Showing real diversity leadership, President Obama today announced his support for same-sex marriage. His decision, applauded immediately by supporters of diversity and inclusion, came after pressure from the LGBT community and DiversityInc, among others.

“I have to tell you that over the course of several years as I have talked to friends and family and neighbors when I think about members of my own staff who are in incredibly committed monogamous relationships, same-sex relationships, who are raising kids together, when I think about those soldiers or airmen or marines or sailors who are out there fighting on my behalf and yet feel constrained, even now that ‘don’t ask, don’t tell’ is gone, because they are not able to commit themselves in a marriage, at a certain point I’ve just concluded that for me personally it is important for me to go ahead and affirm that I think same sex couples should be able to get married,” Obama said in an interview on ABC’s “Good Morning America.”

His announcement comes a day after the voters in North Carolina overwhelmingly voted to ban same-sex marriage and prohibit local governments from offering domestic-partner benefits.

The lesson is one several CEOs have learned. Vice President Joe Biden took a visible stand on Sunday, when he announced on “Meet the Press,” a Sunday-morning TV talk show, his adamant support for same-sex marriage. Secretary of Education Arne Duncan very publicly added his adamant support.

Obama said he has supported other LGBT rights, including the repeal of “don’t ask, don’t tell” after long deliberations. Read Ask the White Guy: What Changed Obama’s Mind About Gay Rights?

Several states are considering same-sex-marriage legislation, both positive and negative. The recent events include the California court decision to strike down the Proposition 8 ban on same-sex marriage that DiversityInc covered earlier this year. Minnesota faces a ban on same-sex marriages in November while Maine residents are being asked to approve marriage equality.

Fifty percent of Americans support same-sex marriage, according to the latest Gallup poll. By comparison, a 2000 Harris poll showed that only 15 percent of Americans at that time approved same-sex marriage. That may not be a comfortable-enough margin for Obama, but it’s a telling indicator that public conviction is changing.

Equality for LGBT people is not a bargaining chip but a fundamental civil right, as noted in the Human Rights Campaign (HRC)’s President Joe Solmonese’s official statement. And real leaders must unequivocally support ALL human rights. This lesson has been demonstrated in corporate America several times by diversity-management leaders, especially CEOs. Click on the images to download a PDF of our Diversity Leadership LGBT Pride Timeline and Facts & Figures.

Corporate Diversity-Leadership Lessons

There are several positive examples of CEOs and corporate leaders who have stood up for LGBT rights with great success. 

• Most recently, jcpenney CEO Ron Johnson very publicly supported the company’s decision to use Ellen DeGeneres as a spokesperson, despite boycott threats from a bogus organization called One Million Moms, which was really an offshoot of the anti-gay group Focus on the Family. Johnson cited DeGeneres’ strong values as a reason for choosing her. Jcpenney is No. 35 in The DiversityInc Top 50 Companies for Diversity.

• Last year, several DiversityInc Top 50 companies, including KPMG (No. 22) and AT&T (No. 4), publicly denounced a Tennessee bill prohibiting local governments from passing antidiscrimination measures. The companies were embarrassed after the Tennessee Chamber of Commerce, of which they are members, supported the bills. Other companies joining in the protest of the bill, which passed, included Pfizer, Comcast and Whirlpool (all three are on DiversityInc’s 25 Noteworthy Companies list).
  
• In Indiana, DiversityInc Top 50 companies such as WellPoint (No. 34), Eli Lilly and Company (No. 29) and Cummins (No. 18) have been fighting the Defense of Marriage Act (which also narrowly defines marriage as only for heterosexual couples). Nationally, according to the Human Rights Campaign, several diversity-management leaders have opposed the Defense of Marriage Act legislation, including Aetna (No. 24), The Chubb Corporation, National Grid, Time Warner Cable and Xerox (Time Warner Cable and Xerox are two of DiversityInc’s 25 Noteworthy Companies).
  
• Many DiversityInc Top 50 companies have been strong advocates for the federal Employment Non-Discrimination Act. This includes Ernst & Young (No. 6), Accenture (No. 12), Merck & Co. (No. 16), IBM (No. 17), KPMG (No. 22), Dell (No. 26), Eli Lilly and Company, Bank of America (No. 31), WellPoint, Time Warner (No. 40), The Coca-Cola Company (No. 46) and Capital One (No. 47).
  
• Companies including Cisco and PG&E have publicly opposed Proposition 8 in California, and companies including The McGraw-Hill Companies urged the passage of same-sex marriage in New York.
  
