The wave of enthusiasm for Diversity, Equity and Inclusion that began in 2020 started to wane in mid-2022, and has now turned into significant backlash. Corporate DEI budgets are being slashed, DEI consultancies are shutting down, and DEI initiatives are being attacked at many levels—including the recent Supreme Court decision to strike down Affirmative Action.
There has been a lot of speculation about the reasons for the backlash. Some individuals are blaming the backlash on resistance from existing power structures. Others believe that the backlash is due to resistance from white men who feel that DEI initiatives are discriminating against them. While there is undoubtedly some truth to both of these viewpoints, only a few DEI experts are asking what we in the field may have done wrong and how we can fix it.
The goal of this blog is to take a candid look at some of the problems in how DEI initiatives and programs are designed, positioned and implemented, and to try to learn from the current situation how we can address the backlash in fruitful and productive ways.
It is often the case that moments of crisis are also times of great opportunity. Those who are willing to take an honest and critical look at past mistakes are the ones who will be most likely to overcome the backlash and turn it into great success.
We need to find better metrics
The first and most profound problem is the single-minded focus on diversity (and more specifically representation) as the only metric used to set goals and measure progress.
A narrow focus on diversity metrics unavoidably leads to a sense of reverse discrimination, and it forces leaders to come up with arbitrary targets that are difficult to justify. But most importantly, it ignores the fact that diversity is an outcome, it is the result of everything that happens in an organization.
The fact that diversity depends on so many factors is also part of the reason why focusing entirely on representation is actually dangerous even for DEI leaders and practitioners: there are so many things that influence the diversity of an organization that it is virtually impossible to predict when or how your DEI initiatives may have an impact. And even if you do see changes in overall diversity levels, you are unlikely to know whether it is because of your initiatives.
The good news is that there are some brilliant individuals and groups that are aware of the collective shortcomings our current DEI approaches, and who have been steadily working on better approaches for measuring impact. Recent books such as Getting to Diversity and Data-driven DEI do a great job of proposing quantitative frameworks to measure the effectiveness and impact of DEI initiatives.
Another promising approach is to expand our metrics to focus on inclusion. Research from my colleagues has shown conclusively that the level of inclusion within an organization has a direct, causal and measurable impact on both the level of diversity and the performance of the organization. In addition, several recent books provide compelling arguments and case studies about the importance of focusing on inclusion. Among these, Inclusalytics and Building an Inclusive Organization stand out for their clear discussions of why inclusion is such a critical ingredient for the success of DEI and the overall performance of organizations.
The problem with “the business case” arguments
Many of the recent arguments lamenting the current backlash make statements along the lines of “The business case for diversity has been proven! How can business leaders refuse to be convinced by all the studies showing that organizations with higher levels of diversity tend to perform better?”
Unfortunately, there are two problems with this viewpoint.
The first problem is that correlations do not imply causality. But what exactly does this familiar expression mean? To explain this in simple terms, just because we see that one thing (A) is correlated with another (B), does not mean that A causes B. It could be that B causes A, or, as is often the case, there may be a third factor, C, that influences both A and B.
Let’s consider a simple example. Imagine a study of cancer patients finding that people with whiter teeth are statistically less likely to have lung cancer. If someone used this study to argue that tooth whiteners prevent lung cancer, they would probably not be taken very seriously. It is pretty clear that, in this case, it is a third factor (smoking) that influences both tooth color and the probability of getting lung cancer.
Of course the smoking example is a bit silly, but we can apply the same logic to DEI: as mentioned in the previous section, there is actually very strong evidence that inclusion is in fact the common factor that links diversity and performance, which can explain why diversity and performance are correlated, even though diversity itself may not cause performance to increase.
Choosing to believe that a correlation implies causality is simply that: a belief. It is just as defensible for someone to suggest that recent problems with banking are due to the increased “wokeness” of certain banks. We can’t pick and choose which correlations we believe are reflecting causality and ignore the ones we don’t agree with.
The second problem is that, even if we believe that the observed correlations reflect causality, leaders don’t use statistical correlations to make decisions. Should a company design their products based on the average of all successful products in the market? Should they design their ad campaigns to be the average of all successful ad campaigns?
