Why Diversity Matters
SPECIAL EPISODE: Diversity Matters in the Middle Market. Brought to you in collaboration with the Association for Corporate Growth (ACG). In today’s episode, we are joined by Thomas Bohn, President and CEO of the Association for Corporate Growth (ACG), and Martin Okner, President and COO of dpHUE and past chair of the ACG Global Board of Directors, for a discussion around the key elements that need to be cultivated within an organization in order to attract and retain diverse talent. These include mitigating biases in the hiring process, facilitating open conversations, and maintaining accountability at all levels. Diverse talent is out there if you’re willing to put in the work to find it.
SPECIAL EPISODE: Diversity Matters in the Middle Market. Brought to you in collaboration with the Association for Corporate Growth (ACG).
In today’s episode, we are joined by Thomas Bohn, President and CEO of the Association for Corporate Growth (ACG), and Martin Okner, President and COO of dpHUE and past chair of the ACG Global Board of Directors, for a discussion around the key elements that need to be cultivated within an organization in order to attract and retain diverse talent. These include mitigating biases in the hiring process, facilitating open conversations, and maintaining accountability at all levels. Diverse talent is out there if you’re willing to put in the work to find it.
Key Points From This Episode
- Some key statistics which highlight the benefits of a diverse workforce.
- The trajectory of diversity in the consumer goods industry.
- Why our society is far behind where it should be in terms of diversity within organizations.
- How executives need to change their thinking in order to ensure they build a more diverse team.
- Examples of how to create an inclusive company culture.
- How inherent bias exists in the hiring process, and the tool ACG uses to mitigate some of that bias.
- What Marty and Tom see as the most important elements of company culture.
- Tom shares the life lessons he and his family have learned through sharing their home with a person of color.
- Why empathy is a prerequisite for being a good leader.
[00:00:02] ANNOUNCER: Welcome to the Diversity Matters in the Middle Market Podcast, where industry leaders share their compelling growth stories and the unseen challenges they have overcome. Our goal is to inform and inspire our listeners to take action and make diversity, equality, and inclusion a pillar of your organization. This is a production of the Association for Corporate Growth, ACG, and Connection Builders.
[00:00:24] AD: Hi, everyone. Welcome to an episode of the Diversity Matters in the Middle Market Podcast. I’m your host, Alex Drost. Today, we’re joined by Thomas Bhon, President and CEO of the Association for Corporate Growth, ACG, and Martin Okner, President and COO of dpHUE, a consumer products and beauty company. Marty is also the past chairman of the ACG Global Board of Directors, Marty and Tom share their views on why diversity matters, both from a personal perspective and a business perspective, and the steps that we can take to build a more diverse culture. All right, let’s jump in.
Marty, Tom, welcome to the Diversity Matters in the Middle Market Podcast. Excited to have you here today.
[00:01:06] TB: Thanks for having us.
[00:01:06] MO: Thanks for having us.
[00:01:08] AD: Before we jump in, why don’t we start with just some quick intros here so that our listeners know a little bit more about each of you. Marty, why don’t we start with you?
[00:01:16] MO: Sure. I’m Marty Okner, President and Chief Operating Officer of consumer brands company, dpHUE. We’re a manufacturer, distributor of haircare products that keep your color fresh between salon visits. I’ve been in the consumer goods industry for about 25 years. As we get to the podcast, you’ll soon discover that’s one of the core reasons why I’m so passionate about diversity and how diversity matters in the middle market.
[00:01:41] AD: Awesome. And Tom?
[00:01:42] TB: Yeah. Good afternoon, Alex. Great to be here. Good to see you, Marty. I am not one of Marty’s haircare product customers. I’ve been an association executive now for going on 20 some odd years as a CEO, mostly focused on driving high performing growth through lagging association. Critical topic, particularly in the world we live in today, so I appreciate you inviting me on to share my thoughts.
[00:02:10] AD: Awesome. Thank you and excited to have this conversation today. Now, let’s talk for a minute. We are coming to you talking about diversity, and we are three white males talking about diversity. I think that’s an interesting point to highlight to begin with. Just to give our listeners a little bit of backstory on this, and where this entire project and kind of this conversation started from, is through the ACG or Association for Corporate Growth Network, we have an initiative around diversity and we think it’s very important to really focus on driving greater diversity across the organization. We all were talking, “Okay. Well, how do we do this? What does it mean? Why is it important?”
Over the last two years, we’ve had a number of conversations that’s really highlighted, one, why we care about it, why we think it’s important and really what it matters to all of us. While we may be white men, we are typically considered more the majority than the minority, I think it’s a really important place for people like us to become advocates and to really push into trying to drive that. All of that said, our goal for the conversation today is to really dig in and unpack that a little bit, and just try to understand that a little bit better. To tee us up here, I’m going to start with sharing a couple of statistics that I think are really important.
