Diverse Leadership
Glen D. Brown
Barry University Melbourne, Fl.

Diverse Leadership
There are many nations in the world we live in. There are so many of them that are poor and there citizen are continually leaving to search for a better life, or for a way to provide for their families in their native land. Immigration has shaped many countries around the globe. This is one reason you see such diverse communities everywhere you go. Immigration is the one of the reasons why it is so critical for companies to build diversity programs to ensure they reach the different demographics in these communities and around the globe. Diversity is the key to success for companies today. It would seem that the companies that build successful diversity programs end up doing very well. This paper will discuss three different leaders that we able to make significant changes in diversity within their companies. These changes proved to be the key to success. First we will discuss Louis Gerstner and the changes that he made during his time at IBM, next we will discuss Richard Parsons and the changes that he made during his time with Time Warner, and lastly we will discuss Steve Reinemund and the changes that he made while he was with PespiCo. Now lets discuss at the leadership of Louis Gerstner.
Louis Gerstner graduated with a Bachelors Degree from Dartmouth College and then Harvard Business School with a Masters Degree. Later he worked as an executive for RJR Nabisco, McKinsey & Company, and American Express. Gerstner was known for his progressive management practices for civil rights and equal employment before IBM hired him. He was hired as CEO of IBM in 1993. When Gerstner arrived at IBM, he brought three of his personal experiences to assist his efforts in the turnaround of IBM, Davidson (2003). He brought an understanding that companies can not successfully compete in all businesses and markets, Davidson (2003). Gerstner experienced IBM's lack of customer focus first hand after being threatened by IBM for buying a competitor's mainframe computer product, Davidson (2003). He also brought an appreciation of the importance of solid processes and management controls for controlling performance and cash flow, Davidson (2003). Fortunately, these three pieces of background turned out to be exactly what IBM needed, Davidson (2003). Before Gerstner took over, IBM’s employees were concerned more about office politics that their cusomets or IBM’s market shares, Davidson (2003). At the time when Gerstner took over, IBM was struggling in practically all the business it was competing in, which cost them to lose market share to other competitors, Davidson (2003). Due to the rapid lose of market share, IBM’s financial position had deteriorated, Davidson (2003). Davidson gives of some insight to what Gerstner had to deal with when he joined IBM:
“The litany of IBM's problems that Gerstner had to quickly address is hard to imagine in today's more competitive world, but they included:
* A reluctance to tackle difficult pricing problems and take a longer view of the business.
* An entitlement culture rather than a culture oriented to performance.
* A political culture with little emphasis upon actual execution (A memo included in the book on the management of "non-concurrence" by IBM decision makers is a wonderful piece of evidence. As the new IBM CEO, Gerstner was startled to find out that often when he issued a direct order his subordinates would choose not to implement it because they disagreed. This culture of "non-concurrence" made IBM the slowpoke of the industry until Gerstner was able to change it).
* A lack of passion in the leaders of the company, especially when compared with their smaller competitors.
* A lack of coordination within the baronies of the geographically organized IBM.
* Massive duplication of administrative staff and processes.
* A lack of focus on serving and listening to customers”
These are some real issue for a new CEO to have to deal with. Gerstner was able to use his experiences to work through these issues and get IBM back on track.
Gerstner’s experiences were vital in his quest to make IBM a diverse company. Once he was in office he took a closer look at his senior executive team and felt that they did not reflect the diversity of the market for talent or IBM’s customers and employee, Canas and Sondak (2014). Gerstner then made some changes to address diversity issues within the company.
In 1995, he would launch his diversity task force initiative that became the corner stone of IBM’s HR strategy, Canas and Sondak (2014). Not only did Gerstner focus on diversity within IBM’s talent pool, but he also made it a market-based issue as well. There were a total of eight diversity task forces to address diversity within the company. The task forces we developed for the Asians; blacks (African American and African descent); gays/lesbians/bisexuals/transgender individuals (GLBT); Hispanics; white men; Native Americans; people with disabilities; and women, Canas and Sondak (2014). These task forces were chaired by 15-20 senior managers were directed to work with their respected groups in order to find out what issue that they have, Canas and Sondak (2014). These managers were from the same demographics as the employees, , Canas and Sondak (2014). There were a few groups that did not have enough senior managers to fully chair their task force, so they filled those spots with midlevel managers, Canas and Sondak (2014). In addition to the senior managers, there was one top-level executive that was appointed to each task force. These executives were not from the demographic of their specific assignments. For instance the task force foe women had a male executive as their sponsor, and the male task force had a female executive as a sponsor. It was the sponsor’s job to work with these task forces and determine what issues they were having and relay them to the top. The executives would have to become comfortable with their respected task force, as well as the task force personnel become comfortable with these executives.
