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Friday, Sep 29, 2023

Businesses Can Do Good, Too

In his new book, “The Homeboy Way: A Radical Approach to Business and Life,” Thomas Vozzo remembers his commitment to the hierarchy of a big corporation he worked for. He called himself “$6MDM” – just like the Six Million Dollar Man, the cyborg character of the popular 1970s TV series.

Vozzo said as an executive vice president of a $1.8 billion business, knowing it had invested $500,000 in his ascent, he felt like “a true and trained apparatus of corporate America. I was to be among the best at what it produced …”
But something changed in 2010. He said he was disillusioned watching how “people treated employees like chess pieces and felt dirty for how they were indifferent to the human cost.

I was a participant in the over-the-top wasteful and gluttonous spending and saw first-hand how the ego drives self-serving decisions to the detriment of doing what’s right for the betterment of society.”
Vozzo admitted he was “missing a killer instinct, to trample over others. I needed to do something that matters.”

Homeboy Industries, the Los Angeles-based gang intervention nonprofit organization that has created jobs for the hard-to-employ for more than 30 years, gave Vozzo that certain something. More than just the unpaid title of chief executive, Vozzo was given a new outlook on how corporate America structures meritocracy and buys into the movement of diversity, equity and inclusion.

When the Business Journal did its philanthropy special report in October, it noted that Homeboy Industries, founded by Jesuit priest Father Greg Boyle, had become a company with $30 million in annual revenue. More than $6 million was generated from its network of businesses that included a bakery, café, silk-screening, electronic recycling and retail. The balance comes from donations and grants. It had also just won the Conrad N. Hilton Humanitarian Prize (with a $2.5 million award) and received a $15 million grant from the state of California that it would use to develop transitional housing for its trainees.

That was a notable turnaround from how it stood in 2010 just before Vozzo arrived. It was then running a $2 million annual deficit and a little more than $2 million in business revenue, even after investing in a $11.3 million facility in the Chinatown area of Los Angeles.

Convinced by the way Homeboy has had a robust recent history of positive annual operating income and has helped more than 40,000 people in the community, Vozzo decided to write his book, which was recently released. He shared more with the Business Journal in this interview:

Q: What has been the reaction to the book from those in your corporate circle?
A: People are very appreciative of what Homeboy Industries represents and how they help people. I try to get them to understand – you can do this too. Even in some small aspects corporate folks can do it. I also get a kick when the homies actually stop and say something nice about the book. That’s the audience I want to represent well.

Do your business friends think your plan can work or do they politely brush it aside?
Look, I’m still a committed capitalist. I believe businesses are good for our society. But if you want to change poverty in America, provide good jobs. How do you provide good jobs? You create more businesses that actually give to people who don’t have jobs a job, and you teach them and give them a different support structure around them.

Businesses can do all that. It just takes a desire to do something different and move it forward from the top level on down. Hopefully we’re at a tipping point in our business society where they are recognizing this concept of DEI (diversity, equity and inclusion), which Homeboy has been on the front lines for 30-plus years. How do you get people who are poor, of color, to have upward mobility in their job? You put a support group around them in their front-line job and you make sure your management team looks like your front-line employees.

I think companies are wanting to figure that out. There are very few examples of how to figure that out, and that’s what I’m trying to say in this book – here is a prescription on how to do it.

Your statement in a chapter entitled “Meritocracy Does Not Always Work,” calls the pursuit of the American Dream problematic as meritocracy provides “false incentives and nonexistent bootstraps. The way forward pursues the Homeboy vision: offering love, encouragement and support that will make a lasting difference in our society.” What convinces you this can get some traction in corporate America?
I want to answer that in a couple different ways. To be glib first, our Homegirl Café is a Zagat-rated café – only seven other restaurants in downtown Los Angeles have as high a rating. And it’s run by former felony gang members. So it proves you can run a successful business with this population.

But in our capitalistic society, we get into this aspect of measuring people and their performance. You can’t measure someone’s self-worth. To help people who are unemployable become employable, you have to figure out what else is in their life that enables them to have the resilience to be in that job. Fundamentally, everyone wants to do a good job. And when they aren’t, there is something else in their life going on that’s causing that. It’s that awareness of those front-line employees of what’s happening in their lives. If we can bring more services around that, they work up the corporate ladders.

In any corporation, there will always be measures of production, but that also shouldn’t be what defines if someone is a good person or not. Corporations need to evaluate more on merit values not so much on work performance along the way.

Are there businesses today that could adapt easier to antimeritocracy? Could the big company you worked for have done this when you were there?
That answer is definitely yes. It would probably be easier for a startup to do this now. In smaller businesses and family-run companies, they get it, and pull together. The question is how you do that on a bigger scale? There are some market forces: Will the private equity world change the way they evaluate deals? Will Wall Street change the way it evaluates shareholders? Reform needs to happen there as well. But in my view, you need a new-age CEO to balance all those things as opposed to CEOs of the last 25 years.

You list 55 different statements and concepts that you believe can be modified in today’s business world. The first: Good logic always leads to good business. How can that be faulty?
Logically, I wouldn’t have come to Homeboy. I mention in the book when Father Greg (Boyle, Homeboy’s founder) asked me to come on as CEO I thought about it and wondered – would I be spoiled goods to go back to the for-profit world? Would I no longer be ‘tough enough’? When I called around to my network, and asked if that would be true, most said, ‘Yeah.’ The logical move was for me not to do that. Everything in my business life was getting the promotion and the bigger job, more money, blah, blah, blah. Sometimes, you follow faith or your gut.

It is easier to hire for management skill sets than to develop them?
If your goal is to uplift more people, you need a diverse management team and invest in it. You can’t just go hire for it. In the for-profit world, the answer can be: Just pay someone more money and bring them in. Nothing wrong with that but if that’s your philosophy you’re never going to build a long-term, sustainable enterprise where you help people.

You’ve called your plan Economic Equality Capitalism, and Homeboy has proven it works. Where can it go from here?
In the for-profit world, there is all kinds of equity to start a company, investing in an idea, and letting it grow. Often times that equity doesn’t get paid back. It’s only one-in-10 private or venture capital investments that work out. I’m saying, let’s invest in an idea and let it grow with our people running it. We’ll take the same type of risks but those people have jobs that keep it going, who make a decent living with benefits and are not on government assistance. We should fund those businesses and there’s a return on this investment for society. But you have to put equity at risk with these businesses by employing the disadvantaged.

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