Then Marty and Tom, let’s peel these apart, let’s talk about them. Then we can get into some of our own experiences and our own thoughts around it. Number one, groups that are today seen as minorities are projected to reach majority status in the 2040s. I’ve seen everywhere from 2042 to 2048. This specific report says 2044. I want to understand that there is a changing demographic going on in this country today. 48% of Generation Z are racial or ethnic minorities. The up-and-coming generation is almost majority, minorities.
Diverse companies tend to enjoy 2.3 times higher cash flow per employee. Diverse management has been shown to increase revenue on average by 19%. Gender diverse companies are 15% more likely to be industry median financial returns. Really, I think a very important one, the last one here, more than three or four workers, surveyed workers, prefer to work for diverse companies. Now, all of those make a lot of sense, and I think we’ve heard those from time to time in other places. But what do they really mean to you? Maybe, Marty, I want to start with you because you’d mentioned some of, in your business, and your industry and some of the passion you have behind that. Why don’t you just give us some reaction to that?
[00:04:52] MO: Sure. I mean, I’ve been in the beauty industry now for close to 20 years and 25 years in consumer goods overall. One of the things that I think the consumer goods industry did a spectacular job with is really being an early pioneer in terms of really championing diversity, both starting with gender diversity, and then really diversifying in terms of race. Also in terms of sexual orientation. I think that’s one thing that the industry really started to latch onto, kind of in the late ‘90s, I would say. That’s really when it really started. I mean, I think there was a lot of talks about, “How do we do this in a really effective way?” before that but as we gotten to the mid to late ‘90s, I think everybody realized, “Wait a second. 40% of the consumers out there buying our products are ethnically diverse, right? And 85% of all purchases of most consumables are made by women.”
As you start reconciling that, and you’ve got 20 white guys in the room, basically trying to make decisions, we weren’t getting it all right. It became not just the right thing to do for business, it became the right thing to do, and it really became a way of how the industry operates, and how the industry really looks at diversity and talent. I think, also, going forward more traditional hard line and soft line consumer goods into beauty category almost 20 years ago, that category actually was even far ahead of the curve in terms of thinking about, “Ddo we have the right shade range to satisfy our consumer base? Do we have representation in the C-suite to figure out exactly how do we get this right?”
I would say, working side by side with women, I mean, I’m one of three men in our entire company, right? So working together side by side with women for the better part of 20 years, I mean, I’ve just learned so much. I’ve seen the hard-line business results that diversity represents. I’m just very proud to say that in the company of 25 people, we have four people of color. While that’s not a huge number, it continues to grow. Actually, three out of the four last new hires that we had were people of color, and I just feel so proud of that. I think it’s something that the industry really needs to embrace more broadly across the middle market, and across middle market private equity, because I think, very soon, you will realize the business results and the new deal making opportunities that that can present.
[00:07:29] AD: Marty, I want to jump in on there because I think there’s a really important point you’re making there. Tom, I want your reaction, some of your thoughts around this. Talking specifically to those that are in private equity in particular, but those that are in company management, whether it’s your portfolio company you’re advising in, or you’re sitting in the C-suite yourself and actually driving the decision making. You had pointed out that the consumers, and in the beauty industry, I understand that they may be skewed compared to other industries. But across the board, many industries back to the statistics that minorities, what today are called minorities, are going to become majority. That’s the consumer base. That’s who’s buying your product. And if you don’t have that representation at that decision making, at the consulting level, at the senior levels to really understand that, you’re going to miss the opportunities, you’re going to miss things behind that. Is that a fair way of looking at it? Tom, I’d love to get your thoughts around that.
[00:08:25] TB: I’d take it even back a little bit further than that. Because to me, the fact that it’s 2022, and we’re having this conversation still is a colossal societal failure. I think it goes even beyond the fact that it’s good for business. It’s good for society. The fact that we are not taking into account at high levels of corporate leadership, 50%, 48%, whatever you mentioned before of the diverse world we live in and incorporating that thought process, just by definition is going to be somewhat different, right? Because the reality of it is, is that, I don’t think any of us approach our hiring process, hopefully most of us don’t, in a deliberately racist way. I think a lot of it has to do, you just don’t know what you don’t know and you’re not surrounded by people as diverse just because of how life happens, and where you grow up and how you grow up.
To me, I think, we were laughing about this when you first reached out and said, “Hey! Will you guys be part of this podcast, this webcast?” Both of us being white males, some of us being older. I think I’m older than Marty unfortunately. But to me, if we’re not part of the solution, there’s a bigger problem. I think it’s an untrue testament to say that this is a people of color or minority issue to deal with. This is an issue for all of us to deal with. And yes, there are layers of reason in there. It is better for business, it is better for the market, it is better for the decision-making process. But ultimately, it’s the right thing and it should have been the right thing infinite times ago. So here we are now, as usual, like many things in our world trying to figure it out and put the train back on the appropriate track.
