Updated: Oct 21, 2020
Organizations that prioritize people over business outcomes will have brighter, long-term futures.
ANGELA K. CHITKARA & MICHAEL V. MARINELLO
As companies are struggling with massive financial losses and layoffs, and the knowledge that they are now going to be operating in the worst recession since the Great Depression what role should diversity and inclusion efforts have in all of this? And what role should it play?
If you needed a case for diversity and inclusion in problem solving, this is it.
Traditionally, many companies have prioritized short-term financial results. But today, their main concern is survival. To quote Albert Einstein, “We cannot solve problems by using the same kind of thinking we used when we created them.” And while companies did not cause the Covid-19 outbreak, those most unprepared are suffering the most.
For organizations to achieve long-term success and corporate sustainability, there is a new and energized focus on a broader set of stakeholders. However, with economic ruin top of mind, will this focus shift? Will organizations give short shrift to long-term results such as trust and loyalty, credible reputation, and an inclusive culture that draws bright and innovative talent in order to simply survive?
Covid-19 will bring in a new way of thinking and operating whether companies are ready for it or not. Still, now is not the time to abandon a vision for long-term outcomes and corporate sustainability. The demographics of our communities—clients, stakeholders and employees—have been and are rapidly changing, and nobody knows what the next six months will look like let alone the next six days.
Covid-19 has shown us that socio-economic inequities exist beyond the paycheck. Covid-19 has also shown us that we as a national community have the ability to reframe how we view success, how we collaborate and innovate, how we value our talent and strength. It is also having a significant, but yet unmeasurable, impact on our young people who are dealing with an uncertain future related to their education options and career prospects. That is why it would be a huge mistake to abandon the progress being made on diversity & inclusion and the impact it will continue to have on long term success.
It has taken a global health crisis for us to begin to reevaluate who we have become as a society and what we value. In the World in 2020: The Age of Transparency and Accountability. Doing What We Say Matters, Sir Martin Sorrell said, “We, as a society, live and travel in bubbles and therefore do not engage with people outside our likeness.”
The same applies to the ways in which we engage with people in our networks, the segmented choices we make in consuming news, politics and social media. We have had conversations about diversity & inclusion at high-ticketed conferences and not in our diverse communities. As a result, we have developed tone-deaf campaigns for brands without understanding our multicultural stakeholders by conducting qualitative research and leveraging the diversity of thought at the management table. In a post Covid-19 world, this will be even more devastating to a brand.
The response to Covid-19 will require new models that reprioritize problem-solving and the good of people and community over business outcomes. Collaboration between private and public sector partners has yielded innovation and creative problem-solving by turning manufacturing plants into ventilator producers. There is grace, strength and richness in serving the greater good through collaborating with competitors.The Life Sciences industry cited shared responsibility and the need for collective action in forming a consortium of 15 companies to accelerate the development, manufacture and delivery of vaccines, diagnostics, and treatments for Covid-19 in response to the pandemic.
Organizations that prioritize people over business outcomes will have brighter, long-term futures and will yield the innovation we need to evolve from this crisis.
Creating shared value (CSV).InThe World in 2020, 'creating shared value (CSV)' is a term coined by Michael Porter and Mark R. Kramer at Harvard Business School. Leela Stake, senior partner and global lead for FH4 Inclusion at FleishmanHillard, believes CSV involves long-termism in business-thinking about a diverse set of stakeholders and beyond profit making. “I think companies are continuing to look at what the needs are and thinking about their own workforces and how they are taking care of their employees but then thinking about non-profits they support and how they can truly be good partners during this time.”
Larry Fink, chairman of BlackRock, the largest asset manager with USD$7.43 trillion under management, recognized that the companies in his investment portfolio that were contributing to society were outperforming those that weren’t. In BlackRock’s response to Covid-19,he warned there are “significant changes ahead for heavily indebted businesses” and governments need to be careful in the “design of their stimulus programs.” Otherwise, the “economic pain” will fall “disproportionately on the shoulders of the most economically vulnerable individuals.” But BlackRock also announced no employee would lose their job as a result of this outbreak. That speaks to an even higher purpose.
