The discussion about diversity in corporate America started in earnest in the 1970s. For the first time, black Americans were starting to graduate from college in significant numbers in fields other than education. My parents were part of that movement. They graduated from St. Louis University, prepared to be young executives. The only problem was that there were very few opportunities for them in their hometowns of St. Louis and Nashville. What was going to become of this generation of talented, well-educated and well-prepared young people of color?
A few very forward-thinking corporations started the first proactive attempts to locate, recruit, train and retain people of color in executive and management position. One of the few places where there were several of these companies was Minneapolis, Minnesota. In 1977, off we went to the coldest place that any of us had ever been in our lives. These companies did innovative things that we still don’t see done today in many cases. They created what we now call affinity groups, they provided mentors for these young executives, they connected them with the very small black community in Minneapolis at the time, and they aggressively worked with local governments to protect their new employees from being subjected to harassment as they drove back and forth to their suburban office parks (there was no living in the suburbs for black folks just yet). They experimented, they stuck with it, and they had measurable and sometimes impressive success.
While the corporate diversity discussion essentially started in the ’70s, the discussion looked a lot different than it looks now. Back then, the discussion was about social justice and creating opportunities for people of color because it was the right thing to do. While that is admirable, we know that “the right thing to do” is not something that drives normal corporate decision-making. Because the entire process was largely based on a non-business related factor like social justice, it was destined to be limited only to companies that saw it as part of their mission to take on the challenge. Because of this, progress across the country was slow and frustrating. As a result, even as people of color graduated from college prepared for these positions in greater numbers over the years, there were not positions for them, and when they did get positions, the environment was so negative and toxic that many of them did not survive in corporate America for long.
Over the decades, the demographics of America slowly began to change, and the corporate diversity discussion changed with it. As people of color began to have more disposable income and purchasing power, the corporate world slowly understood that there were profits to be made if you could appeal to and tap into those diverse communities. This changed the corporate diversity conversation from one of social justice to a discussion of the “business case” for diversity. In 1990, people of color had a collective purchasing power of approximately $500 billion. By 2014, that number had grown to over $2 trillion. In terms of population, people of color went from being 16.5% of the population in 1970 to 36.3% in 2010. As a result, it became evident to many companies that if they continued to only rely on an overwhelmingly white customer base that was shrinking, they would eventually go out of business. Something had to change. Whether it was the right thing to do or not, they had to figure out how to get into those markets.
This was a major step in the evolution of the conversation. We went from trying to convince people that having a diverse workforce was the right thing to do socially to many of them understanding that their competitive survival depended on it. Once that transition was made, the focuses changed from “why do we need to do this” to “how do we do this.”
Most businesses do what they do very well, and they are smart enough to realize that they need to hire outside help when stepping outside of their area of expertise. Interestingly, most of corporate America did not do that when it came to diversity. They tried to tackle this task internally. This was not because they really thought they could effectively do it in-house, but because it was still not really a priority for them so they were not willing to invest the resources to do it successfully. Not surprisingly, most of them failed miserably.
“In 1990, people of color had a collective purchasing power of approximately $500 billion. By 2014, that number had grown to over $2 trillion. In terms of population, people of color went from being 16.5% of the population in 1970 to 36.3% in 2010. As a result, it became evident to many companies that if they continued to only rely on an overwhelmingly white customer base that was shrinking, they would eventually go out of business. Something had to change.”
The failure took many forms depending on how the companies had gone about their work. In many cases, the companies failed to even get candidates of color to apply for positions. They had not done anything to make themselves attractive to these candidates and were still treating them like they were doing the candidates a favor instead of viewing and treating them as potential assets who were going to make their businesses more profitable. In other cases, they got people to apply, but did not prepare their corporate hiring structure to consider candidates of color fairly and honestly. The people serving on the hiring panels did not understand the business case for diversity, many saw diversity as a threat to them, and some were just plain racist and refused to move candidates of color through the process. In many of the instances where the candidates applied and were hired, the companies had not done the necessary work to prepare what had been an almost exclusively white and male work environment for the integration of executives of color and women. This often resulted in miserable working conditions for these people, resulting in predictably poor job performance and incredibly high levels of turnover.