[00:10:17] AD: Tom, I want to hit on something. Marty, I’d love to get some of your thoughts around this. You had said, for most companies, and I hope this holds true, that the hiring process is not intentionally eliminating minorities, intentionally trying to produce a homogenous culture of everyone who looks the same. I think that’s true. I don’t think you’re going to be hard pressed in today’s world to find people who say, “Well, no, we intentionally don’t hire minorities.” However, you don’t know what you don’t know, and oftentimes, we just want the best talent. “I just want to hire the best person. I just want to get the best person,” even though the best person tends to sometimes always be a white male. Marty, how do you think through that? How do you process that as an executive?
[00:10:58] MO: I would respond to that in a couple of ways. Number one, I think the best candidate is a relative concept to what you might think, as an executive, you need, right? The reality is, we all have blind spots as executives. I think one of the things that Tom, circling around with Tom, yeah, sure. It’s not all about the numbers. I would completely agree with you. It’s about doing the right thing, but doing the right thing as an executive. We’ve all experienced this as knowing that we all have blind spots, because we all do. I think our bias that we might have and where we need to really break this down in the C-suite, is that, “Oh! I just want to hire the best candidate,” and that best candidate happened to be a 45-year-old white male. Fine, if that’s the case, but I would challenge any executive who thinks that at face value to go one step deeper into how they’ve actually recruited in scope or scoped this role and then recruited for it. Because I think in that sense, there’s an inherent bias that basically develops from the formative stages in that role and what you’re thinking about how you need to fill that role.
It sort of lends itself to the path of least resistance in a lot of cases in companies. I think that’s where we as leaders need to challenge our organizations and say, “Hey! Now, it’s not just about filling the business void here. It’s about looking at the bigger picture. Do we have the right amount of diversity on our team? Are we embracing new concepts? Are we embracing new ideas? Are we open to new paradigms? I think that’s where, when you really take it at a much higher level, you’re able to break down a lot of those biases that we might have going into the process, even though – we might say, “Of course, I would never discriminate,” or, “I would never think differently about a candidate of color versus a candidate who is white.” Yes, that might be true, right? But you have to go beyond that and you have to really look at why we’re getting a certain profile candidate. And until you change that, you can’t move things forward.
I think one of the things that we’ve experienced in the beauty industry and in consumer goods is that, having diverse candidates from a gender perspective, having diverse candidates from a ethnic standpoint, having diverse candidates in terms of sexual orientation, it’s just normal. It’s how we do business. It’s like, as you as you think about that, it’s just – it’s such a, I would say the beauty industry is way far ahead and it feels great, because it actually takes a lot of pressure off in a sense that there’s a lot of diverse candidates out there. And if somebody can’t find one, then, shame on you for not looking because they’re there.
[00:13:39] TB: Marty was the one, again, as a white male who came to me and said, “Hey! I think we need to start really being mindful at ACG about what we’re doing from a DEI perspective, and really put resources and time, and again, a focused effort on it.” That’s the type of change and the type of leadership we need. But I think that when it comes to individual organizations, and I’ll use ACG as an example, middle market companies, there has to be a deliberative process. It’s one thing to say, Marty was referring to, as a lot of people will say, “Yeah, we’re all about hiring diversity. If we get a good candidate, we’re there.”
Well, it’s not as simple as that, because you take your typical family-owned middle market business. They are a product of the world that they have grown up in. And unfortunately, in America, if you look around at your neighbors, they pretty much look a lot like you, with minor variations depending if you live in a large city like New York, where it could be anything anywhere anytime. We actually went ahead and took a step forward that we think it’s beneficial at ACG. We partnered up with parity.org. It’s a fantastic organization, parity.org.
Parity’s done a phenomenal job, because they really help you focus on bringing the practice of looking at diverse candidates into your business and into your personal life without making it something that is overwhelming or onerous to agree to. The pledge, I took it personally and ACG took it and Marty was a big part of pushing this forward on the board level. It basically says for any senior level positions, you will look at at least one or two in each category, women and people of color as serious candidates. You will find them before you actually make an offer. So it doesn’t say you have to. It doesn’t say you must. It doesn’t require you to get particular ratios or anything like that. It simply requires you to take the effort and to do the work to look. That gets back to what Marty is saying, is that if you can’t, there’s something wrong with your process, because they’re there, they’re willing, and very often that they are the best choice candidate. We’ve taken that and that’s become really important to us overall, in terms of how we look at hiring talent and go for basis.
