Photo: Shannon Fagan/Getty Images

Corporate America knows how to talk a good game on diversity. But as America’s latest racial reckoning has highlighted once again, it has a long way to go on follow-through. On the latest episode of the Pivot podcast, entrepreneur and CEO John Rice talks to Kara Swisher and Scott Galloway about what companies — tech companies in particular — must do to combat what he terms “third-degree racism.”

Kara Swisher: We have John Rice on the line. John is the founder and CEO of Management Leadership for Tomorrow, a nonprofit that works to empower and elevate Black people and other people of color into leadership positions in order to close economic disparities. John, welcome to Pivot.

John Rice: Thank you so much for having me.

Swisher: You recently wrote an op-ed in The Atlantic, which I thought was great, called “The Difference Between First-Degree Racism and Third-Degree Racism.” Can you talk a little bit about it and what you were getting at?

Rice: I think there’s a real realization in what I call “employer America” that where we are is not acceptable. And I think there’s a thirst for needle-moving actions, and not just talking about problems. And I’d say I’m optimistic. Because I just think that for leaders in this country, there’s nowhere to hide, and I think they’re feeling pressure externally and internally in their organizations.

My thesis in the piece was that what we need to do now is to think about how to increase the cost of racist behavior. And I try to dimensionalize racist behavior in three ways. Our first challenge, when we think about how to move forward on racism, is that we’re not really aligned on what it looks like. We’re pretty clear that doing racist and prejudiced things like calling someone the N-word or discriminating against people openly, or policing Black people differently — that’s pretty clear.

But I wanted to focus on the other two areas that I think are important. There’s second-degree racism — essentially not standing up to racist actions. And then the third category, which I really focused on the most in the piece, is a category of what most people would consider to be institutional racism. This is where we’re not trying to really hurt anybody, but we create the conditions where somebody else’s aspirations are really shattered for their future.

Pivot

Twice weekly, Scott Galloway and Kara Swisher host Pivot, a New York Magazine podcast about business, technology, and politics.

Subscribe on:

Swisher: How do you apply this to companies? I know you’ve advised companies — you’ve advised Vox Media,  I believe, is that correct?

Rice: Yeah.

Swisher: So many people of color have told me that companies get them in there, and then they don’t do training, they don’t change the actual system, and therefore, there’s a high failure rate of making them diverse organizations. What has to change?

Rice: Let me start with some context — painting the picture of the kinds of responses that you get when you’re engaging CEOs, especially in tech.  And I think the context is that they’re clearly not doing what I would call racism in the first degree. The doors are open to these organizations, and no one’s holding people back from getting in. But that allows folks to convince themselves that their organizations are meritocratic. And it also helps them to discount the noise when you hear individual cases of folks not performing the way they should.

So here’s the first problem, which is: We’re in a world where — I’ll use the old axiom, when failure is not punished, failure proliferates. So there aren’t costs to being bad, and then there also aren’t really many benchmarks around what good looks like. And then the third component is that organizations and leaders actually don’t feel they have a clear way to move the needle. And that’s not just internally, but it’s also people on their boards and folks from the outside. The advocates are actually struggling with the how-to playbook. I’ll give you an example, which is when you hear, and I know you’ve heard — we’ve all heard many times, a leader say, “Well, we’d love to move the needle on diversity, on tech talent in particular, but until we address the pipeline issues, there’s only so much we can do.”

But the reality is that it’s not the pipeline that’s small, it’s actually the number of folks that they know is small. So you ask a leader, “Well, how many people of color were at your wedding, or at one of your kids’ weddings so far?” And when you think about the pipeline, Kara, I use the analogy — it’s sort of like the oil business. And in the oil business, you would never wait for the stream of crude oil to explode out of the ground, like in Beverly Hillbillies, or flow right by your office. What you do is you invest, in the case of oil companies, billions, right?

Swisher: One hundred percent.

Rice: You invest in identifying where that oil may be, drilling down to find it, bringing it out of the ground to our refineries. So the key here for how-to, and in terms of the advice I give, is you have to invest in cultivating that pipeline. Set aside resources that will only focus, in your recruiting operations, on cultivating relationships with talent of color, and think about it that way. What you see right now is a focus on identifying jobs, and trying to find people of color who fit those jobs right now. And the reality is, what you have to do is flip the script. You have to invest in cultivating that pipeline, find people of color, great, talented folks, and then find jobs for them — take a longer-term approach. So the framing is wrong, and then the actual tactics are wrong. And all we need to do is tweak our recruiting and advancement machines in organizations so that they work for diverse talent. So it’s not rocket science, but you actually have to have a rigorous approach, a rigorous plan.

