Montgomery Business Journal

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Summer 2014

Fred Keeton is vice president of finance, external affairs and chief diversity officer for Caesars Entertainment Corp. He was recently interviewed by the Montgomery Business Journal’s David Zaslawsky.

Montgomery Business Journal: What does diversity mean to you?

Keeton: Diversity simply means difference across any set of circumstances. I think people sort of pigeonhole the word very often and make it something that it isn’t, but diversity is in and of itself about difference.

MBJ: Why do people make it into what it’s not?

Keeton: I think very often people make into this one-dimensional thing. While it is a noun and while in our traditional approach to thinking about it, we attach it only to protected classes. We attach it to only race, gender, sexual orientation, disability and those kinds of things and that’s very, very inappropriate and a shortcoming in terms of how we think about the word. Diversity is really similarities and differences and the tensions that relate to those.

MBJ: How important is it to have a diverse work force?

Keeton: I think it’s hugely important to have a diverse work force. Let’s go back for a second though and really get how we ought to think about the dimensions of diversity.

MBJ: What are those dimensions?

Keeton: We need to think about those dimensions of diversity from the standpoint of cognitive diversity – differences in how we think. We need to think about them from the standpoint of cultural diversity – differences in culture and approaches. We should think about it in the way of market diversity – what are the different markets and who are they made up of and how do we engage those. We should think about it internally from the standpoint of structural diversity – what does our organization look like in terms of the way it’s structured; all the different pieces. Again, you hear that word “different.” And then we should think about it from the standpoint of product diversity – what are those products, goods and services that would be most meaningful to our particular customer base. How can we create a compelling value proposition for those customers based on diversifying our products in a way that would be most meaningful to them as customers of ours from a service perspective? When you’re thinking about diversity and you think about it in that way, now you have all of these pieces and all of those categories that I just mentioned to you, including the protected-class issues. All of those go together to help us to when we mix them and manage them appropriately to think about the business in markedly different ways and to become much more intelligent about how we do what we do as we drive outcomes in the business. I wanted to make sure that I made this point to you because this is a huge point and very often we miss it.

MBJ: From what you are saying, diversity had a limited connotation in the past, but you are expanding it to the point where it includes everything about what a business is.

Keeton: Yes. So when you think about that and you think about what is necessary … if you think about complexity theory and – forgive me for going here, but I really want to share this with you – when we think about complexity theory and we think about complex systems, what we know is that a city is a complex system; that a company is a complex system, especially the larger that they get with the more moving pieces and the different functional areas and the like. Of course, the environment is a complex system. What we want to do is create the capacity for that system to remain not simply a complex system, but a complex adaptive system.

MBJ: What do you mean by a complex adaptive system?

Keeton: What that means is that system creates a degree of intelligence within itself so that it pre-emptively makes adjustments to the environment so that the environment doesn’t always force the change. If you deal in complexity science, it’s called emergence – the ability for that system to emerge with all these different pieces making decisions that really move that organization or that system forward, sometimes not even realizing that a particular decision that was made in one place has such a big impact in another. It does it as a matter of course and what that means is, it plays on its diversity. As you think about diversity, we’ve talked about it here, but we haven’t talked about inclusion.

MBJ: Why is inclusion so closely linked to diversity?

Keeton: Diversity is a noun; inclusion is a verb. Diversity simply means, as I said earlier, difference. It’s all of these differences that we manage. Inclusion is the management of those in a way that helps you to drive your way toward organizational objectives based on outcomes. It’s very, very important to understand that that mix is key. This is a both approach rather than an either-or approach. It requires great leadership so that relevant dimensions of diversity are never left out dependent upon the area or the situation or the circumstance that you’re working around.

MBJ: You’re saying you can’t have one without the other.

Keeton: Yes. For an example, every dimension of diversity is important, but every dimension of diversity may not be relevant in every set of circumstances. I may have a situation where I don’t have … just if we were to think about the traditional way of thinking about diversity – I may be in a business situation where I don’t have a protected-class issue that I’m managing from an inclusion perspective. I have a functional diversity issue, where I have some cross-functionality that needs to take place appropriately and it’s not taking place. I have different functions in the organization that aren’t working together like they ought to in order to drive the very best outcome. As you’re thinking about it, you are now able to say in this particular instance I don’t have a traditional protected-class diversity issue. I have an issue of cross-functionality. It’s not working. These folks aren’t engaging each other. If we go back and think about the very basics of diversity and the reason why we would do it, our chairman Gary Loveman says that ‘the collective IQ of the organization ought to increase with every new hire.’

MBJ: What’s the implication of that?

Keeton: Does that simply mean we need to hire smart people? I would offer to you that if we simply hire smart people we wouldn’t get to that collective IQ increasing. If we’re hiring smart people, now we have to create the capacity to engage those folks in a way that they are included in making the organization smarter. I can have 10 MBAs on my team in a room and if we were to give each cognitive tools and if I was to lop their heads off, which is a pretty grisly thing, and put tool boxes in the place of their head – each one of those
10 folks would have a set of tools in those boxes dependent upon their background; and how they have been trained educationally, etc. If all of those folks are really, really similar it’s very likely they’re going to have a very similar set of tools. If I can bring in another three folks and with those 10 MBAs and each one of them had 10 tools – I have 100 tools to work from, but many of them are the same.