• Companies including Ernst & Young, KPMG and PricewaterhouseCoopers (No. 1) recently announced that they will offset the tax penalties employees pay for having same-sex domestic-partner health benefits.

In the cases of all of these companies, their CEOs stood firmly and visibly behind their decisions to stand up for equality for everyone. Many of these CEOs have told DiversityInc in interviews why they are visible supporters of rights for everyone, including Bob McDonald of Procter & Gamble (No. 5), John Veihmeyer of KPMG, John Stumpf of Wells Fargo (No. 33), Ernst & Young’s Jim Turley, and PricewaterhouseCoopers’ Bob Moritz.

Read What Clinton’s Global LGBT-Rights Speech Means for Your Company.

Vacuum in Diversity Leadership

In the absence of real diversity leadership, those who oppose equality win. There are several companies, including Walmart, whose leaders have to this point been reluctant to advocate for equal treatment of employees, including domestic-partner health benefits for same-sex partners of employees.

The absence of this equality costs companies support in the community from LGBT people, from their friends and allies, and increasingly from younger people, according to several polls from Gallup and other organizations. Read Civil-Rights Progress: Helping LGBT Youth for more information.

It also costs companies a spot on the DiversityInc Top 50 list (a policy that’s been in place for the past four years). This year, when the HRC increased its qualifications for the Corporate Equality Index (CEI), including more provisions for transgender people, we added scoring penalties in the DiversityInc Top 50 for companies that received less than an 80 percent on the CEI. Read Our Analysis of the HRC’s Corporate Equality Index.

The momentum is shifting quickly toward marriage equality, despite the backlash factor remaining in states such as North Carolina. Diversity leadership means taking a public stand. Thank you, President Obama.

Read Ask the White Guy: Decision Making, Clarity of Values & What to Do When It Goes Horribly Wrong for more on the importance of communicating diversity-leadership values

–Barbara Frankel

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Success, according to McDonald, is dependent on being a proactive catalyst of positive change. For him, that includes running a profitable global business that improves people’s lives. In this exclusive interview, he reveals how a firm commitment to empathy and foundational values helps the company bridge cultural gaps, promote corporate diversity and innovate products that directly satisfy customer needs.

LUKE VISCONTI: Tell me about Procter & Gamble’s emphasis on values, what they mean to the organization and how you conduct business globally.

BOB MCDONALD: Procter & Gamble was founded with a purpose: improving people’s lives. During the Civil War, people shipped short-weighted products or clothing that didn’t last very long. This company said, “We’re not going to do that. We’re going to be known as the company that prides in high-quality products.”

It wasn’t until the mid-1980s when John Smale, our CEO, asked John Pepper, our president at that time, to lead a group of leaders to write down the values that we were trying to lead. It was serendipitous and necessary—at that time we were globalizing very quickly. As you move in to another culture, the difficulty is bringing your values with you.

We ascribe to keep the purpose and the values of the company consistent globally, but you have to be willing to change to stay relevant to your consumer and grow. We formulated the purpose about touching and improving lives and giving back to the communities in which we live and work.

Five values—leadership, integrity, ownership, passion for winning and trust—are critical to the success of the company. Leaders can personalize those values by bringing the experiences they had in life that cause them to form different beliefs. We teach people how to do that so that they can share that with their organizations and be introspective as leaders.

Creating Experience & Empathy Through Corporate Diversity

We’ve discovered that people join this company because their personal purpose is about improving lives. It gives them a way to execute that purpose on a bigger stage with more resources. This purpose is what provides meaning to their lives. That means if I as a leader can tie every behavior the person has back to that purpose, their life would be fulfilled.

You don’t compartmentalize that. The more pervasive we make our purpose of improving lives, the more fulfilled the people are and the better the business results. What we’re really trying to show is the virtuous cycle, where companies do well financially and do good at the same time.

What you should do as a company is provide opportunities for employees to do community service—through that, they become more fulfilled. They improve lives but they also have an experience.

We sent a team of people to Mexico to build homes for Habitat for Humanity. We sponsored the trip. People came back totally fulfilled—a life-changing experience. They learned about low-income consumers in Mexico. When we go to hire people around the world, we need to give them opportunities to learn how the majority of the world lives.

LUKE VISCONTI: You’re leading the diversity council personally. Why is this important to you and your corporate-diversity goals?

BOB MCDONALD: It’s so fundamental with everything that we do. If your purpose is to improve lives, you’ve got to have the leadership, the strategies, the system and the cultures to do that. You can’t ignore diversity.

Diversity for us is a strategy. If I’m trying to improve someone’s life, wouldn’t I be better off having somebody in the organization who is of that representation so they can help the company be empathetic to the consumer? Consumers can never tell us exactly what they need. We’re trying to find the unarticulated need. That’s where we develop our best products.

