Does Corporate Diversity and Inclusion Enable Systemic Racism at Companies?

Racism will cease to exist when it is no longer profitable or psychologically useful." Toni Morrison

The subject of race is having a Cinderella moment in the American spotlight. The Black Lives Matter movement and its bold call for dismantling systemic racism following the tragic death of George Floyd has ushered in a long-needed moment of truth and awareness.

Lifting the spell on the unspoken moratorium against speaking about race openly in the corporate sector and its affiliates has been a crucial step forward. Frank discussions about racism no longer represent an act of war, but a reconciliation of America's two realities.

But there is always something.

The new diversity report from Facebook shows that there has been no appreciable change in the number of African-Americans employed at the company - 3.8 percent has now grown to only 3.9 percent. This is the dismal state of progress at Facebook in spite of a year of consistent pressure, an anonymous Medium post from its Black employees, and media coverage in the business press about its race issues.

Black consumers and account holders are a vital part of this company's success and yet, they are barely represented within its workforce. Apparently, there is no "leaning in" on resolving this, it's just the way things are.

Suddenly, it's the stroke of midnight and the beautiful glass carriage of expectations turns right back into that ugly pumpkin of inequity that we're all used to.

When it comes to race in America, workplace diversity and inclusion specifically, there are no fairy godmothers with magic wands to save the day or offer redemptive perfect endings, even for a little while. But there is a glass slipper- for so many, its's an illusion of course, but no less compelling.

The glass slipper of the American dream and its promise of meritocracy and equal opportunity rests on the velvet pillow of corporate diversity and inclusion, as well as the scrolled pages of our Constitution. Just as our government leverages our Constitution to remind citizens of our country's core principles, companies leverage their corporate D&I function and mission to reinforce corporate values and hold forth the promise of equity and a commitment to inclusion.

Yet, race-related dysfunction continues to exist within the corporate sector as an accepted norm, Or, depending on your point of view, an acceptable exception,

In this season of hard truths, maybe this is one of the hardest - corporate diversity and inclusion enables the myth of equality by serving, for all intents and purposes, as an alibi for systemic racism in the workplace.

President John Kennedy once remarked that "there is no problem of human destiny beyond the human mind." But the way forward on the issue of racial equity and systemic racism continues to be our country's most enduring challenge, especially in the workplace.

We all want our shot at wearing the glass slipper, but systemic racism means that if you have the wrong skin color, you won't even be able to try it on. If by some remarkable chance, you are able to navigate past the color line to get that shot, be prepared. Yours will not be a path of least resistance in the face of entrenched racism at a company or firm.

By virtue of being Black, a switch will always be made at the last minute to give you the plastic slippers. Even if the glass slipper and shoehorn were placed in your hands. Even if you helped to make that glass slipper more beautiful and valuable than it has ever been.

Granted, the plastic slippers are more resilient and better equipped to go through the grit and grime of difficult circumstances, but they are easily disposed of. From a distance a plastic slipper can pass for a glass one. That's part of the illusion.

But up close, you can tell the difference. And that difference, as the iconic Frederick Douglass said in his famous Fourth of July speech, is "immeasurable. "The glass slipper can be passed down to the next generation and guarantee their future.

Systemic racism at a company or firm means that if you are Black, you'll never be the right fit for the glass slipper, even if you have excelled by every measure. There will always be a reason why you're being denied the glass slipper. You'll just have to make do with the plastic slippers.

When your life's clock is perpetually set at the stroke of midnight and there are no glass carriages to whisk you away, the following data shows what the footprint of systemic racism looks like. This is how it shows up in real life and it's not a fairy tale.

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In 2015, McKinsey & Company published its groundbreaking report, Diversity Matters which released data from its global study of over 300 companies examining the impact of diversity on business performance. The study's results showed that diversity represents a competitive advantage for business and indicated the following.

• "Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
• Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians."

In 2016, Harvard Business School professor Katherine DeCelles released the results of her two -year study titled: Whitened Resumes- Race and Self-Representation in the Labor Market. Her thesis? African-Americans and other ethnic groups enhanced their success in the job market when they "whitened" their resumes to remove references to race, including ethnic sounding names, organizational affiliations, community ties, etc.

