The murder of George Floyd by a Minnesota police officer in May of 2020 sparked a social justice and racial reckoning that engulfed the US before spilling over to Europe and beyond. There was a global social and cultural inflection point with organizations on both sides of the Atlantic voluble in their response, including corporate America, which pledged to do more and better. Many of the Fortune 500 were fast to voice their support for Black Lives Matter, earmarking a staggering $340bn for the fight against racial injustice.
Firms everywhere jostled to hire, develop, and retain people from underrepresented and marginalized segments of society: black talent, women, people from the LGBTQ communities, and those with physical or cognitive disabilities. Positions like Chief Diversity Officer, Head of Inclusion, and DE&I Facilitator gained more visibility and quickly became ubiquitous. In 2020, it felt like a real shift in organizational culture; diversity, equity, and inclusion were finally within reach.
But four years later, it feels like our DE&I efforts have stalled.
McKinsey has reported a sizable gap between what organizations pledged in the heat of the moment and what has actually been spent on diversity and inclusion so far. Others, including Fortune and the World Economic Forum, have shared a slew of disappointing statistics, all of which suggest that despite good intentions, the pace of global change remains excruciatingly slow. Women still account for less than 7% of senior leadership roles in the Fortune 500, and just 25% of the C-suite globally.
Almost 80% of organizations surveyed by McKinsey recently suffer a chronic lack of diversity across the board. Meanwhile, the neurodivergent and people with learning difficulties or physical handicaps feel substantially more excluded and suffer almost twice as much discrimination in the workplace, according to research by Boston Consulting Group in 2023.
So, what is going on?
In an interview with Forbes, DE&I author, Lily Zheng cites employee fatigue, the backlash with DE&I initiatives, and the denial of inequality as the principal reasons DE&I efforts fail. Leaders often underestimate the time, money, and effort needed to improve DE&I, says Zheng.
Change is hard. Moving the dial on diversity in any meaningful way surely calls for a substantive shift in mindsets, HR practices, metrics, and measurement systems we use – and in the time that we devote to DE&I – time that is in very short supply for leaders juggling strategic priorities in our competitive, uncertain and fast-moving world. Or does it?
I have long been fascinated by organizations that do things a little differently, those that diverge from the norms of commercial enterprise in some way. In my research, I’ve looked at organizations predicated on something other than just profit: social enterprises, organizations with sustainable business models, startups, and enterprises that want to take the common good center stage. These are not communities that operate completely outside existing markets, on the contrary. They also sell their goods and services like other companies, but they do not distribute their profits to shareholders or donate to charity; instead, they aim at “doing good while doing business.” And I’ve found something interesting. These alternative companies also frequently diverge in the way that they approach DE&I.
Take one of the anonymous case studies, I will call PeerCoaching, a social enterprise in Austria working to bridge the employment gap within immigrant and refugee communities and people with disabilities and learning difficulties. PeerCoaching works on both sides of the divide: They educate, train, coach, and support people to help them gain a foothold in the labor market. At the same time, they consult with private and public organizations to improve the integration and workplace well-being of these employees.
The nature of the work, of course, positions PeerCoaching to do things a little differently in DE&I –but perhaps more so than might meet the eye. For instance, instead of simply providing services for these marginalized groups, PeerCoaching works with them to develop and provide the services that they need. They hire trainers with learning difficulties to design and deliver IT courses to people with learning difficulties. When they hire new staff, people from the target group run the interviews – because they know best who can support them, not the social workers and counselors. Also, at the senior management level, PeerCoaching operates differently. Even though the organization is formally led by the two co-founders, all decisions are made by an open executive team, in which all members can volunteer to participate for one year. They just have to be aligned with their team leaders and commit themselves for one year. In practice, this has meant bringing one of their IT trainers with learning difficulties into the executive team, a decision that their CEO reflected in an interview like this:
“We pondered how hard it would be to bring someone with learning difficulties into two-hour meetings if things would have to be explained several times. But we wanted to include his voice, and he wanted to participate. So, before each executive meeting, I made time to work through the agenda with him beforehand. We made a small change in structure to allow him to participate.”
The result? Key decision-makers at PeerCoaching have acquired a dynamic and first-hand understanding of the realities, needs, and challenges of the audience they address. The risk for misinterpretation and misalignment has been drastically reduced. The cost to their CEO in time is less than one hour per month, but they demonstrated how inclusion and participation are possible even against common-sense odds.
