Because I advise brands on social purpose, many business leaders have asked me how their companies can meaningfully respond to the racial injustice that afflicts U.S. society. To best answer this question, I’ve enlisted one of the country’s leading experts on corporate diversity, equity and inclusion, Fred Keeton.
Fred is owner and Principal at Keeton Iconoclast Consulting, which offers expertise in business strategy and leadership development, diversity equity and inclusion, government, regulatory and public affairs. Fred enjoyed a 32-year career at Caesars Entertainment that included 10 years as Vice President of External Affairs and Chief Diversity Officer. He served on the boards of Harvard Medical School’s Joslin Diabetes Research Center, the National Minority Supplier Development Council and the Girl Scouts of Southern Nevada. He currently serves on the Nevada Public Radio board. Fred is also one of my favorite people to work with and I’ve been lucky enough to do so on a handful of corporate social responsibility efforts.
Below is a summary of my illuminating conversation with Fred. I asked the hard questions and he provided the thoughtful answers.
Bea: Fred, I know you as wise counsel and strategic-thinking partner on diversity, equity and inclusion to big brands, but tell us about your personal journey to this work.
Fred: I am a 63-year-old African American male from Morton, Mississippi. The restaurant, doctor’s offices, hospital, movie theater and schools during the first 13 years of my life were all segregated. We had to get off sidewalks so that Whites could go past unimpeded on Main Street among many other slights. Fifty years later, those experiences and my resulting response to transcend them contributed to who I am and what I believe. Thankfully those and many other realities of that time and place are rare and difficult to fathom now.
But, there are two remaining constants. First racism, now less overt, continues both structurally and socially. There is significant, though too often reluctant, focus on effectively suppressing it.
Having said that, I am a champion of business growth fueled by a strong and viable economy. The promotion of highly profitable businesses that intentionally and responsibly benefit their workforces, workplaces, marketplaces, investors, and communities is always my objective.
Having shared that, the second constant is an absence of effectively applied economic focus. Specifically, a lack of focused efforts at strategic and sustained economic inclusion within local, state, regional and national business ecosystems. That requires equal time and sustained commitment from the corporate sector.
Bea, too often folks in my and your roles are not viewed as champions of business growth and profitability. And too many titans of business see us as prone to suspend business logic in executing our work. They see our efforts as contrary to driving best business outcomes. But applied appropriately, and with properly focused business acumen and expertise, our work is a key factor in sustained high performing and profitable businesses. So, I help companies approaching diversity, equity and inclusion engage them authentically and strategically.
Bea: What will it take to move from the current moment of heartbreak, outrage and unrest to meaningful sustainable improvement in racial justice?
Fred: The George Floyd murder is another huge tragedy. We cannot continue to knowingly cycle from multiple law enforcement tragedies, or any other tragedy, time and again as reactionaries. As I stated, appropriate preemptive actions must be taken in those two defined and parallel paths. First, eradication of racism. This is getting the most attention right now, and that’s a good start. And it is hugely important, but by itself insufficient.
The second item we need to tackle is economic inclusion. It is important that we see “being broke” for what it is — food deserts, healthcare disparities and healthcare deserts, housing issues, employment issues, personal/family wealth disparities, financial asset disparities, inadequate education, economic immobility and more. Connect America’s original sin of racism on one side and inadequate economic inclusion on the other, and we have a tinder box primed to explode. There is stark evidence of this reality right now.
We need a mutually beneficial, immediately applicable and robust economic remedy … one that business and industry can enthusiastically support, execute, and quite frankly lead. This requires inclusive growth of both existing and new businesses within local, state, regional, and national business ecosystems. It is why I focus on parallel paths of both racism eradication and economic inclusion. The remedies like the problems must be applied and solved in parallel, and with equal enthusiasm. And, who better to sponsor, develop and help drive economically inclusive profitable business growth than leading CEOs?
Bea: What would the “robust economic remedy” you propose look like?
Fred: We are in the first phase of a COVID-19 driven business renewal. Businesses are already executing a review of short, interim, and long-term strategies coupled with attendant relationships. We need companies, industries, cities, states, regions and trade associations consciously collaborating and deliberately acting to promote economic inclusion. And doing so systemically and strategically within and across industries. A future of purposeful new and enhanced trade between companies in both existing, and intentionally formed new business ecosystems could lend themselves to significant economic inclusion opportunities. This is done such that it strengthens and organically grows targeted industries in a specific region or jurisdiction. And, it does so based on precise existing and future aggregate business supply chain needs in that region or jurisdiction.