Her findings? Candidates with whitened resumes were more successful in their job searches, even when applying to pro-diversity employees. In fact, the data showed that pro-diversity employers were just as biased employers who did not signal a commitment to diversity in job postings. Here's a key insight from the study:

• "Pro-diversity employers discriminate, too...When an employer says it values diversity in its job posting by including words like “equal opportunity employer” or “minorities are strongly encouraged to apply,” many minority applicants get the false impression that it’s safe to reveal their race on their resumes—only to be rejected later...These applicants who let their guard down about their race ended up inadvertently hurting their chances of being considered.Whitening Resumes Results in More Interviews.
• A 2016 Northwestern University study by Professor Devah Pager found that employers were more willing to consider white applicants with criminal records over Black employees with no criminal history at all.
• A 2019 Glassdoor study of employees from companies in the U.S., UK, France and-Germany showed that Black employees from the United States experienced the highest degree of racism.
• According to a January 2018 Pew Research report, 62 percent of Black STEM workers experience discrimination at work ranging from pay inequity to daily microaggressions more than other ethnic groups. I'm a Black Female Scientist- Colleagues Threatened to Call the Cops on Me My First Day ( Mother Jones)
• Hiring discrimination against Blacks and Latinx has not improved in 25 years based on a survey of 54,000 job applicants. Hiring Discrimination Against Black and Latinx Remains the Same. Based on this survey,Whites are 36 percent more likely to receive an interview callback over Black applicants and have a 24 percent advantage over Latinx applicants.
• A May 2019 Pew Research Center poll showed that 81 percent of college-educated Blacks experience higher levels of racism than non- college educated Blacks at work. 69 percent of Blacks with a high school education or less have experienced racism at work.
• Black and Latino graduates of Harvard's prestigious MBA program will make $97,800 less than their White peers six to seven years out from school.
• Only 0.8 percent - 4- of Fortune 500 companies have Black CEOs - Lowes, Merck, Tapestry, and TIAA. There are 37 women CEOs of Fortune 500 companies, none are Black.
• According to the National Association of Legal Placement's 2019 Diversity only 1.97 percent of partners at corporate law firms are Black Americans. Black women represent 0.75 percent of law firm partners.
• According to the American Hospital Association's Institute for Diversity and Health Equity-only 9 percent of hospital CEOs are minorities. Hospital boards and executive leadership ranks are also overwhelmingly white in spite of growing minority patient populations. Minorities hold only 14 percent of hospital board seats and 11 percent of executive positions hospitals, primarily in the chief diversity officer role.
• According to an article in Modern Healthcare from February 2018 titled "Racism Still a Problem in Healthcare's C-Suite," featuring interviews with Black health care professionals, insights were shared about the "unwritten rules" of professional survival. One of those rules shared was that speaking up about inequity openly and professionally "sets yourself up for failure or being seen as a troublemaker."
• According to the 2019 Women in the Workplace Survey conducted by McKinsey Institute and LeanIn.org. of 279 companies and over 64,000 employees, one in five executives in the C-Suite are women. One in 25 executive are women of color.
• Based on its data, the report also established that: "Women of color are not only significantly underrepresented, they are far less likely than others to be promoted to manager, more likely to face everyday discrimination, and less likely to receive support from their managers."
• The survey results also showed that only 22 percent of the companies interviewed view racial diversity as a priority.
• The compensation analysis firm Payscale surveyed salaries indexed by race between the years of 2017 and 2019. The firm concluded that: "Even as qualified black or African-American men climb the corporate ladder, they still make less than equally qualified white men. They are the only racial/ethnic group that does not achieve pay parity with white men at some level.
• Another study by Payscale examined the job referrals process. The study found that out of 100 referred employees, 44 will ten, 22 will be white women, 18 will be men of color.
• A 2015 study by The New School titled "Umbrellas Don't Make It Rain- Why Studying and Working Hard Isn't Enough for Black Americans" produced data that led to this conclusion.
• "Higher education is associated with greater wealth within race groups, but more education will not solve the problem of racial wealth disparity. The financial positions of similarly credentialed black and white families are markedly different. For families with household heads that have a college degree, the typical white household has $180,500 in wealth while the typical Black household has $23,400, a setback of nearly $160,000. Indeed, black families whose head earned a college degree have only 2/3 of the wealth of white families headed by a high school dropout."
• UCLA's Hollywood Diversity report indicates that in:" In 2019, the films that tended to perform the best at the box office were diverse, with casts in the 41% to 50% minority range." Minorities also purchase at least 50 percent of the tickets for nine of the top films. Yet, 91 percent of C-suite level positions at movie studios are held by Whites and 82% are held by White men. Among all senior executive positions, 93% percent are held by White executives and 80% by men.
• A Harvard Business Review article highlighted a survey that showed White men who supported diversity were rated higher in terms of leadership skills and performance. Furthermore,hiring other white men was not judged negatively. However, minorities and women who advocated for diversity were judged more negatively in terms of performance and leadership. Those who hired from their own groups were judged to be less effective and less competent.
• The White Men's Leadership Study, which interviewed executives from major companies like Marsh McClellan and Bank of America, found that 68 percent were unsure about diversity involved them, but recognized its importance. 45 percent stated that their company D&I programs were effective. However, only 21 percent of the women and minority interviewed for the survey rated the programs as effective.
• The Center for American Progress issued a report in December 2019 that reached further confirmed conclusions about the systemic issues impacting Black professionals, both men and women.Two data points merit noting. First, the CAP report indicates that Black women have the hardest time in the job market, in spite of being the country's most degreed professionals- the majority of Black women in the corporate job market have graduate degrees.Second, the report concluded that:
• "Regardless of educational attainment by Black workers, they typically have a higher rate of unemployment than their white college-educated counterparts...40 percent higher. While college attainment helps all workers get more access to better-paying, stable jobs with better benefits, the advantages are not evenly distributed. Black workers, no matter their level of education, still face impediments in the labor market—employment discrimination, occupational segregation, and unequal pay." Racial Inequality and Economic Disparities.