Since these task forces have been implemented there has been significant changes to the diversity of IBM. IBM has seen the number of female executives worldwide increase by 370 percent, Canas and Sondak (2014). It has also seen the number of United States born minority executive’s increase by 233 percent and the GLBT executives grow by 733 percent, Canas and Sondak (2014). IBM’s Worldwide Management Council, which is made up of the top 52 executives, who determine corporate strategy, now has women, minorities (US born and Non-US born) members, Canas and Sondak (2014).
Gerstner did not only seek to change the diversity within the company, but also with the people that they were doing business with. His team actively sought out diverse business owners and reach out to their business needs. In 2003, IBM was able to show hoe important diversity was to the business. Their business numbers increased drastically during Gerstner’s leadership reign. They did more than $1.5 Billion with over 500 diverse suppliers, Canas and Sondak (2014). This was up from the $370 Million in business that they did in 1998, Canas and Sondak (2014). Gerstner’s diversity effort continued through his tenure, and continues with the new CEO of IBM, Sam Palmisano, Canas and Sondak (2014). Gerstner did an amazing job changing IBM to a very diverse company, now we will discuss Richard Parsons’s time with Time Warner.
Richard Parson’s attended the University of Hawaii History as a History major at the age of sixteen, Parsons (2015). He fell six credits shy of his degree, but did well enough on his pre-law exam to get accepted by Albany Law School in New York, Parsons (2015). In 1971, Parsons graduate from law school, as first in his class, Parsons (2015). After law school Parson’s went to work for the Governor of New York and eventually the U.S. Vice President Nelson Rockefeller, Parsons (2015). He then went to work at the Patterson, Belknap, Webb & Tyler law firm, where he eventually rose to managing partner, Parsons (2015).
In 1988, Parsons was recruited to join Dime Savings Bank, as chief operating officer, Parsons (2015). Two years later, during the savings and loan crisis, Parsons became the CEO and was able to keep the bank afloat, Parsons (2015). During this time, he spearheaded the merger of Dime Savings Bank with Anchor Savings Bank in 1994, Parsons (2015). A year later in 1995, Parsons left the banking industry to work for Time Warner as the president, Parsons (2015). He became CEO and chairman of Time Warner in 2001, Parsons (2015). Parsons was able to streamline the business divisions and work through the Security and Exchange Commission and Justice Department investigations, Parsons (2015). He was able to put out all the fires that were thrown his way while he was CEO, and received the Institutional Investor’s nod as the entertainment industry’s top CEO in 2005, Parsons (2015).
During the Richard Parsons five years as CEO of Time Warner, he was able to tame a sprawling, unruly media octopus, Dingle (2015). He took a unorganized company and was able to convert it into a uniform, functional enterprise, Dingle (2015). He did this by simplifying the corproate structure, strengtening the balance sheet, and getting rid of nonperforming assets, Dingle (2015). Even though Parsons was able to make some signifiacant changes to the company, he was unable to to increase the stock value. This caused discontent with the shareholders, and billionaire Chris Icahn pushed to break up the company, Dingle (2015). With all the issue that Time Warner had Pasons was still considered to be one of the most powerful media moguls on the planet, Dingle (2015).
Parsons stats that he is not satisfied with the diversity within Time Warner executive ranks. He was asked this question in an interview: Under your watch, have you been satisfied with the diversification of the management ranks, Dingle (2015)? Parsons answers with:
“No. We've made some progress, over the last five or six years, in terms of diversifying the management of our company at all levels. But it's still a work in progress. I think we have most of the infrastructure in place. We have people at all levels who are doing the right thing by virtue of this objective. But we're not where we need to be yet, and we will need to do more things on the structural side as well as on the human side,” Dingle (2015).
