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Q. What is the importance of the EO policy letter's 50th anniversary?
A. The letter written by Tom Watson Jr. on September 21, 1953 is important for two reasons. First, it's a major reaffirmation of our early heritage. IBM hired women and blacks in 1899 — 20 years before women were given the right to vote and 10 years before the National Association for the Advancement of Colored People was founded. We also hired our first employee with a disability in 1914 — 76 years before the Americans with Disabilities Act; and we were the first company to support the United Negro College Fund in 1944.
Second, this letter sent a critical message to our management team defining the expectations of management conduct. Why? Because those expectations established the framework for management behavior not only in the U.S., but also clearly established our intentions outside the U.S., in South Africa, for example, both during apartheid and after installation of a democratic government under former President Nelson Mandela.
This letter is the foundation of IBM's marketplace leadership and allows us to reach all customers, markets and talent through both our business and diversity strategies.
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Q. Is it true that when Tom Watson Jr. wrote the letter, he used it during negotiations to build IBM plants in the U.S. South?
A. Yes. The EO policy letter was also a strategy document and a tool of execution for IBM. When Tom Watson wrote the letter, he was negotiating with two Southern governors to build fully-integrated plants. He wrote the letter with the specific intent to communicate to those two state governors that he was serious about not having "separate but equal" racial policies at IBM.
And to ensure that the governors took him seriously, he wrote a letter to his management team and made the letter public. As a result, both governors responded by choosing payroll and tax dollars over bad social policy — in effect they chose progress.
By making the letter public and sharing it with the two state governors, IBM's management team, and U.S. citizens, he clearly sent the message that IBM is not going to play by the rules other than incorporating appropriate business conduct. The result? IBM opened its manufacturing plant in Lexington, Kentucky as a fully integrated facility in 1956, although the Lexington community was not desegregated until five years later.
In a personal meeting with Mr. Watson in 1990, he told me, "My father taught me that if we take care of our people, they will take care of us." He applied that concept to all employees.
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Q. Why is this EO policy still relevant to employees today?
A. The policy continues our commitment to the principles of the letter, continues defining IBM's management behavior and our adherence to it, and equally important, gives us a competitive advantage in the marketplace. By that I mean, given the diversity of talent available in the workforce today, people need to know our company is not just discovering diversity today and not implementing policy under legislative pressures.
Rather, IBM is a company that invented this behavior with a 100-year heritage of hiring women and people of color and seeing people in both the workplace and marketplace for what they truly are— talented people who can be counted on to grow our business and who buy goods and services. So we tell people to come join us because we've been practicing diversity throughout our heritage and here, you can be yourself. We've been doing it because before we saw people, no matter what they looked like, as customers, and we saw them as potential employees.
The beauty of Watson's message is that, more than 50 years ago, he and his father saw diversity in the global marketplace before anyone else did — just as we see it today. So when a person comes to work for IBM, they're coming home. They're coming to work with people just like themselves, people who have always been welcomed.
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Q. Although the EO Policy was originated in the U.S., how did it affect the 160 countries where we do business around the world?
A. The most stirring example is the leadership we provided in South Africa during the 1970s. During that time, the Rev. Leon Sullivan, a General Motors board member and founder of the Opportunities Industrial Center [OIC], and General Motors CEO Tom Murphy, recruited 21 leaders from top American corporations to attend a historic meeting at IBM's Sands Point, New York, conference center in 1975 to launch a decade-long effort by U.S. corporations to end apartheid in South Africa. IBM Chairman Frank Cary and the other business leaders used their companies' economic clout to enact social and political change in South Africa.
At the meeting, Sullivan persuaded the corporate leaders to help him draft the Sullivan Principles, a set of stringent guidelines for U.S. businesses in South Africa which sought to increase the freedoms of Black South Africans in both the workplace and the community. IBM and other companies adopted these guidelines. When South Africa failed to respond, Sullivan asked U.S. businesses to leave, and IBM was one of 70 companies to withdraw their presence by 1988. Within five years, apartheid ended, Black citizens gained the right to vote, and Nelson Mandela was elected president. IBM was one of the first companies to return to South Africa and the first company in our industry to appoint a Black General Manager.
Today, our definition of diversity includes global cultures. People in every country, for example, and especially general managers, need to pay attention to our six diversity imperatives. They need to understand them, look at them and analyze them in respect to doing business in their part of the world. In EMEA, we must focus on gender, people with disabilities, and the growing number of ethnic minorities. In AP, we need to focus on gender, disability and respecting and valuing the differences between countries and regions.
