Name: Mellody Hobson: 'It's corporate America's turn' to address diversity
Uploaded: 2020-10-26
Duration: 9 min 7 s
Description: Hobson says that failure to deal with these issues is akin to 'corporate suicide.'

[MUSIC PLAYING] SUSIE GHARIB: Mellody, thank you so much for joining us. As you know, these past four months, there's been a very active and intense conversation all across the country about race, inclusion, diversity, inequality, social injustices. How would you characterize where those conversations are today? Do you see any progress? MELLODY HOBSON: Well, I'd start by saying I'm glad these conversations are happening. But I feel like it's Groundhog Day in a way. Everything old is new again. We had these conversations, obviously, during the times of the Civil Rights Act. They rear-- they come back over and over and over again. And it seems like we're having to relearn the same lessons, have the same conversations. And I'd love it to be that we have these conversations, and we come to some definitive conclusions of actions that makes them obsolete. SUSIE GHARIB: Well, do you think, at least in this go-around, do you think that people are feeling more comfortable talking about race? And do we need to see that first before we can have any real change? MELLODY HOBSON: I don't know if that's comfort. I think that it feels necessary. There's an urgency around this issue right now in a way that I think perhaps the majority community hasn't felt in modern times in this way before. That's not to say this urgency hasn't been there before. Again, I think when Martin Luther King was protesting so many of the wrongs of the South, there was an urgency then. When you were seeing dogs and hoses turned on young Black people who were trying to sit at lunch counters, there was an urgency then. And I think this urgency has come back again in recent times certainly as a result of the murder of George Floyd. Seeing that on camera, eight minutes and 46 seconds, I think raised a level of consciousness that we have not had at this surface level in this way before. And I think that ultimately is a very, very good thing. But I don't think that's about comfort. SUSIE GHARIB: Well, in those examples that you said, in those days, it was very rare to have a CEO talk up on this subject at all. And now, as you know, we are hearing from so many CEOs, saying that they do want to make their workforces more diverse. They do want to do a better job at that. How can they really make that happen? What do they have to do to move the needle? MELLODY HOBSON: Well, first of all, I think it's corporate America's turn. So just so you know, I think that we saw some of these issues around politics and policy in the '60s with laws and the like. But now this really has become a conversation that is essential inside of corporate America because it's essential to corporate America's success or failure. I've been very open in saying if you are not a diverse company, you're not a 21st century company. And ultimately, you are committing corporate suicide. It's not a question of if you will die, it's when. Now it could take a long time. But if you don't have diverse people in your organization over time, that is going to be a major, major problem. SUSIE GHARIB: What do you say to those CEOs and business leaders of what they have to do to bring about real change? What would you like to see, the key one or two things? MELLODY HOBSON: There are three things. So we talk about the three P's at our Black Corporate Directors Conference, where we bring together corporate directors from Fortune 500 companies who are Black, as well as Latinx. And we say to them, we want to make sure the civil rights agenda is also in the boardroom. Because we think that is a part of your fiduciary duty and ultimately leads to the enhancement of shareholder value. So there are three P's. People, first and foremost. If it matters, it counts. Start counting. And what I say to people over and over again, map has no opinion. You can be very emotional about this if you have data. And so the data should start from the top of the organization, the board level, all the way down to all levels of the organization count by ethnicity. No multicultural umbrella with everyone under one heading of race and gender. Count by Black, Latinx, Asian, et cetera, to see where you're over or underrepresented. The next P is purchasing. Last century's idea was minority purchasing or procurement. Make sure that you have business diversity as well. That, as an organization, you're doing business with all kinds of people, all types of organizations. So look at your corporate spend by category. And we all know the biggest areas of corporate spend today are professional services, financial services, technology, how are you doing in those big areas of spend, not last century spend, which were things like measuring minority contributions and construction and things like that. It's not that that's not important. It's just 2/3 of our economy right now is a service economy, and we want to make sure that's captured. The last area, what I actually think is the least-- and I don't mean this in that it's not important, but I don't think it fixes the ills of our society in the way that it should. It's philanthropy, the third P. Lately, I think that's the tail wagging the dog. I think there are a bunch of companies that are making statements about philanthropy, feeling that it does give them some cover and fix some of the ills. However, you cannot fix your own house from without. You need to fix it from within. So while I encourage and want to see that philanthropy in the Black community and in brown communities, I do hope that people understand that doesn't give them a pass for the issues that exist inside of their organization and where they have the immediate opportunity to effect change. SUSIE GHARIB: What are your thoughts about quotas and targets? Fortune had an interview with Xerox's former CEO Ursula Burns, who you know is the first and only Black female CEO running a Fortune 500 company. And she's saying maybe it's time for us to revert to a quota system. And as you know, Ursula has been opposed to quotas forever. But she says that right now, this is a make or break moment in business and society. So what do you think about quotas and what Ursula is suggesting? MELLODY HOBSON: Well, first and foremost, I admire and have a deep respect for Ursula. I completely agree with her on the point this is make or break. Rome is burning, and there is a crisis in Black America. And we must address it, or it will be problematic for everyone. When it comes to quotas versus targets, I think I land on targets for a very specific reason. I think it is language that is very, very common in corporate America. It's something that corporate America understands. As I'd already suggested, we have earnings targets, which is a range. It's a goal that you're trying to hit. A quota becomes more of a non-negotiable. It becomes imposed. I think it's harder for corporate America to get comfortable with that kind of conversation and language. And I want to have language that ensures success. I'm not at odds with the outcome that Ursula and I both see. The question is, how do we get there? And maybe at the end of the day, that will be the only way. I'm very comfortable with being held accountable to a number and a goal. But I think we have to make sure that by using language that-- I don't want to use language that creates a resistance right out of the gates. You're dead on arrival. SUSIE GHARIB: Mellody, what can we learn from you? You are one of six siblings. Your mother was a single mom. You graduated from Princeton. You rose the ranks of Ariel Investments all the way to the top. You're the co-CEO, and now you're also one of the most powerful women in business. What's been the key to your success? What can we learn from you? MELLODY HOBSON: Well, first of all, I never think of myself as all of those things. I think of myself as a person who wakes up every day, who's just trying to do good work and trying to represent both women and Black people in a way that tells the world we need more of them. We need more of her. And so, if I can help cut a path that creates opportunity for those who might come behind me, I will have had a good day's work. I think learning, for me, is just learning that I'm trying my best to be authentic, to be unapologetic, and to speak my truth, whatever room that I'm in, to show up the same way every time. There is no version of Mellody for a certain setting. And ultimately, to, hopefully, create a reputation of having effected change so that we can have a more inclusive society. 

Hobson says that failure to deal with these issues is akin to "corporate suicide."

Mellody Hobson: "It's corporate America's turn" to address diversity

Leadership

Failure to confront these issues is "corporate suicide."