Equity’s ROI

There is a business case for equity, but do we really need one?

In a recent conversation a fellow diversity practitioner put forth the proposition that to be successful, diversity and inclusion efforts in organizations must be connected to the bottom line and deliver Return on Investment. Otherwise, the argument goes, there is no business case for diversity and inclusion. I find this argument interesting on a number of levels.

My first response is my most basic: at which point does maximizing profit become a liability? As I write this, the already ecologically compromised waters of the Gulf of Mexico are replete with the catastrophic fallout of oil company BP’s failures to stop one of its oil wells from spewing raw crude. This oil spew was the product of corner-cutting that BP did, using seawater instead of heavier sludge to manage the pressure of the oil well. Of course, this disaster is going to cost BP immense amounts of money in clean-up costs and public relations efforts, but what if that was not the case? What if BP could have somehow kept the disaster secret and the government was forced to pay for all the clean-up efforts and no one would know that it was BP’s responsibility? Would BP’s actions in cutting costs that led to this oil spill be considered a good thing? Is the business case of maximizing profits the only case for action in this instance? I find it hard to believe that the majority of executives, when faced with a moral dilemma this clear and simple, would say, “Yes, the profits in this case are what matters and the natural disaster that ensues is irrelevant.”

And in regards to the few who might respond so, how do the rest of us respond? Are we comfortable keeping people with that kind of decision making process in control of our businesses if we have any say at all in the matter? Or do we not feel justified, even compelled, to act to stop people like that from having decision-making power?

I know this is an extreme argument, but looking at the pervasive and destructive impact that social and economic inequity has on the groups who are the targets of it, is it that far fetched? In the US in 2010, we Whites often believe that other people do not have the same opportunities as we do. But we stop our analyses there. We don’t explore the systems that are in place that perpetuate that unfairness, and we have an even harder time seeing how that unfairness gives us Whites advantages, one of the biggest of which is the power to decided what the criteria for success will be many areas, including, ironically enough, our diversity and inclusion efforts. We are often the people who have the power to say, based on an incomplete understanding of the impact of race on People of Color, what inclusion will look like. And we Whites seldom ask ourselves “included into what?” If we are deciding what inclusion is then it goes without saying that we are already “included.” We seldom look at that directly - our own sense of inclusion, versus others’ being excluded. We focus on “helping” the excluded to be more like us rather than on our own development, on how often even our attempts at inclusion are exclusionary because they are efforts to make others be like us rather than make the system more welcome to difference.

The idea that companies need to have and pursue a moral purpose is nothing new, nor is it specific to racial equity in organizations. In its groundbreaking study of Sandler O’Neill Partners’ powerful response to their devastating losses on 9/11, TRIAD Consulting Group found that having a moral purpose was central to the company’s success in the aftermath of that disaster. And while these successes did show a remarkable return on investment, they did not occur out of the drive for ROI. ROI was a by-product of the surviving leaders’ need to do what was best for the members of their company, to care for them.

The book The Puritan Gift by Hopper and Hopper discusses at length the sense of working for the greater good that pervaded the US business mindset from the 16^th century onward (as destructive as US business was to racial, ethnic, gender, and sexual orientation equity).

Both of the examples listed here are not divorced from ROI. Moral purpose and the greater good do show return on investment. I use these examples, however, because they show how ROI isn’t the only, or even primary, goal of healthy businesses. A striving for what’s best for everyone can be primary in robust, lucrative businesses.

I’d also like to point out that ROI is in the eye of the beholder. Let’s say for a moment that we could measure equity with a number. Let’s say that my company was at 85% equity—85% of what happens in my company turns out fairly for all people regardless of their identities. What if I could spend 1% of my profit this year to make my company 100% equitable? Isn’t that ROI? I’d bet the people who would have ended up in that unfair 15% had I not invested in equity think it is.

The irony of what I’m arguing here is that the real struggle in all of this in not about the kind of “return” we are getting but the kind of “investment” that needs to be made on the part of us Whites in order for equity to have a chance. Learning a new way of seeing something as profound as the impact of race on people in the US is an intense, personal task that may offer many benefits and successes along the way, but never really ends. Much like People of Color often report never being able to fully let their guards down, that some form of racial inequity is often lurking in the most innocent of situations, we Whites likely never completely unlearn the racially limited socialization that we are subjected to in the US. The business of becoming an ally in equity is a lifelong investment.