AA Lauded for Diversity Efforts

It turns out that Atlantic Southeast Airlines, which hit a historical aviation milestone on February 12 when the first all-female, all black crew took flight in aviation history, is not the only one working on diversity in the cockpit and in management. In April, American was cited by DiversityMBA Magazine as one of the best places for diverse managers to work in its fourth annual rankings.

American, ranked 17th and was the only airline to make the list of 50 Out Front Diversity Leadership: Best Places for Diverse Managers to Work, according to Publisher and CEO Pamela McElvane, who noted that the airline ranked in the top 10 for board diversity. “Our results showed that, on average companies have 10-12% of directors represent diverse populations and American typically has 15-20,” she said. “Our top 10 list is really showing the companies that have made a significant commitment to diversity.”

The magazine's criteria for the list was expanded this year to include companies that implement strategies based on accountability, strong inclusion practices, and ongoing evaluation of retention/recruitment activities that allow and encourage managers of diverse backgrounds to excel and develop into leadership roles. In the past, the list focused primarily on recruitment and diversity programs.

"American has worked hard over the years to be an inclusive employer and we are truly honored to be named by DiversityMBA Magazine as one of the best places for diverse managers to work," said Denise Lynn, American's Vice President - Diversity and Leadership Strategies. "Valuing and promoting diversity and inclusion among employees is good for our workforce and our customers, smart for our business - and most important, it is the right thing to do as a good corporate citizen."

The DiversityMBA Magazine citation goes to companies that not only recruit a diverse population of employees but foster them affording them stretch opportunities, said McElvane, in which they report directly to CEOs.

“This activity represents a major opportunity in breaking the glass ceilings in terms of executive levels which have a lot more representation today,” she said, adding that American provides these employees with opportunities to develop into a diverse talent pool and offers expansive leadership development training. “The last 10 years have been tough for airlines but that hasn’t stopped American from participating in these programs to develop diversity in its management corps. In addition, many in attendance include their white colleagues who gain as much from the training. It is unusual to see both together. We have more C-level participates there than ever before. This proves that American is serious about retaining talent, recognizing leadership and fostering the development of people of color.”

McElvane indicated that DiversityMBA works with other airlines but American is leagues ahead of its peers. “This does not say there are not opportunities for all airlines to do better,” she said. “Our results tell us that what American is doing is not the rule. We have a ways to go but that’s the reality. While some may say that this means the white male is not getting their fair share, it is clear that the white male still has primary access in this field. This means the industry has to invest in grooming the talent it needs."

She noted that the industry has a unique aspect and that is its pilot corps, noting that the role of traditional source for recruiting pilots – the military – is diminishing, which is exacerbated by the small number of pilots of color. “The pool of diversity is not there,” she said. “You have to look where the pool is – finance, sales, marketing – so you can level out diversity and women. A lot depends on the CEO and where their commitment is.”

McElvane pointed out that many organizations are grooming minority aeronautical engineers for leadership. “While American is not the top in recruiting minority employees, it is dedicated to investing in pipeline development as well as the talent that is ultimately going to go out in the industry.”

She noted that her magazine is trying to develop what the metrics are for the industry. “We want more airlines taking our survey, not so they make the list but to mine the research data and say whether or not industry is moving in the right direction,” she said. “The industry has to do an overhaul in terms of imaging and what it takes to prepare people, especially in overcoming areas of weakness. You have to have the data to know what to do about it. If something is not being done about it, it is intentional. If they say that they can’t find the talent, we know they are choosing not to find it and invest in it. In doing that, they are saying that is okay and short changing their own business strategy.”

DiversityMBA Magazine is a niche publication targeting people of color and women MBAs, students, professionals and the business. This year’s ranking, published in its April issue, expanded research evaluations to include companies that implement intentional strategies based on accountability, strong inclusion practices and ongoing evaluation of retention/recruitment activities that allow and encourage managers of diverse backgrounds to excel and develop into leadership roles. In the past, the list focused primarily on recruitment and diversity programs. DiversityMBA Magazine provides research reports on diversity benchmarks for talent retention, industry diversity programs, and performance in the diversity arena through its partnership with DePaul University.

