Difference Is Power

"No matter who you are, you're going to have to work with people who are different from you. You're going to have to sell to people who are different from you, and buy from people who are different from you, and manage people who are different from you," says the thin, balding, black guy at the front of the auditorium, who demands to be taken seriously. "This is how we do business. If it's not your destination, you should get off the plane now."

This is management hardball, as well as gripping theater. Even though it's 9 PM (13 hours into their workday), the 60 newly promoted or recently hired first-level managers at IBM Learning Center, in Armonk, New York, are rapt. They understand that they underestimate J.T. "Ted" Childs Jr. at their own risk.

At least twice a month, Childs, IBM's vice president of global workforce diversity, lays some version of his stump speech on managers who have flown in from across the country. The speech is not standard corporate fare. Childs's lectures, uninterrupted and captivating, last for two hours. He brags, harangues, warns, and chides. During the third hour, he typically takes questions -- then leaves his trainees to buzz among themselves into the night.

His lesson? Accepting, encouraging, and promoting diversity at IBM and beyond is good business. "We've moved beyond the moral imperative to the strategic imperative," he instructs. "What I want most is what's hardest to get: for business to see the link between diversity and competitiveness. Because if we don't understand that, we're not going to win."

Ted Childs is perhaps the most effective diversity executive on the planet. IBM has long been lauded for its progressive employment policies. And for just as long, it's also been known as a place where mostly white guys in mostly starched shirts hold all the cards. Since 1995, though, IBM has acquired a different look, largely because of Childs's strategic campaign to overhaul the company's practices pertaining to hiring and promoting women, ethnic minorities, and other groups that are underrepresented at IBM.

Between January 1996 and December 1999, the number of women executives at IBM worldwide has soared from 185 to 508. By the end of 1999, the number of minority execs working for IBM in the United States hit 270, up from 117 in 1995. "I'm intensely proud of that," Childs says. Both women and ethnic minorities are still scarce among the company's top 50 managers. But in March, for the third time in 15 years, Catalyst, an advocacy group for women in business, awarded IBM with a corporate-achievement award.

Childs, 55, grew up in Springfield, Massachusetts. He aspired to study at Amherst College, but his mother, a schoolteacher, and his father, a chemical analyst, insisted that he enroll at a predominantly black school, as they had. "You need to be in a dormitory with black boys," his mother said. "You need to have that experience at least once in your life." Childs went to West Virginia State College, which is largely black, but he ultimately helped integrate the school's racially divided social life by inviting both black and white bands to perform at the annual homecoming dance.

These days, Childs sports a purple baseball cap with his monogram and the initials of his college fraternity, Omega Psi Phi, on it. Above his coat pocket are three adornments: a fraternity pin, a red AIDS ribbon, and a multicolored orb that symbolizes global diversity. Together, they reflect what is most important to him -- the essence of Ted Childs.

Childs spoke with Fast Company about the importance of corporate diversity and about his strategy for changing the face of IBM.

What's the tough-minded strategic case for diversity?

I've been trying to refashion the discussion about diversity and equal opportunity. This started for me back in 1980, when I took a leave of absence from IBM to work as executive assistant to Benjamin Hooks, who was head of the NAACP at the time. That was a very profound experience for me. I watched executives from large consumer companies meet with Ben and kiss his ring. They'd get photographed with him, then send those pictures to magazines like "Ebony" and "Jet."

Eventually, I came to understand what those executives were up to: All communities -- African-Americans, Hispanics, women -- have purchasing power. In America today, the number of women-owned startups is increasing faster than the number of startups in general. Minorities in the United States have $1.1 trillion in buying power, which is roughly equivalent to the world's seventh-biggest GDP. By 2050, the United States will be 50% white; 25% Latino; and 25% Asian, black, and other minorities. So it's not a bad thing if those communities view a company as a good place to do business.