Robert L. Johnson discusses employing America’s minority population

By Dawson Bell

Page 24-25

On the surface, Robert L. Johnson doesn’t sound like the kind of guy who needs a helping hand.

He is, after all, a serial entrepreneur who rose from storybook humble beginnings as the ninth of ten children in a working class family to become the founder of Black Entertainment Television and, by his 50s, the nation’s first black billionaire.

Now 67 and in what he calls the post-BET second act of his career, Johnson sits atop a business empire with ownership stakes in one of the country’s largest chain of automobile dealerships, hotels in 21 states (including Michigan), and an array of sports, entertainment and private equity firms.

But when he arrives on Mackinac Island later this month to address the Detroit Regional Chamber’s annual Mackinac Policy Conference, Johnson said recently he’s got a big ask in mind for the hundreds of business leaders and policy makers who will be on hand: “I need help.”

The project Johnson has in mind is a daunting one. Making real and significant progress on the problem of chronic unemployment and economic underachievement among America’s minority population, especially African Americans.

Not surprisingly given his personal history, Johnson believes in what he calls “business solutions to social problems.”

Progress, he said, will come when two key areas are addressed – minority access to capital and a formal commitment by white business owners to interview qualified minorities for openings at the executive level.

The latter is the eponymously named RLJ Rule, modeled after the Rooney Rule in the National Football League (NFL), placing an obligation on firms seeking top talent to interview minorities before making the hire. In the NFL, teams are required to use the Rooney Rule before replacing a head coach, general manager or other top official (the Detroit Lions were fined by the league in 2003 when they failed to do so before hiring former Coach Steve Mariucci).

Johnson acknowledges there may be legal hurdles to the adoption of a formal rule and enforcement mechanisms in other industries. But there isn’t any barrier for any enterprise to voluntarily commit to the principles of the RLJ Rule, he said.

The problem, he said, is rooted in human nature. Executive searches tend to follow a pattern that _ ts in ownership’s comfort zone, one in which the hiring team seeks applicants through informal networks and longstanding connections, Johnson said.

The RLJ Rule is designed to compel those searchers to get out of their comfort zones, _ nd and interview minority applicants.

“Nobody is saying we need quotas,” Johnson said. “I don’t want to go for a law (that) creates more problems than solutions. But it’s not a big stretch to say this is what we need for a business model.”

The other side of  Johnson’s big ask involves opening up capital markets to more minority entrepreneurs and small business owners.

The legacy of racial discrimination in the U.S. has meant that black Americans simply haven’t had as many opportunities to accumulate wealth, Johnson said. Chronically high rates of joblessness and underemployment have made it impossible for blacks to establish equity in homes and businesses, he said, resulting in a Catch-22 in which they also are deemed credit unworthy. He uses his own experience as an example.

Johnson grew up as the son of parents who migrated from Mississippi to Illinois for economic opportunity. They found it – as working class employees in manufacturing. He attended the University of Illinois on scholarship, and later received a Master of Business Administration at Princeton.

Through a combination of hard work and serendipity, Johnson said he connected with backers who believed in him and his vision for BET, but he started from the back of the field.

Compare that, he said, to the life experience of another American success story – CNN founder Ted Turner. Turner, he said, is “a smart guy…a good guy.” But Turner’s empire was created on the foundation of a billboard company fortune bestowed upon him by his father, Johnson said.

“Ted started out with 10 times more than me and he’s ended up 10 times ahead of me,” Johnson said.

Minority entrepreneurs are every bit as capable and ambitious as their white counterparts, Johnson said. But even in prosperous times the wealth gap between minorities and whites will persist without more investment in minority-owned enterprise, he said.

“And in the end, somebody will pay for failure,” Johnson said.

People who spend their lives in poverty and unemployment will end up relying on government transfer payments, welfare and food stamps, he said.

The money to pay for them “will not be coming from the black community. It’s going to have to come from outside.”

Former Detroit Mayor Dennis Archer has known Johnson since the 1990s, when both were prominent supporters of President Bill Clinton. Archer said his friend’s mission is a moral and economic imperative.

The country’s demographics are rapidly shifting, Archer said. By mid-century, the U.S. is likely to become a majority-minority nation.

“Smart companies are going to exploit that. It’s a business imperative,” he said.

Minority participation “doesn’t mean there is any reduction in quality or the qualifications” of the workers, Archer said. “If you go about it you’ll see that it works.”

At the same time, both Archer and Johnson concede that more opportunity for minority business owners means more opportunity to fail as well.

Johnson knows from experience that success can be elusive. His venture into major league sports – as majority owner of the NBA’s Charlotte Bobcats – was a _ op. Johnson sold the franchise to former NBA superstar Michael Jordan, originally a minority-owner, after seven money-losing years in 2010.

Johnson said he failed to appreciate how much professional sports teams are “as much about sports as they are about business.”

But thousands of black entrepreneurs have never had the chance to succeed or fail, Johnson said, to the long-term detriment of the country.

“What I want to talk about…is that there are business solutions to these social problems. But they must start with the recognition that when a pair of runners are moving at the same pace, the one who starts out a mile behind will never catch up.”

Dawson Bell is a metro Detroit freelance writer.