If I bring in another three folks and make a team of 13 folks, but these folks are not MBAs from the fancy schools. These folks are really, really smart businesspeople, who had a number of experiences across a number of different functions and industries. They only have eight tools apiece, but four of the eight tools they have are different than any of the tools that the other 10 MBAs have. If those folks can be heard, then the team will get smarter. If their tools are relevant and they can be heard, the team will get smarter. You have to think about how you’re engaging in that way.

A part of my toolbox comes from the fact that I am a 57-year-old African-American male from Morton, Mississippi, about 36 miles east of Jackson. The fact that I’ve been with this company 30 years on the 23rd of July; the fact that I’ve been in risk management; that I’ve been in development; that I’ve been in government affairs; that I’ve been in finance – all of that has contributed to this diverse cognitive toolbox that I have. The way I view the world; the way I engage the world – the foundation for that goes back to Morton, Mississippi. And everything builds upon that, so both how I think, which is a DNA-driven thing; and the cultural side of things I come from, and I just don’t mean protected-class issues. I mean the Southern culture. I mean the small-town culture. I mean all of those different things go into this toolbox that I have.

MBJ: I would expect a number of your co-workers to be from the West Coast.

Keeton: Some of my colleagues are here from out west. They went to UCLA, and as you might imagine, as we think about things very often, we think about them markedly differently and it’s our ability to mix and mesh those to recombine those tools in ways to help us look at the very same thing, but to see it differently that makes us smarter in the organization and smarter about how we do what we do as a business. The people who fit in roles like mine and who call themselves chief diversity officers – we are very often our own worst enemies when we’re talking about this very critical, critical role that we have in organizations; that we have in business overall; and that’s key to every economic system that exists: How do the elements of that system combine and recombine and react to the environment – and quite frankly, pre-emptively push the environment from time to time to drive the very best outcomes for us in a way that is sustainable; and in a way that really sets the stage for us. We talk about diversity and inclusion and we do a number of things when we talk about it.

MBJ: What are some of those things?

Keeton: We talk about not suspending business logic in order to engage in diversity and inclusion and we don’t believe that you have to. We also believe that the suspension of business logic is a double-edged sword. If you are ignoring diversity and inclusion then that’s the suspension of business logic as well. I can go about my ways and do this in the wrong way and it’s not going to drive the outcomes that I need to drive. Or I could not do it at all and it’s certainly not going to drive the outcomes that I need to drive. It’s incumbent upon business leaders to really step back and understand what we need to do in order to be as smart as we can be in an organization and in order to really drive the outcomes that we need to drive in a way that we question – we create the capacity within our organization to question orthodoxy.

MBJ: Talk about questioning orthodoxy.

Keeton: To really understand how do we maintain the requisite reliability in our systems, but how do we at the same time validate new ways of thinking about the business and driving outcomes. Diversity becomes super-additive when you put it in those kinds of circumstances. I want you to understand that the foundation has to be – how do we drive the very best outcomes? What is it that we want to do in order to be as smart as we can as a business and how do we want to make sure that we are in a position globally to address the issues we need to address? If I were to think about Montgomery and the region, I would think about Montgomery in the same way. What are those elements? I already know that Montgomery is a node. If you think about a node, that’s where an attachment point comes to from a number of different places. Within that node itself there is diversity, but there are attachment points that come from other places away from Montgomery that attach to the military presence there; that attach to the automobile presence there; that attach to a number of different industries that are already there. How do I play on that diversity, because that is a complex system and you want it to become a complex adaptive system?

You want the whole Montgomery area to say, “What we want to do is, we want to create an increase in the interdependent value of our node, so that people think they have got to attach to us because there’s this thing that we bring that is super-additive to their existence in another place.” When you think about it that way, that’s what inclusion is all about. You have to be very intentionally inclusive and if you’re not intentionally inclusive, you will be unintentionally exclusive and with really terrible consequences that come from that. Because you don’t position yourself appropriately for the new ideas that are coming and the new opportunities that are going to come.

MBJ: Are businesses beginning to realize what diversity and inclusion mean for their customers and offering different services and products to the various segments they deal with?

Keeton: Beginning to understand it. One of the really critical things that you have to think about is why companies engage in diversity and inclusion. Very often when you talk about diversity and inclusion and markets, you simply think about it in the construct of multi-cultural markets. They talk about Asians helping to market to Asians; they talk about African-Americans to African-Americans; they talk about Latino to Latino, etc. When you’re doing diversity and inclusion in the right way – if you are really managing it at a high level – then it makes you better at multi-markets. Multi-markets means that you can look at markets that you’ve been working with forever and you can see something different because you’re mixing and remixing the eyes that are looking at it. If you want to think differently about a market, you have to put some people on with relevance who will question how you’ve been approaching that market or who have a capacity to see a market difference in a way you might consider approaching that market. When you’re thinking about how can I look at this business differently, the further away that you get from an issue with relevance, the more likely you are to get a breakthrough.

MBJ: You seem very passionate about diversity and inclusion.

Keeton: I get very excited about it. We are losing such a great opportunity because we get stuck on what diversity and inclusion ought to be about. Some people say you should do away with it. Are you going to do away with leadership? How are you going to lead different people unless you understand how to motivate them? You motivate them in ways that are within the construct of an overall structure and plan.


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