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Arena founder says role of a company’s CEO is not just to drive profits but to drive values of organization

Rosenbaum noted in the interview that the key characteristics for a CEO in achieving a strong corporate culture are honesty and authenticity.

A number of chief executive officers of Fortune 500 and other multinational companies have been taking very public stances of such headline issues as the Charlottesville tragedy, workforce gender, sexual harassment and racial issues at Uber, Google and other technology titans, and DACA, Deferred Action for Childhood Arrivals.

In so doing, they tossed aside their natural inclination for “risk aversion” and, instead, demonstrated that being a leader is not always just about maximizing the company’s profits but also about ensuring that company’s moral compass is pointed in the right direction. And that can actually have a highly positive impact on the bottom line.

So asserts Michael Rosenbaum, founder and CEO of Arena and Executive Chair of Catalyte, both national leaders in using data analytics to enhance workforce recruitment and retention.

In an interview on CNBC’s “Squawk Box,” Rosenbaum, a former Harvard Fellow, said, “When I think about what the job of a CEO is, it is obviously out there representing your brand and the values of your organization….When you think about the culture of an organization, and it really is the culture that ends up driving the end results of the organization. And when you think about the role of the CEO it really is to drive that culture.”

Rosenbaum noted in the interview that the key characteristics for a CEO in achieving a strong corporate culture are honesty and authenticity. He said that, “Diversity is obviously a key value of so many organizations. But I think that even more significantly today at least I think for myself as a CEO, for the organizations we work with, authenticity, being honest about who you are as a leader, who you are as a human being is critically important. And that’s core to everything you are as a CEO.”

That, he stressed, will ensure that the CEO earns the trust of the organization while enhancing profits. In fact, he said that, “being able to communicate with the organization that authenticity is important and to drive those values inside the organization, that’s what ultimately drives financial performance.”

Diversity can also be consistent with increasing the bottom line, Rosenbaum noted. Speaking about the need for companies, and especially those in the technology world, to embrace more diversity, he said, “You know when I think about what we do, I am in the business of collecting large amounts of data about people and using it to predict how someone is going to do in a job. When you do that, when you use data analytics and predictive analytics, you find that organizations over time become more diverse.”

To communicate that to clients, Rosenbaum said he and his team talk about long-term strategy as much as short-term goals. The organizations with which Arena works are concerned about diversity long term but “the immediate need is financial return, the immediate need is moving an organization’s outcomes.”

So, the Arena team, with clients that process more than one million unique job applicants a year, explains that organizations shouldn’t think primarily about diversity but rather about getting the right person in the right job at the right time. By doing so, Rosenbaum said, “You are going to end up generating a better result, and when you do that you will get a better financial return and the byproduct of that is organizations will become more diverse over time.”

Inherent biases are the barrier to achieving this. When one thinks about how people hire, they look at a resume and conduct an interview. “And when that happens you do end up having bias in hiring…We want people who look like us,” said Rosenbaum, who recalled that the first time he ever worked in government he got a job because the person who was hiring him went to the same graduate program as he did.

But by using data, you are removing such bias and “you can do a better job of that matching.”

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