The other thing we’ve actually put in place with Parity is we’re building out an actual dashboard, a middle market dashboard that looks at kind of some of the diverse measures within the middle market, because it’s an area we struggled with. But again, think about the typical business that sits in the middle market; family-owned, originated, been there possibly a long time. It kind of pertains to maintain that flavor, regardless of where they were simply because of where they started. How do you help them reposition that conversation without a way that makes it feel like you’re attacking, or trying to guilt them or other types of things? Because that never works, right? You have to approach it from a, “Hey! This is a way to look at this. This is good for everyone involved. How about this?” And they’re like, “Oh! Wait. You’re not forcing us?” “No, we’re not forcing you.” “You mean, we just have to interview?” “Yeah, you have to interview.” Then it’s crazy what winds up happening. It starts happening and they look back and go, “Wow! We didn’t even realize how fruitful this could be.”
[00:17:05] ANNOUNCER: Today’s episode is brought to you by Connection Builders, helping middle market professionals connect, grow and excel in their careers.
[00:17:13] AD: I want to peel this apart. I like this conversation a lot. I want to go back to something you said, Marty. The best candidate is relative. You also had mentioned that we all have blind spots and biases. Let’s just think through this for a minute. I’m in a position of hiring someone, I want the best candidate, I want to go interview. I think step one, I love Parity and the idea of, “I’m going to go and find this candidate. No matter what, I’m going to make a commitment that I’m going to go find candidates to interview.” Now, I interview. Let’s say, I get myself to a place where at the very least, I have a diverse set of candidates that I can interview. What I think is, the next layer to keep in mind and this is where it’s really tough. When you’re hiring, when you’re making a decision of the best candidate, how do you really measure it? How do you really, really tell who’s the best candidate right? There’s not a test. There’s no uniform exam. There’s no way to say, “Oh! I know this person’s going to do it.” It’s intuition. It’s gut feeling. It’s based on some of their experiences. But come on, I mean, experiences, it shifts, right? We all know how many jobs have we started that you didn’t know what the heck you were doing on day one. You just kind of learned as you went, right?
When we say the best candidate, when that’s kind of the terminology, I think we have to remind ourselves that the best candidate is very much a subjective thing. It’s very much a subjective decision. If we continuously pick the best candidate as someone who looks very homogenous within the organization, then maybe there is a blind spot. Maybe there is a breakdown in the process. Maybe there is something that we need to do some reflecting on and reassess how we’re handling that.
[00:18:43] MO: For sure. I think it also comes down to company culture too. Because at the end of the day, it’s one thing to attract and recruit diverse talent. It’s another thing to make sure that everybody feels like the playing field is equal. Knowing that you walk into a meeting and you get down to business, and everybody feels comfortable and people are embracing the diverse points of view, I think that really needs to start at the leadership level, not just in practice in the organization. But Alex, from your earlier point about the right candidate being relative and what I was sharing before, cultural fit is always a really key part of any hiring decision. Beyond the resume, what culture do you have, and how will an individual adapt in that culture? I think that also needs to be a conscious decision on the part of management to make sure that when you bring in diverse candidates that there is a runway for growth, the same as anybody else, people feel comfortable in meetings that they can share diverse points of view, and they’re going to be embraced, that they’re going to be challenged too, and challenged to also expand and grow their skill set and whatnot.
That’s something I think – that’s why all of us get up in the morning, right? If I didn’t learn something every day, job would be kind of boring, right? I think everybody kind of wakes up with that mindset, and I think making sure that you embrace the right culture to bring in diverse talent, you’re going to improve in your retention numbers, you’re going to improve in people’s professional development in the organization overall, because I think by wiring your organization to embrace diverse points of view, and by wiring your organization to embrace dissension and thinking, you’re going to make better decisions as an organization. And those individuals who you’ve brought in that maybe diverse themselves or have a diverse point of view, they’re going to feel respected and they’re going to know that even if we decide to go in a different direction, that their view is very much heard and taken into account. Or we might run with it and that feels great in the other way. And then there might be somebody who has a more traditional point of view that we went in a different direction. You have to respect both sides of the coin, and I think that’s where you really have to develop that balance and the culture.
[00:21:09] TB: Yeah. I mean, Marty, you took the words out of my mouth, it’s all about culture. I would hire someone who better fits our cultural dynamic than skill set any single day. I think that’s the other kind of – in terms of how do you put it into practice is we’ve now, at the senior level, started implementing a cultural instrument survey, if you will. That kind of gives you a better understanding of who the person is. Because you think you can get a sense when you interview them, but those are just glimpses in short periods of time that really don’t give you a true understanding of what motivates that person. I think you can miss an awful lot, because some people, look, they don’t sit in a process like this, in an interview and do very well. They have a harder time articulating in a live setting what they would like to do, how they could do it, how they fit in. I think it allows an opportunity to really make it less biased.
