Stop Performing, Start Reforming: The DEI Reset
Leaders are revealing they are unable to put in the hard work
A note before reading: I write to flesh out ideas and encourage you to read the resources. If you want to engage, seek domain expertise—missteps here carry real company and stakeholder risks.
Look at the headlines about DEI, and you’d be in for quite the narrative.
“Companies are shutting down their DEI programs and pulling back for fear of retaliation.”
Where the reality is more like this:
“Companies are reworking their DEI programs.”
Companies should rework their approach. The WSJ has used data to show that these programs haven’t made companies more diverse.
WHY IT MATTERS: Some companies are pivoting away from DEI, but many are not. Now is the time to reassess, reform, and relaunch.
I’m here to tell you that one month in, the DEI pushback presents a strategic opportunity that ESG, HR, and Impact teams should capitalize on by reframing their approach.
A special note for sustainability-focused professionals: Don’t think you are safe due to the focus on DEI. Companies often put these programs in the same mental space because these are new topics. Pay attention, learn, and lend your support to the community.
The focus is limited to identity
Identity is at the core of many DEI programs and, as a result, the anti-DEI campaign. Companies with DEI programs may have started from the performative or maybe with the best intentions.
Still, identity has largely become the use case, making it vulnerable to legal and reputational attacks.
Hiring or promoting based on demographics in the US is illegal, but there is a nuance in the data and the outcomes. For example, Missouri’s lawsuit against Starbucks is a recent illustration of this. The lawsuit claims that company mentoring programs discriminate against white men and that the company’s diversity goals are quotas. Are they, or did Starbucks successfully reduce the barriers to inequity?
Even if a company doesn’t use identity as shorthand for systemic inequities, it is vulnerable to challenges.
Instead of examining a range of identity-based metrics and concluding, “We’ve identified there aren’t enough people of color in leadership roles,” companies might ask, “What systems are in place that prevent us from seeing society reflected in our leadership?”
The data used to identify the problem doesn’t change, but this mindset shift allows a company to define an equitable outcome rather than focus on identity.
In other words, companies must be crystal clear that they are not supporting identity-based initiatives to favor one group over another but are examining their governance practices to ensure the support of one other pillar of DEI: equity.
Remember when I wrote that 2025 would be the tipping point for governance? This is one way it is manifesting.
Equity should be the focus
Companies acted hastily in response to a crisis (I framed George Floyd’s murder as one of the social tipping points in ESG Mindset) and acted without the data to back it up.
KEY POINT: Companies failed to realize that a crisis and the company’s reaction are not use cases to solve.
DEI should be about governance and structural company change, not surface-level identity metrics. Fearless Futures underscores this in a fascinating whitepaper titled DEI Disrupted.
The whitepaper is informative and well worth reading for anyone looking to expand their understanding of this complex topic.
Singular identities don’t exist, and leading with that fallacy might as well be tilting at windmills. Still, you need varying data points, including identity factors, to assess the challenges. Companies understand something is amiss and lead with identity to solve it because that is the available data, but it doesn’t work without considering equity.
Each pillar plays a role, and equity is the center
Equity is the thing companies can change because, as Fearless Futures calls out, it aligns most closely with governance. The thing most aligned with the company’s policies and processes should be where we look. Still, each DEI pillar has a role to play. I’ve taken Fearless Future’s definitions of each pillar and added context around governance:
Diversity refers to the presence of various marginalized communities within an organisation, team, or initiative.
We do everyone a disservice when we reduce them to a single lived identity experience (which doesn’t exist) or expect them to understand the complexities of this topic just because of one aspect of their identity.
The legal pushback is focused on identity. Use a range of data points to find and track the risks and opportunities, but not to drive them.
Equity refers to the activities focused on deliberate redistribution of power, access, resources, and opportunities through targeted interventions designed to remove or prevent specific barriers for marginalized groups.
Equity is outcome-focused and directly connected with how the core business operates, which means leaders have the power to influence it.
Ask questions about equity in what you see in the data to find the use cases to address.
Inclusion refers to the intentional integration of the needs, contributions, and perspectives of marginalised communities, such that they are valued within organisational structures.
