between the two concepts.
TNJ: How do you measure your own success as a CDO?
Gardner: This is a very, very difficult job for me because it’s intensely personal and not just about numbers or activity. It’s as much about people who are my friends and heroes and colleagues and peers, as it is about helping a large organization to become more diverse and inclusive. So I measure my success in personal and professional terms. The professional terms are about the hard long- and short-term metrics. I look at the data and outcomes and whether I’ve accomplished my objectives every year. On the personal level, I measure my success by how I conducted myself according to my personal values, which is about doing the right thing and sometimes about taking risks. Looking at all of that, I would say I have been successful on both fronts in facilitating progress thus far.
Crawford: The most critical success measurement is getting senior executive commitment because that really drives the focus throughout the organization. The fact that I have the commitment from the CEO and the board allows me to influence outcomes. It also gives me the ability to get others involved easier and to develop key partnerships and collaborations throughout the company. In summary, the ability to get senior-level commitment and to get others involved are the two most critical success factors for me.
Garner: We are judged on two separate points: how many of the billions of dollars spent per year are awarded to minority or women-owned businesses; and how many of our 66,500 employees are ethnic minorities and women. We have increased contract awards to minority, women-owned and disadvantaged business enterprises, and also improved our diversity workforce results. For the first time in history, a Black female, Diana Jones-Ritter, managing director, is the number-two person in charge at the MTA. The president of MTA Bus is a Black male, Darryl Irrick, who worked his way up to the top; the chief of the MTA police department is a Black male, a former three-star chief at the New York City Police Department.
Historically, we have had a special affinity for large contractors because we are building billion-dollar projects. Therefore, the smaller contractors, specifically, the smaller minority and women-owned firms, have been excluded from our business processes. So we have gone the extra step of de-bundling our larger projects into smaller ones, so we can recruit and attract smaller minority and women-owned firms, who can bid directly to us as prime contractors.
Hawthorne: Success is a journey not a destination. I’m pleased with the mile markers we have hit and where we are heading on this journey. We now view diversity and inclusion as a fundamental business strategy, as our senior team has fully grasped the sales performance and reputation enhancement benefits that result from the execution of this strategy. In terms of my personal success, each year I am given performance objectives that I agree to and that are comprised of two major components. One is the leadership effectiveness in carrying out your duties. The second component is the metrics part of the job. This would include the numeric considerations regarding workforce strategies and supplier diversity results. We are judged by results. If we achieve results, we are retained. If not, you are placed in the CCE program, “career continuation elsewhere.” So, I would say so far so good.
Gray-Walker: From a personal standpoint, I look at every piece of the internal as well as the external. From an internal perspective, it’s really engaging employees, looking for ways to leverage D&I, not only as the business imperative that it absolutely is, but also as a development opportunity for talent in the organization. In order to really attract the best and the brightest to your organization you have to have a high quality of satisfaction within the organization. So I leverage D&I to promote engagement to help us with developing and retaining and then ultimately promoting the existing employees in the organization. But I also leverage it through what I would say is the “top-down” approach because unless we have everyone at the top engaged, there’s no way for us to achieve the level of success that we are looking for.
On a personal level, I’ve had some success. Have I had the success I ultimately want? No, we can never be satisfied in a job like this because the work just keeps coming. I believe there is a higher level of engagement on this journey and toward what ultimately will be a more inclusive organization from an internal and external perspective. Internally, we’re moving in the right direction. Externally, we have more work to do, but we are moving in the right direction.
TNJ: When your organization evaluates its overall performance, is diversity in the mix?
Crawford: Yes, diversity is in the mix of the overall evaluation of the company. We gauge our diversity success against the five strategies that I mentioned earlier. Our CEO and his direct reports annually identify specific diversity objectives that they hold themselves accountable to and that are tied to their compensation packages.
Hawthorne: Yes, absolutely. Our initiative is led by an Executive Diversity Council. Our chairman and CEO, Terry Lundgren, heads this Council. It is comprised of his direct reports. Each senior executive is goaled with specific diversity objectives. People do what the company pays them to do. So it is critical to evaluate diversity progress and results as part of the annual performance management process.
Gardner: At the end of the year, all of our operating companies have to report to the chairman on their financial targets, as well as what we call “high-priority objectives,” which may address talent, diversity and inclusion, collaboration and other important business drivers. And this year, diversity and inclusion was even part of our report to our shareholders.
We made a great deal of progress with supplier diversity over the past several years. Our agencies are in the business of ideas and producing creative work and strategic consultation to help our clients market their brands so supplier diversity is difficult for us because we are in the market for a limited range of services. Nevertheless, we have taken steps that include some of the fundamentals that you don’t typically find in our industry. We have a supplier diversity section on our website, where companies can register; we measure and report on our spend, which has been increasing every year since we started in 2004; we are doing the kind of outreach that you have to do through partnerships with local organizations; we have a dedicated director of supplier diversity who actually is in procurement; and we have partnerships with clients such as Johnson & Johnson, with whom we team up
to expand the pool of companies we deal with.
Gray-Walker: When we talk about measuring diversity and inclusion at AXA Equitable, we look at it from both the short-term and long-term perspective. When we look at the overall direction, the goals are aligned with business objectives. When we have clear objectives, we can deliver on them. We also measure success by the commitment and accountability of our leaders. We have tied our senior leaders’ diversity and inclusion goals to their short-term incentive compensation. That’s one way to build accountability to leverage the impact of diversity and inclusion and to motivate, but also to show the senior-executive commitment to diversity and inclusion.
Garner: Yes, it is. MTA Chairman Jay Walder has made diversity a priority, even to the point where we review our diversity results on our capital construction projects at board meetings. If our metrics are not being achieved and our diversity goals are not being met, then there must be core reasons why. Chairman Walder has often said that he has led by example with respect to hiring, and expects all of our operating agencies to do the same. Is compensation tied to diversity? Not at this time. We’re starting to create a set of best practices on the outreach and recruitment of ethnic minorities and women, with a goal on the bottom line of improving our diversity workforce results at the seven MTA operating agencies.
TNJ: Has the election of President Obama, a Black man, had any effect on how your organization perceives diversity or on your whole diversity initiative?
Garner: The battle is now only beginning and that was proven by the debt ceiling conversations we’ve been having over the past month or so. Whenever there are scarce resources, you will see the worse come out in people when they are trying to protect their market share and funding. And unfortunately ethnic minorities depend on certain services that are now being cut.
Crawford: No. Diversity and inclusion for us continues to be a priority and is one of the core values at Wells Fargo. We know we can and must do a better job at recruiting, placing, developing and retaining our diverse members, especially in senior leadership positions. But that is our stance regardless of what political power may be in office.
Gardner: We have not had any let-up on the issue at our company since President Obama was elected. And the notion that “the battle is won” has not come up in any high-level conversation. My chairman still has the same focus and ownership over diversity. Now from a personal standpoint — and I think we can leverage this — I’d say that his election is, in a way, a real challenge to corporate America to facilitate more success stories like the president’s.
Gray-Walker: I agree with what’s already been said. I believe the views around diversity and inclusion remain consistent and I don’t really see any change with regard to President Obama’s being in office.
Hawthorne: Notwithstanding the election of President Obama, the journey has continued for us to achieve the ideal state. His presidency is testament to the fact that our country’s attitude about race relations has markedly improved. Having said that, our company is a microcosm of society, so the same kinds of issues you see happening in our country over race and other issues of inclusion also show up at Macy’s — positive and negative. The difference, though, is that we as a company have decided that diversity and inclusion is a core value of the company.