Look, hiring is always biased. It’s almost impossible not to be in any sense of the word. Even if you look at union jobs where they take tests. That’s inherently biased. If you can do better on a test than someone else and rank it, it’s all – it’s a matter of how do you mitigate that and take some of that out? But I think Marty hits the nail on the head when he mentions culture. It’s all about culture.
[00:22:29] AD: Let’s dig into culture for a minute. I think that that’s a really important element here. Marty, you had pointed to culture and if you create a culture that will be accepting of diverse talent, that will make sure that diverse talent feels welcome, that a basis of that, I think if I heard you right, is to understand how to manage through dissenting point of views. Manage through being in a room where not everyone sees it the same way, and thinks the same way and communicates the same way. Which in general, as a human is just really hard, right? Like we all see things our way, and when someone doesn’t see it the same way, like we’ve all been in those like these discussions with people where we’re just like, “No, you’re wrong.” Even though it’s purely subjective, that we think we’re right, because we have our own experiences. And when we talk about creating a diverse culture, part of that is because we want diversity of experience and thought that helps us come up with better decision making. That means that I have to be comfortable with that in culture. What can organizations do to ensure that their people are comfortable in that environment? How can they continue to move their team farther in that direction?
[00:23:34] MO: There are basically three things that I look at. Number one is trust. Actually, four things really. It’s really about trust, and you have to you have to trust. In order to trust, you have to let your guard down. As a leader, you need to let your own guard down and embrace dissenting points of view, right? The second piece, and sort of related to trust is really alignment. When you gain alignment, one of the things that I find beneficial in a company that really embraces diverse points of view is gaining alignment in and around data, and having data really be a key part of the culture. Because at the end of the day, the numbers are the numbers, right? And we can all have different points of view on them, but it is a grounding principle in the form of business.
I think related to that, in terms of reinforcing the trust, and reinforcing the alignment around the numbers, everybody really needs to be respectful when somebody else is speaking. It sounds very remedial. At the end of the day, kindness counts. One of the things that we have no tolerance for in our organization is somebody who’s a bull in the China shop and rude. There’s zero tolerance for it. I can proudly say that nobody in our organization acts like that. That in and of itself reinforces a trust factor, because nobody feels attacked when they bring up a point of view. That’s something that we need to be super, I mean, we’re rigid about it. I think that’s something that’s really key.
I think the third principle is accountability. We have to have that shared accountability. The fourth is in and around execution. If you have trust, alignment, accountability and execution, in a culture where you have kindness, and you have really good data, it doesn’t really leave the door open to somebody hanging on to something irrationally, or a pet project that they really feel passionate about. Because there’s something in there that’s going to cancel that out. I think, in that, we as leaders can help reinforce that positive culture by really instilling that approach towards our leadership.
[00:26:01] AD: Tom, let me ask. I want to build on what Marty just said there. This idea of we have to have trust, alignment, accountability, and then ultimately execution around that. We create this culture where people feel welcome, they feel like they can voice their opinions. How do you react to that? How do you think about it? If you run an organization, both with a large team, but also a very large membership base, and everything you do people care about and have opinions about, everyone has their own opinion, how do you react to that?
[00:26:33] TB: Have you been sitting in my staff meetings, Alex? No, I think – I would probably add a couple others to Marty’s list. Transparency would definitely be on that. Having fun, that’s the kind of the flip side of what he’s saying, bull in the China shop, bully types of personalities and mitigating that. We actually put together a Culture Committee. We took it so seriously to look at how do we imbue the spirit of the things that are most important to us? We actually put together a list and had the team agree on it. What was most important? Having fun, transparency, commitment to excellence, all those types of things. We try to touch on all those types of things through this committee, that’s led by our Chief of Staff, and really try to do different things that enforce it. Or not enforce it, kind of help build it. And it helps, because we’ve got a couple of challenges. We got, one, we are an entirely mobile team. We’re in many different states all over the place and it’s an incredibly tough job market.
Our goal is to minimize any turnover, at least where we don’t want the turnover to happen, and make sure that we keep those types of folks. We really try to work on that, and look at that and to make sure that we’re walking the walk. Again, I think a lot of these things are great and where good companies become great companies is not – yeah, that’s important, but how do you actually make that happen? How do you measure that? I think what you measure is what gets done. You hear that time and time again. That’s kind of all of the types of things that we look at. In my case, 360 evaluations and making sure that people are truly doing the things that are important. I get measured from my team. I get measured from the board. I measure the team. It kind of all goes back and forth and around so that we’re all saying the same.
[00:28:47] ANNOUNCER: Today’s episode is brought to you by the Association for Corporate Growth, the premier M&A deal making community with a mission to drive middle market growth.
