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Developing Leadership Diversity

India-born Indra Nooyi recently got a promotion. Already one of the most
powerful women in business, in October of 2006 Nooyi became the fi rst

female CEO of PepsiCo. It’s a clear reflection of the emphasis the company
puts on providing equal opportunities for everyone. But Nooyi cautions that
“the full potential of diversity is not realized without an inclusive culture,”
which means that people have to “become comfortable being uncomfort-
able” so they are willing to confront diffi cult diversity issues.
Getting people comfortable being uncomfortable is one reason Nooyi’s
predecessor, chairman and former CEO Steve Reinemund, gave several mem-
bers of his top leadership team an unusual assignment. Reinemund named
eight of his top managers as “executive sponsor” for a specifi c employee
group, including African-Americans, Latinos, Asians, women, women of
color, white males, disabled, and gay/lesbian/transgendered. In most assign-
ments, the leaders would be different from the people they were sponsoring:
white men are sponsored by African-American Larry Thompson, for exam-
ple, and Irene Rosenfeld, a white female, sponsors African-Americans. The
executives are expected to understand their group members’ needs, identify
key talent, and personally mentor at least three people from the group. It’s
an innovative way to give people experience in dealing with differences at
the same time it develops minority talent for future leadership roles.
Both Reinemund and Nooyi know that the goal of inclusion is tough
and elusive. Consider the reminder Reinemund got in an e-mail after ad-
dressing a group of African-American employees from the patio steps at
Pepsi headquarters. He thought his closing remarks had been well received.
The writer of the e-mail, however, said it reminded her of a plantation owner
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lecturing his slaves from on high.
Steve Reinemund and Indra Nooyi, like many of today’s leaders, know
that diversity sparks innovation, leads to better decision making, and spurs
growth. In one recent year, Pepsi attributed one percentage point of its
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7.4 percent revenue growth to new products inspired by diversity efforts. These

benefits of diversity are one reason the face of America’s organizations is be-
ginning to change, with women and minorities, such as Nooyi, slowly moving
into upper-level leadership positions. However, as also illustrated by the story
at PepsiCo, there are still many challenges for creating diverse organizations.
One of the most important roles for leaders in the coming years will be devel-
oping a solid base of diverse leadership talent. “In any organization in America,
you will see diversity at the bottom of the house,” says Roberta (Bobbi)
Gutman, vice president and director of global diversity at Motorola. “But to
get it higher up takes the clout and the wingspan of company leadership.” 3
Successful leaders in an increasingly diverse world have a responsibility
to acknowledge and value cultural differences and understand how diver-
sity affects organizational operations and outcomes. This chapter explores
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the topic of diversity and multiculturalism. First, we look at the diffi culties
leaders encounter in leading people who are different from themselves and
the challenges minorities face in organizations. Then, we explore the value
of diversity for organizations and look at some new styles of leadership that
support a more inclusive work environment. Next, the chapter takes a closer
look at global diversity and how leaders can develop cultural intelligence.
Finally, we discuss the personal stages of leader diversity awareness and the
personal qualities for leading diverse workplaces.

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