Essentially, it applies the remedy with surgical precision based on geography, market and economy. Before there is alarm, this new approach vigorously incorporates traditional supplier diversity as a component and acknowledges the value of traditional supplier diversity efforts. But, it takes us well beyond supplier diversity’s usual wealth building and economic impact capacity as currently practiced.
Strategic economic inclusion of different businesses, industries, and people demographics by local, state, and regional business ecosystem need is our aim. It must become an important and targeted long-term component of the national economic equation. And, by logical extension, a key component in the quest for racial and social justice.
Bea: How might a company start pursuing the type of robust economic remedy to racial inequality that you propose?
Fred: Bea, this is all about teaming, in fact Diverse by Design (DbyD) teams. It requires the bold and forward-looking mindsets of leading CEOs to identify supply chain opportunities and commission the approach. Essentially, a CEO steering committee is formed. With advice and research, it deliberates and agrees on the specific objective. That is to create or improve the availability and/or capacity of an important category or categories of tier 1 supply chain business needs. The steering committee then appoints a DbyD working team representing various factions to frame the issue or opportunity solution. The effort initially includes companies and their attendant industries along with industry associations to identify, quantify, and package the opportunity. And later includes local, state and regional policy interventions as necessary. It is a formal eight-step process to completion and execution in a market.
It’s key that companies collaborate both within existing, and in establishing new market business ecosystems. They do this based on their own precise aggregated business supply chain needs. It is all about assessing market realities, then enabling, supporting, and availing specific business operations to meet those needs. Again, market realities and supply chain needs are our guide. Importantly, this includes opportunities for ownership, investment, employment, mergers, acquisitions, joint ventures, new start-ups, etc. These components are key to thriving robust business ecosystems. What we are doing is adding and fully integrating a new and critical strategic component to compliment them. That is, economic inclusion.
As in any large successful business venture progressing from concept, to launch, to sustained success has requirements. They are hard to reverse contractual commitments, aligned assets and interests, and a formal governance structure for facilitating integrity and cooperation of involved parties over the long term.
Bea: You and I have both heard CEO’s reject calls to action like the one you just voiced with something like, “We comply with the law, we pay our taxes and we condemn racism so we already do our part.” Are they wrong?
Fred: Wrong might be too strong a word. But that response is antiquated, short-sighted, and suspends business logic. What I am proposing is markedly different from what you’ve been seeing from major corporations over the past month. Companies, especially those with large employee bases operating in multiple locations, are simply a microcosm of the larger society. Politically, they have left-leaning employees, right-leaning employees, and some moderates in the workplace. They will have different races, ethnicities, genders, sexual orientations, generations, disabilities, nationalities, professions, geographies, thinking styles, etc. The same is true with clients, customers, shareholders and every group of stakeholders the business relies on to operate and thrive. All these categories of difference must effectively interact. Including during varied and numerous points of daily contact at work and in the marketplace to most profitably operate any business or industry. Facilitating this effective, efficient, and profitable interaction is the epitome of inclusive leadership.
To ignore, mismanage, or come across as patronizing to the employee base, or any of its major segments, is a prescription to drive sub-par business execution and outcomes. Racial justice and equity issues cannot be ignored. If these are unled, under led, or even over managed, no consistently profitable company culture is possible.
This is not a suspension of business logic. Again, I champion business growth fueled by a strong and viable economy. And I promote highly profitable businesses that intentionally and responsibly benefit their workforces, workplaces, marketplaces, investors, and communities. When I say that business has a role to play here, I am not saying that business needs to sacrifice success for racial justice. Rather, that racial justice can play a major role in optimizing that success.
[Note: For more on the business benefits of pursuing racial justice, see post written after the Charlottesville White supremacist rallies.]
Bea: What about the segment of workers and other stakeholders who feel threatened by changing demographics and prefer the status quo? Might business leaders who promote racial justice undermine their own success by offending these individuals?
Fred: I am not naïve. Especially in the short term, CEOs will have to ask themselves what they are willing to risk and even possibly lose in taking a principled stand. Standing for and acting on greater racial justice will unquestionably drive long-term business success. Nevertheless, today some of their stakeholders will resent and criticize their racial-justice actions. But again, this is a business-logic question for CEOs to consider: Is it ever truly productive for a brand to align with a group that opposes what is right for business performance. And, for what is increasingly becoming a universally accepted moral imperative as well?
Bea: Any final thoughts or suggestions for company leaders?
Fred: Too often business leaders, whether they admit it or not, see efforts at inclusion generally as a suspension of business logic. Yet, they do not see their ignoring strategic inclusion as an equally egregious suspension of that same logic. If we can make more money and be more profitable businesses and industries while addressing these economic and social ills through authentic business and economic development, why not? What is a more noble cause than that?
Learn more about Fred Keeton.