In general, when a business leader asks to prove the business case for something, what that means is “give me some evidence of how this is going to work for my company.” Just knowing that a certain factor—when averaged across hundreds of companies—is correlated with somewhat higher performance does not help a leader decide how that factor will impact their company, their customers, and their overall success.
The problem with “diversity for the sake of diversity”
Another common argument in support of DEI is that diversity in and of itself leads to superior results, such as making better decisions, avoiding group-think, or driving more innovation.
However, here, too, there are some problems.
The first problem is that the tangible evidence supporting these claims is very scant. The next time you read such a claim, try to see if you can trace it to the source. Assuming you are able to do that, you may be disappointed to find out that there are only very few examples, which typically rely on carefully controlled experiments with small groups of graduate students, or on drawing parallels with examples of the apparent value of biodiversity in nature. Extrapolating from these examples to make decisions about how to run a company would be unwise.
Unfortunately, people’s tendency to refer to citation they have not actually read is as universal as assuming that correlations imply causality…
The second problem is that there have also been studies showing that, in some situations, diversity actually hurts performance and can lead to conflict and decreased efficiency.
One of the best sources of information on both of these problems is a report describing the results of a five-year study to look for evidence supporting the business case for diversity. The authors report that most of the studies cited in support of the business case were conducted in academic settings that would be difficulty to apply to corporate environments. They also found that, of the few studies done in corporate settings, there are equal numbers showing positive and negative effects of diversity on performance. It is important to note that this seminal study was commissioned by the Building Opportunities for Leadership Development (BOLD) Initiative, with the specific aim of finding evidence to support the business case for diversity.
With few exceptions, articles and books that tout the implicit benefits of DEI ultimately rely on the belief that diversity is good for the sake of diversity. Notice that this is very different from simply believing that diversity is good: I firmly believe that diversity is great—as an outcome. But I don’t believe that just forcing people from diverse backgrounds into an unwelcoming environment is likely to lead to anything other than frustration and resentment.
Moving beyond “nice-to-have”
The main goal of a leader is to ensure the success and longevity of their organization. Any activity that does not contribute to that goal is, at best, a “nice-to-have,” and is likely to be ignored or dismissed. Any activity that interferes with that goal will be rejected quickly.
DEI experts have often expressed deep frustration with the fact that so many corporate leaders treat DEI as a “nice-to-have.” Often they see this as a shortcoming on the part of the leaders. Instead, the DEI experts need to collectively understand that as long as they continue to promise outcomes based on correlations or unfounded claims, all they are really offering is a nice-to-have.
We also need to recognize that driving change in organizations is not easy, and it requires an understanding of tools and disciplines that leaders commonly use to run most other aspects of their organizations. A very promising approach in this context is the work of James Felton Keith, whose organization, Inclusion Score, contributed to the creation of the international standard for D&I (ISO 30415) and helps large organizations integrate DEI into the change management processes around governance, human resources, product delivery and supplier diversity.
Unless we learn to understand and respect the constraints faced by corporate leaders, learn how to demonstrate quantitatively how our activities link to corporate KPIs, and help figure out how to implement the changes we propose, the field of DEI will never make significant progress and will continue to be treated as a form of corporate philanthropy or social responsibility.
Let’s treat corporate leaders as our customers
To help us avoid some of the emotional minefields around these topics, it can help to think of DEI initiatives and programs as products, and corporate leaders as our customers.
If our goal is to make good products and to drive their adoption, we should constantly strive to understand how to make our products more useful, more valuable and more reliable for our customers.
Ultimately, it doesn’t matter how good we think our products are: if the products are not selling, blaming our customers for having poor taste and simply increasing our marketing budget will not be fruitful. Instead, we should listen to our clients and improve our products accordingly.
By focusing on the needs and constraints of corporate leaders, taking more systematic approaches, and expanding how we measure impact, we can develop offerings and tools that will help leaders create better, more diverse working environments and superior performance—without the resentment and backlash.
For those interested in these topics, the author’s DEI research nonprofit is organizing an event in November to engage in fruitful conversations about measuring DEI impact and dealing with the backlash.
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