[00:28:57] AD: The culture idea and this idea of, as a leader speaking, if I’m in a position that I’m leading the culture, whether I’m actually the top executive or just someone who has influence across the organization, it is my job to really make sure that I can build this culture that that has this accepting, this nonjudgmental, this ability to deal with dissenting points of views. All the elements that we talked about and I like kind of the good-to-great, how do companies really go to that next level? It is building that culture.
For us to do that as individuals, if I want to be an advocate and be really creating the right culture, I personally believe that you have to really believe that in yourself, right? It’s like the old saying goes, it’s the private battles that matter the most, right? What are you doing in your personal time, that the things that you do, that no one else has a clue about that makes you who you are, and that’s what allows you to show up and make sure that your team can do that, and be there and be that advocate?
All of this to lead to, I’d love to start with you Tom, why does diversity matter to you? Not for our business, but like you as Tom, why does diversity matter? Because I think if we’re clear, if we know into ourselves why it matters, it allows us to show up that much easier and really help others embrace that thinking as well.
[00:30:15] TB: I think to me, it matters because I’ve seen it firsthand and it’s personally impacted my family. We have a – we jokingly call our bonus son, who is a person of color who entered our life about 10 years ago, and has been living with us most of the time, since then. He has an incredible mom. This isn’t The Blindside type situation. He had an incredible support structure, but he integrated into our family for the benefit of making his world a little bit more accessible in terms of schools, and commuting and those types of things. It helped our family because we have an only child, and a son, and he was seeing one aspect of the world. They really come from two different places, socioeconomics, all the rest.
I watched this dynamic unfold, and I realized, and – sometimes things like this just forced you to step back and think and see. I realized how much richer everything was when you’re able to experience that type of thing and kind of get those multiple perspectives out there. My son, obviously has grown up in a pretty comfortable world. Well, now all of a sudden, he’s talking to someone who saw other perspectives, right? It broadened his horizon, it makes him understand where people come from, it makes me understand where people come from, and how and why.
I mean, it was an interesting Thanksgiving. I had at our Thanksgiving table, I had a New York City police officer, who I adore, is one of the smartest people, committed people I know. And I had someone who was deeply committed to the Black Lives Matters thing and they were talking about some of this stuff. And guess what? 99% of what they discussed, they agreed on. But we allow all the dynamic around us of the craze of social media, and the craze of cable news, those things are designed to draw attention. The more inflammatory, the more sensational, the more out there, the more provocative, the angrier it is, the more views they are going to get. So guess what they’re going to keep doing. They’re going to keep fueling that and fueling that. I realized some time ago that that wasn’t part of the world that I wanted to participate in. I’d rather participate in the world which I do with people like Marty, who are like, “Let’s bring common sense solutions to real issues, and let’s not make everyone the bad guy.”
[00:32:51] AD: I love that story. Marty, let’s go to you for a minute. Why does diversity matter to you?
[00:32:56] MO: For me, I just remember, I’ll never pretend to empathize with the struggles that people of color or anyone has walked through. I mean, it’s a very personal and a very deeply personal journey. What I can empathize with is being shut down. I remember, interestingly enough, it was actually one of the first ACG events that I went to about 11 years ago. I had just left Revlon. I was the director, running a strategic project, reporting to the Chief Operating Officer and the project went extremely well. Throughout that time, I had friends from private equity, calling me saying, “Hey! What do you think about this brand? What do you think about that company?” And it was always one of those things where it was just very casual, and just friendly conversation, but it really piqued my interest in servicing the mid-market private equity community who are investing more in beauty and lifestyle brands.
I hung out my own shingle back in 2009, and I joined ACG to meet more middle market private equity firms. I remember going to one of my first events and meeting a gentleman who was quite more senior in the industry, very prominent PE firm. He said to me, “Let me ask you. Did you go to Wharton?” I said, “No.” He said, “Are you a CEO or prior CEO of a Fortune 500 company?” And I said, “No.” And he said, “Well, I think you’re smoking dope if you think that you’re going to ever service the mid-market private equity community as a consultant.” That stuck with me and I said, “Geez. If that’s the kind of cancel culture that exists in this firm, number one, I would never want to work for that firm, even as a consultant. But number two, it sort of highlights a lot that needs to change in terms of people’s mindset within mid-market PE.” I think that was just a one-off example, but it was really one of the first times in my career that my profile on paper didn’t match or didn’t measure up.
