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CHAPTER 11: DEVELOPING LEADERSHIP DIVERSITY 347

IN THE LEAD diversity understanding and sensitivity to working in the restaurant business. In
the “We Can” training program, for example, employees learn a three-step model:
(1) prevention, such as how to behave in order to reduce the possibility of a guest
or fellow employee feeling that he or she has been discriminated against; (2) inter-
vention, which teaches people to “acknowledge, apologize, and act” when some-
thing goes wrong; and (3) managing escalation, in which employees learn how to
genuinely listen, show empathy, and reduce the anger and frustration level. Denny’s
spends several million dollars a year on building awareness, and its diversity training
system is one of the most comprehensive in the industry.
Hood cemented diversity awareness by working with managers to increase
supplier diversity, developing marketing campaigns targeting minority customers,
and tying bonus pay to meeting diversity goals. In 1993, only one of the chain’s fran-
chises was minority-owned, the company had no minority suppliers, and the board
was made up primarily of white males. Today, however, things are very different:
• Forty-three percent of Denny’s franchises are owned by minorities.
• Between 1995 and 2006, Denny’s contracted nearly $1 billion for goods and ser-
vices with minority suppliers, with African-Americans accounting for 48 percent of
the business. That represents around 18 percent of the company’s contracts, as
compared to a national average of 3 to 4 percent.
• Fifty-six percent of the board of directors is composed of women and people of
color.
• At the senior management level, 50 percent are women and people of color.
Minority employees represent 32 percent of Denny’s overall management and
51 percent of the workforce. 77
Denny’s turnaround is one of the best examples of how far and how fast a company
can progress with strong leadership and an aggressive approach to culture change.

Summary and Interpretation

One main point of this chapter is that diversity is a fact of life in today’s world,
and leaders can create change in organizations to keep up. The U.S. population,
the workforce, and the customer base are changing. In addition, people of differ-
ent national origins, races, and religions are no longer willing to be assimilated
into the mainstream culture. Organizations are also operating in an increasingly
global world, which means dealing with diversity on a broader stage than ever
before.
Today’s leaders face significant challenges leading people who are different

from themselves. The first step for leading diverse people is understanding the

hardships that people who do not fit the mainstream white, U.S.-born, male cul-

ture often endure. These include unequal expectations, the need to live bicultur-
ally, the glass ceiling, and the opportunity gap. Another important issue is global
diversity. Leaders can be aware of the impact culture may have, understand social
and cultural value differences, and develop cultural intelligence.
Dimensions of diversity are both primary, such as age, gender, and race, and
secondary, such as education, marital status, and religion. There are several reasons
why organizations are recognizing the need to value and support diversity. Diversity
helps organizations build better relationships with diverse customers and helps
develop employee potential. Diversity provides a broader and deeper base of ex-
perience for creativity and problem solving, which is essential to building learning