C.J. Prince

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Corporate leaders continue to speak out on the issue of racial injustice, but not all have backed up those statements with investments in broad diversity initiatives. In the following interview, Denny's CEO John Miller explains the business case for D&I investment at the restaurant chain—including $2 billion on supplier diversity—and why true progress requires patience and long-term commitment. Why is diversity and inclusion important to you as a CEO?  We all have a role to play in fighting for equality. I want to live in a world where all people – regardless of background – are treated equally and respectfully. Prioritizing diversity and inclusion makes Denny’s a better business, a better employer and a better member of the diverse communities we serve across the country and abroad. We want to live in a world united in harmony and peace. This cannot be achieved in a world filled with inequity and injustice. What is the business case for it, as you see it?  As America’s Diner, we are committed to ensuring we are an inclusive company that reflects our diverse customer base. While diversity and inclusion efforts have long been an important focus for us as a company, we are always open to working with others that can offer valuable perspective and insights that can help us continue to evolve and grow as an organization. It’s important to me that Denny’s internal employee network reflect the customers we’re serving each and every day. Our mission is to be America’s Diner for today’s America, an America that is wonderfully and beautifully diverse. We pride ourselves on creating a welcoming dining environment for all guests, regardless of their backgrounds. Having diverse voices at every level from our board of directors to our corporate offices to our restaurant teams allows us to do just that. What efforts have you made at your company to move the needle on diversity?  Effective programs we’ve launched include our unconscious bias trainings, which are available to all franchisees and executives, as well as our Hungry for Education scholarship program through which we help combat childhood hunger and provide scholarships to Black, Hispanic and Asian students to support their dreams of getting a college education. These are in addition to our Supplier Diversity program, through which Denny's has spent over $2 billion with diverse and disadvantaged suppliers since the program was initiated in 1993. In 2019, diverse and disadvantaged businesses represented 14.1% of Denny's purchases. We encourage our leaders to serve in their areas of capabilities and passion. For me personally, this is in the area of education and hunger relief as you may have noted from above. Two of my current assignments are service as Vice Chair on the Wilberforce University Board of Trustees, our nation’s first black private college founded in 1856, and on the Spartanburg Academic Movement Board, a cradle to career movement to improve outcomes in education through early learning, remediation, goal setting and mentorship. Do you believe all leaders have unconscious bias? If so, how do you compensate for your own? I believe all leaders, and all people, have unconscious bias. For this reason, I frequently take part in unconscious bias trainings and provide them for our executives and franchisee network as well. How do you measure the success of your diversity initiatives?  Success in our diversity initiatives is first and foremost measured by how our employees feel about the programs we have to promote diversity. We have an open line of communication between corporate employees and our franchisee network to receive real-time feedback on how we’re doing and where employees would like to see changes. Secondly, we measure diversity through our workforce. About two-thirds of the total Denny’s workforce is made up by minority groups including half of our restaurant management level employees. Our board of directors consists of 44% minorities and 33% women, and we are committed to improving those numbers. What is the biggest lesson you've personally learned on this front? The biggest lesson I’ve learned is that being a true leader in diversity, equality and inclusion takes 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. That’s what we have accomplished at Denny’s. Is it important for CEOs to be vocal on the issue of racism in the U.S.? I think more than anything it’s important for CEOs to be authentic, especially when talking about race and addressing racism. Being the loudest person in the room means nothing if you don’t have the hard work and proof points to back it up. That’s why I’ve committed our company to making real strides for diversity, equity and inclusion. We take it very seriously and fully support the ongoing fight for racial justice in the U.S. Our work is focused on several key areas we’ve identified including supporting organization that directly address racial inequalities, promoting education, and creating economic opportunities for minority businesses. Why did you become a signatory of CEO Action for Diversity & Inclusion? For decades, Denny’s has taken steps to ensure that our commitment to DE&I is met at every level of the business. We understand that change requires a long-term, sustainable commitment and we joined the CEO Action for Diversity & Inclusion coalition to help emphasize that. Our company values and mission to drive diversity, equality and inclusion among our employees is very much aligned with CEO Action. Through participation in the coalition, I have had the chance to ideate with other CEOs on what diversity, equality and inclusion look like in the modern workplace. Diversity and inclusion are not something one company can achieve on its own and it’s rewarding to be part of the collective action that CEO Action promotes. How being a signatory has contributed to D&I progress at your company; what resources has it provided? The CEO Action for Diversity participation brings a wealth of resources, best practices, practices not to repeat again and a wealth of shared experiences toward successful progress. Being connected to and working alongside other CEOs that prioritize diversity and inclusion has helped Denny’s evolve our own diversity, equality and inclusion programs. Being a signatory has opened up an important dialogue and started many candid conversations that have helped inform our DE&I strategy. Being a leader in the diversity space means you are constantly learning and seeking counsel from people with different experiences than your own and CEO Action has given me access to some of the brightest minds in the business world. In particular, the CEO Action Closed-Door Sessions provided a valuable space where business leaders including myself could have an honest talk both progress made and challenged face in driving DE&I forward.

