Ted Childs
Vice President for Global Workforce Diversity, IBM
From the "Explorations in Black Leadership" series
November 12, 2002

Ted Childs: Leadership as a topic is a dynamic subject. Everyone seems to be familiar with the term leadership. I have found, however, that getting two people to agree on its exact definition is difficult. Here are three definitions that I came across in preparing to meet with you:

One--"Leadership is the art of getting someone else to do something you want done because he wants to do it." That was Dwight Eisenhower.

Two--"The difference between a boss and a leader--the boss says 'go' and the leader says 'let's go'." E. M. Kelley from Growing Disciples in 1995.

And third, from an anonymous person--"A real leader faces the music, even when he doesn't like the tune."

So, there is a great deal of debate about leadership--the qualities needed to be a leader or, in my case, the qualities needed to be a successful diversity leader. In order to have a discussion about workforce diversity and leadership, I want to talk about IBM's heritage because it serves as a company foundation.

We began hiring women and black employees in 1899, and that is documented, the first disabled employee in 1914, hiring professional women in 1935 and creating an equal opportunity and minority suppliers program in 1968.

That 1899 reference, when I am talking to groups of our team, I frame if for them as follows:

You hired women in 1899, that is 20 years before women's suffrage. You hired a black man in 1899, that is ten years before the founding of the NAACP and 36 years after the signing of the Emancipation Proclamation. That is an extraordinary historic point.

We were the first company in America to create a national child care resource and referral program in 1983 and an elder care program in 1988. In the 1990's we expanded our commitment to diversity in the global arena, and throughout our history, IBM has been acknowledged as a great place to work.

While our heritage is unparalleled, we must continue to focus on maintaining our leadership so that we can be seen as an employer of choice, not for the workers of today, but the workers of tomorrow. As IBM was becoming more reflective of the changing demographics of the marketplace, so was our government. If you look at the evolution of women and minorities in the Senate and the House over the last 75 years, you will see a shift as people have become elected. You will even see three people in the House who are gay. But, there are other demographics.

We have 50 cities in America that have 100,000 or more people where the minority population is the majority. I believe we have 23 cities, out of the top 50 cities in the country, where the mayor is a woman or an ethnic minority. And, we have several state capitals where the mayor is a woman or an ethnic minority. That does not speak to the America I grew up in. It speaks to the America that I live in today. You could argue that they are two different places, but we have to deal with the one we have today. We have to do it because we are at war. We are in an economic war. We are going to compete with countries that can produce more workers and more buyers of products than we can. We are not making the greatest possible use of our greatest asset--our people.

We have a global diversity council at IBM and we have determined that there are six diversity imperatives. We call them global imperatives--that no matter where you are in IBM as a general manager, you have to deal with these six imperatives. We said that we would not allow you to say that these do not work in your part of the world or in your country. We have determined that they are appropriate everywhere.

The first one is the global market place because we market and do business in over 170 countries. The second imperative is the advancement of women. Thirty percent of our business is women. The third is the diversity of our management team worldwide. That means not just race and gender, not just ethnicity, not just sexual orientation, not disability--it means also people managing in countries other than their native country. That does not mean Americans leaving here and going to some other country. It means people from all countries having a chance to go to another country. The fourth is cultural awareness and acceptance. We have a couple of subtopics under it--ethnic minorities, multi-lingualism and individual differences. The fifth is the integration of people with disabilities into our workplace and into our marketplace. The sixth is work-life balance. The work-life balance has three subtopics--how do you attack the culture, what do you do to support dependent care, and how do you address the flexibility needs of your people?

To intensify our leadership posture, we have also begun a major focus on legislation. Employment legislation is no longer a U.S.-centric issue. In the year 2000, we started looking at this and we found that 38 of 73 countries had some form of workforce diversity related legislation. In the year 2001, 60 of the 73 countries had legislation, and in 2002, we were up to 68 of the 73 countries. That is pretty powerful because the expectation is that that legislation is going to help define the expectations of corporate conduct and behavior. By the end of next year, each of the 15 European Union member states must have legislation in place prohibiting discrimination in employment based on gender, ethnic minority status, religion or belief, disability or sexual orientation. By 2006, they must also address age.