We believe that we have five strengths: consumer knowledge, innovation, branding, go-to-market and global scale. That innovation strength is the primary way we improve lives. The more diverse your organization, the better your innovation. We try to be very deliberate about setting up diverse teams of people in order to accelerate the innovation that comes from them.

I’m a big believer in the work of a fellow named James Burke, who wrote a book called “American Connections” and a TV show called “Connections.” He says the greatest innovations in the history of the world have never happened in a linear way. Alexander Graham Bell invented the telephone to help hearing-impaired people; [Guglielmo] Marconi invented the radio for two ships to communicate at sea; Tom Watson said someday the United States might only need two or three computers.

How do we create conditions that allow people to bring their diversity to work and have their diversity become the modes that provide the potential for these innovative connections? That’s what we’re really trying to do.

Trust: A Synergistic Effect

LUKE VISCONTI: What do you expect out of your diversity council? 

BOB MCDONALD: A much more deliberate goal, objectives, strategies. We’ve done that. We’ve put together a scorecard. The other thing that comes out is insights.

Procter & Gamble always cared about diversity. But why haven’t we achieved the results? We did a deep dive on the advancement of women as an example. Everybody was well intended but we weren’t happy with the results.

We promote from within, and in any company, leaders tend to attract individuals that they know to work for them. We’d always insist that you get a diversity candidate. Unsurprisingly, the diversity candidate wasn’t selected enough because people didn’t know the candidate. We had to put in place a much more deliberate system of making sure the diversity candidates get exposure.

Secondly, we had to join hands as a leadership team, saying, “I trust you. I’m going to take a risk on this person because you know them and I don’t.” The way to do that is to bring people together and create that trust.

LUKE VISCONTI: A synergistic effect by having everybody in the room? Do you think that it adds to not only awareness but accountability for corporate diversity?

BOB MCDONALD: There’s nothing stronger than accountability. In a combat situation, people perform heroically; they don’t think they’re heroes. They say, “I did this because I didn’t want to let my buddies down.” The same thing happens in a corporation.

I’ve seen attitudes totally shift. I’ve seen individuals who were skeptical of diversity become the biggest advocates. I don’t think it’s simply because of a feeling of hierarchy and me being in the room. I do think it’s the group dynamic. Everybody has good intentions, but it takes more than that.

Connecting With Consumers

LUKE VISCONTI: How have you seen this connection manifest between this diversity council, more disciplined corporate-diversity efforts and your successes around the world?

BOB MCDONALD: We are in the fast-moving consumer goods of business. We have no alternative but being empathetic to consumers; no alternative but to have a diverse workforce that represents those consumers.

We talk a lot about the importance of knowing the culture, knowing the language. In my own experience, it gives you an empathy that you couldn’t otherwise get.

LUKE VISCONTI: How are you leveraging this empathy? What are you structurally doing to make sure that you’re not making mistakes when you go into a place?

BOB MCDONALD: The challenge for us is we have to innovate for everybody on the economic pyramid. We don’t just innovate for the people on the top and dilute that product for the people on the bottom.

For example, in the Philippines, people really want clean clothes. They wash by hand and use soap suds as a surrogate for cleanliness. It takes the average Filipino five buckets of water to rinse their clothes.

Water in the Philippines is very expensive. Water runs by your house generally 30 minutes a day. You have a high horse-powered pump on the street; you pump the water into your water tank. If you miss that 30 minutes, you don’t have water.

We developed a product called Downy Single Rinse. It sequesters the suds and allows you to rinse with one bucket of water, an innovation particularly designed for people at the bottom of the economic pyramid.

Finding Purpose, Improving Lives

LUKE VISCONTI: What do you expect to flow through at the end of the day—the tangibles to the bottom line of the business?

BOB MCDONALD: It’s developing and delivering sustainable, outstanding business results, being in the top third of our peer group and total shareholder return sustainability, and doing that through a workforce that represents the consumers we’re trying to serve, the lives we’re trying to improve. Importantly, people are performing at their peak.

For people to perform at their peak, we’ve got to be empathetic to their needs and improving employees’ lives while we’re working to improve the lives of the world’s people.

If you ask me what success is, every person in the world uses a Procter & Gamble product. It’s every employee reporting to us, that they’re working at their full potential and that we’re helping provide meaning in their lives.

I love Viktor Frankl’s “Man’s Search for Meaning.” He wrote the book right after World War II. He was in the Auschwitz concentration camp and what he discovered was a new school of psychology.

