What CEOs Think About Diversity

News Updates

NEW YORK—Getting diversity and inclusion (D&I) “right” requires strong CEO commitment. But an all-white panel of CEOs who recently won diversity leadership awards said the seeds for their passion were planted long before they entered the corporate ranks.

George Borst, president and CEO of Toyota Financial Services, grew up playing stickball in Hollis, Queens, N.Y., while Michael I. Roth, chairman and CEO of Interpublic Group, was raised in nearby Brooklyn. Michael Howard, COO of the Army and Air Force Exchange Service, lived on military bases because his father was in the Air Force.

Meanwhile, John Edwardson, chairman and CEO of CDW, was raised in a small southern Illinois town that had just one African-American couple but later lived in Hyde Park, a diverse area on Chicago’s South Side. And John B. Veihmeyer, chairman and CEO of KPMG, who has five sisters and two daughters, said he has seen first-hand the career challenges the women in his family have faced.

Personal experiences frame you, Veihmeyer told attendees June 8, 2011, at the CEO Diversity Leadership Awards and CEO Forum, held at Columbia University here. “You’re actually in a position now to try to make a difference about something that has probably been important to you your whole life.”

The 2011 CEO Diversity Leadership Awards were presented by Diversity Best Practices, a New York-based membership group for diversity and inclusion practitioners. In addition, the group recognized diversity officers with its annual Diversity Officers Leadership Award (DOLA).

2011 DOLA winners included Herbertina “Tina” Johnson, senior director of diversity for the Army and Air Force Exchange Service; Melissa Donaldson, director of inclusion practices at CDW; Heide Gardner, chief diversity and inclusion officer at Interpublic Group; Kathy Hopinkah Hannan, national managing partner of diversity and corporate responsibility at KPMG and Joe Husman, corporate manager of corporate social responsibility for Toyota Financial Services.

Carol Evans, CEO of Diversity Best Practices and president of Working Mother Media, said the awards recognize CEOs who are “leading the culture” and diversity officers “who not only have the strategy on their shoulders, but also have to make sure that everything gets implemented.”

The Business Case

During the event, several CEOs explained why diversity is a strategic imperative:

Borst said diversity is key to helping mirror the market his company competes in and said Toyota Financial Services makes more loans to African-Americans, Hispanic-Americans, Asian-Americans and women than does any other captive finance company in North America. “By having an organization and a structure that is diverse, we’re better able to understand this market,” he said.

Toyota supports underserved and underprivileged communities, “which unfortunately are dominated, in a lot of cases, by diversity,” Borst noted. This has had a spillover effect with employees: In the most recent annual associate opinion survey, 96 percent said that they thought that Toyota Financial Services was socially responsible, he added.

Instead of what he called “checkbook charity,” Borst said, the company participates in events at Boys & Girls Clubs of East Los Angeles, where associates “can dig in and volunteer and build relationships both with the community and with one another.”

As a professional services firm, KPMG requires intellectual capital that is as diverse as the clients it serves. Veihmeyer said it’s easy to get passionate about diversity because “it’s the right thing to do, for all the right reasons.”

But if that’s all you view it as, you’re not going to succeed, he said.

“We can’t have our diversity initiatives kind of tucked over to the side as some fifth leg to a stool,” he said. “What we have tried to do is to bake diversity into each of those four strategic priorities: quality growth, professionalism and integrity, being an employer of choice, and maintaining a global mind-set,” Veihmeyer explained.

The company can’t afford to fail to attract or retain a single high performer because it doesn’t believe KPMG is “supportive, committed to and totally focused on their success, irrespective of what their background or other needs may be,” Veihmeyer added. That’s why, among other things, the company has a key accounts rotation program that targets ethnically diverse associates to ensure that, early in their careers, they receive the client exposure and broad range of experience needed to succeed.

Roth of Interpublic, an advertising and marketing giant with 41,000 employees in 130 countries, noted that the advertising industry has “historically been terrible when it comes to diversity and inclusion,” pointing to the television show “Mad Men” as an example. His firm’s diversity initiatives are a differentiator in the marketplace because “If we’re not communicating the message correctly for our clients, we lose our clients.”

Edwardson of CDW, an IT products and services provider, said that shortly after he joined the company, he asked about the company’s target market and was told by its advertising agency that it was “white males between the ages of 26 and 42.” A couple of weeks later, he viewed focus group videos and realized quickly that this wasn’t the case. Changes were made and revenue grew. Diversity is “clearly the right thing to do, but it has been darn good business for CDW as well,” he said.

Bringing the Mission to Life

Borst said recent drama—a global recession, product recalls and a tsunami and earthquake in Japan—could have pushed diversity onto the sidelines at Toyota. However, “What we have tried to do is to make sure it stays as one of the important priorities,” he said. “I try to make sure the behavior I’m trying to model is modeled by the rest of the people on the management committee, and it all cascades down,” he said.

The Army and Air Force Exchange Service, which provide goods and services for the Army and Air Force, has about 43,000 employees in 30 countries. Howard said he likes “helping develop the future.” He spends a couple of hours each week with different diverse groups and asks high performers “what can we do to help you?” Howard said they usually have the hard skills—they know how to do the jobs—but they often lack networking or social skills. “They are very eager to learn,” Howard reflected. “I say ‘well I’ve got half an hour,’ and two hours later we’re still talking.”

At CDW, it’s critical to build the pipeline at all levels of the organization, according to Edwardson. “I spent a lot of time with recruiting to make sure that for every single opening that we have that comes up that we have a diverse list of candidates,” he said.

Roth noted just how influential some diversity groups can be. Interpublic’s Women’s Leadership Network, which has about 10,000 participants globally, sponsored an event in June 2011, titled “Beyond Mad Men: Toward Gender Diversity in Creative Roles,” during the Cannes Lions International Festival of Creativity. Roth will host the event, which will be moderated by CNN anchor Soledad O’Brien and feature a panel that includes Martha Stewart. It will focus on the dearth of women in the most senior creative roles and what can be learned from women who have made inroads in advertising, marketing and media.

In the end, organizers emphasized, it’s important to have a partnership between the chief executive and chief diversity officer. Andrés Tapia, president of Diversity Best Practices, said that without an effective diversity leader, “a CEO’s commitment cannot be turned into the strategies, programs, processes and action plans that bring the mission to life.”

In closing, Gardner of Interpublic offered this thought: “What I am learning is: Inclusion is pretty much the same everywhere,” she said. “It’s not just about making diversity counts but about making diversity count. And that holds true wherever you are.”

Pamela Babcock is a freelance writer based in the New York City area.