In addition, there is U.S. legislation called Amendment 508, which is an amendment to the U.S. Rehabilitation Act of 1973. Amendment 508 mandates that all companies who are doing business with the U.S. Federal Government must provide products and solutions that are accessible by the disabled. A failure to comply can impact your ability to win a bid. Degree of accessibility is more important than cost. What we are seeing now is that several U.S. states, Japan and the European community are creating legislation modeled after Amendment 508.

This has already proven to be a battleground for billions of dollars worth of products because the government is a major customer. The government buys a lot of products. And, if it spreads to some of the states or all of them and to other countries, then disability legislation has become very important.

Other new news. The U.S. Department of Commerce reported in the year 2001 that there were 9.7 million women and minority-owned businesses in the United States. That is a lot of businesses. From and IBM perspective, all of those companies would not be legitimate customers. Some of them are very small. But, we know now that 22,000 women and minority-owned businesses in America have either 100 or more employees, or generate 20 million dollars or more in revenue each year. Collectively, they are a 253 billion dollar enterprise. And, a particularly interesting point is that 71% of that 22,000 businesses are located in 16 states. And the 71% drives 76% of the 253 billion dollars in revenue. That is a lot of business opportunity. That also says that companies owned by women and by minorities are becoming an extraordinarily important component of our business opportunity.

A couple of years ago, in preparing for a briefing for senior management, I asked my team to develop a different kind of chart. I wanted to get a sense about women-owned businesses around the world. We developed a chart that listed 14 countries. It listed the country name and the percentage of businesses owned by women. Profound data. Between 15 and 30 percent of the businesses in each country were owned by women. From that piece of work, I was able to say that 60,000 businesses in Japan are owned by women. What is important is that we understand that if you are in a technology company like the IBM company, those companies are not going to run their companies on the backs of napkins. They are going to buy some company's technology. Do we want to compete for it?

My vision about this workforce diversity thing is embodied in a concept--workforce diversity is the bridge between the workplace and the marketplace. In 1996, we announced that we were going to provide domestic partner benefits to our gay/lesbian community. I want to share with you the debate points that I took to our senior management.

I wanted to make it clear that a debate about domestic partner benefits was not a debate about what people do in the privacy of their homes. It was a debate about the marketplace. I made a statement that the gay/lesbian community represented the highest blend of three things of any group that we had data on: computer literacy, disposable income, and educational level, which said that this is a marketplace for a company that markets technology. Would you walk away from a marketplace? Of course, I knew that the answer was, "no, we wouldn't." But, the challenge was a challenge of leadership--to find a way to communicate that this is about our business, not about people's sexual behavior. We needed to isolate one so that we could about the other.

I mentioned to you that we created a minority supplier program in 1968. In the year 2000, we spent over 1.6 billion dollars with companies owned by women and minorities. We became one of the ten introductory members of what is known as the Billion Dollar Round Table, that is, companies that spent more than a billion with women or minority-owned businesses. We replicated that in the year 2001. I would submit to you that you cannot spend 1.6 billion with companies cutting the grass and sweeping the floors. If you are spending that kind of money with companies owned by women and minorities, that means you have found companies owned by women and minorities that can influence your company. That can help you win in your respective marketplace. We have done that. It is very important.

Hopefully I am convincing you that diversity is more than good corporate citizenship or just doing the right thing. It is about creating business strategies that allow all people, including constituency members, to spend their money with IBM and feel good about it. Now, with that as a backdrop, the two questions I am usually asked about my profession are clearly about leadership. First, what attributes must an executive possess to be effective in corporations today. And second, how can a diversity executive work in the corporate boardroom, but stay in touch with the various constituency groups, meet their needs, and still remain credible and effective. These are good questions and there are many good answers--answers I have been thinking about for many, many years. I have arrived at one conclusion. It is about passion and leadership.

For me, success comes down to how the following questions are answered: How do you exhibit leadership, both in your personal approach to work and the policies you embrace for your company? And second, do you care about the outcome of the debates you engage in? Do you hate to lose? I would say to you that my Chairman, Lou Grishner, the first time I presented to the IBM Board of Directors, introduced me as the most relentless man he had ever met in his life. I hate to lose. I am very committed to honesty and integrity--I will not cheat or lie. My Dad taught me that the beauty of telling the truth, no matter how painful it is, is that you only have to do it one time. You do not have to remember what you said as long as you keep telling the truth. So, I cannot deal in lying because the things I do are too controversial and there is too much debate. But, I will stay up all night to out-think you. If it only requires not sleeping, then you better give it up because I'll not go to sleep.

