Joelle Emerson's DEI consulting firm Paradigm works with more than 500 companies. The growing backlash against DEI is “usually the first order of business on every call,” she said.
Critics of DEI, or diversity, equity and inclusion initiatives, have tried to make it a scapegoat for everything from regional bank bankruptcies to a panel's in-flight theft of a Boeing plane last week. That debate gained momentum this month when three famous billionaires argued on social media about the merits of DEI: Elon Musk and Pershing Square CEO Bill Ackman attacked DEI efforts as “racist,” while investor Mark Cuban argued that they were “good for business.”
The economic and political landscape has changed since 2020, when companies hired DEI officers in droves amid a racial confrontation following the killing of George Floyd. Recently, DEI programs have become less visible. Over the last two years, the number of new hires for DEI positions has decreased and the number of investor calls mentioning DEI has decreased.
This begs the question: Have companies retreated from DEI? Or have they simply changed their approach and the way they talk about it?
DEI operates in a new environment. Last year, the Supreme Court struck down affirmative action in college admissions, sparking a wave of similar lawsuits and legal threats against corporate diversity programs. And while polls suggest that most Americans believe it's good for companies to focus on diversity, equity and inclusion, there's a wide partisan divide: In a Pew poll last year, 78 percent of workers said, Those who identified as Democrats agreed, while only 30 percent of Republican workers thought the same.
The pushback may have led to a rebranding, according to DEI experts. In some companies, what was once called a DEI survey may now be promoted as a culture survey, Emerson said. Or management training, once designed as part of DEI efforts, can instead be discussed as a course that helps managers conduct performance reviews more effectively. “This term seems to be widely misunderstood in a way that I don't think any of us realized until the last few months,” Emerson said of DEI. She added that it might make sense for companies to “get far more specific about what we’re talking about.”
Some corporate DEI programs now include a wider variety of groups, said Porter Braswell, co-founder and CEO of Jopwell, a professional development platform for Black, Latino and Native American professionals. “I think instead of saying this is a program for black employees,” he said, “you would say, ‘This is a program to increase equity in promotion rates across the company, and everyone can apply to take part.' Part of this program, but will play different roles.'”
Some companies are now talking about “IED” instead of “DEI” with an emphasis on inclusion.
However, a dip in DEI job postings could signal a decline. After rising in 2020 and 2021, job postings for DEI roles on employment sites ZipRecruiter and Indeed declined in 2022 and 2023, the companies said. On ZipRecruiter, the number fell 63 percent in 2023. On Indeed, the number fell by 18 percent from December 2022 to January 2023.
The slow turnover of DEI jobs (employers that hired in 2021 may not have needed to hire more in 2022) and a cooling job market—particularly in industries like technology and finance that are most likely to have DEI jobs— likely contributed to the decline, said Julia Pollak, chief economist at ZipRecruiter. But these factors do not fully explain the change.
Some see the decline in job postings as a sign that companies have backed off their commitments to DEI. It shows that the surge in hiring for DEI positions after Floyd's killing “was performative at best,” said Misty Gaither, vice president of diversity and inclusion. Justice and Belonging at Indeed.
Jopwell's Braswell added that many companies tried to shift all responsibility for changing company culture to a few new employees – a strategy that predictably failed. “All these people are getting fired, all these people are quitting, all these people are feeling burned out,” he said, adding: “The only way these cultures can change to be more diverse, more equitable and more inclusive is if it’s everyone’s job “The individual is the company.”
There is also evidence that companies are continuing to commit to DEI In a survey released this week by employment law firm Littler, just 1 percent of 320 C-level executives said they had significantly reduced their DEI commitments in the past year, and 57 percent said they had expanded those efforts.
In a survey of 194 HR leaders released last month by the Conference Board, none of the respondents said they plan to reduce DEI initiatives. And while the number of mentions of DEI in investor conference calls has declined, the number of mentions in annual filings is high, according to AlphaSense.