Our boundaries are dissipating. Our ability to do business will be weighted heavily by respect and driven by technology. We must all pay attention to our workforce diversity imperatives, and the opportunities they provide to today's community from the workplace to the marketplace. The best IBM employees will come from the countries where we do business, or they will own businesses, or be in traditional businesses and buy from IBM. We want all of those people to see others like themselves at IBM.
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Q. How can IBM, in its course of doing business, stay abreast of the changing face of society?
A. An important component of how we see the workforce and marketplace is how we present ourselves to customers. Today, we have Executive Diversity Task Forces that allow our CEO to deputize executive leaders from our eight constituencies to help us understand what they see as problems or perceptions that, if addressed, could improve our workplace climate and marketplace performance.
We also encourage the formation of diversity network councils and groups that cross all geographic borders and have strategic impact on our business. All of these are important tools to allow people to work together, and demonstrate they can address sensitive, personal and often passionate issues — issues that can help us recruit and keep talent, and better connect IBM to a changing customer set.
According to the Year 2000 Census, Asians, Blacks, Hispanics and Native Americans, for example, collectively represent 86 million people or 30.7% of the U.S. population. We recognize the aggregate buying power of these groups is estimated at more than $1.7 trillion. And that's just in the U.S. So we have a great opportunity in front of us — around the world — because the buying power of these various groups will drive all businesses, including IBM, to become obsessed with inclusion.
That's why we work hard to reflect this global marketplace in our advertisements, whether print, television, or radio. We want to make sure our customers see people that mirror who they are - from the mailroom to the boardroom. From an IBM worldwide perspective, we see women, the disabled and gay, lesbian, bisexual and transgendered people and, depending upon the country, we see ethnic minorities. In other words, it's important our customers and employees see people who look like them. And when they see these portrayals in print or on television, they know that they are part of IBM's vision.
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Q. How has affirmative action changed from the 1950s?
A. The environment of the 1950s was fueled by the affirmative action dialogue. I still believe in affirmative action, but it must be redefined, and possibly renamed. I'm in the "mend it, don't end it" group. By that I mean, we need to make it applicable to today's society.
The legal brief we filed recently, along with MIT, Stanford, DuPont, the National Academy of Science, the National Academy of Engineering and the National Action Council for Minorities in Engineering, on behalf of the University of Michigan Affirmative Action Case earlier this year, is an example of building the pipeline for future constituency business leaders who are students graduating from premier universities. These students will work for IBM, our customers and competitors and fill important leadership positions in the communities across our nation.
The Supreme Court ruled that the universities can retain the right to use race as one of many factors to build their student bodies. This is a great step for the diversity of our future business, community and political leaders.
Another way to redefine affirmative action is to understand the makeup of our population. We now have 31 million people in the U.S. living below the poverty line - 17 million are ethnic minorities and 14 million are White. The message we must expand is that affirmative action needs to help people who are disadvantaged and poor, and not just confine it to women and minorities. I believe that problems attributed to affirmative action today or during the last 50 years have been misplaced — it's not about race, gender, or disability, it's about education, poverty and economic parity, regardless of what someone looks like.
For example, one of the outcomes of global sourcing is that we are competing with countries who have invested better in their education system and now yield a better outcome of skilled, talented people. If we don't have people trained to participate in industry today, they can become a lost resource to us in the U.S. So we must be prepared to unleash the energy, the capability and the talent of America's team through affirmative action. We can't win in the marketplace if we allow barriers to impede the development and preparedness of our workforce.
During the next 50 years it is my hope that we will rename "affirmative action" and come to the understanding that, in most cases, a country has a disadvantaged or poor community. And that country should have programs to help this community, whoever they are. That effort will be the next generation's affirmative action strategy.
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Q. What is the next significant diversity milestone we'll be celebrating at IBM?
A. Let me answer that by going back to Watson's EO policy letter. When he wrote it, it was years before any key legislation or civil rights acts. So it was a statement for our country, not just our company. It was about the kind of country and company we should be. What I hope for future diversity milestones is that IBM will continue to be guilty of that kind of visionary behavior. And that we will do what's right, before it is required by legislation or expectations of politically correct behavior.
But I also think the stakes are higher today. Back in the 1950s, we stated our policy because we thought it was right. Today, it clearly positions us to gain competitive advantage. And there can be no better outcome than to be better positioned to compete for both customers and talent today, particularly in a global environment.
Going forward, maintaining the integration of our diversity initiatives within the mainstream of the corporation is crucial to IBM's future success in the information technology industry. Diversity is becoming a key factor in helping define leadership in today's marketplace — effectively reaching customers and markets. Today, continued diversity leadership at IBM will quench our insatiable appetite for talent and enhance our ability to create new revenue streams, retain talent, win and retain customers and maintain our marketplace leadership.
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