Contributor, Korn Ferry Institute
DEI Needs a Why
Daniel Goleman is a senior consultant at Goleman Consulting Group, author of the best seller Emotional Intelligence, and host of the podcast First Person Plural: Emotional Intelligence and Beyond. He is a regular contributor to Korn Ferry.
Over the past six months, businesses have seen a mass exit of Chief Diversity Officers. While LinkedIn reports that DEI job openings increased by almost 170% between 2019 and 2022, the high attrition isn’t new: according to data from an executive search firm, roughly 60% of CDOs at S&P 500 companies left their jobs between 2018 and 2021, decreasing the average tenure of that position from three years to under two.
Attrition is one of many things complicating the landscape of diversity, equity, and inclusion in the workplace. Between a societal demand for equality and the recent proceedings in the Supreme Court–ruling that affirmative action initiatives in college admissions programs were unconstitutional–companies are being pressed to re-articulate their stand on DEI, even if they aren’t entirely sure how to best follow through.
Meanwhile, shareholder support for DEI reveals a fault line. While 92% of investors believe that strong diversity and inclusion metrics have a positive impact on a company’s share price, only 60% say that demonstrating improvement in these areas impacts how much they trust a company. This suggests that the benefits of DEI are clear to most investors, including access to a more extensive and diverse talent pool; increased innovation by way of a more diverse set of viewpoints and ideas; higher employee retention and lower turnover due to increased employee wellbeing; and improved decision-making with more voices and perspectives at the table. Still, having a proclaimed focus on DEI doesn’t necessarily mean investors trust an organization to reliably and credibly follow through.
This gap in trust is exactly why so many CDOs are leaving. According to them, departures have mostly to do with the fact that companies who say they are committed to DEI don’t take it as seriously as they claim to. “Frustrated by talk but little action and a lack of resources, many diversity executives find themselves rotating through C-suites,” the Wall Street Journal wrote in an article in July 2020.
Broadly called diversity-washing–this gap is a version of purpose-washing–the phenomenon whereby a company commits to something in the public sphere but doesn’t necessarily follow through behind closed doors. Think back to the murder of George Floyd in 2020. Within weeks, hundreds of companies released statements articulating their commitment to creating more diverse, equitable and inclusive workplaces as they scrambled to hire CDO’s and other diversity-focused workers. Two years later, many of the same organizations were labeled as “performative” as stories emerged about companies lying about things like recruitment practices and pay scales in order to meet their DEI objectives. Meanwhile, CDOs who had been quickly hired to ignite and sustain change found themselves in the boardroom without any support to be effective.
When it comes to DEI, efforts fall within three basic categories: training; organizational policies and practices; and culture. The goals are to get people trained up on the role of bias and discrimination, get them thinking about how to create more just and equitable practices, and to eventually make respect and inclusion a part of how the company behaves across every single domain.
In order for companies to be effective in each category, there needs to be a belief, particularly among top leaders, that the work actually matters. One positive example is from the tech giant Salesforce. Not only has Salesforce donated more than $128 million and completed more than 610,000 employee volunteer hours over the past three years to support organizations advancing racial equality and justice, but also their employees can feel how a culture of DEI impacts their day-to-day experience.
“As an African American male, it is refreshing to work for a company where you feel welcomed,” one Salesforce employee told the Great Place to Work Institute, “I hope and pray that Salesforce continues this company culture from the top down.”
Motivation may be the most critical piece of any DEI initiative. Are companies committed to inclusion because they fear losing market share? Or because they actually believe that DEI will lead to a better world for them, their employees, and the communities they aim to serve?
These questions are the differentiator between DEI as a fad and DEI as a north star. Afterall, it’s one thing for an organization to be “interested” in DEI, and quite another to be unequivocally committed. The first is about curiosity and optics. The second is about seeing something as a non-negotiable part of a company’s core purpose.
Co-written by Elizabeth Solomon