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Peeking Inside Culture's Black Box

Profitability. Innovation. Competitiveness. This is the sacred trifecta of business. Racial diversity enhances the value of all three and the data science has confirmed this, not just with the McKinsey study, but with others such as this year's Just Capital Study.Diversity Improves Financial Performance The return on investment is clear.

So why the continued pushback, antagonism, and active resistance to Black lives at work?Why has the professional apartheid of the corporate sector remained intact?

The answer is simple. Culture, Culture, Culture.

It's the governing compass for everything at work. It is our shorthand for affinity, the path of least resistance, and risk. It's the mirror through which we recognize the familiar and validate ourselves, identity and world view.

Even if proven beneficial, Diversity poses a challenge and threat to this psychological, decision-making, and strategic validation process. In response to that threat, majority workplace players can respond tribally by creating barriers to entry that reinforce cultural recognition and dominance.

Examples include an overemphasis on culture fit (as opposed to values fit). a "winner take all" mindset or a"hoard-the-pie and pull up the drawbridge" approach to decision-making about talent and high-visibility assignments. These dynamics deepen both unconscious and conscious animosity towards diversity.

When a workplace culture celebrates homogeneity as a virtue and proxy for excellence without processes for accountability, systemic racism will thrive. Leadership advancement will not be hindered by racists practices or attitudes. There will be no checks on group think, or biased decision-making.

There will be indifference to the corrosive impact of disconnects between corporate values/ethics and everyday practice towards Black and Latinx colleagues or employees. They will be treated as a class apart. Convincing data science that attests to thevalue and advantage of diversity will be ignored.

Without accountability, Change that takes place on the D&I front will be more symbolic and crisis-driven than strategic and systems-based. The culture that sustains racial inequity will remain intact and its imprint will be on everything, including corporate diversity and inclusion.