Freud was all about looking in the past and basing your future behavior on what happened in the past. Frankl was about developing a vision of the future, recognizing the control you have over that vision. He would convince people in Auschwitz that how they reacted to those guards was in their control, that they could have a positive vision of the future that would determine the positive nature of their future.

I believe what we do in this company in improving lives is giving people meaning in their lives. I went to West Point because I wanted to free the people who were living in un-free societies. I joined P&G because I wanted to make a difference in the world.

When I go to college campuses today, the students tell us they want to work for a company where they can have meaning, where they can make a difference. I think that’s the opportunity we provide.

LUKE VISCONTI: In your bio, there’s a long list of organizations that you serve. Can you talk about how important that is to you?

BOB MCDONALD: I’m trying to help people understand what their individual purpose is in life. I have a set of 10 leadership beliefs: No. 1 is living a life driven by a purpose, compared with simply meandering through life without direction. With technology the way it is today, everyone is time starved. It’s possible to go through life reacting to external forces.

I’ve given this speech maybe 300 different times, maybe every college campus almost in the world. For me, it’s a calling. If I can help students understand how to make a difference in the lives of others and if that is a higher purpose, then they should set that purpose now rather than simply reacting to what affects them.

The point is people like to do what they’re good at, and they’re good at what they like to do. We naturally gravitate to certain things, and that may lift the veil a bit on what your purpose is.

It’s the No. 1 thing, in my opinion, that differentiates those who succeed at Procter & Gamble versus those who don’t, or those who succeed in life versus those who don’t. It’s maintaining the ability to learn.

I often tell people, “When you graduate, you’re not done learning. That’s the beginning of the learning journey.” No one can predict the future with certainty, particularly in today’s world which we at P&G call a VUCA world (volatile, uncertain, complex and ambiguous). How do we prepare ourselves for that future to make the right decisions in real time? The way to do that is to continue the ability to learn.

The leadership challenge today is so different with so many generations that are so diverse. The people complain about not text messaging and other things like that, which is all true.

What is going to be the analogy for the young person today? Twenty or 30 years from now, they’re going to face the same challenge. The older you get, the harder it is to learn new things. Reverse mentoring becomes a very powerful concept: forcing yourself to learn things that are new or very difficult is a powerful concept. If we don’t do that, we won’t get the most out of life.

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Carlos Orta’s job is to convince corporate America of the need for Latino leaders. That should be easy, given the demographics of the United States, yet corporate diversity still remains a challenge. Why?

The Need for Corporate Diversity

Orta is the president and CEO of the Hispanic Association on Corporate Responsibility (HACR), with a combined background of politics, corporate-relationship building and community outreach. He was a featured speaker at DiversityInc’s 2012 DiversityInc Top 50 event.

Orta first heard of the nonprofit in 1998 while working at Ford Motor Company, No. 47 in The 2011 DiversityInc Top 50 Companies for Diversity. There he was responsible for managing the company’s relationships with the Latino community and other philanthropic outreach responsibilities to improve efforts in corporate diversity. He assumed similar responsibilities at Anheuser-Busch, where he became director of community outreach for the Western Region.

His earlier career had been in politics, where he was executive director of Miami-Dade County’s Legislative Delegation, a bipartisan group with 27 members. This is where he learned valuable lessons about how to succeed in business.

“I was able to see firsthand how things really worked. I understood the role of the private sector, the public sector and the not-for-profit sector, and that all three have to work together for society to move forward,” Orta recalls.

HACR was a good fit for him. Orta says, “I truly believe in the organization’s mission and the potential it has” for corporate diversity.

HACR is a national advocacy organization that represents 16 Latino organizations in the United States and Puerto Rico. These include ASPIRA, Congressional Hispanic Caucus Institute, Hispanic Association of Colleges and Universities, MANA and the National Society of Hispanic MBAs. Currently, HACR Coalition Members collaborate with more than 1,500 affiliate community-based organizations—including more than 450 colleges and universities and 400 publications.

In 2012, HACR’S corporate membership will reach an all-time high of 52, including 20 Fortune 50 companies, which nearly doubles the size of its membership since 2006.

Good Enough to Buy and Manage

HACR’s mission is to advance the inclusion of Latinos in corporate America at levels commensurate with the demographic’s economic contributions. The goal is to achieve “market reciprocity,” which Orta asserts as a key argument for the business case for corporate diversity.

“If as a community we are contributing X dollars to a company’s bottom line, we believe that the company has a commitment to give back to the community at a similar level,” says Orta. “If we are good enough to buy from you, then we are good enough to serve on your boards.”

