Why DE&I is broken—how corporate America can end its Groundhog Day loop of ambivalence

Whether confronted by public assaults on their legitimacy or quiet withdrawals of “unwavering support,” corporate diversity, equity and inclusion (DE&I) efforts are again at a crossroads. Will DE&I deliver on its transformative potential or remain locked in an endless start-retreat-repeat Groundhog Day that reflects decades of ambivalent commitment? Some companies have made meaningful impact, but most have not. The need to continually justify DE&I strategy is perhaps the strongest indicator of corporate America’s ongoing vacillation. It’s no secret that DE&I has been disproportionately vulnerable to pendulum swings of corporate cuts and de-prioritization—its very existence subject to the ups and downs of company performance, public relations or both—and its teams among the first exits in reorganizations and RIFs. The most recent loop began with the murder of George Floyd in the summer of 2020. Hundreds of companies declared public commitments to DE&I, and many staffed up to deliver. It didn’t take long to realize that the moment would not ignite a movement and that many corporate pledges and actions were performative and lacked follow-through and accountability.Attrition rates for DE&I roles were higher than non-DE&I roles at more than 600 U.S. companies that laid off workers since late 2020. And a February 2023 analysis of racial equity commitments from Fortune 1000 companies found that the pace of monetary commitments slowed by almost a third from 2021-2022. Ad Age World’s Largest Advertisers 2023 Ad spending, rankings and analysis for the top 100 advertisers Click here When DE&I commitments begin and end with public statements, it’s clear that perception outweighs purpose, and with optics prioritized over action, appearances get mistaken for accomplishments. DE&I leaders encounter vast remits, vague organizational accountability and insufficient resources and executive support—even when social media squares turn black. Inequities that had previously been acknowledged are now the bullseye on a dartboard of denial. DE&I’s latest challenge: The Supreme Court’s recent college admissions decision being used to mischaracterize corporate and other DE&I efforts as discriminatory and reverse racism. Using this ruling to pause or stop progress internally is misguided. Even in its decision that the Equal Protection Clause of the Fourteenth Amendment was violated by universities, the Court still allows them to consider “an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.” As U.S. Equal Employment Opportunity Commission Chair Charlotte Burrows has observed, the ruling “does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers,” and “it remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” Related: News and analysis on diversity, equity and inclusion initiatives across the agency, marketing and media industries Extensive research also indicates DE&I’s positive impact on financial performance, creativity and culture. A 2020 McKinsey study reaffirmed the strong business case for both gender diversity and ethnic and cultural diversity in corporate leadership, and found that the most diverse companies are now more likely than ever to outperform less diverse peers on profitability. The same study found that the likelihood of outperformance was even higher for diversity in ethnicity than for gender. In August, a survey from The Black Economic Alliance Foundation and The Harris Poll found that more Americans “support businesses taking measures to ensure companies reflect the diversity of the American population than oppose,” with most acknowledging the positive ripple effect on innovation, job performance and profits. So, if DE&I is smart, fair and fiscally responsible, why hasn’t there been more progress, and why haven’t more shareholders and other stakeholders demanded it? One reason: Corporate America’s primary approach to DE&I as a compulsory course correction or nice-to-have option has devalued its role. Unlike sales, marketing, technology, finance and other areas that seldom have their business value questioned, DE&I has not been seen as an essential strategy and growth driver. Now more than ever, business leaders must not succumb to misguided notions, fear, threats or rhetoric regarding what DE&I is designed to do, but instead champion DE&I’s transformative power for both business and a more equitable and inclusive society. Workplaces mirror society and are uniquely positioned to intentionally create sustainable policies that prioritize representation, access, opportunity, advancement and belonging for everyone. Microcosms of equity in action can be created that inspire beyond corporate walls. Business has that kind of power; here are ways it can snap out of the DE&I Groundhog Day cycle: Lead with consistency and a long-term view DE&I begins at the top with commitment through the inevitable ups and downs of business cycles. This type of leadership fosters the understanding that everyone is responsible for respect, fairness, empathy, accountability and transparency—not just one person or a team. Innovate DE&I Build DE&I models with the same innovation expected across the entire business to drive organizational transformation and performance. Eighteen months ago, I took on an industry-first role—charged with developing a new framework to embed DE&I into enterprise-wide business operations via the fusion of marketing and equity. The new model includes HR as a key partner, but also builds infrastructures and implements systems to equip the full enterprise with the skills to apply DE&I across day-to-day roles. Prioritize progress over perfection This is about making strides, not waiting for perfect steps or perfect timing. Assess what the organization needs to maximize and accelerate its DE&I impact, then commit to do it and stick with it. Move forward with a clear vision and use data to guide strategy and planning while leaving room for necessary adjustments along the way. Given the current climate of our society, the near-term path might be more challenging. But those dedicated to real change and advancement must not waver. We must design resilient systems, act with integrity and intentionality and inspire others with our commitments and our actions. As Nelson Mandela said, “It always seems impossible until it's done.” So, let’s do it, together. Check out the latest Ad Age events and award programs

Why DE&I is broken—how corporate America can end its Groundhog Day loop of ambivalence

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