Reviving public gealth. Bias is real toward people of color and low socioeconomic backgrounds. According to an Associated Press analysis from early April: “Of the victims whose demographic data was publicly shared by officials — nearly 3,300 of the nation’s 13,000 deaths thus far — about 42% were black,” a disproportionate statistic considering that African Americans make up roughly 21% of the cities nationwide covered by the analysis. The analysis also found that the rates for Hispanics are disproportionately high in some areas.
In Louisiana, where African Americans make up 32% of the population, they make up 70% of the deaths resulting from Covid-19. In Michigan, African Americans, who make up 14% of the population, are reported as more than half the state’s casualties. The analysis reports similarly striking statistics for other areas, including Illinois and New York City.
Courtney Cogburn, associate professor at the Columbia University School of Social Work, says, “The rate at which black people are dying, compared to whites is…astounding. There are patterns at this intersection of race and socioeconomic status that make it very clear this is just not a story about poverty.”
Social isolation is another telling issue in this discussion: according to a recent survey conducted byThe CUNY Graduate School of Public Health and Health Policy (CUNY SPH), “Latinx/Hispanics reported the highest rates at 56% compared with other ethnic minority groups that report between 36-39% and Whites who report 28%.” These statistics point to much-needed systemic changes in which we emphasize the need for creating shared value for all, the need to revive public health throughout our communities rather than within fractions of our communities.
As new data is released by the scientific community, we need to be prepared to assess risk associated with the disconnect between organizations and their communities, which stems from the lack of inclusion and a failure to address socioeconomic disparities between everyday Americans and organizations.
There are gaps between the ways in which an organization self-regulates and government policies that are put in place. There is a leadership crisis in organizations and widening socioeconomic disparities between everyday Americans and organizations. Brad MacAfee, board member of Global Impact Relations Network, and former CEO of Porter Novelli, is helping companies who want to contribute their expertise, resources, products and services all in an effort to help during this time of crisis. “Many organizations simply do not know the priorities or how to engage with the government.”
Matthew Bishop, a former business editor of The Economist and coauthor of the book,Philanthrocapitalism, believes Covid-19 is the first real test of the sincerity of the many pro-stakeholder, pro-diversity inclusion statements made by business leaders over the few years preceding the pandemic crisis. "So far, there has been both a return to bad old ways, such as laying off too many employees, too fast, and inspiring acts of corporate humanitarianism like supporting small farmers at the far end of product supply chains. However, the next few months will provide a better indication of whether more enlightened, long term behaviour by business will be part of the post-crisis 'new normal.'
How do we move beyond the pandemic recovery to sustain this approach we see working?
Leadership & talent.The responsiveness and resourcefulness of leadership in the public and private sectors will be tested in fulfilling the needs of their local communities, and in how they prioritize inclusivity and the needs of their stakeholders. This is an opportunity for an organization to pool its diverse talent and resources in tackling problems facing underserved communities.
In The World in 2020 report, June Sarpong, author ofDiversify, stated companies that are not diverse and inclusive will cease to exist when the generational shifts challenge the social attitudes inside and outside organizational structures, and she warns that the change will happen overnight. Gen Y expects their organizations to live the values of diversity and inclusion.
Organizations can support their communities in an ongoing, sustained manner through rethinking policies to provide access to good healthcare, food security, and the retraining of employees. As we have seen during the Covid-19 pandemic, one innovative method is sustaining public-private stakeholder partnerships, which promote a better understanding of the day-to-day economics and policies affecting stakeholders on a local level.
Understanding the needs of multicultural stakeholders in local communities beyond their wants as consumers is needed. Organizations are adopting United Nations Sustainable Development Goals (SDGs) but it is done based on a company’s marketing or business goals, not necessarily based on the needs of the communities it operates in.
There is a shift occurring in which more activity, investment and focus will be applied on a local level by the public and private sectors in addressing the reskilling of employees, access to capital and good information as it trickles down from the federal to the state to the local level.
