Just last year, we defended comments from Andy Kessler, who suggested the collapse of Silicon Valley Bank (SVB) may have resulted from the team “being distracted by diversity.” 

Yet, it’s when pressure is applied that change happens. 

Take COVID-19 as a recent example. Employee demand to work from home and flexibly was growing, yet companies were painfully slow to respond. Then, a global pandemic took hold, and we saw an unprecedented acceleration in the enablement to work remotely. 

Post-pandemic, we commented on this trend, wondering what significant event could put a rocket up the stagnant progress happening in the DEI space. Enter the legal battles in the U.S., placing the whole industry under fire. 

This presents us with an opportunity and we need to make the most of it. Below are three ways organisations can safeguard and optimise the effectiveness of their DEI efforts. 

1.       Evolve from DEI initiatives to DEI integration.

DEI efforts are most impactful when embedded in the organisational strategy; they become much easier to defend when they are integral to a business’ success.

Don’t silo DEI in HR, it impacts every aspect of an organisation. Placing it solely under HR can diminish its impact, often making it the first to be overlooked. HR traditionally focuses on risk mitigation to safeguard the organisation, but DEI thrives on risk-taking for value creation. It should be treated as an essential function that is a key contributor to business performance.

To achieve this, DEI should be owned by business leaders, with key metrics embedded into business unit KPIs. Further, it needs to be woven into the way of working for all teams, with inclusive behaviours being the status quo and equity being top-of-mind across all hiring and promotion decisions.

2.       Walk the walk before talking the talk.

To date, DEI has primarily been treated as a tick-the-box exercise, with efforts focusing largely on brand image rather than lasting and impactful change. As external promotion of DEI efforts becomes increasingly scrutinised, it encourages us to move beyond surface-level initiatives that focus more on external perceptions and towards those that drive impact and progress internally.

Organisations can take the opportunity to assess the current initiatives they have in place and what their expected outcome is. Every initiative should be closely linked to a business priority, with mechanisms for measurement of effectiveness in place. Activities that are just for show should be challenged; they are taking money, effort, and resources away from actions that drive true and lasting progress.

Gone are the days of being able to bluff our way out of DEI scrutiny. In Australia, we’re on the brink of gender pay gap data being publicly released. Organisations will have the opportunity to release a statement to defend existing gaps. Still, for them to be regarded, they will need to demonstrate tangible steps that are being taken and the expected outcome of these. 

3.       Tweak positioning and messaging, not effort.

Responding to DEI backlash has been a requirement for as long as the discipline has existed due to the redistribution of power, the inevitable resistance to change, and the “perceived” threat it brings. The focus and sensitivity we should have is on how efforts are being communicated and positioned with a consistent talk track and rationale across the board. 

When launching or rolling out a new DEI initiative or project, organisations must be clear on how it has come about, how it’s intended to support the business, and the role all employees play in supporting it. Consider employees’ different perspectives, anticipate the threats they may perceive as a result of suggested initiatives, and address these proactively in your communication strategy. 

It feels like DEI as an industry is dealing with one new challenge after another. Still, we’re optimistic about the opportunity this time presents for realising what we’ve all been working towards for years: for full DEI integration to be the natural and expected way of doing business.

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Powerful conservative groups have take a number of high-profile companies to court, claiming that DEI programs and policies breach Title VII of the 1964 Civil Rights Act, which prohibits racial discrimination in the hiring process.

The law was originally designed to prevent discrimination on the basis of sex, race, religion and national origin in hiring, promoting and dismissal, as well as tackle the issue of desegregation of schools. Recently, it has been mobilised by conservative anti-affirmative action groups determined to get rid of programs specifically designed to counter unconscious bias in corporate hiring process. 

The anti-affirmative action movement has gained momentum after a Supreme Court decision last year that ended race-conscious affirmative action in college admissions programs. The ruling was a blow to decades’ long race-conscious admissions schemes, aimed at diversifying the student population of the country’s most elite ivy-league colleges. 

