Why corporate diversity initiatives are doomed to fail
Despite big cash promises from the world’s largest companies, progress towards diversity goals remains slow.
“The problem is that everyone is left in the bucket of ‘Diversity, Equity and Inclusion,'” said Charisse Conan Johnson, managing partner of Next Street. “What we need to talk about is anti-racism.”
Next Street is a unique consulting firm that acts as a laboratory of sorts, co-creating products and solutions specifically tailored to the needs of small businesses and entrepreneurs. your turn? Racial justice is the focus. Johnson heads her consulting practice. “Small businesses are our lever to move us towards an anti-racist society,” she says. What does full economic inclusion look like? Partly the access to markets and specialized training and tools, the recognition of systemic barriers and the opportunity to reinvest locally. “And that means making sure these companies — particularly BIPOC and systemically disadvantaged communities — get the right resources at the right time.”
The customers are diverse, but the work is focused. Verizon used Next Street to develop free, “digital-ready” training courses tailored to the needs of BIPOC small businesses, and Doordash used the company to help traditionally underrepresented restaurant owners make better use of the platform’s marketing tools. This summer, Next Street announced the Economic Opportunity Coalition (EOC), a partnership with Vice President Kamala Harris’ office and the White House aimed at increasing private sector investment in underserved communities alongside that of the Biden administration. The EOC is a tri-sector collaboration comprised of senior executives from Ariel Investments, Bank of America, Capital One, Citi, Ford Foundation, Goldman Sachs, Google, McDonald’s, McKinsey & Company, Netflix, PayPal, Rockefeller Foundation and others.
While Next Street’s theory of change focuses on small businesses, Johnson points to the disconnect between the amount of corporate money committed to diversity efforts and the amount of money spent. That’s a lot of potential clout on the table. “But if there’s no real, measurable impact, then what would the point have been?” she asks. Where are the investments in various suppliers? Where’s the power shift? “In terms of the wealth equation and the ability to create new jobs, this is not going to build an inclusive economy.”
To be successful, leaders need to acknowledge what they don’t already know.
“I don’t think there is a common vision… a common language on the way to becoming an anti-racist organization,” she says. Senior leaders need to be trained in this language and equipped with the tools to challenge their internal policies and practices. And then they have to do it.
“We begin most of our board meetings with a commitment to understanding the norms of white supremacy [may be] come in,” she says. “People have to ask themselves, ‘How do we ensure that equity is embedded throughout the business strategy?'” Part of that is making sure the people making decisions at the C-suite and board level are confident enough to to meet challenges of how they have done things in the past, and add new voices to the mix with cultural nimbleness and decision-making.
She knows it’s hard work. That means it’s time to tackle it.
“If I had a scorecard two years after the murder of George Floyd, I would give American companies a C-minus,” she says. “The only reason I didn’t give a D-Plus is the size and scope of those commitments. People have been electrified in the right spirit and we still have a long way to go.”
Her final advice is radical collaboration, similar to the three-sector EOC model.
“Government, business, philanthropy — everyone needs to work together,” she says. “Be bold enough to make the right changes internally and have the right leaders who really want to embrace that inner introspection and questioning and do something.”
To wish you again a weekend of bold action.
This issue of raceAhead has been edited by Ashley Sylla.
To the point
Queen Elizabeth II has died. The Queen was the longest-serving monarch in British history, with a career spanning seven decades and more than twice as many prime ministers. She was 96 years old. Honors poured in from around the world, including many official company statements. She leaves behind a complicated legacy, and her death has sparked a worldwide conversation about royalty, civic duty, colonialism, and plunder. For some, she was a model monarch, stoic and service-minded. For others, she was a symbol of an unrepentant racist colonialist regime. It’s not surprising that some would express their joy at her death, says Matthew Smith, history professor and director of the Center for the Study of the Legacies of British Slave-ownership. “You think of the British monarchy as an institution and the relationship of the monarchy to systems of oppression, oppression and forced extraction of labour, especially African labour, and the exploitation of natural resources and enforcing systems of control in those places. This is what they often respond to. And that is a system that exists beyond the person of Queen Elizabeth.”
Will King Charles III be the first monarch to commit to stakeholderism and ESG? All signs point to… maybe. As Prince of Wales, he has been warning of the effects of climate change for decades, speaking forcefully in Davos in 2020 and most recently at the COP26 summit in November 2021, where he declared it would cost “trillions, not billions of dollars,” and would make one need a “warlike base” to combat climate-related threats. But he has also promised not to be an activist king. Without the late Queen’s capital and popularity, it’s hard to predict how he will shape his role to better meet a world in crisis.
Delta updates its Close the Gap diversity report. The company says it is focused on the pipeline from frontline jobs to executive level with an eye on developing talent and removing barriers to advancement. Results are mixed, but work continues. Currently, 27% of hourly workers are Black, 22% are from other underrepresented racial and ethnic groups, and 42% are women. Women in vice presidential and senior positions saw the largest increase in the category, from 29% to 34% from Q1 2022 to Q2 2022; They would likely be promoted from manager-director level. Delta’s long-term goals include significant investment in black leadership talent and a newly developed skills-first hiring approach.
“This is a happy day for me; but it is also one that brings with it serious thoughts, thoughts of the life ahead with all its challenges and with all its possibilities. I explain before you everything that my whole life is, if be it long or short, shall be dedicated to your service and to the service of our great imperial family to which we all belong.”
— Princess Elizabeth, on the occasion of her 21st birthdaySt Birthday, from a radio address during a tour of Cape Town, South Africa, 1947.
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