NASCAR’s drive toward DEI is yielding big benefits—to the bottom line

When you think of NASCAR, diversity, equity and inclusion probably aren’t the very first words that come to mind.

But over the past several months, I’ve been reporting a feature for Fortune that surprised me—and might surprise you, too.

NASCAR’s story dates back to 1947, but mine really started in June of 2020, when the company made the decision to ban the Confederate battle flag at races. The ban “has turned out to be probably the single most important move that our sport has made, perhaps only rivaled by when it was founded,” NASCAR President Steve Phelps said. Another executive at NASCAR, John Ferguson, SVP and chief HR officer who joined the company in August, told me a story of why he was at first hesitant to take the position.

“I will be transparent,” Ferguson said. “My gut was hesitant about NASCAR. Because, while it might have presented the opportunity to lead the HR function, was it an environment where I could show up as myself and feel supported, and be able to really make a change and have an impact?” He continued, “One major thing had already happened by the time I was in conversations with NASCAR—the Confederate flag had been banned. Candidly speaking, if the flag was still flying, it would have been a nonstarter [for me].” Ferguson told me about conversations he had with Phelps, and one of his mentors, that inspired him to take the job.

I talked at length with Bubba Wallace, the only Black full-time driver to win the NASCAR Cup Series in the modern era (following in the footsteps of Wendell Scott, who won in 1963), about the new face of NASCAR. “There are a lot more diverse people in the stands,” Wallace told me. “Maybe it’s somebody that’s always been like that closet NASCAR fan but was afraid to come out and say that because they haven’t seen representation. So now that we show, ‘Hey, NASCAR is cool. NASCAR is where you want to be,’ now they can be more comfortable. It’s really all about making everyone feel comfortable in their own skin, in their own voice and elevating those voices.”

Black and Latino celebrities, including former NBA, NFL, and boxing champions, have bought into teams in the past two years. For example, NBA great Michael Jordan and Denny Hamlin, a three-time Daytona 500 winner, announced on Sept. 21, 2020, that they would co-own the 23XI Racing team to begin Cup series competition in 2021. Wallace drives the No. 23 Toyota Camry for the team.

Wallace and Daniel Suárez are full-time drivers in NASCAR’s Cup Series who have broken barriers in the sport. They shared their experiences with me. And I reviewed the data reflecting gains in a new diverse audience. It’s making a pretty big business impact.

For example, a recent survey of 2,507 respondents conducted by Directions Research found that 93% of fans say the brand is on the right track. By demographics, that includes 96% of Gen Zers and millennials and 97% of Hispanics and Black Americans. According to NASCAR, a private company, there has been a 25% increase in total current followers across all platforms compared to March 2020 and a net follower increase of 1.43 million since 2020. So far this season, new-fan ticket sales are up double digits. The Cup Series season-opening Daytona 500 in February was a sellout.

One new race attendee they found? Well, me. I attended my first NASCAR race on a Sunday in April. During my interview with Wallace a few days before the event, I asked him what I’d need for the day. “Bring ear plugs,” he told me. Those definitely came in handy!

On the grounds of the Richmond Raceway in Virginia, some people camped out for the weekend in RVs. Attendees who clearly have been fans for years knew their way around the track and had high-tech noise-canceling headphones. And some attendees wore fashionable attire like Chanel boots or were sporting the latest sneaker fashion. There was a sort of pre-event pageantry with a red carpet for athletes and a parade of cars before the start of the race, combined with a festival-like atmosphere that culminated with a win by driver Denny Hamlin. There were a lot of families at the event. I also saw the diversity in the stands in Richmond that Wallace told me about.

At a time when ESG is top of mind for many companies, NASCAR’s journey is a case study of a company undergoing a major transformation. Jackie Glenn, founder of Glenn Diversity and HR Solutions and former VP and global chief diversity officer at Dell EMC, told me: “NASCAR is letting their audio match their video. They’re not just talking.” You can read my complete report here.

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

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Big deal

"Some economists argue that consumers’ bad mood and increasing lack of faith in the economy—which is sometimes unrelated to their own financial reality—could in and of itself affect economic growth or even trigger a recession," according to a recent Fortune report. Well, it seems consumer confidence is decreasing. Gallup's Economic Confidence Index measures Americans' perceptions of current economic conditions and their outlook for the economy. The index measured -45 in May, down from -39 in April. It has a theoretical range of -100 to +100. In May, 46% of Americans perceived U.S. economic conditions as "poor," compared to 42% in April, 
according to the report. And, 13% think the U.S. economy is in a good place, a decrease from 18% in April. The data is based on a random poll of 1,007 U.S. adults aged 18 and older. 

Going deeper

Is Workplace Loyalty Gone for Good?, a report published in the Wharton School of the University of Pennsylvania's business journal, explains how the modern workplace has become increasingly transactional. Loyalty may be an old-fashioned concept, according to Janice Bellace, a Wharton professor of legal studies and business ethics. "Loyalty implies something more about the relationship” being reciprocal, Bellace stated in the report. "If you’re at a company and feel productive and properly treated, you may still go to another company if they pay you 20% more. But if people feel very engaged and well treated, they not only will feel productive, they will want to stay."

Leaderboard

Pamela Hunt was named CFO at BRIX Holdings, LLC, a Dallas-based multi-brand restaurant management and franchising company, which includes Friendly's Restaurants. Hunt has more than 20 years of experience as a financial and operational leader for global organizations. Hunt was most recently VP of finance and accounting at Bioworld Merchandising, a manufacturer and distributor of headwear and related accessories. Prior to that, Hunt oversaw the accounting operations of On the Border Mexican Grill & Cantina as the brand's vice president and controller.

Raj Kalathur was named CFO at Deere & Company (NYSE: DE). Prior to assuming his current role, Kalathur was president of John Deere Financial and chief information officer (CIO). Under Kalathur's leadership, the John Deere Financial loan portfolio has grown to over $50 billion, according to the company. As CIO, he helped lead the company's digitalization journey. Kalathur's CIO responsibilities will now be led by Ganesh Jayaram who has been appointed as the CIO, effective May 31.

Overheard

“We have been working really hard on costs top to bottom, taking action to get our costs down so that the second quarter looks better than the last quarter, and we’re on our way.”

—Doug McMillon, president and CEO of Walmart, said on June 3 at an investor event near the company’s headquarters in Bentonville, Arkansas, as reported by CNBC.