“And the result? Access to a much broader talent pool of people who are motivated and who have skills to contribute – skills that might be less immediately obvious than neurotypical or able-bodied colleagues who also benefit from learning how to lead and collaborate within diverse teams.”
PeerCoaching isn’t the only company doing DE&I differently. Meet OneFurniture, a production and retail firm that makes and sells sustainable furniture in DACH countries.
OneFurniture is part of the circular economy and prioritizes the transparent, ecological, and ethical sourcing and distribution of its materials and products. OneFurniture is also ability agnostic. In practice, this means that they have adapted their manufacturing plants and offices to accommodate all workers, including those with special cognitive or physiological needs. This is how OneFurniture describes their workplace policy:
“The ambition of our company includes giving people with special needs who are disadvantaged in the world of work a fair chance. We provide individually suited workplaces. Depending on their respective abilities, these employees take up various tasks within the company. This is not simply occupational therapy, but meaningful, productive work embedded in a team.”
And the result? Access to a much broader talent pool of people who are motivated and who have skills to contribute – skills that might be less immediately obvious than neurotypical or able-bodied colleagues who also benefit from learning how to lead and collaborate within diverse teams.
Another firm doing DE&I divergently is OrganicWorld, a producer and seller of organic foods. OrganicWorld is committed to minimizing the environmental impact of pollutants and unsustainable practices in farming. OrganicWorld also operates a pay structure with an income divergence of 1 to 3.5 across its 500 employees. In practice, this means that the highest salary is capped at 3.5 times the lowest. It also means that its founder earns less than some higher-paid employees. And that’s not all. OrganicWorld has purposefully situated its production facilities in rural areas, not cities, meaning its agricultural workers spend less time commuting.
“Transparency in pay is known to appeal more to employees.”
“Equity too high, personnel costs too high? Yes, and therefore, we are so successful. We grow out of our own strength, invest our profits exclusively in our own company, and thereby show that doing business sustainably works differently from descriptions in established textbooks.”
Or:
“We connect common interest, social interest, and self-interest and have the proof that economy, ecology, and social issues are not contradictory. Rather, they complement each other in a functioning whole.”
The result? OrganicWorld has built a culture that accelerates employee engagement, one that also hedges very effectively against attrition in its talent. Transparency in pay is known to appeal more to employees. It builds trust and engagement and boosts employee wellbeing and productivity – productivity that is also enhanced instead of sloughing through a long train ride or car journey after the working day.
Interviewing employees in several case organizations, I discovered something else that is striking: People from different walks of life and with different types of backgrounds or abilities had proactively sought to work there because of their “alternative spirit,” because they did things, including DE&I, differently and offered workers an opportunity to actively participate in shaping organizational culture.
“How can we broaden participation to come to decisions that better reflect the complexity of the world we are operating in?”
The examples I have shared here may not resonate with you. If you work within a large corporation, a for-profit entity, or a multinational, you might very legitimately say: That’s all very nice, but what does it have to do with me?
I would challenge you to think, nonetheless, about how you might extrapolate or adapt some of these small ideas to your own context. Because the examples I have shared here, while not insignificant, still represent a very small outlay in terms of time and the real cost to the organization. I would ask you to explore whether there are any similar interventions your organization could enact to accelerate your own DE&I efforts. And consider what kinds of benefits might accrue from doing so. Ask yourself:
What barriers or obstacles might currently exist in our organization that inhibit the integration of more talented people?
What are we missing if we stick to existing mechanisms that prevent us from broadening and diversifying our workforce so that it reflects our client base or the audiences we want to reach?
Are we consistent in our efforts to hear the voices of all the people we need to address?
How can we broaden participation to come to decisions that better reflect the complexity of the world we are operating in?
The scorecard on DE&I suggests that we could do better in our efforts to include the underrepresented and marginalized talent in our world. At the same time, the evidence that diversity benefits organizations is irrefutable and compelling.
In light of the troubling challenges we face globally – climate catastrophes, rising socio-economic inequalities, wars, to name a few – we should rethink how we do business. So, small steps in your company to further participation and inclusion may be the building blocks needed. In your efforts to build more diversity, equity, and inclusion into your organization, I urge you to think more divergently about who to include and how to go about it. I would challenge you to think differently about difference.
An article that is part of this research topic recently got published in the Journal of Business Ethics.
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