Now Reading
Todd Sears: The gay business guru Out on the Street

Todd Sears: The gay business guru Out on the Street

If you want to make the world’s most powerful companies more gay friendly, you should go straight to the top.

That was what Todd Sears realized when he founded Out on the Street – an annual gay summit for the leaders of the world’s biggest banks in New York which has just mirrored the success of that event in London.

Sears made a fortune for a top US bank by delivering private banking to wealthy LGBT people. And now he is working to spread the message that lesbian, gay, bisexual and trans people can help create a healthier, more profitable company.

He’s working to provide funding for gay small businesses on the one hand while trying to roll out the Out on the Street summit to the top law firms, tech and travel companies while also expanding it into Europe and Asia.

Have you always been out at work?

I came out when I was 18. I grew up in the South, in North Carolina, I had decided up until that point I was going to be closeted, get married, have kids. Then I saw I saw Angels in America, the play, in my senior year in boarding school and saw how my life would turn out, played out in front of me and that was how I came to myself.

I came out to my parents that summer and I went to college and came out to my fraternity and it was really very positive. Even my friend who was a Navy Seal who had the opinion that gays should be lined up on a cliff and given the choice either to jump or be shot, amended his opinion after I came out.

So the first negative opinion I encountered was when I came to Wall Street. On my second week on the job my managing director called the guy three cubes down from me a faggot. And immediately I thought, ‘oh my god, what have I done. I have come into this industry that is homophobic. Should I go back into the closet?’

So I very quickly decided I wasn’t going to stay at that firm and found another small investment bank and was out from the very beginning – so much so that at my interview I said ‘I’m gay and you need to know that’ and the guys said ‘that’s great, we’re fine with that, we’re more excited about the fact you are smart and can do all these things’ so that was a funny learning for me.

You went on to target the LGBT market, so how did that happen?

I went to the second investment bank and we actually worked on some gay media mergers and that started to make the business connection for me between the gay and lesbian market and the business opportunity. And in 2001 I went from investment banking into private banking and private banking is quite a different animal.

At Merrill [Lynch] and most of the firms you have targets where you have to bring in x number of dollars a month – for me it was a million dollars a month of new assets. And if you don’t make it after eight to 10 months you are sacked.

So I looked around and said ‘as a mid 20-something how can I bring in assets to this firm?’ And the immediate answer which I was petrified of was the gay and lesbian market. In 2001 nobody had gone out to the gay and lesbian market. So I came out of my interview process there and said this is the market I want to go after and they said ‘great, good for you’. I don’t think they quite realized that was going to work but it did and after the first 12 months we had brought in $100million of new assets and that proved the business case to the firm and really started Merrill Lynch’s LGBT initiative.

I tracked ROI [return on investment], the number of clients we brought in, where we spent dollars on sponsorship and said ‘we spent x dollars here, this is the return for that investment’. We were in six cities after three years and after five years we had brought in a billion and a half dollars.

How did you make the LGBT business work for you?

I had to make sure Merrill had all the right policies because gay and lesbian consumers pay attention and are significantly more likely to patronize companies that support gay and lesbian causes. Luckily Merrill had most of those policies and over a couple of years we would able to implement some more forward-thinking policies as well.

We had 31 LGBT non-profits who became clients of the firm, like HRC and Lambda legal and that burnished our reputation. And I did domestic partner planning seminars, educating these couples around the pitfalls and what they need to know. Both of those things were huge business drivers for us.

Then you moved into promoting diversity, why was that?

The guy who was the head of wealth management basically badgered me to give up my clients and go into diversity leadership for him. It took him about a year and I said no the first two times he asked. And that is how I ultimately went into the diversity side of things both at Merrill and later at Credit Suisse.

I define myself more as a business diversity leader than an HR diversity leader. Both are important but I think firms are more successful when they make diversity live in the business and report to the business. Otherwise it gets stuck.

What do you concentrate on in diversity and why?

I call it diversity 1.0, 2.0, 3.0. Diversity started from an equal employment opportunity perspective. That’s 1.0 focus. Then 2.0 focus is connecting it to the business but it’s not fully driven by the business; it’s much more about HR. How we are hiring people, are we hiring enough women, enough African Americans?

I try to get companies to focus on 3.0 which is about the opportunity – it’s about all the differences that the employees bring to the table. It’s not just race, gender, ethnicity, orientation.

Diversity 1.0 and 2.0 is problem based, it’s ‘we don’t have enough of… insert blank’. There’s a lot of finger-wagging and compliance. And ultimately you can’t focus on opportunity if you are focused on problems.

In 3.0 the straight white male sees an opportunity there and then you actually see a change and a difference.

Do you think there’s another step – getting companies to realize they are agents of social change?

It’s the result of 3.0. Corporations absolutely can and do drive social change. Depending on the corporation you get various degrees of comfort with calling themselves that.

But you get companies which won’t discriminate or fire people because they are lesbian, gay or bisexual or transsexual in countries where that is absolutely a problem.

The chief executive of Goldman Sachs said this at May’s Out on the Street [in New York]. He said he doesn’t understand why Wall Street is the leader in this but he feels like we are and he is looking forward to companies leapfrogging us. And I asked him if Goldman has lost any clients because of it and he said ‘yeah, and I don’t care’. That means a lot when you are going to these countries where arguably you could say ‘if you discriminate against employees Goldman is going to pull out’.

Google has got its Legalize Love campaign which is very forward-thinking. It’s easier for Google because of the nature of their business but it’s a great model, it sets the standard. And I hope more companies will at very least discuss it, if not try to emulate it.

You are trying to get banks to help LGBT business. Are they willing to lend to gay business at a time like this?

In the States there is an organization called Start Out which is an LGBT entrepreneur organization. They are about three years old and I asked ‘what do your members need?’ And they said ‘capital’. And I said ‘I’ve got 12 banks and I think there is something we can do’.

In the States most of the banks have community investment arms that are focused on women and minority-owned small businesses. But heretofore they have not focused on LGBT businesses. So the discussion has been how do we add that gay and lesbian sleeve to what already exists and it has actually been a very positive conversation so far.

We literally started these conversations a month or two ago but we have six banks of the Out on the Street members who are interested and looking through it; Goldman Sachs, Citi and Bank of America are the three top ones.

We are also trying to do research to look at gay entrepreneurs – what they need, how they survive, how successful they are? I think the cool thing about this initiative is not just the access to funding but the opportunity for senior bankers to then feel some ownership and support of these gay and lesbian start-ups. It is lending their expertise of 20 or 30 years on Wall Street to the community.

What do you try to achieve through your company Coda?

If you take diversity 3.0, that’s what I’m trying to do for corporations and companies. We have five clients who are corporations. They bring us in to rebuild diversity strategy because it hasn’t worked, start diversity strategy, connect diversity to their clients. All the retaining, marketing, business development, supplier diversity, all of those kind of pieces. I really do focus on getting the business leaders involved from the very beginning.

Out on the Street is really developing and you are now thinking about expanding to Asia. What’s your ambition for it?

We are creating an umbrella structure called Out Leadership and Out on the Street will be one initiative of Out Leadership. We are piloting Out in Law, very similar model – senior leadership, client engaged, business driven. And potentially Out in Travel and Out in Technology.

And we are also looking to build a global LGBT emerging leaders summit in combination, connecting across all those.

So you’ll get senior execs from top law, travel and tech companies to work on LGBT diversity?

Yes, in their own industry segment. So create an Out on the Street type summit for just law firms. But also connect them [to other industries]. For Out in Law we have started thinking about launching in London and New York and we will build up.