To answer these questions I have drawn from the examples of two people that I have learned from and admire greatly. The first example comes from professional sports, the second example comes from business. Both are legends. I am talking about Jackie Robinson of the Dodgers and Tom Watson, Jr. of IBM. "Life is not a spectator sport," said Jackie Robinson, who broke the baseball color-barrier in 1947. "If you are going to spend your life in the grandstand just watching what goes on, in my opinion, you are wasting your life." He lived as he believed. I think that we have not done him justice because we have not talked enough about the other things he did besides play baseball.

While in the Army from 1942 to 1945, before he played for the Dodgers, he challenged segregation at Fort Hood. As he went through military channels stating his costs to superior officers, his protests led to the desegregation of the camp. He also once faced and defeated Court Marshall proceedings after refusing to move to the back of an Army bus when the driver gave the order. His protest was legitimate and since Army regulations prohibited discrimination on all government vehicles, all charges were ultimately dismissed.

He lies out a valuable example for diversity executives and, perhaps, for all of us. Our work is not for spectators, but for those who thrive on change. Not for change alone, but change that is a catalyst for improvement, creating fairness where it does not exist, moving organizations from separate but equal points of view, to inclusiveness and migrating people from conflict to collaboration.

Aspiring leaders can also learn from the leadership of Tom Watson, Jr. When it involved IBM, he sought to live by his values as he led our company. In his book, A Business and Its Beliefs, Watson said, "If an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself except its basic beliefs as it moves through corporate life. The only sacred cow that an organization should be is a basic philosophy of doing business." He had three basic beliefs: respect for the individual, service to the customer, and excellence must be a way of life.

One of the interesting things I talk about is that IBM has had eight CEO's and I have known and worked for seven of them. I did not know Mr. Watson's father. And I asked Tom Watson in an interview I had with him in 1990 why he wrote one of America's first equal opportunity policy letters in September 21, 1953. Why did he write an equal opportunity letter a year before the Brown decision and 11 years before the Civil Rights Act of 1964? The letter communicated his commitment to fairness and inclusion. Tom Jr. told me that he was negotiating with the governors of two states--North Carolina and Kentucky--to build plants at Raleigh and Lexington. Both southern states. He told me, "Ted, I told both governors that there would be no separate but equal at IBM. I wanted the plants in those states for strategic reasons. I was not prepared to negotiate on that point. I did not think the governors believed me. I wrote the letter with a specific strategy in mind--write a letter to my management team on my views on race in the workplace, make the letter public so the governors know I would not negotiate." What happened? Both governors sent word saying "Tom, manage your people anyway you want to, but bring the payroll." Now, I believe that that is an early example of "show me the money" because those two governors looked at social policy, separate but equal, an IBM plant that was going to employ thousands of people. They saw the payroll dollars and the accompanying tax dollars, and voted for the money. I think that Tom Watson's decision to write the letter was leadership.

I believe that every leader in my profession must be passionate about the people working for their company and passionate about their customers. They must help all people involved in their business understand that workforce diversity can be that bridge between the workplace and the marketplace. Passion is contagious and, when combined with leadership, the equation is, I believe, very effective.

But the most important quality for a diversity leader is the ability to motivate others to be part of the overall leadership on the subject and to see it as part of their day-to-day performance. A leader must be able to draw others into the debate and to be the catalyst who can convince others that helping to change the content and character of the workplace makes the team stronger and a better performer in the marketplace.

So, why is leadership important in my chosen career? The answer is simple--our work is not done. I believe there are three examples that frame our current challenges.

First, we have not solved the problems of gender and race. Women represent more than 50% of the world's population, but they are not 50% of our workforce and, certainly, have not achieved parity on our management and executive teams. There are, however, increasingly becoming members of our executive teams and owners of their own businesses. We must view them in a more important and inclusive context. A workforce talent context and as customers. The issue of race has been a pivotal item in our nation since its founding.

Today, driven by immigration patterns, the growing presence of people of color as citizens, business owners and customers puts this issue on the social, business and political agendas of many countries.

