"No matter who you are, yous're going to have to work with people who are different from you. You lot're going to have to sell to people who are dissimilar from you, and purchase from people who are different from you lot, and manage people who are different from y'all," says the thin, balding, black guy at the front of the auditorium, who demands to exist taken seriously. "This is how we do business. If information technology'south not your destination, yous should become off the plane now."

This is direction hardball, also as gripping theater. Fifty-fifty though information technology'south 9 PM (thirteen hours into their workday), the 60 newly promoted or recently hired first-level managers at IBM Learning Center, in Armonk, New York, are rapt. They empathize that they underestimate J.T. "Ted" Childs Jr. at their ain adventure.

At least twice a month, Childs, IBM's vice president of global workforce diversity, lays some version of his stump speech on managers who accept flown in from beyond the state. The speech is not standard corporate fare. Childs's lectures, uninterrupted and captivating, last for two hours. He brags, harangues, warns, and chides. During the tertiary hour, he typically takes questions — then leaves his trainees to fizz among themselves into the dark.

His lesson? Accepting, encouraging, and promoting variety at IBM and across is proficient business concern. "We've moved beyond the moral imperative to the strategic imperative," he instructs. "What I desire most is what's hardest to become: for concern to see the link between diversity and competitiveness. Because if we don't sympathize that, nosotros're not going to win."

Ted Childs is perchance the well-nigh effective diversity executive on the planet. IBM has long been lauded for its progressive employment policies. And for just as long, it's likewise been known as a place where mostly white guys in mostly starched shirts concord all the cards. Since 1995, though, IBM has acquired a unlike look, largely considering of Childs'southward strategic entrada to overhaul the company's practices pertaining to hiring and promoting women, ethnic minorities, and other groups that are underrepresented at IBM.

Between January 1996 and December 1999, the number of women executives at IBM worldwide has soared from 185 to 508. By the end of 1999, the number of minority execs working for IBM in the U.s. hit 270, up from 117 in 1995. "I'k intensely proud of that," Childs says. Both women and ethnic minorities are still scarce among the company's meridian l managers. Merely in March, for the third fourth dimension in 15 years, Goad, an advocacy group for women in business, awarded IBM with a corporate-achievement award.

Childs, 55, grew up in Springfield, Massachusetts. He aspired to study at Amherst Higher, but his mother, a schoolteacher, and his male parent, a chemical annotator, insisted that he enroll at a predominantly black school, as they had. "You lot demand to be in a dormitory with blackness boys," his female parent said. "You demand to take that experience at least once in your life." Childs went to West Virginia State College, which is largely black, but he ultimately helped integrate the school'southward racially divided social life by inviting both black and white bands to perform at the almanac homecoming trip the light fantastic toe.

These days, Childs sports a majestic baseball game cap with his monogram and the initials of his higher fraternity, Omega Psi Phi, on information technology. Above his coat pocket are iii adornments: a fraternity pin, a cherry AIDS ribbon, and a multicolored orb that symbolizes global diversity. Together, they reverberate what is virtually important to him — the essence of Ted Childs.

Childs spoke with Fast Company about the importance of corporate variety and nigh his strategy for irresolute the confront of IBM.

What's the tough-minded strategic case for diversity?

I've been trying to refashion the discussion nearly diversity and equal opportunity. This started for me back in 1980, when I took a leave of absence from IBM to work every bit executive banana to Benjamin Hooks, who was caput of the NAACP at the time. That was a very profound feel for me. I watched executives from large consumer companies meet with Ben and osculation his ring. They'd become photographed with him, and so send those pictures to magazines like "Ebony" and "Jet."

Somewhen, I came to understand what those executives were up to: All communities — African-Americans, Hispanics, women — have purchasing ability. In America today, the number of women-owned startups is increasing faster than the number of startups in general. Minorities in the United States have $1.1 trillion in buying power, which is roughly equivalent to the world's seventh-biggest GDP. By 2050, the United states of america will be 50% white; 25% Latino; and 25% Asian, blackness, and other minorities. And so it's not a bad affair if those communities view a company as a proficient identify to do business.

When I returned to IBM, people patted me on the head and said, "That's nice, Ted." Dorsum then, we were selling big boxes to large companies, and then nosotros didn't really touch consumers and pocket-sized businesses. But personal computers started getting us into people's homes and into minor businesses — many of which were endemic by indigenous minorities, women, gays and lesbians, and the physically handicapped. That development presented an opportunity to accept a different sort of word about multifariousness.

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 the states to bring the best solutions to our customers. If we don't reach out and make diversity a competitive reward, information technology will become a liability. If customers go within our visitor, they should see people who wait similar them at all levels.

Then this is virtually protecting jobs. Merely it's also nigh getting and keeping talent. This insatiable hunger for talent must exist reflected in our diversity effort. Workforce diverseness is all about getting talented people from every group to piece of work for y'all. We have a slap-up opportunity. We can't beget to proceed people out.