Scott Galloway: I think it starts at the top. If you want it to have the most impact, you’d focus on the boards of directors, which would lead to more CEOs of color: 13 to 14 percent of America is black, but in the Fortune 500, there are four black CEOs today. Less than one percent. I realize it’s a complicated problem, but what do you think is going on here? Why do less than one percent of Fortune 500 companies have a black CEO?

Rice: Well,  I will say it is not the pipeline. Okay? It’s not.

Swisher: I’m tired of the pipeline issue.

Rice: Right. But if we’re going to put the pipeline issue to bed and take it off the table as an excuse, we need to look analytically at that pipeline. If you think about the pipeline for tech — just go back to the National Science Foundation data from five years ago — and I’m sure it’s even better today. But with 2 million or so college graduates, 450,000 four-year college grads a year are Black and Hispanic in this country.

If you dig down, there are 100,000 folks of all backgrounds who are getting engineering degrees, B.S.s in engineering — 22 percent of those are Black and Hispanic. And then you look at computer science degrees — 60,000 nationally, and 22 percent of those folks are Black and Hispanic. And math is a similar story. So you’ve got a pipeline of 40,000 Black and Latino college graduates a year who are either engineering, math, or computer science. That’s 200,000 over the last five years, because that number is from 2015 from the National Science Foundation. So with 200,000 you can’t actually build your pipeline? That doesn’t address the CEO issue, but it addresses the argument that we can’t build a pipeline. Actually, it is there. And it goes back to the oil analogy. It’s actually a refinery issue, right? What we’re not doing is cultivating, exposing, and helping to prep that talent to make the transition from what they’re learning in college to what you’re looking for on the job. That’s all happening informally in our networks that are obviously more weighted toward people who are not of color.

Swisher: I’ve never believed their pipeline argument, and I think their focus on unconscious bias — I’m always like, “It’s completely conscious.” I think they sort of give themselves an out, a lazy out, in that way. But one of the things that I’ve heard from a lot of people of color is that HR departments really don’t work for the employees. They work for the company. When people of color or women have an issue, the onus is always on the employee who hears, “You’re not fitting in right.” Everybody feels like something’s wrong with them. So many stories have the same trajectory to me, and it’s never the company that’s the problem. HR is not human resources, they’re company resources. I don’t know what else to call them. How do you solve that? How do you get the HR department on the side of employees?

Celebrate Life With SMART Gadgets!!!

Get Them NOW @ Very Affordable Rates

Click Here to Shop Now

Rice: What Scott was saying — it starts at the top. And it starts with understanding at the CEO level, what is helping the people who are getting to the top? What’s facilitating their trajectory to the top, who are largely white and white male? And then, what’s different for people of color? And this is what I talk about in the Atlantic piece, which is HR departments and the front line parts of each organization. What they’re missing is that the experience for Black and Latino, Native American folks in these organizations is completely different than that of their white peers.

So, as a black male, we spend literally a third of our brain bandwidth, our energy in every meeting of every day, twirling questions around in our head. Do I measure up? Am I viewed as capable? Why aren’t there more people here like me? And those types of questions, again, take away your bandwidth from focusing on the content. And when you’re dealing with those kinds of questions in your head, it also leads to behavior that doesn’t help you advance. You’re less likely to take risks. When people reach out to you, when you’re twirling those types of questions in your head and they’re trying to give you constructive feedback, you’re not sure where it’s coming from a place of building you up or taking you down.

When people are trying to mentor you, you’re less likely to trust them. So, not only are you competing against white peers who are spending zero percent of their day-to-day bandwidth on this, but you’re also more prone to navigate differently. So that’s the essence of the diverse experience in these organizations when you are one of a few. And so the first step is for organizations to actually understand that these things are happening. And then if they’re happening, then you would say, “Well, we need to move beyond unconscious bias training and diversity training. And we also can’t just focus on sponsorship and mentoring.”

What you actually need to do is take a page out of the world of sports. Which, by the way, is the only place in our society right now where if you have talent, regardless of your race or socioeconomic background, you don’t get lost. One of the distinguishing factors that we should bring to the professional world outside of sports, where 99 percent of us are pursuing our career, is high-accountability coaching. The kind of coaching you get in sports, which is distinct from mentoring.

