WARNING! (And you should heed it)
By Brad Federman
2020 thus far has been a unique year consisting of a pandemic, a financial crisis, and racial injustice protests and riots. Businesses are being asked to juggle more matters than ever before. But what ball should they focus on? All of them? As foolish as it is, many businesses are choosing to ignore some of these crises. With the pandemic causing significant financial pressures, most businesses are largely focused on the bottom-line. After all, making money is central to most companies. We are ruled by the mighty balance sheet. In response to these pressures, businesses are furloughing associates and laying off team members, including their Human Resources Diversity/Inclusion executives. At first glance, this decision may seem to be cost effective and prudent, but it can also be detrimental to a company both culturally and financially.
You have probably heard of Starbucks, the largest coffee chain in the world and a well-run company to say the least. Starbucks has been very involved in the community for years and is seen as progressive on many issues. Even they have struggled with these matters. One of their employees wrote a racial slur on a man’s cup instead of his name. Between this incident and another incident involving two African Americans in Philadelphia, Starbucks closed 8,000 locations for an afternoon in order to provide racial bias training to 175,000 employees. One afternoon does not sound that particularly concerning until you realize they lost an estimated $12,000,000 in sales revenue in one day, and the hard work for brand loyalty of a portion of their customer base. This happened in May of 2018 and unfortunately Starbucks is back in the news. Recently they claimed, like many other companies, that they supported Black Lives Matter. Actions speak louder than words, however, they banned their employees from wearing Black Lives Matter apparel. It is difficult to rebound from missteps like these. People began to boycott, costing the company money. They did overturn their previous decision not to allow the workers to express their support through clothing. Starbucks has also clarified their commitment to ending systemic racism. However the damage was done and their stock price has dropped nearly 12%. Of course, part of the financial difficulty was caused by the pandemic but the damage to their brand and reputation was also clear. The challenge companies face is that they can’t dip their toes into these issues. Once you wade in the waters the measuring stick people use to determine your commitment is high. Employees and consumers are watching every move and the path can be a minefield. It would be foolish to think that Starbucks was the only major corporation to grapple with these challenges.
Other companies going through similar complications include: Gap, Target, Taco Bell, Papa John’s, Dove Soap, Volkswagen, and Disney. They all have one particular thing in common; every mistake could have been prevented with a broader and stronger commitment to inclusion and equity. Companies can no longer use window dressing efforts to demonstrate they are inclusive and reactive piece meal attempts backfire because companies end up responding to negative reactions and press.
Demands for racial equity have resulted in many high level employees and executives being fired or removed. Recently, the co-founder of Reddit, Alexis Ohanian, was forced to resign from the company after fifteen years. The CEO of CrossFit, Greg Glassman, had to resign after receiving massive backlash for a comment he made regarding the death of George Floyd. Adam Rapoport, editor-in-chief of Bon Appétit, also stepped down recently. There are numerous examples that illustrate to us this problem is more common than many believe. We need to invest in the proper inclusion interventions. If there was ever a time to do so, it is now.
Developing an inclusive company that values equity requires commitment. Creating a real sustainable change entails a culture change that is measured in years, not events or initiatives. Too many companies turn to the obligatory training. While training is a good tool it is often not the answer and certainly, by itself, won’t help you cross the finish line. Here are a few things companies must start to address through the eyes of inclusion and equity:
- Revamping job descriptions and job postings for more inclusive language
- Rethinking your recruiting processes and sources
- Changing the way you screen, interview and select employees
- Reviewing compensation practices that may accidentally yet inherently discriminate
- Approaching the performance evaluation and promotions process differently
- Revising policies so they represent a broader group of employees
- Running marketing ideas through a uniquely different lens
- Make D&I, Equity and Equality a part of the overarching organizational strategy and tie it to measurable goals
- Create a fully resourced and trained D & I team and invest in D & I training for HR/Senior Leaders
- Train executive leaders at every level to go through comprehensive and experiential diversity and racial sensitivity training by competent consultants
- Require members of the D & I team or proxy member to be present when making decisions at all executive/senior level interviews
- Empower the appropriate people to challenge decisions because Transformational Culture changes require you to value truth and authenticity over political correctness to ensure equality and equity in the workplace.
With everything going on in the world, you might think that it’s most productive if you just focus on survival, but that would be ill-advised. That decision can easily backfire. We are working with companies that have made that mistake and are suffering from social media backlash, protests in front of their place of business, and even worse. Most executives and business owners often feel badly when these things occur. They feel misunderstood and uncomfortable. What they don’t understand is that ignoring challenges does not make them go away. It only delays dealing with the problem and makes the problem feel almost insurmountable. Waiting or ignoring these challenges only hurts your bottom-line, your employees, your customers and puts your brand at risk. It also negatively impacts the community. Imagine if Franklin Templeton had made a strong culture change prior to their ex-employee, a white woman walking her dog, engaging with a black man bird watching in Central Park might have gone if she had been able to learn and address her issues prior to that day. In the words of John Armstrong, “You don’t ask a juggler which ball is highest in priority. Success is to do it all.” We have an opportunity to change our world if we choose to juggle without running out of hands.
Brad Federman, CEO
PerformancePoint LLC
bfederman@performancepointllc.com
www.performancepointllc.com