I had seen the opportunity in diversity long ago, and most 4 or five years ago, I took that message to two plants in N Carolina to see how white men there would react. Those men had never heard multifariousness discussed that manner before — every bit something that they could benefit from and that would protect their jobs if they supported it.

Virtually people remember of IBM as a historically "button-downwards" culture. Is information technology hard to make your arguments in the context of such a conservative past?

That direct-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, visitor 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 to the lowest degree 1899 — 21 years earlier women's suffrage. One African-American was also in the lodge, 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 adult female vice president in 1943. Nosotros 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 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 consequence of "I'm a graduate of a big-10 university, and I take a police degree from an Ivy League school. After several interviews, I finally said to the concluding human who interviewed me, 'Wait, tin can yous tell me why you fellows won't hire me? Considering I have to give my wife an explanation. Is it my Jewish name?' And, of grade, 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'south 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 state of affairs, considering whoever was shouldn't work here anymore."

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

Heritage is i affair, but progress is some other. You've spent five years on a campaign inside IBM …

Real change takes fourth dimension. In 1995, eight executive task forces were assembled — 1 each for African-Americans, Asians, disabled people, gays and lesbians, Hispanics, Native Americans, white males, and women — to await at IBM through the optics of that constituency. Executives from each of the groups led their corresponding task forces. We also assigned a senior vice president — ane of the CEO'southward direct reports — to sponsor each grouping.

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'due south productivity? What tin we do to influence your group'due south buying decisions, so that IBM is seen every bit a solution provider? I chose July 14, Bastille Day, as the job-force launch day because it'due south considered to be a day of social disruption. We were looking for some constructive disruption at IBM.

Lou Gerstner began the outset meeting of task-force chairs. He spoke for twenty minutes most what he wanted, reinforcing his delivery to Squad IBM. He said that he didn't desire anyone to create divisiveness. Then he left. When I was certain that he was gone, I said, "Expect, you're all here because I handpicked you. And you all know I fought for this, then I don't want whatever misunderstandings. I desire to remind yous of something. Many of y'all take bitched to me privately, saying such things every bit 'I'm a woman, and I had to go through this,' or 'I'yard blackness, and I have to alive with this.' Well, now you've been given a license to help u.s.a. all understand those bug. And if nothing else, be motivated by what yous've encountered during your career that you lot didn't remember was off-white. Make this a better place for the kids who will be your predecessors, so that mayhap they won't run across those same problems."

How have you encouraged people to represent their constituencies without turning IBM into a collection of special-interest groups?

We've taken steps to minimize that possibility. Nosotros continue to talk most the concept of Squad IBM, and, once a calendar month, I lead a meeting of all task-force chairs, during which I ask, "What are you working on? What are your bug?" I say, "Look, I want these meetings to be substantive. I want everyone to know what everyone else is working on. Because we need to exist going forward equally Team IBM, not as the black group, not equally women, and not equally gays and lesbians. We demand to be going forward as a team with recommendations that will brand this a better company. So think about what we can do to make IBM a ameliorate place for your constituency — and a ameliorate place for all people."

Because these executives were senior people in the company, they had enormous credibility. I knew that they weren't going to drive this project off a cliff. But at the showtime coming together, the chair of the white-male person chore force made a telling comment: He said that his group's members had ended that their main objective was to brand certain that the other seven groups didn't see them every bit the trouble. He made the comment humorously, so everybody laughed. But we as well saw the value of his annotate, and we knew that the guy who spoke was very thoughtful. He too said, "We recognize the issues here, and we want to be role of the solution. And part of our vision of the solution is that there volition be more people who don't look like the states in senior-management positions." That provided a foundation for enormous thought — and enormous cooperation.

What have these groups accomplished?

We scheduled their preliminary presentations for December ane, the anniversary of Rosa Parks'south refusal to give upward her seat on a bus. The groups each came back with two or 3 things that they thought were important for the company to address. Consistent throughout was a focus on the talent pipeline, employee development, and making certain that nosotros had good, detailed recruiting strategies in place. That our development programs and our mentoring programs were at work. That nosotros were sending well-baked, clear messages to people about how they are valued. That we were sending clear messages to men that work-life is an effect for anybody, not only for women.

The white-male group presented a wonderful agenda. First, its leader said, if we are serious about diversity, so nosotros need to accept more ownership of it — ownership at the senior levels of the business. Second, if we are serious most the universal pertinence of piece of work-life problems, then we need to start having discussions that accost anybody, instead of just women. 3rd, if we are serious about diversity, then we ought to address the subject on a nationwide basis, not but within IBM.

One presentation that I was particularly eager to hear (to find out how it would be received) was the one from the gay and lesbian grouping, because I knew that its members' most of import result involved domestic-partner benefits. I thought information technology would exist a benchmark give-and-take because some of the other constituencies had difficulty with those issues. But goose egg exploded.

Yous were expecting more controversy?