These groups have also been boosted by their successful campaign to oust Claudine Gay, Harvard’s first Black president of Harvard, who had the shortest tenure in the university’s 388-year history after stepping down from her role in the first week of 2024 after just six months. Late last year, Gay was accused of antisemitism and plagiarism in her academic work by conservative online journal, The Washington Free Beacon. 

On January 2, Gay resigned from her role as the first Black woman to serve as president of Harvard. A week later, she penned an Op Ed in the New York Times, warning of “a broader war to unravel public faith in pillars of American society”.

“Trusted institutions of all types – from public health agencies to news organisations – will continue to fall victim to coordinated attempts to undermine their legitimacy and ruin their leaders’ credibility,” Gay wrote. 

One of the main agitators in forcing Gay to step down said his primary objective is to “eliminate the DEI bureaucracy in every institution in America and to restore truth rather than racialist ideology as the guiding principle of America.” 

In the past year, a number of prolific anti-DEI groups have undertaken this agenda with aggression and fervour. In their attempts to shut down DEI initiatives and programs that have clear race-based eligibility components, conservative groups are claiming that DEI policies force hiring managers to make race-based decisions — therefore breaking the law. 

These groups insist that DEI initiatives constitute discriminatory hiring practices. And a growing number of them are taking legal action to see that these programs are erased.

The American Alliance for Equal Rights cited section 1981 of Civil Rights Act of 1866 to go after The Fearless Fund — a venture capital fund which invests in businesses owned by women of colour. 

Virginia-based medical advocacy group Do No Harm filed a lawsuit earlier this month against the National Association of Emergency Medical Technicians, claiming that the association’s  “diversity scholarship,” which is only awarded to students of colour constitutes “racial discrimination.”

On its website, Do No Harm states that its mission is to “protect  healthcare from the disastrous consequences of identity politics” and file federal civil rights complaints to challenge “medical schools…[that] offer scholarships and programs that illegally discriminate based on sex, gender identity, race/ethnicity, colour or national origin.” 

In December, The Wisconsin Institute for Law & Liberty sued the State Bar of Wisconsin, asserting its diversity fellowship program for law students breaches the free speech rights of bar members whose fees are used to fund it.

America First Legal announced it was “putting woke corporations, law firms, and hospitals on notice that all DEI programs, and all “balancing” in employment, training, scholarships, and promotions, based on race, national origin, or sex are illegal.”

“Such programs have violated the law since their inception, but based on [last June’s] Supreme Court decision, there is no excuse for them going forward,” a statement posted on the organisation’s website reads. 

In recent months, the world’s biggest companies have been modifying their DEI policies. Giants including JPMorgan Chase, American Airlines, Lowe’s and Pizza Hut operator Yum! Brands have altered, or in some cases even cut their DEI programs, amid claims their programs constitute “illegal discrimination and a breach of the directors’ duties to investors.”

Google, Nike, Amazon and Meta have reduced their DEI departments. According to a source obtained by CNBC, Google and Meta also made cuts to staff members responsible for recruiting underrepresented people. 

Are companies really breaking the law by having initiatives that aim to increase Black and other minority representation? Are they breaking the law when these initiatives are simply trying to widen their candidate pools and erase bias in the hiring process? 

Could there be other reasons for the cuts? Recent research by Indeed revealed that over a third of employers cited cost and budget constraints as the main reason why DEI efforts were being put on the back burner. 

What about here in Australia?

Jasleen Kaur, Senior Principal, HR Advisory at Gartner, believes that here in Australia, DEI initiatives remain critical and that they are driven by greater involvement and accountability from boards. 

“The consequences of not prioritising diversity or getting it wrong can be severe, so it is up to HR to make a persuasive case,” Kaur said in August, citing Gartner research that showed diverse and inclusive teams perform 1.4 times better than those that are not. 

The research also revealed that organisations with sustainable DEI strategies benefit from significant differences when it comes to talent outcomes, including employee performance, on-the-job effort and intent to stay.  

