In 1990, Hugh McColl Jr. was busy transforming NationsBank into the largest financial institution in the country.
“That time period was kind of like The Wild, Wild West,” the outgoing vice-chairman of Bank of America Corp. (NYSE:BAC), David Darnell, said at an event Wednesday. “It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company.”
During that busy time, McColl, now the retired chairman and CEO of Bank of America, set another goal for the company: 10% of the bank’s suppliers would be minority or women-owned businesses and services.
It was the start of Bank of America’s supplier diversity program— an initiative that paved the way for BofA to be inducted to the Billion Dollar Roundtable this year. The Charlotte-based bank is the first financial services firm to join the group of 20 companies that have reached $1 billion in diversity spend annually. Today, Bank of America spends $2.5 billion on minority and women-owned suppliers.
BofA celebrated the 25th anniversary of its supplier diversity program Wednesday evening at The Westin Charlotte hotel uptown. Darnell and McColl conducted a fireside chat in front of an audience of the bank’s suppliers. At the end of the evening, recently promoted Chief Administrative Officer Andrea Smith presented McColl with the bank’s first-ever Visionary Award.
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“When you step back and think about that one idea and the deliberateness and the impact of that idea, I think you see the true essence of what it means to be a visionary,” Smith said. “So tonight it is my honor to present the first-ever Visionary Award to Hugh McColl for hatching this idea 25 years ago. For his commitment, his leadership, his vision and as he just said a minute ago, doing the right thing.”
McColl and Darnell discussed how the bank has changed over the last 25 years and the role diversity played as NationsBank scaled and expanded to become the Bank of America we know today.
“I think we really understood that brains come in all different kinds of packages,” McColl said. “We didn’t really care what the package looked like, as long as people could get the job done. We were looking for brains, energy and talent. We needed it.”
Here are highlights from the conversation with Darnell and McColl, edited for brevity and clarity:
The need for supplier diversity
McColl: Well, we were really trying to attract good people to our company and we were here in Charlotte and a lot of good people were located in cities all over the world. We knew we had to have a better city and a stronger business community. We looked around and saw lapses in small businesses, in particular an absence of minority-owned businesses. That got us interested in that. We were trying to figure out how to move that ball. We came up with the idea inside the company. We decided we were going to have 10% of suppliers be minority suppliers.
Dealing with pushback
Darnell: That time period was kind of like The Wild, Wild West. It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company and I know there were some leaders that didn’t really understand that we needed this kind of program. You got some pushback. As the leader of our company, how did you handle that?
McColl: Internal resistance went away rapidly. I mellowed a lot as I got older, but when I was younger we would have a discussion about it, in which I did all the talking. We really would just tell them we want to do what’s right. It wasn’t very complicated, it was just doing the right thing and if you were good enough to be in charge or part of our businesses, you ought to be good enough to figure out how to get 10% of purchases from minorities and we did that.
I couldn’t decide whether to tell this story or not, but we had one very large telephone company essentially tell us they couldn’t do that, or wouldn’t do that and everybody said we can’t do anything — they won’t do it. I said, ‘Oh yeah? We could do something.’ So we started switching to Sprint. Guess what. They came around fast because we had a very large telephone bill.
We don’t do anything in a halfway deal. We liked to be the best at whatever we did. If we were going to have a minority purchasing business, we were going to be No. 1 in the country.
McColl’s secret formula
McColl: Something we shouldn’t lose is talking to our customers because people who don’t talk to customers, they will lose them. At the end of the day, customer satisfaction is a huge part of everything.
I always thought the formula was taking care of your own employees first. Then they will take care of the customers and that will take care of the shareholders.
Who hired Darnell?
McColl: I have to ask you a question. Did I hire you?
Darnell: I will tell you that you came to Chapel Hill to hold a ‘Meet the president of NCNB.’ I went, and that night — that’s when I decided that’s where I wanted to work, and it’s been a fun 36 years.
McColl: Well, we were glad to get you.
Words of wisdom
McColl: It seems to me that we should feel good that we’ve been successful and we’ve done it because we wanted to. We’ve had fun doing it and it’s the right thing to do. I don’t believe we want praise for it necessarily, we are just doing what we think is the right thing.
If I’m around here in a decade from now, which I plan to be — y’all cant get rid of my pension and it’s expensive by the way — I hope we can do this again.