Second, the gay-lesbian workplace issue achieved legitimacy as a discussion topic in the last decade. The driving force was the debate about weather or not to offer domestic partner benefits. Although approximately 145 of the Fortune 500 companies now offer such benefits, many companies do not. While the domestic partner benefits issue is still a legitimate topic, we need to move forward with the gay-lesbian debate. We need to understand that it is no longer a gay-lesbian debate. It is now about gay, lesbian, bisexual and transgender. We have to ask ourselves if we have equivalent programs to attract, develop and retain gay talent as we have done for women and people of color. Are we even-handed? Are we just saying that gay and lesbian people work here so we need to solve this benefits thing or do we see them as part of our core business environment--employees, leaders and customers?

We must ask the same inclusion questions about our disabled community. Is our approach to disability anchored in sympathy, or based on respect for the individual and a high-regard for ability?

Third, a key emerging issue is the concept of being global, whether in the United States, Europe, the Asian Pacific region, Latin America or Africa. When I ask other company executives to take a hard look at their businesses, I ask them to tell me what they see. Do they see a business that is limited to conducting its day-to-day operations in one country or do they have a perspective that crosses national borders? What is the company's expectations regarding its conduct in other countries? Do they have a commitment to ensure fairness in the treatment of women, the disabled, gays and lesbians, ethnic minorities--no matter where they do business? Are they taking steps to understand workforce diversity legislation in each country where they do business? Are they ensuring they comply with the requirements of the legislation? Do they understand that such legislation can serve to define the expectations of corporate behavior and conduct, and to ensure that no country's businesses expect or tolerate bad behavior?

Workforce diversity is a global topic--a global workplace topic and a global marketplace topic. Successful businesses will have a border-less view and an unyielding commitment to ensuring that diversity is a part of their day-to-day conduct.

Success in my profession must also be measured as it pertains to a company's composition and its program content. A management team must ask itself, "do we look like our customers at all levels of our business? Do our programs reflect an understanding of the demand for talent in a competitive worldwide marketplace? Is our business culture one that fosters inclusiveness and tolerance in each country where we do business?" And, most importantly, "are we using workforce diversity issues to improve marketplace performance and gross shareholder value?

To be successful, leaders of diversity must continue to look toward the future, not the past. I believe diversity leaders play a key role in the process. If we are to address the complex issues in the 21^st Century--the continuing core issues of race and gender, the issues of child and elder care, the emerging issues of multiculturalism, tolerance and religious practices, and the full inclusion of people with disabilities in the workplace--then diversity professionals and future business leaders, such as the students in this room, must lead. We must lead because businesses cannot get there by themselves. I know that these are tough issues. I also know that the world is smaller today than when I was a boy growing up in Springfield, Massachusetts. But, one thought has guided me during my lifetime. My mom always continues to tell me to always set high goals. She says, "Never reach for the mountaintop. If you fall, you may fall to the bottom of the mountain. Always reach for the stars. And, if you miss, you may land on the mountaintop."

We still have several mountaintops worth pursuing. If reaching for the stars will help our companies have the most diverse, talented workforces we can assemble in our respective marketplaces, then it is a goal our shareholders, customers and employees deserve that we pursue.

As I conclude, I believe that one element of my premise has held true--that each generation will have their tenure of leadership, roughly in ten-year blocks of time. That view, linked with a statement from Lyndon Johnson, is very appropriate. President Johnson said, "You will find meaning only by sharing in the responsibilities, the dangers, and the fashions of your time."

The 1990's and the new millennium represent the beginnings of a new generation of leadership. Opportunities for clear messages around fairness, talent, and the marketplace. We must keep our eyes on our core issues, but move onto other issues. Whatever the issue or the time, the critical ingredient is the need for leadership.

This is our time. For the young people in the room, your time is coming. Consistent with Lyndon Johnson's statement, we have to be engaged. We need to provide workplace and marketplace leadership. Our disadvantaged and underrepresented youth need to be able to look up and see people like them in positions of leadership.

A great black leader, Frederick Douglas, once said, "Without pain there is no progress." We have seen enough progress to know what is possible and prevent our being intimidated by the possibilities of pain. Frankly, there have been too many following for too long. Together, let's lead.