“Gartner research indicates that 56 per cent of full-time employees believe it’s very important that their workplace is ethnically, racially or culturally diverse,” Kaur said. “An inclusive environment is more likely to attract and retain workers, with employees more productive in a positive work culture.” 

“Establishing a positive work culture requires a whole of organisation commitment…[a] board’s involvement is central to the effectiveness of any DEI initiative.”

A Randstad Enterprise Talent Trends Report from 2023 delivered some good news about the state of DEI programs in Australia. 

According to the report, which surveyed more than 900 C-suite and HR leaders in 18 markets, 90 per cent of business and HR leaders in Australia have confirmed that DEI is embedded in their talent strategy. The survey also found that almost half of Australian jobseekers say they will not join a company that isn’t making an effort to improve its DEI initiatives. 

Anthea Collier, APAC Managing Director, RPO & MSP; interim Country Head of Australia, Randstad Enterprise, said in April, “Now’s the time (when your competitors are potentially cutting budgets) to properly embed your DEI strategy into your organisation’s talent infrastructure and blueprint, so you can access a broader and more diverse talent pool to help overcome the talent shortage and reap the rewards in retention.”

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Understanding an organisation’s ‘why’, is instrumental in establishing more effective DEI policies and practices, driving commitment and fostering a culture of accountability.  

Global Chief Diversity, Equity, and Inclusion Officer at Coca-Cola, Tameka Harper, explained this approach during her recent address at Coca-Cola’s 2023 Diversity Equity & Inclusion Summit, Level the Playing Field, which took place during the 2023 FIFA Women’s World Cup.  

Understanding your organisation’s ‘why’ 

“It’s really about understanding your ‘why’.  Why is inclusion even necessary? Why do we need to think about it in this way?” Harper told the summit, which was held in Sydney, in August.  

Harper suggests that once organisations comprehend their ‘why,’ they should pledge commitment to DEI goals, establish what success would look like, and devise a plan to accomplish those targets. 

Alisha Fernando, the Head of Diversity and Inclusion APAC, Bloomberg, said her organisation’s media arm had intentionally worked to diversify the talent it booked in speaking slots.  

Fernando shared. “A lot of the speakers we were booking were male. We were told no one else had the experience to be able to speak.”  

So we intentionally looked at the why, and then we asked why not?”  

Fernando explained how Bloomberg took action and developed its own media training program called New Voices, and went out to other big organisations offering to train underrepresented people and voices. As a result of the program, Bloomberg is now booking more diverse and media trained speakers. 

“Our intention was there, and we’ve now seen through our organisation more diverse speakers being booked and featured,” she said. 

‘Welcomed, safe, valued and respected’ 

What about those people, especially leaders in organisations, who might be feeling uncomfortable with the changes that come along with bettering DEI practices?  

Fernando has a simple fix, and it’s something she exercises every day in her role at Bloomberg: “I tell people four words – welcomed, safe, valued and respected.” 

“I say if you strive to making sure every single person you come into contact with feels welcomed, safe, valued and respected, then you’re on your way,” she explained. “If you break it down and make it that simple, that’s where progress starts.” 

“Sometimes DEI practitioners tend to make it a bit hard for everyone, but if you’re sitting there thinking I’m scared of doing something wrong…just remember those four words.” 

‘It’s not a quota, it’s an understanding’  

Director of the TechDiversity Foundation, Luli Adeyemo told the summit that it’s time organisations start getting to know their employees better. Understanding your people is key to authentic DEI practices, and building healthy, thriving organisations.” 

“We spend billions of dollars to understand everything about the people we want to sell to…yet when it comes to our employees – who allegedly are our most important assets – what we truly know about them is the information we need to hire them. Beyond that, what do we really know about our workforce?” Adeyemo asked at the summit. 

“When we talk about equity, and we talk about inclusion, we can’t truly build the programs… if we haven’t taken the time to know who our employees truly are,” Adeyemo shared.  

“And we aren’t going to get that information unless they feel safe, and that they work for an authentic organisation.” 

Adeyemo said there is ample opportunity in the tech industry to work towards understanding employees better.  