I can only imagine somebody hearing that time, and time and time again. It just stuck with me so deeply that I just vividly remember the conversation now 11 years, almost 13 years later, geez. I say to myself, “That is something that needs to change.” Because to think that somebody who comes from one pedigree will have all the answers. And without that pedigree, nothing else matters. It just identifies a systemic approach towards promoting and continuing to keep exclusivity in the industry. I think it’s improved. I think a lot has happened in the past 13 years, but it certainly has not transformed. I think that is an opportunity not just to do the right thing. It’s also to bring the deal-making community together in and around new opportunities where more and more diverse businesses get funded, because there’s a hell of a lot of them out there that are looking for funding. And we have more capital than we know what to do with.
So you know what? I mean, that’s my personal journey on it and that’s why I’m so darn passionate about it. Because at the end of the day, it’s not just good for business, it’s the right thing to do, but it also is good for business too. It’s like you have a win, win, win all around.
[00:36:32] TB: I can’t tell you how many stupid Harvard graduates I know. I’m being serious. Just because you were good in certain tests, or good in school does not translate directly into being a good CEO, or a good private equity consultant. Now take that down even further to being a black male, which I’ve witnessed firsthand. I can tell you numerous stories where, he was part of our lives, and part of our family, and in our neighborhood where we had to send out email saying, “Hey! He’s living with us. He’s part of the family, just so you know.” Because our fear, and it was true, was that something would happen, God forbid. They were playing in the backyards or down by the lake or something like that and someone saw him, that he wasn’t from this area, you know. So it happens all the time
Then it translates directly into work now. God bless him. He’s now going into his second year internship with Blackstone. Smart as can be, hardest working person. But getting back to you don’t know what you know, he didn’t know what private equity was. He didn’t know it until he met me, until I actually started working at ACG. It became, “What is that?” He knew what a doctor was. He knew all these different things that you kind of grew up thinking about, but he never knew about this incredible world. Again, it’s what you’re exposed to. I look at lacrosse. My son, Hudson, is an incredible lacrosse player. You look at most lacrosse players, they are white, they are white males. Why? None of it is in areas of diversity. There’s a cool Brooklyn lacrosse, Harlem lacrosse team. Not Brooklyn, Harlem lacrosse team. I mean, I even got the gear from it. It’s cool as can be. But that is the few and far between of saying, and guess what, when some of these kids join a lacrosse team, they wind up being some of the top talent. But you’re only looking at what you know, you’re only getting what comes into the local team, into the local travel team.
That’s the same thing with business. If you want to get better, if you want to get bigger, if you want to get more profitable and successful, you have to look at all the different tools that are available. If you discount 48% out of your marketplace, you’re shooting yourself in the foot.
[00:38:51] AD: That’s right. I couldn’t agree more. I want to share my own why, and I think it ties in very well to what both of you said. For me personally, I think it’s a couple things. Number one, and this is speaking specifically to our kind of our target audience behind this, called the ACG audience or the middle market deal community audience. If you’re someone who is, in particular, private equity, investment banking, where these are career paths that open doors up for people and create opportunities to do things that for most people, they could never even imagine. And they really do, they create opportunities for wealth creation. There’s also a ton of experience, entrepreneurial experience and so much benefit that comes out of it. But to your point, Tom, not everyone even knows that that exists. That’s really my story as much as anything.
I came from a lower socioeconomic background, and it certainly was not talked about – going to college wasn’t even talked about, let alone going to college in the right track, to the right schools, to the right place, to get the right internship, all these things that typically have to happen to get there. I was very fortunate that there were series of events, and the right people being in the right place at the right time. I was able to find my way. And actually, through ACG Cup, and that’s a discussion for a totally another podcast, but through getting involved in the right networking, in front of the right people, I got an opportunity to join an investment banking firm that allowed me to change the trajectory of my life. All that really came from just having the right exposure and understanding. I think that that’s one huge element of why diversity matters, is realizing that there are some talented individuals out there that just don’t even have a clue it exists. And if they’re not exposed, if you don’t go look for that, you’re not going to find those individuals.
Now, the other side, and talking for me personally, as an individual, I have and I’ve spent the better part of nearly two years and I can unfortunately say that it was at the time that George Floyd was murdered, that it kind of opened my eyes and made me say, “Okay. I gotta understand what’s going on here a little bit more.” I spent a lot of time doing both reading, my own kind of understanding, learning, talking to people, plus the podcast and really trying to do my part of doing my own personal journey of understanding diversity. What’s happened for me personally more than anything is, I realized that my personal capacity for empathy and compassion has radically increased. My ability to look at someone instead of judging, instead of jumping to conclusions, instead of assuming they’re wrong, instead of thinking negatively, I can say, “Man! I wonder what’s going on. I wonder why they’re doing that,” or “Oh! That’s got to be tough.” That all happened because I put time into like, step back, and think and to see that.
