Workforce diversity is key to business innovation, says Carnival CEO Arnold Donald

Carnival CEO Arnold Donald said Thursday that workforce diversity is critical for any company trying to innovate and disrupt an industry, emphasizing its role in ensuring the longevity of a firm.  

“Businesses thrive over time through innovation. You have to introduce new products, refine your processes so you can be more cost-effective. You have to innovate for a business to sustain success over time. If you don’t innovate, you get gobbled up or you go out of business,” Donald said at CNBC’s Inclusion In Action Forum.

And for that innovation to happen, Donald said a business needs to be hearing a range of ideas. 

“Innovation, by definition, is diversity of thinking. It’s thinking out of the box and so you are far more likely to engineer sustained innovation if you’ve engineered diversity of thinking in your organization,” said Donald. “And diversity of thinking is often reflected by the diversity of the people, and so you need diverse people in the organization. It’s absolutely a business imperative.” 

Donald said he has taken this approach with him throughout his business career, including since he became Carnival’s president and chief executive officer in 2013. Donald, who is Black, stressed that diversity can take many forms. 

“We kept a lot of the people that were there,” Donald said of taking over Carnival. “But I seeded in diverse talent, different ways of thinking. And that was gender talent and even educational talent. I purposefully brought in a leader who did not have a college degree but had been wildly successful in life and producing great results. But I also brought in African Americans.”

Arnold Donald, CEO, Carnival Cruise

Scott Mlyn | CNBC

And for Carnival, due to its global presence, Donald said it was important to have people in management roles who reflected that reality. “A lot of our business is outside the United States, and I made certain that I had leaders — I have one who was born in communist East Germany and so that’s a whole different way of thinking,” he said. “You just purposefully engineer into your leadership ranks diversity, and you do start at the top.” 

CNBC’s Inclusion in Action Forum comes after corporate America stepped up its pledges to address racial injustice in the U.S. following the police killing of George Floyd in Minneapolis, which helped ignite a wave of protests and demonstrations across the country. The forum aimed to focus on actions business leaders can take to concrete action to address racial disparities in their organizations. 

Donald’s comments came as part of a panel that featured Shundrawn Thomas, president of Northern Trust Asset Management, and Caroline Wanga, interim CEO of Essence Communications. 

Donald, who grew up in the segregated U.S. South, said he believes it is critical to build opportunity pipelines for Black Americans and other underrepresented groups to move up the ranks in companies. However, he contended it is necessary to focus on the management ranks, too. 

“If you start at the top, those people No. 1, bring other people with them over time. And No. 2, they create the condition for aspiration where people believe they can aspire and achieve it as well,” he said. “And No. 3, they kind of socialize the concept of inclusion with their peers.” 

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