If you want the best talent, go after them and make them feel welcome. If you want a diverse set of customers, be sure to work with domain-specific experts to understand the limitations of your offering
Don’t overlook inclusion when technology and AI are involved.
This refocus moves the discussion from diversity and identity and the ‘feelings’ part of inclusion. Without equity, feelings of inclusion through programs like ERGs (Employee Resource Groups) are as empty as performative goals.
*cough cough Sustainability people: this is like disclosures without action.
Now, we can ask different questions:
How are we managing and reducing systemic inequities that affect our business and stakeholders?
What outcomes could be achieved with process change?
How can we build on equitable processes to serve as the foundation of inclusivity?
What does equity look like in practice?
Fearless Futures recommends moving from an identity-focused approach to an issue-led approach. For companies navigating legal risks, this approach provides a defense and a stronger business case.
For example, imagine if a company became more diverse because it removed inequitable hiring barriers. It wasn’t the goal of having more ‘identity-based’ people in specific roles but the efforts to build equity that resulted in diversity. The outcomes manifest in the data, but identity is not the outcome, just the evidence of equity.
It is coincidental that Social (ESG) and Equity (DEI) are in the middle of their respective acronyms. Both require these foundational pillars to serve up the risks and opportunities. To find these, we need data.
Fearless Futures states:
…only 25% of companies in the McKinsey study said they consult data before new DEI activity is planned and when asked why they choose certain areas over others, “data showing there are inequities in this area within the organisation” did not appear on the top five in the list of reasons.
So, how have programs been created? Mostly arbitrarily. A quote after this section from Marginalisation Coach Yeong Cheng describes it as ‘not understanding the problem, so how can you know the solution?’ Here’s how they framed it:
Like, you never talked about where you going. You said, ‘I want to go on a trip.’ You didn’t say, I want to go on a trip to Alaska. So, you know, sorry that you ended up in Mississippi."
Lily Zheng, who developed the FAIR methodology and recently wrote What comes after DEI in HBR, echoed the importance of data.
Leaders at the forefront of reimagining this work are using data to design interventions that measurably improve outcomes for all. They apply a change management approach to create impact at scale, improving personnel policies; hiring, promotion, and feedback processes; leadership incentives; and organizational culture and norms, rather than repeatedly seeking to “build awareness” without follow-up.
What fascinates me about Zheng’s FAIR approach is that the concepts outlined, including Fairness, Access, Inclusion, and Representation, are very close to modern Responsible AI principles. Even the incorporation of feedback and learning is recommended across both.
We must bring DEI data together with other company data to identify the use case at the start and uncover our progress throughout.
Another note for sustainability professionals: This is the same argument I keep making to you!
Pair together an issues-led approach backed by data focused on the outcomes (not the identity), and your company could strengthen its DEI programs, minimize systemic risks, and create a powerful defense against attacks.
Your company’s actions speak volumes
Reassess, reform, and relaunch working DEI programs. That is one positive externality from all of the pushback today. Companies are taking a renewed interest in what they are doing well with working programs and what they should do. What comes out on the other side could be more durable.
Meanwhile, a few high-profile companies are getting attention for pulling back entirely.
When a company pivots hard away from DEI, it tells its stakeholders and shareholders that ‘as soon as things get tough, the company only reacts.’
If I were an investor, I’d look at the headlines and statements and wonder just how qualified these leaders are to make any decision about their business.
For companies struggling with what to do, let’s make it simple. There are two choices.
NEW MISSION STATEMENT: Play the PR game to avoid blowing sand, and then when things get difficult, stick your head in it.
Or
DO THE HARD WORK: Get serious. Use data, fix inequities, and build a resilient business.
Resources
DEI Disrupted: The Blueprint for DEI Worth Doing Fearless Futures Limited
NOTE: Fearless Futures is a training, audit, and advisory company that “can identify how your organization functions and how you can affect transformative change at scale to create a more inclusive working environment.”
What Comes After DEI by Lily Zheng (HBR)
Corporate America isn’t abandoning DEI — it’s just rebranding it by Kenji Yoshino and David Glasgow (TribLIVE.com)
RIP… D.E.I. with Ruha Benjamin (What Now? with Trevor Noah Podcast)