Does it matter how companies talk about DEI? Executives have stopped discussing their sustainability efforts and using the term ESG to refer to environmental, social and corporate governance issues as the issue has become increasingly politicized. (BlackRock's Larry Fink recently described “ESG” as “totally weaponized.”) When it comes to DEI, some professionals don't mind changes to branding as long as the work continues. “The end goals of these diversity initiatives and programs will not change,” Braswell said.
For others, changing the words themselves is a retreat. “We have to call it what it is,” said Indeed’s Gaither. “The data says that when there is diversity, equity and inclusion, all of these positive things happen. So we’re not going to mask it or call it anything else.”
– Sarah Kessler
IN CASE YOU MISSED IT
Citi will cut 20,000 jobs. The Wall Street giant announced the layoffs after reporting a fourth-quarter loss of $1.8 billion – the bank's worst result in 14 years. Citi boss Jane Fraser admitted the bank had performed poorly but said 2024 was “a turning point”.
BlackRock relies heavily on infrastructure. The asset manager agreed to buy Global Infrastructure Partners for about $12.5 billion, which would create the world's second-largest infrastructure company. BlackRock also announced a major restructuring, with Global Infrastructure CEO Bayo Ogunlesi joining BlackRock's Global Executive Committee and Board of Directors.
The SEC approved the first Bitcoin ETF The regulator has given approval to 11 fund managers to develop a new product designed to make it easier for retail investors to buy and sell the cryptocurrency. But SEC Chairman Gary Gensler issued a cautionary statement following the decision, clarifying that Bitcoin is a “speculative, volatile asset” used for illegal activities.
The World Bank warns of a “wasted” decade. The institution predicted global growth would slow to 2.4 percent this year from 2.6 percent in 2023. The forecast put the global economy on track for its weakest half-decade in 30 years. Two wars, a slowing Chinese economy and an increased risk of natural disasters due to global warming have added to uncertainty.
The geek way
Andrew McAfee's books, including The Second Machine Age, have focused on how technology is changing work. In his latest work, The Geek Way, McAfee, a professor at the MIT Sloan School of Management, describes a shift from industrial-age management philosophy to a new era of constant change.
McAfee discussed the book with DealBook. The conversation has been edited for length and clarity.
They recommend that companies adopt the “geek norms” that characterize the most successful modern companies. What do you mean by that?
Norms are expected behaviors at the group level. I say there are four great geek norms.
The first is science, an ongoing argument that is resolved over time by evidence.
The second point is ownership. It's about giving responsibility to an autonomous group and then ensuring that it remains an autonomous group.
The third point is speed. How quickly do you iterate, do something, get meaningful feedback on it, integrate it, and bring something else back to market? You need a plan, but the key is a minimally viable plan.
And finally, openness, which is very close to psychological safety (which my former colleague Amy Edmondson talks about a lot). It is the opposite of defensiveness. We are defensive creatures by nature. We don't like to be challenged, and the geeks have realized that if we want to actually make progress together, we need to get past that.
They write that a key to the property norm is keeping bureaucracy under control. Why is the bureaucracy bloating?
As humans, we have this very deep-rooted desire to want status. And one way to gain status in a large, complicated organization is to be a gatekeeper, or a person in the decision-making loop.
Hitting your numbers helps the organization as a whole – if you’ve done the alignment process right. But do you make the 20th signature on the approval route to get a specific spending amount through the system? No, let's try not to have that.
Which of the geek norms is the most difficult for leaders to face?
Probably openness. Like the rest of us, our leaders are defensive creatures by nature. Saying, “Oh yeah, I hadn’t thought of that – good idea” is not what the Jack Welch-style management style of the industrial age should do. Maintaining this lack of defensiveness, creating an environment of psychological safety, and reasoning in a way that doesn't derail things are all difficult things to do and continue to do as a leader.
Was there a time when that wasn't the best way? What has changed in the world that makes it more important?
It has always been a better idea to be open rather than defensive. In a slowly changing environment where the landscape is static, being insular or not welcoming debate is not such a problem. That's what happens when competition is global, when things get twice as good every 18 months, and when your environment is periodically shaken up by something like generative AI
When the world changes very quickly, all these old industrial habits become even worse.
Thank you for reading! See you on Tuesday.
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