Difference Is Power

When I returned to IBM, people patted me on the head and said, "That's nice, Ted." Back then, we were selling big boxes to big companies, so we didn't really touch consumers and small businesses. But personal computers started getting us into people's homes and into small businesses -- many of which were owned by ethnic minorities, women, gays and lesbians, and the physically handicapped. That evolution presented an opportunity to have a different sort of discussion about diversity.

IBM does business in more than 160 countries. And global companies like IBM won't do very well for very long if its employees all look alike. Diversity of thought and culture and geography and race and gender enables us to bring the best solutions to our customers. If we don't reach out and make diversity a competitive advantage, it will become a liability. If customers go inside our company, they should see people who look like them at all levels.

So this is about protecting jobs. But it's also about getting and keeping talent. This insatiable hunger for talent must be reflected in our diversity effort. Workforce diversity is all about getting talented people from every group to work for you. We have a great opportunity. We can't afford to keep people out.

I had seen the opportunity in diversity long ago, and about four or five years ago, I took that message to two plants in North Carolina to see how white men there would react. Those men had never heard diversity discussed that way before -- as something that they could benefit from and that would protect their jobs if they supported it.

Most people think of IBM as a historically "button-down" culture. Is it hard to make your arguments in the context of such a conservative past?

That straight-laced reputation is a misconception in many ways. I can look back 75 years and find an appreciation for the power of diversity inside IBM. In 1924, company president Tom Watson Sr. created the first Quarter Century Club -- a club for people who had worked at IBM for at least 25 years. Among the 42 eligible members were three women, all of whom had worked at IBM since at least 1899 -- 21 years before women's suffrage. One African-American was also in the club, having been an employee in 1899 -- 10 years before the founding of the NAACP. Our hiring policy for professional women in 1935 was equal pay for equal work. We had a woman vice president in 1943. We hired black salesmen -- salesmen! -- in 1946.

When Tom Watson Jr. became CEO in 1956, he hosted a meeting of senior managers in Williamsburg, Virginia. He had recently received a letter, which was more than four pages long, from a man who wanted to be an IBM salesman but couldn't get hired. The letter said something to the effect of "I'm a graduate of a big-10 university, and I have a law degree from an Ivy League school. After several interviews, I finally said to the last man who interviewed me, 'Look, can you tell me why you fellows won't hire me? Because I have to give my wife an explanation. Is it my Jewish name?' And, of course, the gentleman said, 'No, we just think you're overqualified.' "

After reading the letter to senior management, Mr. Watson said that he never wanted a person's race or religious beliefs to factor into who gets hired and who doesn't. He just wanted people who could do the job. He told the managers in the room, "I want to know who on our team was involved in this situation, because whoever was shouldn't work here anymore."

That heritage was the foundation for what we're doing now.

Heritage is one thing, but progress is another. You've spent five years on a campaign inside IBM ...

Real change takes time. In 1995, eight executive task forces were assembled -- one each for African-Americans, Asians, disabled people, gays and lesbians, Hispanics, Native Americans, white males, and women -- to look at IBM through the eyes of that constituency. Executives from each of the groups led their respective task forces. We also assigned a senior vice president -- one of the CEO's direct reports -- to sponsor each group.

The task forces were charged with answering three questions: What is necessary for your group to feel welcomed and valued at IBM? What can we do, in partnership with your group, to maximize your group's productivity? What can we do to influence your group's buying decisions, so that IBM is seen as a solution provider? I chose July 14, Bastille Day, as the task-force launch day because it's considered to be a day of social disruption. We were looking for some constructive disruption at IBM.