“Let’s use tech for good. Let’s use the information for good. It’s an opportunity to understand our workforce and then do something about it. It’s not a quota, it’s an understanding.” 

Vulnerability goes hand in hand with DEI 

Co-Chair of the Women Leadership & Diversity Committee at Citi Singapore, Munir Nanji said he has learnt through experience how focusing on inclusion, and showing vulnerability to your team can be vital to inclusive leadership. 

“Flip DEI around,” Nanji told the summit. “When you bring inclusion into an organisation, it becomes front and centre, the D and E will follow. There’s also a whole point around vulnerability.” 

“When people realise we are all people, that we all have our own challenges, we all have our own goals and ambitions, and at the end, we all want to do good. Vulnerability is very important, especially in management.  

“As you move through an organisation, your shell gets thicker and thicker. We end up building our own biases and we need to understand what they are, and be able to confront that.” 

Women’s Agenda is sharing a number of key insights from the Diversity, Equity and Inclusion Summit held in line with the 2023 FIFA Women’s World Cup, thanks to our partnership with Coca-Cola. You can read our first piece in this series, exploring how Jessica Brown’s charity helps vulnerable women take charge or their lives. You can read Coca-Cola’s Level the Playing Field Report here. 

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A world first, Impacter is a new cloud-based software designed to help businesses self-assess and improve business outcomes when it comes to diversity, equity and inclusion (DEI).

Financy chief executive Bianca Hartge-Hazelman says she is on a mission to clean up ‘DEI washing’ in Australia.

“Our goal is to prevent organisations from falsely claiming effective DEI initiatives by introducing a tool that can measure this and hold executives accountable for their actions.”

“Although well-intentional, many initiatives designed to improve workplace DEI often fail because measuring performance, and ensuring executives are held accountable for its success, is difficult. That is where Impacter can provide clarity,” Hartge-Hazelman said.

Financy’s new software enables businesses to measure and track their DEI position while being able to verify their results in a centralised and secure location. There’s evidence-based assessments given on a quarterly basis. Impacter also helps to hold business leaders accountable and compliant with things like gender pay gap reporting and other diversity considerations under the Workplace Gender Equality Act 2012.

The software provides real-time data through a secure dashboard, and recommends best practices for business planning and risk management when it comes to DEI.

“I first designed Impacter as a Equality Tracker Tool in an Excel document after becoming frustrated at the slow pace of change on gender equality issues as noted in the Financy Women’s Index, a quarterly snapshot on women’s finances and gender equality timeframes,” said Hartge-Hazelman.

Impacter was developed over an 18-month period in consultation with business experts and academics specialising in diversity, equity and inclusion, as well as tech company Tech For Good Group. Financy also partnered with the University of South Australia’s Centre for Workplace Excellence to set, test and review the Impacter assessments and unique scoring algorithms.

A pilot of the software was conducted in late 2022 with over 30 organisations, and Hartge-Hazelman said the results concluded that organisations reported improvements in gender pay gap, brand awareness, better budget allocation, time and resource savings, improvements in staying on top of DEI compliance, and higher staff retention and attraction rates.

“Studies show that when employees feel valued for their differences, they are likely to be more satisfied, innovative, productive and let’s be honest, more likely to stick around. These are all factors that boost business performance,” Hartge-Hazelman said.

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As with all major events, a multitude of factors played a part in SVB’s downfall, such as the failure to account for rising interest rates; the drying up of venture capital, which forced startups to draw down funds held by the bank; uninsured depositors; and a lack of regulatory oversight.

What didn’t contribute to its demise is the “45% women, one Black, one LGBTQ+ and two Veterans”, who sat on the board and oversaw the bank’s operations, but it seems that The Wall Street Journal columnist Andy Kessler missed the memo.

“Was there regulatory failure? Perhaps. SVB was regulated like a bank but looked more like a money-market fund”, he wrote in March.

