Creating Business Solutions

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.

The Grandest of Years

Mackinac Policy Conference venue celebrates 125 years of history
By Clair Charlton
May 2012: Page 64-65

It’s not every day that influential leaders, entrepreneurs and philanthropists meet to plan the future of one of the country’s most forward-moving regions. So when they do, it’s only fitting that a quasquicentennial celebration should be part of the festivities.

This is a grand year for both the Mackinac Policy Conference and its loyal venue, the Grand Hotel on Mackinac Island. Looking ever more beautiful than the day she debuted 125 years ago, the Grand Hotel is honored and pleased to welcome the Mackinac Policy Conference May 29 to May 31, 2012.

An idyllic island setting, the Grand Hotel offers old world charm blended with modern technology required for the Conference, according to Dan Musser, III, president of the Grand Hotel. The Conference pillars of innovation, collaboration and 21st century global market reflect perfectly in the majestic pillars that grace the world’s largest front porch, he said.

“The Mackinac Policy Conference has been held at the Grand Hotel for over 30 years, and our guests are consistently provided with a level of service and experience that is exceptional,” said Tammy Carnrike, CCE, chief operating officer of the Detroit Regional Chamber. “National and international guests, as well as our own Michigan participants, leave the Conference with a positive Michigan experience that bolsters our state’s brand and reputation around the nation and world.”

The world’s largest summer hotel has 385 rooms, each uniquely decorated, offering guests a wide range of accommodation choices. There are 95 deluxe rooms and 54 named rooms, including seven in honor of former first ladies. Recreational activities are abounding at the Grand Hotel with tennis, afternoon tea, saddle horses and even their very own 18-hole golf course, The Jewel. Live music entertainment happens nightly, whether its dancing or the Grand Hotel Orchestra or live bands at The Gate House.

Since its opening on July 10, 1887, The Grand Hotel has worked to keep its historic appeal. In 1957, the Michigan Historical Association recognized the hotel as a State Historical Building and in 1960 R.D. (Dan) Musser was appointed president. 2012 marks the 79th consecutive year the Grand Hotel has been under the stewardship of the Musser family. While the hotel’s original architecture and charm have been preserved, guests can still enjoy modern amenities and the hotel is recognized as one of Travel & Leisure’s 500 World’s Best Hotels.

“We are proud of the unique role Grand Hotel has played in the history of Michigan. It first opened its doors just 50 years after Michigan achieved statehood and has played host to state and national leaders on a consistent basis ever since,” Musser said.

The Grand Hotel’s picturesque milieu is only accentuated by its location on Mackinac Island. Overlooking the Straits of Mackinac, the hotel’s 660-foot porch makes a perfect first impression to those approaching the island by ferry. Visitors are taken back 200 years, surrounded by antique shops and historic sites like Fort Mackinac. A place where motorized vehicles are forbidden, bicycles and horse-drawn carriages are the only form of transportation.

“The Grand Hotel certainly matches the focus that the Chamber wants to accomplish for this conference,” says Musser, noting that the hotel has hosted all but the first one or two of the Conferences. “The hotel, like the island, provides a setting that promotes interaction inside the sessions and out, and the Chamber does an extraordinary job of providing quality content and working with us to build creative events that promote interaction among attendees of what is arguably the most important policy event in the state.”

Grant Hotel President Dan Musser III and Chamber President Sandy K. Baruah at an event commemorating the hotel’s 125th anniversary at the Detroit Athletic Club in March 2012.

For a destination that throughout 125 years has witnessed events large and small, welcomed five U.S. presidents and hosted thousands of memory-making celebrations, creating connections between people is what the Grand Hotel does best, Musser said.

“The Grand Hotel is a key element to the Conference’s success and are great partners each and every year,” Carnrike said. “The Grand Hotel has played a significant role in Michigan’s history, and is now positioned as a key asset in Michigan’s future. The Musser family and their team should be very proud of achieving such an impressive milestone.”

Claire Charlton is a Metro Detroit freelance writer.