My interview for the job of CEO at Jamba, Inc., couldn’t have come at a more troubled time in the company’s history. It was November 2008, and the Great Recession had begun to hit hard — but even before the financial crisis blew up the U.S. economy in September of that year, Jamba had started bleeding cash. Its net losses for the previous year had been $113 million, against revenue of $400 million.
I wasn’t the board’s first choice for the job. I arrived at 6:00 p.m., their last interview on the schedule. And after having spent much of the day interviewing a slate of candidates, they had already decided on a top choice. I sat down with only one board member, Ramon Martin-Busutil, an operating partner from New River Capital, the firm that had led the IPO of Jamba Juice in 2006. This was apparently just a courtesy interview. I’d done my research and told him the plan I had for transforming the brand and the company. I told him that a cultural transformation was central to what I believed needed to happen — a cultural change consistent with the way I always led, seeking a staff with diverse lived experiences and a wide variety of perspectives. They asked me to come back and meet with other board members.
So in my follow-up interview, I faced a highly accomplished group of men (all white). My plan included making DEI an essential part of the company’s DNA. The board wanted to know how I would restore profitability and get the company on a sustainable growth trajectory that would boost the value for shareholders rather than create a culture of DEI, but my approach has always been that an intentionally inclusive organization is essential to solving problems and creating innovations in the real world.
When you’re a leader, one of your most important roles is to develop other leaders.
So they hired me. Now I had to live up to my words and turn the company’s fortunes around. You can’t separate culture from a company’s financial fundamentals. Revenues, valuation and all other numbers stem from the company’s values, expectations and mission. All operations are built around the people in the company and the way they work together and align around the mission.
To start initiating change, I put together cross-functional action-learning teams (ALTs), striving for diversity not just in ethnic and gender balance but also across functional disciplines. Powerful things happen when you bring together diverse talents to learn from one another. And when you’re a leader, one of your most important roles is to develop other leaders who can make decisions and initiate the required changes in their area.
ALTs can make a big difference when it comes to innovation and problem-solving, but to actually make them a part of the cultural transformation, I purposely chose previously overlooked employees to be part of the teams. As a result, the teams were far more diverse than the company’s workforce as a whole.
Typically, middle-level managers are the ones who decide who gets these high-profile assignments, and if most of the middle-level managers are white men, they will often pick the junior staffers they most relate to. Even if there is a chief diversity officer to encourage diversity hires, that person has little control over who gets these coveted assignments — unless the CDO is also the CEO or is working closely with the CEO.
The underpinning of all of this is a CEO who sets the tone and requires that all senior managers and middle managers make DEI one of their business priorities — not just because it’s the right thing to do, but because more-diverse teams are going to transform the way the company solves problems and expands.
When I became CEO, most Jamba shops were in strip and shopping malls and urban commercial centers. Our diverse ALTs came up with the idea that we should reach out to more consumers on their own turf. So we opened Jamba Juice stores on college campuses, and we went into K-12 schools, including many in underserved neighborhoods, honing a role for the company as a solution provider in schools looking for healthier food and beverage options.
Just as notable as the redesign of Jamba Juice’s business strategy was the purposeful culture that we created. Our action-learning team members brought insights on social and environmental initiatives that they cared about, and we developed a few programs that helped make Jamba Juice more of a company that mattered in the lives of people.
These projects served an additional purpose: They made Jamba an exciting, cool place to work, and helped create bonds within a diverse pool of employees.
CEOs Need to Take Charge of DEI
Now, when you take the helm at a troubled company and announce that you’re going to be making big changes, inevitably there are going to be people who don’t want to see things change. I let everyone know from the start that we are going to treat all people in the organization with respect, we are going to unbias our systems, we are going to educate ourselves about unconscious biases and we are going to be more inclusive in our hiring and assignments. If you find these conditions problematic, you probably need to go, but otherwise give transformation a try.
In resetting the culture at Jamba Juice, I changed about a third of the leadership team within the first six months. For the most part, we mutually agreed that it was time for them to go.
It’s equally critical to have diversity at the top; that way you not only show all stakeholders what a true meritocracy looks like but you also populate the board and management with people who are likely to support the structural changes you want to accomplish.
In resetting the culture at Jamba Juice, I changed about a third of the leadership team within the first six months.
In my first year at Jamba Juice we brought two women onto the board, one of whom was African American.
When I started at the company, management was 80 percent white men; by the end of my first year, half of the managers were women and people of color.
Within three years the company’s market cap soared by 500 percent.
A diverse culture performs better because the more variety you have in thinking and expertise, and the greater the variety of people you have in a room, the more innovation you’ll have, along with better awareness of trends, markets and risk. I am confident that the new range of voices on our board changed the way the company thought about its people and its business. With a less diverse board, my overall plan for structural changes might not have been supported in the same way.
* * *
Reprinted by permission of Harvard Business Review Press. Excerpted from Anti-Racist Leadership: How to Transform Corporate Culture in a Race-Conscious World by James D. White with Krista White. Copyright 2022 James D. White. All rights reserved.