Companies can also do good

Tom Vozzo, once an executive of a large company, decided to work for the betterment of society. So he became head of Homeboy Industries, the nonprofit organization that employs former gang members. He has now written a book explaining how for-profit companies “can do this too.”

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

Vozzo said that as executive vice president of a $1.8 billion company, knowing that he had invested $500,000 in his rise, he felt like “a real, capable apparatus of corporate America. I was going to be among the best in what I produced…”
But something changed in 2010. He said he was disappointed to see how “people treated employees like chess pieces and felt dirty because of their indifference to the human cost.

I participated in excessive waste and gluttonous spending and saw firsthand how the ego drives selfish decisions to the detriment of doing what is right for the betterment of society.”
Vozzo admitted that he lacked “a killer instinct, to trample on others. He needed to do something that matters.”

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

When the Business Journal did its special report on philanthropy in October, it noted that Homeboy Industries, founded by Jesuit priest Father Greg Boyle, had grown into a company with annual revenues of $30 million. More than $6 million was generated from his network of businesses that included a bakery, cafe, screen printing, electronics recycling and retail. The balance comes from donations and grants. He had also just won the Conrad N. Hilton Humanitarian Award ($2.5 million prize) and received a $15 million grant from the state of California that he would use to develop transitional housing for his trainees.

That was a noticeable change from how it was in 2010, just before Vozzo arrived. He then had a $2 million annual deficit and just over $2 million in business income, even after investing in an $11.3 million facility in the Chinatown area of ​​Los Angeles.

Convinced by how Homeboy has had a strong recent track record of positive annual operating income and has helped over 40,000 people in the community, Vozzo decided to write his book, which was recently published. 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?
TO: People really appreciate what Homeboy Industries stands for and how they help people. I try to make them understand that you can do this too. Even in some small ways, corporate people can do it. I also get a kick out of it when the homies stop by and say something nice about the book. That’s the audience I want to represent well.

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

Companies can do all of that. It just takes the desire to do something different and move from the top level down. Hopefully, we are at a turning point in our business society where they are recognizing this concept of DEI (Diversity, Equity, and Inclusion), which Homeboy has been at the forefront of for over 30 years. How do you get poor people of color to be upwardly mobile in your job? You put a support group around them in their frontline work and make sure your management team looks like your frontline employees.

I think companies want to realize that. There are very few examples of how to solve it, and that’s what I’m trying to say in this book: here’s a recipe on how to do it.

His statement in a chapter titled “Meritocracy Doesn’t Always Work,” calls the pursuit of the American dream problematic, as meritocracy provides “false incentives and non-existent supports. The Way Forward pursues Homeboy’s vision: to offer love, encouragement and support that will make a lasting difference in our society.” What convinces you that this may have some traction in corporate America?
I want to answer that in a couple of different ways. To be simplistic first, our Homegirl Café is a Zagat rated café – only seven other restaurants in downtown Los Angeles have such a high rating. And it’s run by former criminal gang members. Thus, it shows that you can run a successful business with this population.

But in our capitalist society, we get into this aspect of measuring people and their performance. You can’t measure someone’s self-esteem. To help people who are unemployed become employable, you need to figure out what else is in their life that allows them to have the resilience to be in that job. Fundamentally, everyone wants to do a good job. And when they are not, there is something else in your life that is causing that. It’s that awareness of those frontline employees of what’s going on in their lives. If we can bring more services around that, they will work on the corporate scales.

In any corporation there will always be measures of production, but that should not be what defines whether someone is a good person or not. Corporations need to assess more merit values, not so much job performance down the road.

Are there companies today that could more easily adapt to anti-meritocracy? 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 companies and family businesses, they understand and work together. The question is how do you do that on a larger scale? There are some market forces: will the world of private equity change the way they evaluate transactions? Will Wall Street change the way it evaluates shareholders? Reform must also happen there. But from my point of view, it takes a CEO of the new age to balance all those things compared to the CEOs of the last 25 years.

He lists 55 different statements and concepts that he thinks can be changed 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 that when Father Greg[Boyle, the founder of Homeboy]asked me to be CEO, I thought about it and wondered, would I be a pampered commodity if I went back into the world for profit? Wouldn’t he be ‘strong enough’ anymore? When I called my network and asked if that was true, most of them said, ‘Yes.’ The logical move was for me not to do that. Everything in my business life was getting the promotion and the biggest job, the most money, blah blah blah. Sometimes, you follow faith or your instinct.

Is it easier to hire for management skill sets than to develop them?
If your goal is to encourage more people, you need and invest in a diverse management team. You can’t just go hire him. In the for-profit world, the answer may be: just pay someone else money and bring it on. There’s nothing wrong with that, but if that’s your philosophy, you’ll never build a long-term sustainable business where you help people.

He has called his plan Economic Equality Capitalism, and Homeboy has proven that it works. Where can you go from here?
In the for-profit world, there is all kinds of capital to start a business, invest in an idea, and let it grow. Many times that capital is not returned. Only one in 10 private or venture capital investments works. I’m saying, let’s invest in an idea and let it grow with our people running it. We’ll take the same kind of risks, but those people have jobs that keep them going, making a decent living with benefits and receiving no government assistance. We should finance those businesses and there is a return on this investment for society. But equity with these businesses must be put at risk by employing the disadvantaged.

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