Approximately 125 CEOs gathered to attend a “closed-door session” in New York City yesterday to talk about advancing diversity and inclusion initiatives. The meeting was sponsored by CEO Action, a coalition launched in 2017 that now has nearly 800 CEO signatories who have pledged to change their cultures by having difficult conversations with employees, educating their teams about unconscious bias and sharing D&I practices.
One of the coalition members, Cardinal Health CEO Mike Kaufmann, said the event encouraged leaders to get out of their comfort zones, which is always a good thing. “I’m a guy that believes you can’t make any progress without having uncomfortable conversations,” he told CE.
The CEO’s Role
Kaufmann said that if the CEO isn’t leading conversations about D&I, nobody else will take it seriously. “In my opinion, it has to start with the CEO—and I don’t mean just saying the words and periodically having meetings, but literally making themselves vulnerable and authentic and talking about where they got something wrong. If you don’t do that as CEO, nobody is going to take time away from their busy schedules to attend an event or take money out of their budget to bring a speaker in or to fund unconscious bias training. If CEOs aren’t engaged, you can see it across the company—it’s really just happy talk.”
Kaufmann added that incentives tied to D&I metrics should definitely be in the mix. “We do that in our compensation program,” he noted. “Sometimes in the beginning, incentives might feel more like softballs, but at least it gets the conversation going. You’re encouraging people to to at least look at their numbers, to have diverse slates, to do things that will start leading the organization in the right direction. And over time, you have to assess things like putting metrics out there and real numbers on representation.”
Those goals have to be based in reality, he cautioned. “You can’t say I’m going to increase female leadership by 10 percentage points when your turnover is low and there’s no way to do that without firing 30 percent of your people. So you have to be careful about how you set goals. But organizations have to tie some portion of compensation to making progress in this area.”
A Life-Changing Experience
Kaufmann first became interested in the topic a decade ago, when the leader of the company’s women’s initiative left the company and Kaufmann asked Cardinal’s then-CEO George Barrett if he could run it. It was an experience that led to a lot of uncomfortable conversations that ultimately changed his interactions with women from then on. “It was the most important thing I’ve ever done in my life.”
It also led him to believe that the only way diversity initiatives can move forward is when white men, like himself, get involved. “And I mean really involved, so they’re in uncomfortable situations and you’re making mistakes and you’re willing to make them.” CEOs also have to surround themselves with “truth-tellers,” he added. “They will say to me, ‘Hey Mike, when you said that, that could be kind of offensive to women,’ or ‘Mike, that choice of words wasn’t quite right.'” While he acknowledges that the company’s employee resource groups are intended to give space to like-minded people of similar backgrounds or cultures a chance to commune, he said he routinely encourages male employees to join the women’s ERG, white employees to join the African-American or Hispanic ERGs, and so on, so each can get exposure to the other’s viewpoint.
“I get really frustrated when folks say—and particularly white males—that they feel like they’re being discriminated against. Because that’s not what we’re trying to do at all. We’re really just trying to level the playing field,” he said. “I know it feels uncomfortable when you’re used to having a 30-year start in a hundred-yard dash and now everybody else is only 10 yards behind you, but that doesn’t mean we’re discriminating against you. We’re just trying to remove the barriers for others.”
Kaufmann also gets impatient with those who can’t see the business case for D&I. “That thinking is really outdated now,” he said. “If you were a CEO 20 years ago, there really wasn’t a lot of data available. But today there’s plenty of scientific, reliable data that will tell you that companies that are more diverse, both in gender equity and people of color, perform better.”
And if you don’t trust the validity of the data, he added, “just look at the workforce. If you’re not a company that can attract talent from all groups, you’re going to be limited to a really small group of people. How can you get the best talent if you’re only choosing from 30-40% of the population? You have to be able to choose from 100% of the population. There’s evidence—not just from the returns but the demographics of the country. If you can’t see that, you’re just not looking. Or you’re ignoring it. Because I think it’s there.”