On May 25, 2020, the brutal murder of George Floyd in Minneapolis sent shock waves throughout the U.S. and ushered in a modern civil rights movement in protest of deep-seated racial and economic disparity.
Ripple effects were also felt throughout corporate America, with many companies realizing for the first time how critical — and precarious — their relationships with their customers, employees, and communities are. Companies large and small were called on by stakeholders and the public to denounce racism and to re-evaluate their approach to diversity, equity and inclusion. It was a watershed moment for corporate responsibility, and many organizations were quick to make sweeping promises and public commitments in their statements to address racial inequality.
Now, almost a year later, how much of this promised change has been realized?
When George Floyd’s death dominated the news cycle, companies were quick to express solidarity with the Black community, pledge money to organizations committed to fighting discrimination, and make promises to embrace diversity in their workforces and communities.
Press releases and transactional gestures were easy — but the public saw right through many low-impact efforts, with many recognizing an empty promise.
At the time, polling found that 66% of Black baby-boomers and more than half (53%) of Black adults in Generation Z believed that brands were primarily supporting the Black Lives Matter movement in order to retain customers. Black consumers suggested that companies address racism within their own ranks — as opposed to or in addition to posting about it on social media — as a way to demonstrate a genuine commitment.
A year later, it seems that some corporations are taking the first necessary step in achieving authentic, transformational change. Companies are asking themselves what role they can and should play in championing change, and the public is asking them to demonstrate transparency with their commitments and to deliver action on their promises. Still, there is a long road ahead.
Corporations that were quick to realize the high cost of inaction during calls for transformation should be equally aware that a similar burden applies to sweeping last year’s promises under the rug.
Some companies, like Target, for example, were proactive and prescriptive from the beginning — offering reform plans for public consumption, pinning goals to measurable benchmarks, and acknowledging room for improvement. Target has continued to follow through, announcing plans to spend more than $2 billion with Black-owned businesses by 2025 by adding new brands to its shelves, hiring Black-owned construction or advertising firms and launching a new program for start-ups.
General Motors, too, differentiated itself from the pack with a commitment to diversify the outlets where it advertises, allocating 4% of its U.S. advertising spending to Black-owned media companies by 2022, with an increase to 8% in 2025.
Companies that stuck to general terms in their promises — speaking vaguely about supporting the Black community and conducting internal reviews of existing policies — may find it harder to hold themselves accountable, even as the public continues to. Though they’re often initiated as a result of social justice movements, diversity, equity and inclusion (DEI) efforts are a critical enabler of growth for a company across multiple benchmarks, including revenue, workforce and market share. Studies have shown, for instance, that companies with diverse management teams have higher revenues, to the tune of about 19%.
The work still to be done is difficult, but there is much to be gained if that work is done strategically, authentically and consistently. So, when it comes to DEI in 2021, how can companies make it clear to stakeholders that they’re “walking the walk”? Simply put, it comes down to investment, specifically:
1. Invest in communities: Understand the needs of a community instead of expecting it to cater to the needs of your business. Doing so can mitigate risks at a corporate level, but, more than that, it can build an organic network of dedicated supporters, engaged consumers and necessary goodwill on top of boosting the bottom-line. Make sure your engagement efforts are genuine; if community stakeholders don’t feel like full partners, any effort will ring hollow and transactional.
One example of a company doing well on this front is Fifth Third Bancorp, which recently announced that it has surpassed by 30% its $32 billion, five-year commitment to the communities it serves.
Another is PepsiCo, which last summer made public its reform plans and pinned its goals to measurable benchmarks, while acknowledging room for improvement. Pepsi has continued to follow through — for example, a sponsorship deal with the Southwestern Athletic Conference in support of HBCUs and a $40 million scholarship and professional mentoring program for Black and Latinx community college students through its philanthropic arm, The PepsiCo Foundation.
2. Invest in workforce development: Some of the most common promises made by companies last year were related to workforce diversification, but this continues to be an area of underperformance along racial, ethnic, and gender divides.
Employees are among a company’s most important stakeholders. Employees can act as great advocates for their organizations, leveraging personal-, professional- and social-media networks in a way that holds huge, often untapped grassroots power.
At the same time, employees are a resource that companies must invest in, educate and consider themselves beholden to. If a company is publicizing all it has done to generate goodwill but isn’t following through behind the scenes, management should expect to have more than low morale on its hands. It’s only a matter of time before that information gets out and the call for change comes from within.
3. Invest in active listening: One of the major barriers to crafting equitable solutions is the challenge of developing a true, holistic understanding of different perspectives and lived realities. Active listening is a key factor in developing a better understanding of the socio-cultural dynamics, nuances and sensitivities of a company’s key markets and stakeholders.
There’s much to be done to achieve true equality in the U.S., and consumers and shareholders alike are looking closely at corporate actions. Through these steps, companies can start to make a meaningful investment that will have an impact on their legacy and longevity.
(Updated to include full text on 5/6/21)
At Ichor Strategies, we help companies act on their promise to create diversity, equity, and inclusion solutions that resonate in the communities in which they operate. Through active community listening and engagement, we’re able to partner with our clients to understand different perspectives, build authentic relationships, and foster mutual success. Our team knows firsthand how important it is that companies lead by example and go beyond a transactional approach to create meaningful, transformational change. Watch this video to see our leadership in DE&I and signup for our monthly newsletter to learn how we can help you community-backed business today.