Harvard Business Review's article, "The New Analytics of Culture" provides a valuable breakdown of how this lens of culture and culture recognition plays out in the workplace:

"Conventional wisdom holds that firms must choose between homogeneous, efficient culture and diverse, innovative culture. A homogeneous culture improves efficiency and coordination because employees agree about the norms and beliefs guiding work, but the benefits come at the expense of fewer novel ideas. In contrast, a heterogeneous culture sacrifices the benefits of consensus of favor of healthy, disagreement among employees that promotes adaptability and innovation."

Striking a balance between resistance to diversity and acceptance of diversity has led companies to coast along in a "happy place" of compromise. They have positioned their D&I mission between two opposing realities-a status quo antagonistic towards or ambivalent about racial equity and a performative alt-reality celebrating diversity without accountability.

In this alt-reality state, the D&I mission serves as more of an alibi and enabler for inequitable behavior, not a deterrent. That does far more harm than good.

With a continued emphasis on the value of homogeneous "shared norms and beliefs",racial equity, in particular, remains a blind spot and low priority. Antagonism towards Black success also festers. At some companies and firms, race has been treated more like a four-letter word,or inconvenient outlier, than a legitimate D&I goal. Racial equity has been in a D&I's no-man's land as result.

That changed this spring. After all, Culture doesn't change without a crisis.

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The Impact of Black Lives Matter

The tectonic force of the Black Lives Matter Movement rocked the entire world and shook the foundations of systemic racism in an unprecedented way. The aftershocks included a tidal surge of voices from Black professionals.

Their stories painted a troubling portrait of professional apartheid and second-class citizenship in 21st century Corporate America. It's a state affairs that led Ford Foundation CEO Darren Walker to declare: "Corporate America has failed Black America."

Black employees went on the record en masse. Their stories were shared in interviews, blog posts, on the record testimonials in article like the Forbes article on Black doctors, open letters such as the petition signed by 600 Blacks in the advertising industry and social media platforms such as the Instagram page titled BlackatNike or Twitter with the hashtags, #WorkingWhileBlack, #BlackinThe Ivory, #biasinbadging, which refers to the unique phenomenon of Black employees being questioned by white colleagues about their badges at work.

The dysfunctions set forth in these accounts have been far-ranging and startling- Salary and hiring gaps, non-concern by leadership and managers about hiring and recruiting Black talent, demeaning, low-trust relationships with managers and HR, invisibility from key decisions, prestige assignments, leadership and succession planning discussions, lack of connection to Black talent hubs like HBCUs, gender on gender "crime", workforce segregation within back-office and support positions, the elevation of non-intersectional gender equity as the sole diversity standard, unchecked microaggressions, loss of social capital and resentment from white colleagues following project success or promotion, rare opportunities to advance.

The ethical and moral warning lights that go off when issues like global warming or child labor are raised, seem to go blank when it comes to racism or for that matter other kinds of inequitable treatment such as sexual harassment. How we can forget the events or workplace cultures that spurred #Me Too and #Times Up?

Under the current model of diversity and inclusion, those warning lights are not working and companies, like Facebook, as well as others have continued to conduct business usual. Professional apartheid has continued unchecked.

While the spike in corporate diversity and inclusion job postings over the last several weeks has been encouraging, it's clear that a major paradigm shift and overhaul is needed to empower corporate diversity and inclusion with the muscle and capital it needs to foster change.

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Only Systems Can Overhaul Culture

Systemic racism is not the first effort at cultural overhaul by Corporate America. The record of success and skill in doing this is evident in the corporate record on sustainability.

Not everyone believes in the science behind climate change and global warming. There are true skeptics and conspiracy theorists who think that environmental science is one big hoax and that milestone goals like zero carbon emissions will hurt the economy and traditional industries like the coal industry, not save the planet. But guess what? At work, there is no opportunity for their personal biases or opinions to have any sway.

Why? Because companies have enacted frameworks of compliance, incentives, rewards, benchmarking, accountability and organizational design to create ironclad systems around sustainability. Processes flanked by the guard rails of accountability lead decision-making, not individual intentionality or beliefs.

What if companies treated antiracism with the same diligence as climate change?