The only way you deal with those types of questions in peoples’ minds that I mentioned is actually to have the frequency to engage and get the kind of personal, under-the-surface relationship with folks in the organization to understand what they’re dealing with, and then to provide practical advice for navigating an environment where there is a critical mass of diverse talent. So you actually have to have different interventions: coaching, plus mentoring, plus sponsorship, and those would come out of a better articulation and understanding of the underlying problems and the underlying drivers of where you are. And that’s how you would solve it. It’s just like any other problem in business.

Swisher: I have one final question. What advice would you have for white executives and board members?

Rice: It’s twofold. The first thing I’ll do is ask them, “Do you have a strategic plan overall for your company, for the next three to five years?” Of course, the answer is yes. “Do you have one for diversity and inclusion?” And they’ll say, “Kind of.”

And I’ll ask them, “Is it as comprehensive as your overall strategic plan?” And they’ll say, “No.” And I’ll say, “Well, then how can you possibly conclude that you’re taking your best shot?” So I’ve really challenged them to unpack what they’re doing currently and try to encourage them to elevate the level of rigor around their approach to diversity, so that approach to diversity doesn’t compromise excellence, and doesn’t become a self-fulfilling prophecy. That’s the first thing, and the second thing if I may, or if I have time, can I give one more piece of advice?

Swisher: Yeah, please.

Rice: Another piece of advice is when I get the question, Kara, I hear, “We’re really making the effort to hire more diverse talent” — and this gets back to the CEO pipeline, Scott. At the mid and senior levels, I hear, “When we bring people in, they’re A players on paper. And for some reason, when they get here, they’re B and C players. They’re not performing at the levels that we would expect.” And so, the advice I give them is to understand that.

I say, “Well,” and I’ll do this with a smile on my face, I’ll say, “Do you like to dance?” Right? And most white male executives, not all, okay, but most white male executives will say, “Well, not really.” I’ll say, “Well, those few occasions …”

Galloway: That is so unfair.

Rice: Well, okay, there we go. So, I’ll say to them, there’s a few occasions where you actually have to head out on the dance floor with people who are important to you, whether it’s somebody’s wedding or it’s a corporate event. Walk me through the feeling in your heart and your mind that you have as you’re heading out on the dance floor, right? And what I will get in the vast majority of cases are a few adjectives, okay? “Awkward, zero confidence …”

Swisher: Yeah.

Rice: It’s like Southwest Airlines — “Wanna get away?” And I say to them, “Okay, well, the good news is, is that your confidence and your level of dancing is not ever going to hold you back from your career standpoint. But if you think about it, when you are one of a few people of color, the words that you’re using to describe how you feel on the dance floor are exactly how we feel in every meeting of every day of our careers.”

And so, when they get that and sort of feel the visceral understanding of what it’s like, then we can move onto a set of action steps that they’re much more prone to buy into, because they understand the problem at a more granular level.

Swisher: Well, you’re being very kind.

Galloway: My solution to the dancing problem is vodka.

Swisher: Okay, Scott. Do you have any more questions for John?

Galloway: What piece of advice would you give to a 25-year-old person of color who’s ambitious, who wants to be a CEO? What one piece of advice would you give them in terms of their approach?

Rice: The one most important thing that I would tell them is to study the people who are getting to the top and try to analytically understand what the bar is for the people who are getting promoted to those senior levels. And that bar is going to include what they are really good at from a skill standpoint, it’s going to include what they’ve done from an accomplishment standpoint, and who’s been leaning in on their behalf, right? You have to understand what the bar is to get to the next level, and ultimately what the bar is to getting to the senior level. And in our organizations, we don’t tell you what that bar is. We don’t tell you what you have to demonstrate. So, you have to look at the people who have gotten promoted to those levels, study them, and then articulate, well, what have they done? And then emulate that. Compare yourself to that success model, and it’s probably not going to be a person-of-color success model, but that’s fine. And then you’ve got to go out and close that gap. And when it comes to getting senior, it may obviously take several years, but you have to take one step at a time in two-to-three-year increments for every promotion opportunity you have over the course of your career.

Swisher: All right, John, this is really helpful. Thank you so much.

Pivot is produced by Rebecca Sananes. Erica Anderson is the executive producer. 

This transcript has been edited for length and clarity. 

The Pipeline Isn’t the Problem