When IBM was thinking virtually offering domestic-partner benefits, I was the one who led a discussion among senior direction. Some employees worried that such a benefit would bring in more than AIDS cases, which would drive upwards the price of our premiums. And so nosotros had an outside firm examine our insurance expenses. And that company discovered that the cost of treating a catastrophic affliction, such every bit cancer, or of dealing with a serious accident is typically college than the cost of treating someone with AIDS. We pointed out that what increases medical costs most at IBM is childbirth.

Nosotros also pointed out that the grouping with the nigh educational activity, the highest reckoner-literacy rate, and the largest disposable income, as a whole, is the gay community. Then practise we want to ignore that kind of a market? The diversity game is played from the cervix up, which ways that you have to utilise your encephalon.

In 1996, IBM announced that information technology was adding domestic-partner benefits, after which I spoke at an employee meeting. Information technology was the first fourth dimension in my career that I had been heckled, which really intrigued me. People were upset about this policy. Finally, I said, "I think you guys are right. We shouldn't hire gays, and we shouldn't sell to them either. We should but walk abroad. It'southward a matter of principle. Walking away is going to cost some jobs, but the principle is of import. At present, which i of you wants to be outset to give upwards your task?"

Of class, no one moved.

Honestly, though, it's difficult to imagine that those task forces have had an impact on something as complex, something every bit homo, equally barriers to diversity within a company. What's the connexion between their work and genuine results?

Let'due south take the women'south task force, for instance. The senior-executive sponsor for that grouping was Ned Lautenbach, who at the time was senior vice president for worldwide sales and distribution. That's a major chunk of IBM's employee population. Earlier those task forces, Lautenbach'south staff members would give him a slate of candidates from which they wanted him to choose someone to fill an executive position. He would generally corroborate the slate.

Well, he stopped doing that; he started rejecting the slates. He would ask, "Why are no women on the slates? I want to see women on the slates. And if these women are qualified to be on the slates, what's going to happen if we pick them for executive jobs? Is something bad going to happen?" He would enquire logical questions to find out why people thought that a man would exist best qualified for a particular job. And frequently, there wasn't a reason.

Somebody in ability who was reviewing jobs had to push button for fairness, and that person was Lautenbach. Before the first Global Women Leaders Conference, in 1998, Lautenbach wrote a letter to general managers around the world. He told them, "I want you to go back to me past September with your strategies for addressing our global-diversity challenges. And to assistance you, we're going to host our first Global Women Leaders Conference."

I added a couple of sentences to the letter, and subsequently Lautenbach signed it, I got nervous. I went back to him and said, "I want to make sure that you read the unabridged letter, that you didn't just trust me and sign it." And I pointed out my add-on, which read, "I desire you lot to talk to our women leaders about the barriers to their advancement. I don't care about the opinions of the men." He said, "I read it. It's going to put starch in some collars, isn't it? But nosotros've got to let these guys know that we're serious."

I wanted the men to understand that they were not going to determine what the issues were. They had to let themselves to exist influenced on the issue of the advancement of women past the views of the women. And that has happened. Since 1996, nosotros've gone from one to 13 women executives in Asia; and nosotros've gone from 5 to 46 in Africa, Europe, and the Middle East. Men are listening to women.

In 1998, I spoke about diverseness to a group of employees that IBM had just contracted with. A few weeks earlier, women from that grouping had gear up a women's network. I told them, "That's groovy, and I'k going to announce it at the town meeting." The women were worried because they thought that it would upset their male person bosses. They wanted to keep it tranquility. I said, "Trust me."

At the meeting, I said, "I'd similar to congratulate the women here who have established a new women'south network. And I'd especially similar to congratulate their managers, who had the foresight to let this happen. You embody the values that we correspond at IBM." And I never heard about any bug.

IBM all the same isn't very diverse at the tiptop. Why not?

That'due south true. Among our peak l executives, nosotros have only two African-Americans, 3 Asians, ane Hispanic, and 4 women. Merely change is under way. Glass ceilings exist here. But they exist at the entry level. If you fill up the pipeline with qualified, talented people, they will pause through. Nosotros have an extraordinary pipeline, but we have to focus on that pipeline. We have to wait downwards, non up.

The job forces are continuing their work. This yr, each one will concord an executive forum. About 150 women are expected to attend this year's Global Women Leaders Conference, in July. In May, 700 people participated in an IBM Women in Technology Conference. Plans are also under way for a black-executives forum, a disabled-executives forum, a gay-and-lesbian-executives forum, a Hispanic-executives forum, a male person-executives forum, and a Native American-executives forum. I recently went to Japan to speak to 1,600 women IBM leaders, at their second meeting. That'south historic stuff for Japan. Pre-1995, that never would have happened.

I think this railroad train is moving. We tin contend that the step is as well tedious. Merely I've been to a lot of places that I wouldn't have visited 10 years ago — including Lou Gerstner's office and the Oval Office. We're on a journeying. It'southward not over.

Keith H. Hammonds (khammonds@fastcompany.com) is a Fast Company senior editor. Contact Ted Childs by email (childsjt@united states of america.ibm.com).