The corporate America of the last few years has seen an explosion in attention to social justice issues. This includes everything from cultural appreciation events in workplaces to an increased focus on diverse hiring to corporate messaging aimed at demonstrating a commitment to diversity, equity, and inclusion (DEI) to consumers.
But not all consumers and not all employees have been fully on board with these efforts. In fact, some observers are suggesting seeing a backlash.
A prime recent example was that of Tractor Supply Company. “Tractor Supply Company has eliminated its diversity, equity and inclusion initiatives as part of what the retail chain says is a push to distance itself from ‘nonbusiness activities’ after conservative backlash from some of its customer base,” writes Eva Rothenberg in an article for CNN. “In a news release, Tractor Supply, which advertises itself as the country’s ‘largest rural lifestyle retailer,’ said it will stop sponsoring activities like ‘pride festivals and voting campaigns” and would be cutting DEI roles and “retire (its) current DEI goals while still ensuring a respectful environment.’”
“We have heard from customers that we have disappointed them,” Tractor Supply Company said. “We have taken this feedback to heart.”
Another, even more high-profile, case of a company dialing back its DEI messaging is the Budweiser/Dylan Mulvaney backlash in 2023, in which the beer giant alienated a significant portion of its consumer base by embracing trans activist Mulvaney and then alienated the LGBTQ+ community and its allies by backing away from Mulvaney amid the consumer backlash.
It seems that DEI is under assault in corporate businesses, and DEI leaders in those organizations are finding that they need to proactively defend their roles and demonstrate ROI. Is this a broader trend of companies retracting or changing direction with their DEI strategy when they receive backlash? Or is it limited to more conservative brands like Budweiser and Tractor Supply Company?
“In the weeks following George Floyd’s murder in 2020, companies panicked,” explains Dr. Priya Nalkur, author of Stumbling Towards Inclusion: Finding Grace in Imperfect Leadership and president of the RoundTable Institute, a coaching and research firm focused on inclusive leadership and workplaces. “Executives wanted to ‘do right’ by their employees, particularly their Black employees, but feared that they were not prepared to handle the resistance and their reputations would be destroyed if they made a fatal mistake.”
Nalkur argues that these business leaders were right to be fearful because they didn’t have a solid game plan for their massive efforts and messaging around DEI. “By and large, they did not handle that fear effectively,” she says. “If directed appropriately, their concerns should have been channeled into creating thoughtful, strategic, human-centered, and data-driven solutions for their DEI initiatives; the approach should have been swift but steady.”
Unfortunately, Nalkur says, what we saw instead was a frenzied approach. For example, companies began to hire, often for the first time, Chief Diversity Officers (CDOs), along with a cadre of other DEI professionals who, she says, “were set up for failure via unrealistic and unclear expectations and little support.” Companies also made considerable financial investments in DEI training without fully understanding the underlying drivers of change.
“Their efforts back in 2020, while well-intentioned, were what we DEI professionals call ‘performative,’ meaning their efforts were superficial and more about keeping up appearances than addressing the core issues,” Nalkur says. She argues that this “performance” resulted in what can be thought of as a “DEI bubble” that expanded until companies realized they weren’t seeing the culture changes they’d hoped for.
The shifts we’re seeing now, says Nalkur, represent a “necessary calibration and correction of a swelling bubble.” The over-hiring of DEI professionals back in 2020 is now being corrected through layoffs and reduced funding for DEI professionals and programs. Recognizing that many efforts may have been “overzealous,” Nalkur says that today’s DEI efforts are “being calibrated with more thoughtful programs and investments in ERGs, with smaller budgets and with more deliberate outcomes that are actually resulting in changed behaviors and mindsets and ultimately, more inclusive workplaces.”
While many observers share Nalkur’s predictions for a more muted corporate DEI posture in the future, others believe the social justice movement’s influence on corporate America won’t be so fleeting.
“DEI is here to stay—even if the name of the role or words to describe it shifts,” argues Rachael McCann Jones, Global DEI Solution Leader at WTW, who points out that DEI efforts are (or at least should be) about more than just scoring PR points.
Organizations continue to reshape or refine their strategies to make them fit within their companies, while increasing governance with an eye to compliance and risk, Jones says. “What is often overlooked is how DEI intersects with an organization’s purpose, people strategy, employee value proposition, and brand. Do they want to be perceived as caring about employee health, their wellbeing, their ability to grow and thrive individually, and in their careers?” These connection points, the DEI journey, and the industry they reside in are greater drivers of DEI evolution than reaction to other employer actions in the news, Jones says.
We’ve seen plenty of examples of how companies can get DEI messaging very wrong and how damaging those efforts can be to a corporate brand. Companies that seek to virtue signal and jump on the bandwagon of social justice without genuinely embracing the commitment are likely doomed to experience similar results.
DEI efforts shouldn’t be pursued simply to appeal to a trendy social movement. Instead, organizations need to understand and appreciate the very real benefits of DEI on their business, including everything from increased retention and engagement to greater creativity and more comprehensive understanding of target markets.
This doesn’t mean companies can’t pursue DEI for their own benefit without being sincere. Indeed, by embracing the business motivations for DEI, companies can be more successful in both the DEI and business goals being pursued while also being able to pursue those goals in ways that are perceived as more genuine than those that simply seek a brand boost from a trendy cause.
DEI isn’t going away. Too many companies now recognize its importance to business success, employee retention, and a positive societal impact. But, what some may consider an overzealous focus on DEI in the past is giving way to more measured and thoughtful approaches, aligned with corporate values and strategic objectives.
In the end, these shifts will represent a win-win-win for companies, employees, and customers.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.
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