What Companies Get Wrong When It Comes to DEI — Careers Done Write

Over the last two weeks, I’ve seen two troubling major headlines. First, the Society for Human Resource Management (SHRM) announced that the organization was officially eliminating Equity from Inclusion, Equity, and Diversity and would lead the effort with Inclusion and Diversity instead. “Effective immediately, SHRM will be adopting the acronym “I&D” instead of “IE&D.” “This strategic decision underscores our commitment to leading with Inclusion as the catalyst for holistic change in workplaces and society,” the organization announced on LinkedIn. However, by removing “equity” from its directive, SHRM sends a message that the structural inequalities and systemic barriers many individuals face are not worth addressing.”

Then, Microsoft sparked an internal revolt after it fired its diversity, equity and inclusion (DEI) team. The tech giant’s move was exposed in an email obtained by Business Insider, which appears to show the DEI internal team leader criticizing the fact diversity was “no longer business critical.” Microsoft joins a number of tech companies that are walking back DEI commitments that were made in the wake of the Black Lives Matter protests in 2020, including Google, Meta, and Zoom.  

Ask any CEO about DEI, and they will inevitably say that DEI is a key business imperative. But make no mistake, companies do not implement DEI programs out of altruism. Businesses started caring a lot more about diversity after a series of high-profile lawsuits rocked the financial industry. In the late 1990s and early 2000s, Morgan Stanley shelled out $54 million—and Smith Barney and Merrill Lynch more than $100 million each—to settle sex discrimination claims. In 2007, Morgan was back at the table, facing a new class action, which cost the company $46 million. In 2013, Bank of America Merrill Lynch settled a race discrimination suit for $160 million. Cases like these brought Merrill’s total 15-year payout to nearly half a billion dollars. In short, CEOs care about DEI because not caring costs them – big time.

In reality, DEI stands for diversity, equity, and inclusion. DEI policies can relate to gender, sexual orientation, age, disability status, race, or other personal identifiers. Theoretically, DEI programs aim to create an equitable playing field by recognizing institutional discrimination and giving everyone the same opportunity. Affirmative action and Title IX are examples of DEI policies, and although the term “DEI” is relatively new, the ideas underpinning it are not. 

However, there is a persistent narrative in the media that “woke” society is forcing private businesses to prioritize race and sexual orientation over actual skills and experience. The reality could not be further from the truth. DEI programs strive to recognize and value differences among people, ensure fair opportunities for everyone and foster a work environment where all feel welcomed and respected.

Why do DEI efforts fail?

Lack of commitment: The most critical reason DEI programs falter arises from the absence of genuine commitment at the leadership level. Treating DEI as a mere procedural formality or a publicity gesture represents a fundamental misstep. DEI demands authentic, deep-seated dedication starting from the highest echelons of management.

Lack of understanding: Another stumbling block for DEI programs involves a superficial grasp of diversity, equity, and inclusion concepts. Diversity extends beyond just the numbers and includes embracing and valuing myriad perspectives and life experiences. Equity transcends the notion of equal treatment. Inclusion means more than having a diverse team.

Lack of integration with business strategy: DEI programs often fail when not integrated into the organization’s overall business strategy. DEI should be a key consideration in every business decision, from hiring practices to product development.