In the very rare situations where the candidates survived all of those challenges and stayed in a corporate position for more than two years, the corporate community was still not prepared for the idea of people of color in significant management and leadership positions. This was even the case in many of the most progressive companies. When people began to realize that there was a glass ceiling waiting for them even when they did perform at such a level to justify their advancement into management roles, they got frustrated and eventually looked for other opportunities.
In the 1990s, after two decades of largely failing at diversity, the corporate world started to do something that it really had not done previously. They sought external help. They brought in experts, many of whom had been executives of color and had firsthand experience of the problem and understood how to address it. Instead of approaching diversity haphazardly and randomly as many of them had, some companies finally initiated long-term efforts with sound principles. They understood that it would be a process, would take time, and would require them to be willing to trust their consultants and maintain their commitment to the goal even in times where the results were not coming as quickly as they wanted.
It became clear that the most important factors in any company being successful in terms of diversity were commitment by leadership at the highest levels and accountability throughout the organization. If the CEO and the rest of the corporate suite did not model commitment to diversity to the rest of the organization, it would not be taken seriously. If diversity was not “owned” by everyone throughout the company, with real accountability when efforts were not successful, there was very little chance of success. When I meet with corporate leadership teams that have brought me in to help them with their diversity efforts, we often realize that they treat diversity differently than every other company priority from a management perspective. There is often no one person who is responsible for diversity, and there is almost never any actual accountability or ramifications (positive or negative) based on the success of diversity efforts.
In 2016, the corporate diversity conversation has come a long way, but there is still a lot of work to be done. As we learned from the survey conducted of Madison region businesses and corporations by MadREP in 2016, the vast majority of companies in the area (86%) still do not have a written diversity statement, and only 2% have a supplier diversity plan. The percentage of these companies that have engaged a diversity professional to assist them in coordinating their diversity efforts is so small that it is essentially immeasurable. We have progressed to the point where companies understand the business case, they see that their workforce is not prepared to reach the fastest growing demographics in the region and the country, but they are not quite ready to pull the trigger and figure out how to actually get it done. The local companies who have figured it out are seeing the benefits. Again, it is no longer a question of “if,” it is now about “how.” The next question for Madison region companies and organizations is “when.” With each passing year, market share is being lost to the competitors that have figured it out and taken the steps necessary to be competitive.
One of my favorite parts of working with companies to achieve their diversity goals is that in almost every case, the excitement of the leadership and others involved grows with each success. The change in their environment is palpable. The mentality quickly changes from “what do we have to do?,” to “what else can we do”? Eventually, they engage the creative thinking skills that have made them successful business people in the first place and apply them to what they know about their company and workforce. That is when you really see progress. I can provide them with guidance and tools for success, but I will never know their company, their workers or their customers as well as they do. When they have fully bought in and taken ownership of their success, the real innovation begins and the successes follow. It is a fun thing to be part of and I find it to be very satisfying.
The only problem is that we still need to take that next step in the Madison-area business community to make this happen on a larger scale. The results of the MadREP survey show just how much work we have to do. When we consider that participation in the survey was completely optional and that it is very likely that the companies that responded are the ones who are doing the best. If we were able to gather this information for all companies, the results would be even worse.
Our goal as a company is to serve as a resource to the companies that decide that they are ready to take that next step and realize that they need professional assistance to do so. It is essential to the business community and the community at large that we have success in this area. The Madison area needs to be able to successfully recruit talented people from all backgrounds to this area, retain them, and provide an environment that is positive and gives them an opportunity to be successful. We have come a long way over the last 40 years, but it is time to keep moving the ball forward. We look forward to playing our role in making that continued progress possible.