Building an Equal Opportunity Workforce

IBM’s culture of inclusiveness dates back to the early twentieth century and continues today. Perhaps the most significant moment in IBM’s equal opportunity journey occurred roughly sixty years ago, when IBM President Thomas Watson Jr. wrote a letter—and took a stand.

IBM Centennial Film: They Were There

In this video, watch “Set an example that others can follow: Policy letter #4” about IBM’s long-term commitment to equal opportunity.

In the early 1950s, as demand exploded for IBM computers, Watson sought to build manufacturing facilities in North Carolina and Kentucky. Of concern to the president was how his intention to integrate IBM’s plants would be viewed by segregated states in the US South. Stating his position in a letter dated September 21, 1953, Watson wrote to his managers, “It is the policy of this organization to hire people who have the personality, talent and background necessary to fill a given job, regardless of race, color or creed.”

Watson’s policy letter #4, as it came to be known, was written one year before the US Supreme Court’s
Brown v. Board of Education decision, which effectively integrated public schools, and 11 years prior to passage of the
US Civil Rights Act. The letter expressed both personal conviction and company practice, which had been in effect for decades but never before codified. Policy letter #4 conveyed without qualification that IBM would not comply with “separate but equal,” an entrenched euphemism for sanctioned segregation in the US, and what would today be considered institutional racism.

Watson wrote the letter to his managers but by targeting a much broader audience, he allowed it to reach the media. In effect, Watson was publicly stating not only the ethical but the business case for diversity, forcing the governors in North Carolina and Kentucky to decide between racial segregation and an influx of job opportunities along with their associated tax revenue. Three years later, black and white IBMers worked and ate together in the company’s new plants in Raleigh, North Carolina, and Lexington, Kentucky.

Watson’s proclamation, although bold and groundbreaking, was rooted in the company’s history, reflecting principles first espoused by his father. Thomas Watson Sr.’s concern for employees was based on a fundamental respect for the individual and an appreciation for those who contributed to the company’s success. By 1953, IBM had enacted an unequalled string of progressive workplace programs and policies, from hiring the disabled in 1914, to the arrival of professional women and equal pay for equal work in 1935, to appointing the company’s first female vice president, Ruth Leach Amonette, in 1943. Amonette was one of the first executives, male or female, to publicly state the business case for diversity. Upon her appointment she asked, rhetorically, “Doesn’t it make sense to employ people who are similar to your customers?” Over the decades, IBM’s focus on diversity would become an integral part of IBM’s overall business strategy.

In the 1970s and ‘80s, as hiring of women and minorities increased, IBM’s approach to equal opportunity steadily evolved, from a policy that promoted respect for cultural differences, to an outward recognition of the differences between diverse groups and the workplace issues they faced. Prompting the change was the emerging realization that a more inclusive workforce provided more talent and, in turn, increased innovation.

The business case for diversity took full flight in the 1990s, when Louis Gerstner became CEO. At the time, IBM was experiencing its most trying downturn, with sinking profits and a severe loss of market share. Gerstner well understood that a workforce more closely reflecting the cultural makeup of the marketplace would ultimately lead to greater business opportunity and profit.

Devoting attention to issues such as diversity when the company’s financial future was in question seemed to many an inopportune diversion. In retrospect, though, it was the best time to become the most inclusive large corporation in the world.

Alongside Gerstner was Ted Childs, vice president of global workforce diversity. Regarded today throughout the global business community as an equal opportunity pioneer, Childs enacted numerous innovative programs; chief among them was the establishment of eight task forces, each devoted to a specific constituency and sponsored by a senior vice president. “It worked out well,” Childs reflects, “because a great deal of listening needed to take place. And we had senior vice presidents who were willing to listen to their assigned constituency groups and hear from them and understand what their challenges were. And those challenges were not challenges that those guys had encountered in their careers.” Childs led the diversity charge, creating minority networks and mentoring programs, promoting community outreach and education.

It is only appropriate that a technology enterprise like IBM assign version numbers to the company’s advances in the workplace. Company-wide, policy letter #4 represents Diversity 1.0, innovative in its time, though decidedly a work in progress. In the 1980s, Diversity 2.0 reduced and even eliminated many barriers to opportunities for minorities and women, and strengthened a corporate-wide attitude of inclusion. In 2008, IBM released Diversity 3.0, promoting cultural intelligence: the notion that greater understanding of differences can improve teamwork and collaboration. Under the leadership of Ron Glover, vice president of diversity and workforce programs, 3.0 builds upon the company’s original task forces by establishing a number of cultural communities throughout IBM, including a cross-generational network, and communities for women and people with disabilities. Glover also oversees the company’s Global Diversity Council, an umbrella group consisting of representatives from IBM’s many cultural constituencies across the globe.

Diversity 3.0 continues to undergo modification. The latest advancement, “diversity of thought,” is partly a return to Thomas Watson Sr.’s respect for the individual, now within a twenty-first century, multicultural context. Diversity of thought facilitates inclusion and collaboration by highlighting a paradox of human nature: that differences among individuals within a cultural group are often as significant as differences between groups. The concept emphasizes awareness of, and respect for, those personal differences—in attitudes, beliefs, experiences, traditions and, most importantly, in thought processes and problem solving.

In the midst—and in support—of change, IBM’s early principles remain a stabilizing force. Policy letter #4 continues to be an important reminder. As Glover explains, “It exists as a premise about how we operate around the globe even today. It’s, I think, frankly more relevant on a global basis now than it was when it was written.”

Today, IBM takes advantage of the attributes of its diverse employee mosaic to fuel innovation and reflect the multicultural character of customers across the globe. For every employee, diversity means far more than compliance. Inclusion goes well beyond tolerance. In this centennial year, IBM is, in large part, celebrating its rich history of diversity.