With the country at a point of heightened awareness around racial injustice, U.S. CEOs have been issuing statements in support of their employees of color, announcing new initiatives to boost workforce diversity and reviewing their policies to see how they might do more to ensure that, at least within their company walls, employees are truly treated fairly. Some companies have gained more traction with their D&I programs than others. CE spoke with CEO Michael Kaufmann about the impressive results Cardinal Health has seen on its D&I efforts and why he believes CEOs cannot stay silent on the issue of systemic racism.

Why is diversity and inclusion important to you as a CEO? Was there an "a-ha" moment for you around this?

Building a more diverse and inclusive workplace is not just the right thing to do – it’s the smart thing to do. By respecting and appreciating diversity of thought, experience and background, we are becoming more innovative, increasing employee engagement and improving customer and shareholder value. That is why D&I has been a priority of ours for many years – and I’ve had many “aha” moments. Let me tell you about two. More than a decade ago, prior to my current role, I realized that women tended not to apply for promotions or stretch assignments as readily as men, and didn’t ask for sponsors or build networks as frequently. That understanding fueled my passion for D&I, and led me to want to serve as the Executive Sponsor of our Women’s Initiative Network. I thought it would be a powerful opportunity to learn – and it was. There’s no doubt that that experience made me a better leader. Over time, I’ve also learned more and more about racial and social injustice and the inequity that many African American parents face when raising their children. One example - Black parents have to teach their children about what not to wear, about what to do if they’re pulled over while driving, and about how to behave when in a store so as not to seem suspicious. As a white man and a father, I never had to talk to my sons about these things… and that’s privilege.

What is the business case for it (D&I, racism, social injustice) as you see it?

The business case is clear: Research shows that diversity increases creativity and innovation, promotes higher quality decisions, and enhances economic growth. Diverse and inclusive workplaces consistently outperform non-inclusive and non-diverse workplaces. In addition to company performance, employees and leaders have a choice where they want to do great work and build a career and future. Diversity and inclusion are at the heart of our culture and a differentiator in attracting and retaining the best talent.

What efforts have you made at your company to move the needle on diversity?

Over the years, we have put into action D&I strategies, solutions, programs and processes that will allow us to create a robust culture that will benefit our employees, our customers and our communities. We require diverse slates for all director and above open positions; we established our D&I Steering Council, and positioned our Executive leaders as Executive Sponsors of our Employee Resource Groups (ERGs) for added visibility and allyship. We have recently established a special CEO cabinet on racial inequity. In February, I took our leadership team to Montgomery, Alabama, to experience the National Memorial for Peace and Justice and the Legacy Museum, where thousands of victims of lynchings and slavery are honored. We left those sites humbled and changed, and with a continued commitment to speaking out about racial injustice. Regularly, we review pay and other benefits, and make adjustments on an ongoing basis as necessary. As an example, we recently increased our new parent leave benefit. But we also know we have more work to do. We want to be a place where every employee is comfortable bringing 100% of themselves to work every day… and we’re committed to that, day in and day out.

Do you believe all leaders have unconscious bias? If so, how do you compensate for your own?

I think everyone has biases, both explicit ones and unconscious biases. We all hold unconscious beliefs about various social and identity groups – these come from the way our brains work to organize and understand our world. The challenge, of course, is that we don’t immediately recognize our own unconscious biases. That takes work. Personally, I surround myself with people I call “truth-tellers” – including some of our employees as well as individuals outside the company. 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. To help our employees discover some of their own biases, we launched the unconscious bias training that I mentioned. We require managers and above to take the training, and 97% of them have completed it in just the few months that it’s been available. It’s inspiring lots of “aha” moments throughout our workforce.

How do you measure your success on this front?

We look at our own internal metrics to see how we’re doing. While there’s always room for improvement, here are some of our current data:  Of the eight leaders who report directly to me, four are women and one is an African American man. Around the world, nearly 40% of our management-level employees and 51% of our professionals are women. In the US, 25% of our executives are ethnically diverse; 23% of our managers are ethnically diverse, and 27% of our professional population is ethnically diverse. We also benchmark ourselves with world-class studies, including McKinsey & Company’s Women in the Workplace and others. And we’ve been designated as a Best Place to Work for LGBTQ Equality by the Human Rights Campaign (12 years in a row), we’ve been named a Top Company for Executive Women by the National Association for Female Executives (eight years in a row), and our Chief Diversity Officer, Devray Kirkland, was recently named one of the Top 50 Chief Diversity Officers by the National Diversity Council.

What is the biggest lesson you've personally learned from this work?

It’s become very clear to me over the years that truly inclusive organizations, where everyone can bring their very best to work every day, are more successful. These organizations are able to attract top talent – and talent thrives in inclusive cultures. Employees are more engaged, more innovative and more collaborative. Building a diverse and inclusive culture is work – in part because 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.

Is it important for CEOs to be vocal on the issue of racism in the U.S.?