“Then there’s this: In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘one Black,’ ‘one LGBTQ+’ and ‘two Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”

Unsurprisingly, the pile-on was swift, and journalists and leaders alike have called out Kessler. While some of his points are warranted, Kessler’s commentary has opened the gateway to address and analyse the mindset underpinning this thinking — especially at a time when so many companies are investing in diversity, equity and inclusion policies (DEI).

Resistance to change

No matter the policy or topic, there will always be people who feel threatened by change. Until recently, the fact that white men dominated the world was not in question. But as society moves on and culture changes, more organisations realise that focusing on DEI is ethical and makes good business sense.

Kessler’s commentary indicates his resistance to change, and the fact it was published in such a prominent newspaper shows, unfortunately, that there is still an audience for this.

People uncomfortable with change are looking for an excuse to justify why the old guard is still the best way forward, and Kessler has provided them with an argument: that the pendulum has swung too far the other way when it comes to DEI.

As this backlash against diversity grows, all sorts of failures, no matter how illogical, will be attributed to companies protesting diversity efforts over so-called “best person for the job” rhetoric.

The merit argument, while worthy, makes sense only in an ideal world: a world where diversity and inclusion are just a normal part of everyday life, as unnoticed as the office carpet. It is a world where social structures, constructed off the back of colonialist and patriarchal principles, no longer apply and where everyone, regardless of race, gender, sexuality or ability, is considered only based on their experience and talent.

Unfortunately, we do not exist in this world, so we have DEI frameworks. Talent may be equally distributed, but opportunity is not. You level out this playing field by interrogating how the current “best person for the job” got his (let’s face it — it’s usually a white man) position.

Misconstrued facts

Despite no evidence supporting the correlation between DEI and lack of business performance (particularly in the case of SVB) — research supports just the opposite — the fact Keller even raises this possibility shows tunnel vision or, at worst, a deliberate attempt to misrepresent information.

During the financial crisis of 2008, the approximately 24 financial institutions that either collapsed, got acquired, or bailed out were almost exclusively led by white, middle-class men aged 50 or older. Yet no one commented that a lack of diversity was the problem.

As researchers Robin Ely and David Thomas eloquently explain in this Harvard Business Review piece, it’s unrealistic for a business to take the “add diversity and stir” approach and expect immediate results (this usually means shareholder earnings).

The commitment to increasing diversity must be based on a genuine desire to see a change in the workplace and an understanding that tapping underrepresented people’s identity-related knowledge and experiences as resources for learning will enhance every aspect of the organisation — and not just its profits.

Diversity as the norm

I cannot wait for the time when diversity is no longer an add-on consideration to the day-to-day running of a business but a simple fact of life. Airtasker founder Tim Fung and former CEO of David Jones Paul Zahra are both vocal proponents of the importance of embodying diversity within an organisation’s core ethos.

Executives must actively consider what diversity and inclusion mean to their business and why it is essential. Most companies, no matter the sector, cater to everyone, and making decisions at the top without consulting with a wide variety of people has proven detrimental.

As Ely and Thomas point out: “leaders must acknowledge that increasing demographic diversity does not, by itself, increase effectiveness; what matters is how an organisation harnesses diversity and whether it’s willing to reshape its power structure.”

Broadening our notion of success is also paramount. Success isn’t just about maximising shareholder returns but about learning, creativity, flexibility, and human dignity.

So when people like Kessler misconstrue the value of diversity in the workplace and deliberately ignore facts, we must look beyond the words and consider the fine print: why is he saying this? Who is the person writing or speaking, and where do they come from? And what do they stand to gain from pedalling their view?

As a society, as organisations and as individuals, we must strive to bring people who are disengaged, misinformed and are serving as blockers on the journey to understanding why DEI is beneficial. This can be done through dedicated programs — like allyship training — which foster a psychologically safe environment to accelerate understanding, acceptance and engagement with diversity.

Intentional action is needed to engage everyone if we are to accelerate progress. Organisations can’t afford to be complacent, otherwise the time, money and resources they’re spending on DEI are continually being wasted and undermined.

This article was first published by Smart Company. Read the original article here.

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