Time Warner is making changes to its diversity, but it seems that Parsons believes that they still have a ways to go. The intreviewer went on to ask Parsons: Should black directors use their positions to push for greater diversity in corporations, Dingle (2015)? Parsons reply to this question was:
“Do I think that somehow we need to come together collectively to validate this initiative? No, because each director's obligations and responsibilities are to the shareholders of the entity that he or she is serving. I can assure you, having been on half a dozen large, public company boards, the agenda item is on the table and being addressed pretty much across the board. One of the things that I've found is that most directors who come from a diverse background, particularly African Americans, introduce other minorities within the entities that they are serving on. When the board is looking to fill some seats, they are the persons it will go to in order to find some good minority directors.
Now are we making progress as fast as we need to? There are always those who argue that we've got to move faster, and the dynamic tension that comes from that is good,” Dingle (2015)
With all the good changes that Time Warner went through while Parsons was CEO, the company struggled to make a significant recovery, so Parsons steped down in 2008, Dingle (2015). Even though Parsons stepped down as the CEO, he retained the responsibilities of chairman of the board, Dingle (2015). Parson proved that diversity is important to buisness. Being selected as the CEO of a large corporation as a black man and being able to keep it afloat during harsh times, paves the way for other ethnic individuals to be hired into these positions. Parsons did amazing things no matter where he went. He was called the corporate problem solver, for the works that he has accomplished in his career. That is a look at Richard Parsons, now we will discuss Steven Reinemund and his time at Pepsico. Steven Reinemund attended the Naval Acadamy, where he received his undergrauate degree, Thomas and Creary (2009). After he graduated from the acadamy, Reinemund served in the Marine Corps for five years, Thomas and Creary (2009). He then went on to get his MBA at the Uiverity of Virginia. In 1978, Thomas and Creary (2009). After graduatine from the university of Virginia, Reinemund went to work for Bill Marriott. He was selected to work at Marriott’s Roy Rogers division, Saadi (2012). He worked at the Roy Rogers from 1978 to 1984, when Marriott decided toget out of the resterraunt buisness, Saadi (2012).
Once he left the Roy Rogers, Reinemund went to work for PepsiCo’s Pizza Hut division, Saadi (2012). He was hired to be Vice President of Operstions, Saadi (2012). Reinemund would go on to hold several positions within PepsiCo. He held the president and CEO position for the Pizza Hut division, from 1986 to 1991, Pizza Huts Worldwide, president and CEO from 1991 to 1992, PepsiCo, Frito-Lay, head of snack division, from 1992 to 1996, PepsiCo, Frito-Lay, chairman and CEO, 1996 to 1999, PepsiCo, president and chief operating officer, 1999 to 2001 PepsiCo, CEO, 2001 to 2006, and then PepsiCo, Chairman, from 2006 to 2007, Saadi (2012).
Reinemund was being groomed to be the CEO of PepsiCo. There was some worry from the BEA about how he would deal with diversity. The BEA was reassured that Reinemund supported divesity, no one thought that it would be one of his top priorities, Thomas and Creary (2009). Many of the past leaders of PepsiCo focused on the developing the leaders of the company, where Reinemund focused on the diversity and inclusion from the perspective of changing the culture ot the entire organization, Thomas and Creary (2009).
It was in 2000 when Reinemund proposed making diversity a business strategy to help PepsiCo keep up with the shifting demographics in the United States, Thomas and Creary (2009) He was under the assumption that the company could grow into a healthier and more competitive company by pursuing opportunities in the urban and Hispanic markets, Thomas and Creary (2009). “Reinemund realized that each of his buisness had low penetration in markets that had significant ethnic populations,” Thomas and Creary (2009). Reinemund thought that the way to understand the different ethnic markets, that they would need to hire employees of different ethnicity, Thomas and Creary (2009).