CEOs cannot remain silent. When more CEOs take the time to learn about the systemic issues that hold minorities and other groups back, then there is an opportunity to conduct business differently and make different business decisions to help further change. Racial injustice is our past – and our present. If we remain silent, it will also be our future. As CEOs, we have an opportunity – and a responsibility – to create a different experience for our employees. To fix the problems that are so apparent and heartbreaking, it will take every one of us to listen, learn and act in tandem.

Is that why you’ve become a signatory of CEO Action for Diversity & Inclusion?

I firmly believe that leaders can – and must – inspire critical and courageous conversations to drive action for change. As CEOs, we can be the voices that inspire conversations about D&I at all levels of our organizations. We can ensure our leadership teams work to be the best allies we can possibly be for all minority communities. Racial injustice, systemic oppression and improving internal practices  for Black Americans and employees are issues of deep importance to me and the entire Cardinal Health team. I want to be sure that we’re living our company values — of integrity, inclusive, innovative, accountable and mission-driven — in all facets of life. We knew we needed to take a more public position on the issues of D&I and racial injustice, and signing the CEO Action for Diversity & Inclusion was one important step.

How has being a signatory contributed to D&I progress at your company; what resources has it provided?

Again, we’ve been working at creating a more diverse and inclusive workplace for many years. Signing on to the CEO Action pledge has inspired us to be much more intentional in having courageous conversations about diversity and inclusion – addressing uncomfortable issues openly. It also led us to prioritize our rollout of unconscious bias training. CEO Action has helped bring together a diverse group of CEOs to talk about our experiences. We all care deeply about D&I, and I’m grateful that CEO Action is providing a forum for information sharing. We learn from each other and, I think, inspire each other. And I believe that is helping to make us more effective D&I leaders.

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Charles C. Butt, 82, is the longstanding chairman and CEO of the 115-year-old family-owned grocery store chain H-E-B, renamed after his father, Howard E. Butt. Now based in San Antonio, the grocer was founded in Kerrville, Texas in 1905 by Charles’ grandmother, Florence Butt, in the name of her ailing husband, C.C. Butts Grocery Store. In the 1920s, her youngest son Howard took over and began to expand with stores in several additional Texas locations. Charles began working in the stores in the 1940s at age 8, bagging groceries. After receiving a bachelor’s degree from University of Pennsylvania Wharton School and then an MBA from Harvard Business School, he joined the company full-time. In 1971, Charles assumed the top posts, and H-E-B’s expansion really took off. Today, there are more than 400 stores in Texas and Mexico, with 120,000-plus employees, making the company the largest private employer in the Lone Star State. With 2019 sales of $28 billion, H-E-B was ranked No. 11 on Forbes' 2019 list of “America's Largest Private Companies." The company has five retail brands: general H-E-B grocery stores; Central Market, an upscale urban market that includes an organic and international food selection; H-E-B Plus!, stores with an expanded focus on non-food categories, such as entertainment and other general merchandise; Mi Tienda, which sells Mexican baked goods, and also houses a tortilleria, a carniceria and the Cocina Mexican restaurant; and Joe V’s Smart Shop, a brand featuring discount items modeled after discount grocer Aldi. H-E-B also operates several manufacturing facilities in Texas, including one of the largest milk- and bread-processing plants in the Southwest. In addition, the company in 2018 acquired Favor Delivery, the Austin-based on-demand delivery service. In 1997, Charles told Wharton Alumni Magazine that “the most important place a retailer can be is in the store. That’s where you can speak with customers personally and learn about their changing needs.” In 2005, the year of the company’s 100th anniversary, Charles discussed with Supermarket News the struggles his father had unsuccessfully trying to launch a second store four times until one finally took hold. “I understood his frustration in those early years, and his exhilaration and pride when he got things moving -- that's been valuable learning for me,” Charles said. “The lesson is that you have to hang in there. Eventually, things go in a good direction.” Charles is also a lifelong philanthropist. “My mother always had great concern for social issues in our community,” he said. “She was a great advocate of improvements in health care, education, recreation, et cetera. So, thanks to my father and mother, I developed an appreciation for both business and community.” In 2001, the Mexican government awarded Charles the Aguila Azteca medal for his philanthropic involvement and business dealings in Mexico. In 2017, Charles established The Holdsworth Center, investing $100 million of his personal wealth to create a nonprofit leadership institute for Texas public school administrators. Also that year, he pledged $50 million to the Raising Texas Teachers scholarship fund to support the training of Texas public school teachers. “Research consistently shows that the strength of the teacher makes the biggest difference in influencing a student’s success,” Butt said at the time. “To improve academic achievement, it is critical that Texas elevate the status of the teaching profession, strengthen the existing pool of aspiring teachers, and inspire our most talented high school graduates to consider a career in teaching.”   Headquarters: San Antonio Age: 82 Education: bachelor’s degree, University of Pennsylvania Wharton School; MBA, Harvard Business School First joined company: 1946 at age 8; 1959 full-time after college Prior to joining Butt Grocery: N/A Named CEO: 1971   He’s No. 122 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies

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