The role of city and state-wide leaders will be essential in communicating economic and policy information to stakeholders in communities filing for SBA (Small Business Administration) loans and Supplemental Nutrition Assistance Program (SNAP). For organizations, they will need to take a long term approach toward their capital allocations for employee benefits, meeting payroll and community outreach. Longer term cash flow is a consideration that all private and public organizations must now factor. Rainy day funds and tax raises can no longer be the only tools to account for the fiscal challenges that lie ahead including pandemics and severe weather incidents. A new approach to fiscal management in the public sector - using the same tools available to the private sector - seems to be a necessary way forward.
Having long-term sustained collaboration through public-private partnerships can address inequalities in education, provide access to capital, help develop pipelines into industries, support local businesses and academic institutions with access to grant funding, and establish coordinated efforts with non-profits, NGOs, and international organizations.
Brand messaging. According to Jack Leslie, chairman of Weber Shandwick, we have entered the fourth industrial revolution in which “the lines between physical, digital and biological are all blurring amid chaos, where people are looking to institutions to find the common good. In global health, communicators have jobs as important as frontline healthcare workers. Pandemics, and non-communicable diseases like cancer and diabetes, are best treated by changing behavior. Whether it’s practicing social distancing or stopping smoking, clear, compelling messages are necessary to change habits and behavior that often is very difficult.”
Some in the PR industry have embraced the opportunity to help clients reframe their messaging to dovetail with the “new normal.” Rob Schwartz, CEO, TBWA/Chiat/Day, said in theWorld in 2020report that brands want to do right in the world. “It’s about people,” Schwartz says. “As an ad agency, we are working with our clients to find ways to serve their customers and be helpful in this fight. We are also available to lend a hand to state and city governments to get the word (and importantly images) out to keep people safe.”
Now is the time for organizations to show compassion and empathy for their employees, customers and communities. This is a time for public-private partnerships to address socio-economic fault lines in providing affordable healthcare, education, job creation, and social mobility; to shift from short-term to long-term planning in understanding the needs of employees and communities holistically, as part of their corporate sustainability efforts, in coordination with C-suite leadership and board governance. This involves advocating for stakeholders on a local and federal level, shaping legislation, and institutionalizing self-regulation.
Oscar Suris, executive MD at Zeno Group, agrees. “There are countless needs where the private sector can play a role through its employment practices, philanthropy, and its advocacy for causes, such as mental health, homelessness, hunger, etc. These are gaps that government is unlikely to be able to fill in the near-term.”
For Douglas Davis, author ofCreative Strategy and the Business of Design, and professor chair in communication design at New York City College of Technology, the City University of New York (CUNY), inclusion and equity are analogous with belonging and relevance as it relates to brand responsibility. “I’m concerned that the disruption in our daily lives due to the public health crisis that has caused an economic crisis will cause a diversity crisis. I hope I’m wrong and brands could invest in ensuring the tools, and infrastructure is there to prevent this talent gap we may face the longer this lasts.”
Brands that are able to understand the pressing needs of their multicultural consumers and employees will be the ones who will prevail. By raising awareness of issues that affect multicultural communities, there is an opportunity to improve civic engagement, voterturnout and transparency and accountability on a local level.
Michael Green, CEO of Social Progress Index, measuring the extent to which countries provide for the social and environmental needs of their citizens, says “This crisis is worse than it needs be because too many lives are blighted by health conditions that make them more vulnerable to Covid-19, too many people don't have access to the healthcare they need, and we have not invested enough in the past in the capacity of our public health systems. Successful economies are built on strong social foundations that make them more resilient to shocks like this. This time we need to build back better."
The global markets are more interconnected than ever before, our multinationals have a workforce presence in and around the world, and our supply chains are vulnerable to risk and disruption. There is an interdependence on each other that exists like never before. Diversity of thought, skills and expertise will be needed on a global and local level to solve problems in our communities through public-private partnerships and relationship building.
Now more than ever, the time has come for organizations to prioritize people over business outcomes, problem-solving across the organization, factoring in risk assessment for our clients, addressing socio-economic inequalities in our society, hiring courageous leaders, breaking down silos, raising questions and listening. The youngest of our population is taking notes. In fact, so is the entire world.