The CEOs of the biggest companies, the ones with all the resources and manpower — not to mention the potential of having powerful board members and activist investors — understand the importance of establishing diversity, equity & inclusion programs.
That still doesn’t mean they get implemented — or have the desired impact.
Without buy-in from middle management and leaders throughout the organization, a DE&I program may end up being no more significant than a corporate-written statement following the latest instance of social injustice.
The challenge is even tougher with smaller companies.
So said the speakers on a powerful panel at last week’s DEI in New Jersey Town Hall, put on by the African American Chamber of Commerce of New Jersey and the New Jersey Chamber of Commerce.
Dana Peterson, a former global economist at Citi who now serves as the chief economist and center leader, economy, strategy and finance, at the Conference Board, said the challenge is helping executives across the spectrum of super-large to super-small businesses understand why you want to engage in DE&I.
For starters, it helps get rid of groupthink, she said.
“There are so many studies out there that indicate that, when you have diversity from the board down to the operator, you avoid the group thinking — you have better outcomes because you’d have different perspectives all weighing in to shed light on all the dark corners,” she said.
It also helps reach your audience, she said.
“For small businesses, especially in New Jersey, given the fact that the state is so diverse, you want to make sure that your employees represent your community — and that, when people who are patronizing your businesses walk in the door or engage with you, that they can see someone who looks like them, or at least someone who’s interested in understanding their experience.”
Jackie Taylor, the U.S. government and public sector alliance and ecosystems leader for EY, said the key is making sure a company’s diversity, equity & inclusion strategy translates into the company’s business plan.
“Senior leaders and the middle managers have to understand how that’s going to translate into what you do every day,” she said.
They need to understand this isn’t a one-off.
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“Inclusion should be a part of how you do business every day,” she said.
That role can fall to a chief diversity officer — but only if that person’s role has the proper backing, Taylor said.
“I have conversations with a lot of very frustrated diversity, equity & inclusion leaders who are in leadership positions reporting to the top, but don’t necessarily have the teeth to really execute on some of those strategic initiatives,” she said.
Ferlanda Fox Nixon, chief of policy/external affairs for the African American Chamber of Commerce, kept it simple: The only programs that matter are the ones that are measured, she told the crowd.
“You have to figure out a way to track the success of the program,” she said.
Whether it is hiring, procurement spend or anything else, it needs a metric, she said.
“You have to keep tracking those numbers — and you have to make your managers accountable for those numbers,” she said. “That’s really the only way that you’re going to have a positive impact on your program and your initiatives.”
But even Nixon said forcing someone to participate will only go so far.
“You have to figure out what your business proposition is for DE&I,” she said. “It can’t be, ‘Because Ferlanda said to do this.’ You need to know that it positively impacts your bottom line. And you have to buy into that so that you can share that with your managers, your supervisors, your employees, your investors, your shareholders, stakeholders, whomever.”
The lack of understanding runs throughout the business world.
When she was at Citi, Peterson said she prepared a report following the death of George Floyd that showed how systems have hurt Black entrepreneurs, who couldn’t get access to capital.
“One thing we mentioned in the report is that access to capital is not just going to a bank, it’s going to VCs and angel investors,” she said. “Many Black entrepreneurs don’t get the money that they asked for — if they get any at all — because the investor doesn’t understand them, the community or the product.”
And, while that report — and those times — sparked change, Peterson said she is worried about the recent backlash to DE&I programs.
“We can’t just pass it to the side because of the backlash,” she said. “The backlash is from ignorance and lack of understanding.
“If you want to be a strong corporation, or a strong small and medium-sized business, you need to embrace it and figure it out, so that you can have better outcomes.”
Nixon said it should be an easy sell.
“Black people in the state of New Jersey spent $57 billion,” she said. “If you can’t take that number and make it work for your corporation, I can’t help you.”