This year, amid a tense climate, equity and racial justice became a serious part of the corporate conversation.
But as we enter 2021, talk isn't enough. Companies must take decisive action, driven by commitment and resources at the very top.
To become more sustainable, diversity, equity and inclusion initiatives must be proactive and aligned with business strategies to provide greater opportunity for people from all racial and ethnic backgrounds and genders.
For many companies, the assumption around DE&I is, "We do not have any significant problems with inclusion."
But can they prove their assertion? Organizations need to use data and deep analytics to measure key elements, including:
The results may be eye-opening. And until companies take a deep dive into the data and analytics, they won't know where they stand.
Business leaders tend to think that how people are treated in an organization reflects how inclusive the culture is.
However, strategy plays an important role in influencing culture. It is the ultimate driver of organizational decision-making and resource allocation, while culture is meant to support the execution of strategy.
This will take more than DE&I training as a one-time event. Within smaller teams, for example, managers must establish psychologically safe environments in which people can be fully themselves and talk about their experiences.
Rather than taking a reactive approach with the induction of guilt and anxiety — if we don't become more diverse, we will be vilified — organizations must be more proactive by taking strategic actions to thrive in a world that is becoming increasingly more diverse.
As the world's population continues to grow (projected to reach 9.7 billion by 2050), there will be significant shifts among demographic groups.
Half the growth will come from only nine countries, led by India, Nigeria and Pakistan, according to a recent report from the United Nations. In the U.S., white Americans, who are now the majority, are expected to account for less than 50% of the population by about 2045, while the populations of minority groups increase.
Companies on the cutting edge will anticipate and meet the needs of a changing consumer demographic by attracting, retaining and developing the best talent who are, themselves, from diverse backgrounds.
By becoming more equitable, companies also position themselves as more attractive to investors, particularly as environmental, social and governance investing skyrockets.
And the demand is growing. Fundr, for example, puts artificial intelligence to work to help investors find diverse companies in which to invest.
For years, organizations have espoused DE&I as the "right thing to do," yet that thinking alone has failed to produce the desired results.
As the authors of a new McKinsey report on racial equity wrote, "Despite decades of efforts by public, private, and social sector organizations, racial inequity has only increased."
Instead, leaders need to recognize this as "the smart thing to do." In doing so, companies can reap the benefits, from improved financial returns to expanded ways of thinking that can enhance creativity and performance.
Additionally, while DE&I is often emphasized for entry-level hiring, it may be lacking at mid-level management, which is the pipeline into more senior leadership positions.
Bringing more diverse people through the door is a place to start, but for greater justice and equity to take hold, strategy and culture must work in concert for lasting change.
It takes more than a "Noah's Ark" approach of "having two of every kind," including in board composition. Diversity initiatives only become effective when people truly have a voice and can make an impact.
The clearer leaders are about where they want to go, and what success will look like, the greater their commitment to DE&I.
Bernard Banks is the Associate Dean for Leadership Development and Inclusion and a Clinical Professor of Management at Kellogg School of Management at Northwestern University. He was also a faculty member in the Department of Behavioral Sciences & Leadership at West Point and a Brigadier General in the U.S. Army.