"We learned that high-trust organizations are responsive to ongoing communication and integrated feedback, which ultimately supports an environment that facilitates and fosters innovative thinking and inclusion,” said McElvane. “In my opinion this is the essence of diversity of thought and vision."

Last year, American was named one of the Top 60 Companies for Hispanics by Hispanic Business magazine, one of just two airlines to make the list - and the third consecutive year that American was selected. In addition, for seven consecutive years American has received the highest possible score from the Human Rights Campaign, an organization dedicated to promoting and ensuring understanding of gay and lesbian issues through innovative education and communication strategies.

This is an organic part of the company, said American's Lynn. “It is ingrained in us. It is not just about brand image, it is about who we really are. Our general counsel is a white male but he won the employer of choice by the Minority Corporate Counsel Association for his personal efforts in bringing diversity to the legal profession. It is another profession where there is not a lot of diversity. His efforts resulted in an internal leadership forum for 250 top executives at American, who heard about his efforts and how to extend it so they could make progress in their own fields.”

The September 2008 issue of Hispanic Business magazine featured the Diversity Elite 60, an annual list determined by more than 30 variables that measure companies' commitments to Hispanic hiring, promotion, marketing, philanthropy and supplier diversity. In that issue Salvador Mendoza, Hyatt Hotels & Resorts' vice-president of diversity and inclusion, noted that today "diversity and inclusion initiatives align with business." Indeed, said that magazine, corporate executives and experts indicated that, “when properly synced with business objectives, diversity has turned into a powerful, quantifiable asset that corporations pursue to stay competitive.”

Top companies on this year's list went beyond workforce diversity initiatives and implemented strategies to reach more Hispanic consumers and increase their businesses with minority- and Hispanic-owned suppliers.

American has a long history of fostering equal employment opportunities for minority employees. In 1963, the airline hired the first African-American flight attendant to fly for a U.S. commercial airline. The first African-American pilot was hired in 1964 and the first female pilot was hired in 1973, both by American. Today, approximately 32 percent of American and American Eagle's domestic employees are minorities and about 40 percent of the two airlines' employees are female.

Diversity efforts at American are guided in part by a Diversity Advisory Council, which includes representatives from the company's 16 Employee Resource Groups. Now in its 15th year, the council helps ensure that American is a good place to work for all employees.

“Diversity is something we value and have for many years, thanks to the commitment of [former Chair and CEO Robert] Crandall, who was a pioneer in this area,” said Lynn. “It is also extremely important to [Current CEO Gerard] Arpey. The value is seen at the very top of the company. In the airline industry we are so lean and mean you have to be able to make a clear connection between resources you use and the value it brings to the business. We have consistently placed a priority on diversity in good and bad times, because we know we are in the business of serving people. American serves about a quarter of a million different people from all over the world every day. It’s our business to bring people together, and we won’t be successful in that endeavor without a fundamental appreciation for the individual. It’s essential that we create an environment and an experience that is safe, welcoming, and respectful for employees and customers from all cultures and backgrounds. We are a global airline serving different cultures and our people must have a human connection to people of all different backgrounds and experiences. We are all about creating a safe welcoming and respectful environment for both our customers and our people.”

Lynn’s team is small but highly complex since it goes well beyond recruitment/retention, including both diversity and talent strategies as well as a lot of employee participation, all integrated into a single effort. It focuses on how the company develops, promotes and recruits in the organization. “It is not a separate thing,” she said. “If it were it would make it hard to integrate into the main stream which is what we do.”

