CONFIDENTIAL DRAFT EMBRACING INCLUSION AT TOP Should NASCAR Take a Stand on DEI to Refuel the Growth of their Sport Embracing Inclusion at Top Speed Information for Instructors This case tells the compelling story of an iconic sports organization whose leaders amid great societal upheaval faced a high profile decision and organizational pivot that could change their legacy forever and potentially help fuel the revival of their sport Should they make a public statement on racial injustice and ban the Confederate flag at race events From the perspective of leaders like Steve Phelps and Brandon Thompson NASCAR faced a sport weighted down by historical perceptions but fueled by a strong calling to open motorsports to a new generation of fans of all ages genders and races Could NASCAR do it in the middle of a pandemic and a chaotic racial reckoning in America The case is based on multiple site visits and over 20 depth interviews with NASCAR executives and other stakeholders like drivers team owners and engineers Three critical lessons emerge for students and business leaders first NASCAR showed that tough times can counterintuitively be the best time to shift into high gear on DEI Second the principles of prepared leadership facilitate a firm s ability to leverage crisis for the good And third spotlight moments are important but the authentic roads to increase inclusivity require small consistent identity congruent shifts over the long run Instructors should note that NASCAR cooperated in all phases of case research and writing further they hope to support any future teachers of this case with access to class interviews with NASCAR leaders or other stakeholders through their Drive for Diversity program and NASCAR IMPACT platform https www nascar com diversity Learning objectives After reading and discussing the case students should be able to Identify the expanded set of NASCAR stakeholders governing body race teams OEMs drivers fans sponsors track owners merchandisers TV carriers and how each might have different goals and concerns for DEI Analyze 3 critical business concepts at play o how change behavior theories created counterintuitive opportunities to drive new practices in a turbulent time o how elements of prepared leadership were observable both before and after key decisions o how authenticity and brand identity played a role in short term and long term actions Develop a rationale for the decisions that you would have taken if in this position and analyze the outcome of the decisions taken by NASCAR leadership Recognize the role of long standing programs and relationships within the organization and the family oriented structure of motorsports culture in the success as well as the perceived challenges to overcome inherent in these decisions Assess the long term impact of high profile decisions and the need for continued follow through on increasing inclusive engagement Additional case materials include Video interviews with NASCAR figures President Steve Phelps Vice President of Diversity Equity Inclusion Brandon Thompson Chief Operating Officer Steve O Donnell former Chief 1 CONFIDENTIAL DRAFT EMBRACING INCLUSION AT TOP Marketing Officer Jill Gregory Senior Vice President Ben Kennedy Chief Impact Officer Eric Nyquist and drivers Bubba Wallace and Daniel Suarez Links to key footage of decisions from the time e g Steve Phelps speech Bubba Wallace walking track Drivers united commercial Bud Light protests How NASCAR Works video NASCAR on Race Day video Video interviews with Senior Director of Diversity Equity Inclusion Caryn Grant and Managing Director of IMPACT Strategy Development Pete Stuart discussing NASCAR s DEI initiatives and the NASCAR IMPACT platform Video interview with Chief Human Resources Officer John Ferguson discussing culture talent development and the importance of representation Data points for attendance viewership sponsorship metrics fan engagement and Google Trends Teaching Note and supplemental Extend Your Learning case addition Business concepts involved Diversity Equity Inclusion DEI Innovation Change Behavior Strategic Growth Leadership Branding Customer Engagement Crisis Management Sponsorship Sports Management 2 CONFIDENTIAL DRAFT EMBRACING INCLUSION AT TOP Should NASCAR Take a Stand on DEI to Refuel the Growth of their Sport Embracing Inclusion at Top Speed Section 1 Case Introduction The 2020 NASCAR season started with the 62nd running of the Daytona 500 on February 16 The pre race pageantry included celebrity and athlete VIPs the Air Force Thunderbirds flying overhead and President Donald Trump pacing the field in his presidential limo Unfortunately rain erupted just as the race got underway forcing its postponement only the second time in the race s history Little did NASCAR know but this dubious start would foreshadow the challenging year that lay ahead for President Steve Phelps and his senior leadership team one that would test the sport beyond anything it had ever faced in its history Steve Phelps grew up in Burlington Vermont and went to races at Thunder Road with his dad After 14 years with the NFL he joined NASCAR in 2005 and served as Chief Marketing Officer before being promoted to President in the fall of 2018 With a broad agenda of innovation required to change the perception of NASCAR Phelps stepped into a leadership role that was besieged by challenges and the need to align a fragmented industry When the pandemic hit in 2020 Phelps had been in the President s role for less than 18 months He knew a misstep early in his leadership tenure could have devastating consequences for a sport that desperately needed to grow The margin of error was very very slim In the weeks following the start of NASCAR s 2020 season critical events began to unfold across the globe as COVID 19 spread quickly What started as a trickle of COVID 19 cases nationwide soon became a torrent overrunning basic infrastructure and leading to mandated shutdowns across many jurisdictions As a live entertainment business and one that had just taken out 2 billion of debt months earlier NASCAR was facing an existential calamity of truly epic proportions With pandemic shutdowns NASCAR had to focus on saving revenue by racing any way they could via iRacing at tracks with no fans or with safely distanced fans Keeping the races on was the only way to keep the NASCAR industry afloat and the weight of that responsibility absorbed Phelps and a senior leadership team featuring