Latino representation among the upper levels of management is low nationally compared with their 16.3 percent population share. HACR’s 2011 Corporate Inclusion Index shows a decrease of Latinos in the C-suite from 8 percent in 2010 to 7 percent in 2011.Orta says these gaps mean companies are losing out on key benefits. “Census data says there are] 50 million Hispanic consumers and a trillion dollars in buying power,” he says. “It’s about the business opportunities here in the United States. It’s sitting right here in your backyard.”

The Latino demographic also is extremely brand loyal, adds Orta, equating to more value for companies that hire Latinos and make a viable connection with these communities. Read The DiversityInc Top 10 Companies for Latinos for a list of companies who excel in this area of corporate diversity.

“[Latinos] understand the [Latino] market better than anyone else. You understand what resonates with that particular consumer and understand the products that do as well,” he says.

Corporate Diversity: Optimizing on Growth

To capitalize on this growth opportunity, HACR currently runs three programs on a variety of levels to foster Latino inclusion and diversity among corporate America.

The HACR Young Hispanic Corporate Achievers aims to gain recognition for young Latino employees who demonstrate excellence and leadership skills. The HACR Corporate Directors Summit and HACR Corporate Executives Forum serve as a resource for Fortune 500 board members and HACR corporate company executives to share insights, challenges and strategies.

Orta is particularly excited about HACR’s recent projects to promote awareness for Latino inclusion—its first documentary. “Insider Game” features firsthand interviews with executives about the lack of Latinos in corporate leadership.

“The community really is starting to understand political power, the influence it has with organizations. It’s a big responsibility but there’s a lot of potential,” says Orta.

Most importantly, Orta stresses that “HACR is a team, in who we are and why we exist.” It’s a philosophy for collaboration that he learned during his early days working in politics.

The post Corporate Diversity Lacks Latino Leaders: How Your Marketplace Value Will Suffer appeared first on DiversityInc.

CSX Corp. has remarkable CEO commitment and has made huge strides in diversifying its workforce and management ranks by race/ethnicity and gender, which is particularly tough for a railroad company headquartered in the South. CSX also has a remarkable record of community philanthropy. Some specific achievements:

• Major efforts to diversify workforce and management. Of managers with less than five years of employment, 42 percent are women, Blacks, Latinos, Asians and American Indians. Two of the top six executives now are women, and CSX has the first woman chief transportation officer in the rail industry.
• Growing emphasis on employees with disabilities, including having a website designed for people with disabilities and being the first company in Northeast Florida certified as disability-friendly.
• Close affiliation through Chairman, President and CEO Michael Ward and the company with the Wounded Warrior Project as its first corporate partner.
• Strong veterans employee-resource group and overall program for veterans, including support of the National Guard and reserves, recognized recently with the Freedom Award from the Department of Defense. CSX is the only company to win this award twice.

Award accepted by Michael Ward, CEO, chairman and president, CSX:

“This is a tremendous honor, on behalf of our 30,000 employees, to receive this award from DiversityInc. As I look around this room, my guess is everyone’s looking to make a positive difference in the lives of others. I want to thank you all for this award and I assure you we will continue to work hard, and we expect to be here every year in the future.”

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In 2010, Southern Company introduced several changes to its benefits program to align with other large employers and to better meet the diverse, multi-generational interests of employees and recruits. One significant change was the addition of domestic-partner benefits, which DiversityInc had been urging the company to add, to create more equality for LGBT employees.

Other changes included parental leave, maternity leave and adoption reimbursement. The company has increased its relationships with external multicultural organizations, for example, serving as a sponsor for the 2011 Atlanta Human Rights Campaign Gala Dinner. Southern Company also has been working hard to increase the diversity of its talent pool. For example, this year, the company hosted two interns with visual impairments for a three-month rotation as a result of a partnership with the Center for the Visually Impaired in Atlanta. And recent efforts in military recruiting led to Southern Company being one of 15 recipients of the 2010 Secretary of Defense Employer Support Freedom Award. Southern Company’s leadership clearly understands the importance of diversity management in terms of talent development, innovative work solutions and the ability to connect with customers. The company has escalated its efforts in recent years and shows every indication of doing even more.

Award accepted by Susan Story, CEO, Southern Company Services:

“The ability to be named in the same breadth as the companies we have heard from tonight is extraordinary. We believe in a working environment that allows every single employee to develop to his or her full potential … One of the measures we get paid on is how well we do in the DiversityInc survey. We did improve our employee benefits significantly but another thing we’ve improved upon is our military recruiting. At the end of the day, we know that investing in our communities makes us stronger as a company; and when we invest in our communities, they invest in us.”

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