The objective she sets, she said, cascades from the top down through the company and extends to the use of suppliers and their efforts in this area. “It is the same as our approach to safety, financial and operational performance and we measure ourselves on a regular basis,” she said. “Historically, we focused diversity objective in four areas, leadership diversity within the company and ensuring women and minorities are at top levels; supplier diversity, making sure suppliers include minorities, women and LGBT businesses and growing spending with diverse suppliers; customer diversity which these days has to do with pretty involved segment marketing; and community diversity – how are we making the right relationships with volunteerism, philanthropic efforts and community relations in the things we support across the company.”

Since establishment of the Diversity Supplier Program in 1989, which focuses on both ethnic minority (African American, Hispanic, Native American and Asian Pacific) and women-owned, diverse and small businesses, total expenditures with diverse suppliers exceed $3.6 billion. In 2004, American began partnering with Business Matchmaking, an organization focused on matching women and minority-owned suppliers with companies needing to purchase supplies. Its latest initiative focuses on the disabled. This year it is partnering with the American Association of People with Disabilities to create an award which encourages companies to build advertising campaigns portraying people with disabilities in a positive light.

“Diversity is the foundation,” she continued. “This is organic to the company. I see my role as an influencer and facilitator to help people think about how they make progress. But the leadership knows how important this is so it is not a difficult thing to do.”

Its Employee Resource Groups (ERGs) include the infrastructure to support the groups, she said, but the ideas come up from employees who choose what activities and how to make it align with business. “We started in the mid-90s with one ERG and now have 16,” she said, adding the company’s efforts are very employee driven instead of company driven. “We are one of the few companies to have religious groups and, for us, it is a great way to creating understanding among different groups and appreciation for those differences.”

More recently, American created external customer advisory councils, focused specifically on key segments. “It has given us invaluable insight into what we can do (and, frankly, stop doing) to build customer loyalty,” said Lynn. “This feedback has driven enhanced customer-service training, specialized content on AA.com/women and AA.com/rainbow, and product enhancements, many of which benefit all customers.

“When I meet with other companies, I note we are leaders in diversity,” she continued. “We have been doing it for lot longer and are often cited as leaders in field. Part of challenge is our story doesn’t get told as well as I’d like it to so we have a new link on our web site – aa.com/diversity that highlights some of the things we are doing. The latest ones are an ERG for new hires and another for employees under 30 and we are working with them to tap their expertise in many ways including more effective recruiting, service and branding. Another new group is military vets and they are helping us with ways we can help returning vets. This is more than just using them to advance business but is creates a connection between the passion of our employees, the American brand and what it stands for, the community and what is important to our customers. We are no longer focused on self interest but in how to support the business within the various communities and extends to creating joint leadership programs with airports.”

The airline also has a diversity advertising council and a diversity committee within the board which is very engaged. Lynn indicated everything is designed to guide access and break through barriers both within the company, at airports and with the outside community.

The company has also designed a measurement program called the diversity dash board which is six years old which pro-actively reports diversity metrics on leadership, hiring and promotion targets that will drive and improvement leadership at the top. “We have made steady improvement in the representation of women and minorities in top management ranks, despite the fact we have reduced head count and lower turnover at American,” she said.

Among all work groups, for all of American’s U.S. employees 40% are female, 32% minority, she said, more representative of the workforce at large. “At the top levels – manager level and above – we are 28% female, 24%. That is very good for a company with certain technical areas where there is low female representation.”

Its growing diversity in its managerial corps is especially impressive given the sharp reductions in the overall number of management employees. The vast majority of this has been achieved through internal promotions by hiring from within, which makes the executive training programs in which it participates all the more important. Minority representation has more than doubled between 1996 to 2008 from 10% to 24% while female representation has risen from 21% to 28%.

And all this is done despite the difficulty in making a direct connection between these efforts and the bottom line. “That is hard for us to measure at this point,” she said. “What we are really trying to measure is whether or not our efforts are making a difference and I believe we are. Because it is the right thing to do doesn’t mean that it is bad for business. Clearly we are spending millions of dollars without a clear payback but we think of it as an investment. Our board and CEO are committed and have maintained a steadfast focus on the importance of diversity and inclusion through good times and bad because it’s critical to our business and because it’s the right thing to do.”