For anyone listening, and specifically, you’re a white male, and you want to learn about diversity, just go start reading, start learning, start talking to people and just realize that it will make you step back and say, “Wow!” Maybe there’s things in your life that are a lot better than you realize. Once you start like seeing it that way, to me, it’s opened up my mind in so many ways, and radically shifted just how I perceived things. It’s removed a ton of judgment from my mind, by doing this work and realizing like, I thought my life was hard. But wow, I’ve talked to some people, it’s like, my life was nothing. My life is super simple compared. We just got to remember that more often, I think.
[00:42:17] MO: I think you really highlight something so important, and that is empathy. I think as a leader, as somebody who embraces diversity, somebody who just genuinely embraces people. And the value of people in an organization, I mean, it’s your single – Tom, you referenced tools, the single largest lever that we have in our organization is how we leverage our resources, and those are our people. In terms of what makes a good leader, it’s, you have to have empathy. I mean, it’s impossible, because unless you can really deconstruct how an individual is analyzing something through their frame of reference, or their lens, it’s impossible to ever really, truly understand where they’re coming from. I think that’s something that in order to – it’s goes beyond just being nice, right? Kindness also involves really active and intentional listening. In order to intentionally listen, you have to have a degree of empathy, because you need to understand how an opinion may have gotten formed in order for you to properly construct what it means as they’re inputting into the business issue at hand. It’s like, I think when you touched on empathy and our capacity for empathy, I think the more that we deepen that as leaders, the better leaders we become, and the more that benefits our organizations and the people.
[00:43:44] AD: Gentlemen, this has been an excellent conversation. I’m going to give just a quick recap of what we talked about here, just to kind of tie all of these thoughts together. We opened up talking about some statistics and understanding that our customer base, and specifically speaking, if you are an executive or decision maker within an organization, the likelihood is that your customer base is largely a diverse base or will be in the future a diverse base. The more that you can understand that, the better decision making, the better business outcomes that will come from that. Now, this is much more than just the business outcomes. This is the personal incomes, this is a lot of society, but speaking from that lens in particular.
Now, we talked about, you don’t know what you don’t know, and when it comes to hiring good talent, we all say we want diverse talent, but sometimes that doesn’t always happen. In recognizing that if we really want to be part of the solution, we have to really step back and understand we have blind spots and what is the best candidate? Our blind spot may be blinding us from truly understanding what the right candidate is. And if we truly have an organization that is lacking diversity, we need to step back and look at that process. Tom, you had mentioned Parity, we’ll make sure that’s linked in the show notes below. Parity being a great resource to take that pledge, and make sure that you’re interviewing a diverse talent pool. And then understand, if you are only selecting a non-diverse talent base, well, understand what’s driving that.
All of this comes to being a deliberative process, something that we’re truly taking the time, we’re putting an effort in and really, Marty your point, you brought up culture and how important it is to develop the right culture. Because it’s not just hiring that person. It’s hiring that person and making sure they feel that they’re part of the culture, and they have opportunity and that they belong there. And all of that comes from, you said, build trust, build alignment, create accountability and ultimately execute on it. Tom, you layered in transparency, and the importance behind having that as well. All of this, building that culture, creates, as we talked about at the end here, empathy. It gives people that capacity to see dissenting thoughts and not jump to a judgmental point of view and saying, “Well, you’re wrong. I know this.” It’s saying, “Huh! Help me understand that. Help me understand that more,” and picking up all those perspectives, which all of that is building the empathy and creating better capacity for us as individuals, as leaders and as organizations to really be our best.
Gentlemen, this has been an excellent conversation. I hope our listeners have really enjoyed this and had some good takeaways from this. Tom, for our listeners, how can they get in touch with you?
[00:46:20] TB: Anytime through LinkedIn, they can send me a chat, send me a note, send me an email. I look forward to connecting with anyone out there who’s interested in the middle market, DEI or guitars.
[00:46:31] AD: Awesome. And Marty?
[00:46:32] MO: Anybody can link me in at any point, same thing, Martin Okner. That’s my profile name and love to hear from anyone. Certainly, if anybody’s interested in keeping their hair color fresh, those inquiries are always welcome as well.
[00:46:48] AD: Awesome. Well, thank you both. We’ll make sure your contact info is linked in the show notes below. I enjoyed this conversation, and it really was a fun time here and I think we covered some great topics.
[00:46:57] TB: Thanks for having us on Branch Out, Alex. Appreciate it.
[00:47:00] MO: Thanks, Alex.
[END OF INTERVIEW]
[00:47:04] ANNOUNCER: Thank you for tuning in to today’s episode of the Diversity Matters in the Middle Market Podcast. We hope you enjoyed our content and encourage you to take action today. While no individual will bring all the change necessary, we can all make an impact. If you enjoyed our content, please share with your network. This is a production of the Association for Corporate Growth, ACG and Connection Builders.