By design, the standard model for corporate D&I has not been part of a virtuous cycle of change concerning systemic racism. It isn't process-driven and wasn't designed in the spirit of change agency or antiracism. At it's core, it was designed to contain crises and reputational fallout.

Every company is different in terms of its commitment to diversity. Some have truly solid records of progress and longstanding-commitment- IBM, Microsoft, Vista Equity (Its PPP initiative represents a major deployment of capital towards the Black small business sector), Xerox, American Express, TIAA, Janney Montgomery, PayPal, Netflix have good reputations on the ground for being serious about racial equity, with the right cultures to match, and there are others as well.

But as a rule, compromise and trade-offs between "stop and go" politics and the headwinds of "diversity fatigue", anemic leadership support, low budgetary support, and tension-filled reporting relationships are the stock and trade of D&I professionals.

Unlike the corporate model for sustainability, which has enforced a core operational and strategic discipline for meeting chief goals, corporate D&I has not positively affected corporate discipline on the subject of race. It has not been given the agency to do so.

Functionally, corporate D&I has no strategic or operational hooks. Moreover, it is not process-driven, has no accountability muscle and as an outlier, has limited access to leadership or organizational influence, unless it's a C-Suite position or there is board oversight.

As a result, the corporate diversity and inclusion function has operated more like a referee on the sidelines tiptoeing around embedded racism rather than an empowered change agent and advocate for change. That empowers systemic racism rather than defuses it.

In fact, when it comes to addressing systemic racism and the culture than anchors it, this operational model from the last 10 to 15 years is the equivalent of throwing small rocks at a moving tank.

The traditional model for corporate diversity and inclusion greenlighted by leaders over the last 10 to 15 years has been more of an ad hoc mix of programming, HR protocols, C-Suite consciousness-raising, and event sponsorships held together by outdated bias training. Bias training has long been shown to be ineffective and a lightening rod for workplace antagonism and division.Why Diversity Programs Fail.

That alienates potential allies and champions. We know from Black Lives Matter rallies, the call for change is multicultural, multigenerational, cross-gendered, and global. A rally sign describes it best, "Everybody vs. racism."

Bias is the wrong focus. Culture changes have to foster affinity and collective ownership, not division. What we must focus on and fight is a system that enforces segregated divions, devalues talent and potential based on color and endorse unfairness. Like an evil stepmother.

Bias is endemic to how people operate in the world. Systems are the only intervention that can alter culture and its norms, not one-on-one lobbying and appeals to human nature.

It's up to companies and organizations to create infrastructures and incentives that govern antiracist corporate conduct through systems enforcing operational and ethical norms for racial inclusion.This is how culture changes at work. Change the system, change the culture.

Next Steps

For companies and their leaders who want to on-ramp as allies for antiracism,their decision to make a long-term commitment stands at the crossroads of three pressing questions.

First, will industry and institutional leaders finally do what's needed to turn the page on systemic racism or will systemic racism continue to serve as a crutch for sustaining economic advantage, power and a social/economic order organized by the shorthand of skin color?

Second, will companies take a hard look at how the intersection of culture and structural weaknesses in their traditional D&I have made it difficult to press forward on a model for racial equity at work?

Third, what is leadership prepared to do in order to create a new systemic framework for change and more antiracist practices in the post-Covid remote and hybrid workplace? How will they integrate racial inclusion into equity agendas that intersect with color re: gender, LGBTQ, the specially abled and neurocognitive diversity?

These are big questions that will require a shift from the last 10 to 15 years of diversity and inclusion, but the mandate is clear and companies have signaled their intent to step forward. Time is up on a model of diversity and inclusion that has enabled the professional apartheid and systemic racism of our status quo. The future demands so much more of us.

Long before the current Black Lives Matter and antiracism moment, revered management guru Peter Drucker took note of the emerging Civil Rights movement and its mission in his seminal 1954 book, The Practice of Management. He wrote: “Increasingly, it is to [the institution of] business that our citizen looks to for the fulfillment of the basic beliefs and promises of society, especially the promise of equal opportunity.”

That's still the case. It's the Cinderella ending that so many of us are hoping for. Maybe this time, it will actually happen.