What BlackRock, Heidi Klum and Head-hunters have in common

It has literally become a fashion to position yourself as pro-Diversity, including in contexts that historically were struggling with many, most or all aspects of D&I. Here is why we must be careful about full-mouthed statements from famous, rich or powerful people and what companies can make their D&I communication credible and accepted.

When BlackRock announced this month to increase their efforts and expectations regarding Board Diversity, it was not the first time the investment giant took a position on this topic. This time, however, experts and media reacted more passionately, both for and against BlackRock's CEO, Larry Fink. Many of the comments addressed the basic question whether or not it was adequate that an investor addresses the topic. Our analysis shows that part of the controversy could have been avoided and which biases are overlooked in the discussion.

How C-level communication about D&I is different

Whenever CEOs support or even demand D&I efforts, they should be recognised for doing this in the first place. For most of them had been ignoring the topic for decades – including on their way to the top… On the other side, their exposure and their power – both factual and symbolic – create a complex context that needs to be navigated carefully. The BlackRock example is not the first where several aspects went wrong so that good intentions had multiple – avoidable – adverse effects.

Context, connotation and cause: Success factors or pitfalls

It was eleven months ago that BlackRock first put a public focus on Board Diversity. At that time, the giant investor added the topic – as second – to ‘climate change’, which was the headline of their annual ‘Shepard’s message’. This year, Diversity was added to a pledge for ‘purpose’ in the very same context and it was combined in a fluffy way with other “issues […] from protecting the environment to retirement to gender and racial inequality, among others”.

The unfortunate approach to the communication included four major mistakes which contributed to predictable backlash.

Mistake #1: Only once a year – Diversity communication as an exception

When a CEO or a company want to credibly focus on D&I, the communication cannot be once a year and not only on special occasions (management meeting, International Women’s Day, Gay Pride …). D&I must be positioned within the strategic agenda as well as within business and leadership processes, and hence be brought up throughout the year.

Mistake #2: Only second priority – Diversity as an add-on

When a CEO or a company wants to position D&I as a meaningful framework, this cannot be done in combination with one of several other topics that are not firmly established in the business agenda. D&I must be explained with a robust, holistic storyline that connects it with all corporate key elements, including values, business priorities and challenges, and long-term vision.

Mistake #3: Only a belief: Diversity as a hard-to-prove benefit

When a CEO or a company wants to describe its motivation for D&I, this cannot be based on beliefs. Unlike knowledge, evidence or insight, beliefs (or convictions) include doubts or assumptions, which serve as toxic elements in business communication. Just like in any other area, business leaders literally need to ‘do their maths’ before starting their communication. The good news is that, unlike ten years ago, valid, reliable, significant and robust evidence exists.

Mistake #4: Only a human cause – Diversity as an ethical responsibility

When a CEO or a company wants to explain its reasoning for D&I, humane arguments are no longer common sense nor do they find the common ground anymore; for since a few years, it has become publicly accepted (again) to raise your voice against equality, inclusion or integration, and this is what happened to Larry Fink. He was accused of introducing a personal (and in the US-context, political) agenda and people from the other camp openly disagreed with his opinion. They suggested BlackRock should stick to their last by focusing on business benefits, which was contrasted by Fink’s wish to also benefit ‘the communities in which they [the companies BlackRock invests in] operate’.

“If Fink had stuck to proven evidence for the business benefits of D&I, most of the backlash would not have happened”, the D&I Engineer, Michael Stuber, comments the case.

BlackRock’s credibility for D&I has increased, yet along a bumpy avenue

One fundamental question was not even raised in this heated media battle: Can a company like BlackRock credibly claim stewardship for D&I? This refers to one obvious and one less obvious aspect.

• Does BlackRock work on D&I internally beyond the legally required measures?
• Does BlackRock reflect its own business model against the proclaimed D&I priorities?

In timely proximity to the 2019 Letter to CEOs, Blackrock announced to intensify their internal D&I work. Actually, Fink told media bluntly that five years from now his company should no longer be run just by “a bunch of white men.” A number of other CEOs before him had already experienced the destructive force of such a derogative wording. The hefty verbal bias makes it difficult for people to see the good intentions or the promising sides of change.

Missing self-reflection of the business model  

But Fink’s simplified phrasing also suggests that BlackRock has not reflected their own role as obstructers of D&I over decades as a result of their business model. Just like most investors, BlackRock was feared for rigorous number-crunching, profit-pressing and quarter-to-quarter stock price observing of the companies of which they owned shares. Most investment models consist of only two priorities:

• Profit that ensures attractive dividends
• Rising stock price that allows to sell shares and invest in another company that promises more stock price advance than the previous

Both these elements include time limits and hence promote a short to mid-term focus that has been seen as detrimental to D&I work that is not legally required nor risk-avoiding.

Two-way value-add: Tailoring D&I to your business model and identity

Ironically, most business models only seem to be incompatible with a stringent D&I agenda and vice versa. A closer look at more elaborate empirical insight from global academic research shows that D&I – if tailored to the given situation – can contribute immensely to the business agenda. Reversely, only minor tweaks to the business and leadership processes are required to make the deal complete, credible and clear.

The ethically, politically or personally driven impulse of senior leaders to hastily impose a target-driven D&I agenda does not fulfil the criteria of a consistent business nexus. The result is the impression that something strange was added to a running system and that it will probably pass or be streamlined sooner or later. A bit like a fashion trend that does not make it into the mainstream stores. Apropos fashion: Heidi Klum has also discovered Diversity and created a shit storm with a number of insulting clichés in one of her TV shows. She made the same mistake as Larry Fink of not reflecting how her business (and fashion) model has always been the exact opposite of Diversity (or Inclusion!).

Read the full story about Heidi Klum and Executive Search Firms as false friends of D&I