Peggy Moorre was promoted to Senior Vice President of Human Resources to assist Reinemund with his diverity plans, Thomas and Creary (2009). Reinemund would also bring Ron Harrison in the to help guide the companies diversity plan, Thomas and Creary (2009). “Reinemund and Moore believed that Harrison’s history of success in engaging a broad cross-section of employees across racial and ethnic divides made him a valuable resource and partner in PepsiCo’s new diversity strategy,” Thomas and Creary (2009). “In partnership with Moore and Harrison, Reinemund refined the three goals and measurements that he discussed with Moore during her interview process, namely 50% diverse hires, parity rate of promotions, and parity rate of turnover,” Thomas and Creary (2009).
The results of Reinemunds diversity plan also saw that “Women and minorities held several of PepsiCo’s top leadership positions including president and CEO of PCNA, senior vice president of human resources, chief health and wellness innovation officer, senior vice president and general counsel, senior vice president of global diversity, and most recent, chirman-elect and chief executive officer,” Thomas and Creary (2009). Reinemund retired in 2006, but retained the position of Executive chairman and chairman of the board until 2007 when he fully retired. Reinemund brougth a diversity plan to PepsiCo and made it come to life with great results.
Gerstner, Parsons, and Reinemund are great leaders that care about the employess that work for them and the corporations that they work for. Gerstner and Reinemund had about the same out look on diversity. They believe that they need to reach the urban and Hispanic markets. With their vision and support from the boards of directors, they were able to transform their respected companies to not only gain the urban and Hispanic buisness in the United States, but globally as well. They both saw massive financial gains in the profit margins. It proves that these two individuals new how to meet the companies shareholdes and take care of their employees at the same time.
Gerstners diversity task forces were a great success and are still used today. It is amazing how one Idea and a great group of leaders can prove to be the key to successs. These ideas only work if you can get the leaders and the employees to buy in to those ideas and concepts. Gerstner was able to get them to buy into his ideas with the help of Ted Childs. It was Childs responsibility to over see the progress of these task forces and to ensure that the individuals on the task forces understood their responsiblities. Gerstner was able to meet all of his diversity goals and build a company that every ethnicity was willing to use or be apart of.
Parsons was able to sustain Time Warner through some tough times and eventually was able to set the foundation for changes in diversity. Though he left the company before it was fully functional, there was already some changes in top levels of the company. Parsons is a figurehead on diversity. He is a black man that has been a CEO of many different companies. Parsons has proven that if you work hard and educate your self that anyone can make it in the corporate world. He didn’t even finish his first degree and got accepted to law school. Parsons went from being a lawyer to a banker and finally the CEO of a media buisness. He is the face of diversity.
Reinemund made his way up the corporate ladder to become a leader in diversity. He worked in the resteraunt buisness, before going to work for PepsiCo. He has worked for them for many years before he got the chance to really make a difference in the diversity of the company. Once he became the CEO of all of PepsiCo, he immediately introduced his diversity plan and made it a success with the help of his board of directors and his Human Resource executive. Reinemund’s diversity plan proved to be what PepsiCo need to reach the markets that PepsiCo was strugling to reach.
All three of these leaders proved that diversity is the key to a successful business. Without a diversity paln they can not reach across the globe to increase their customer base. Divirsity was the reason they were able to reach all ethnic groups in the Unoted States as well. The world is always changing and the growth of diversity in the U.S.and across the globe will shape even more companies in years to come. These three guys have paved the way to successful diversity in a corporations.
References
Canas, K., & Sondak, H. (2014). Opportunites and challenges of workplace diversity: Theory, cases and exercises (Third ed., pp. 73-83). Upper Saddle River, New Jersey: Pearson
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Dingle, D. T. (2008, February). Parsons' time: in an exclusive interview, Time Warner Chairman Richard D. Parsons discusses his business accomplishments, his new role, and diversity in corporate America. Black Enterprise, 38(7), 120+. Retrieved from http:go.galegroup- .com/ps/i.do?id=GALE%7CA175549080&v=miam50083&it=r&p=AONE7sw=w&asid= c5f453ae746731d6516fd72005d4b069
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Saadi, S. (2012, March 12). How I Got Here: Steven Reinemund. Retrieved April 23, 2015, from http://www.bloomberg.com/bw/articles/2012-03-12/how-i-got-here-steven-reinemund
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Steve Reinemund Era." Harvard Business School Case 410-024, August 2009. Retrieved April 23, 2015 from http://www.hbs.edu/faculty/Pages/item.aspx?num=37751