Why Diversity Matters: A Conversation about the Importance of DE&I in Business with Efua Obeng, Marketing Professor at Howard University

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In this episode of On Record PR, Sarah Larson goes on record with Efua Obeng, associate professor and department chair of marketing at Howard University.

Efua recently spoke at HubSpot’s annual conference inbound 2021 a few weeks ago discussing mentorship and advocacy in black business leadership and appeared on a podcast interview entitled Why Marketers Need to Listen to Black Voices.

In addition to earning a bachelor’s degree in business from UNC Chapel Hill and a master’s degree from Duke University, Efua earned a PhD in business administration with a marketing concentration from the Katz Graduate School of Business at the University of Pittsburgh. Her experience at Katz helped sharpen her thought process, leadership, and research skills and highlighted the importance of making decisions based on data.

Transcript:

Sarah Larson: Welcome to the show, Efua.

Efua Obeng: Thank you so much, Sarah. I’m excited to be here.

Sarah Larson: We’re very excited that you were able to make time for us today. We’re going to focus on diversity today.

Why does diversity matter?

Well first, let’s get into the history of diversity and specifically from a D, E, and I perspective embedded in businesses. One thing I want everyone to know is that this D, E and I boom, is not new. As a matter of fact, workplace diversity training first emerged in the mid-1960s after the introduction of equal employment laws and affirmative action. But given our current sociopolitical climate, now many companies feel the need to spotlight their diversity efforts because of the current social political climate and they’ve also elevated a lot of their existing D, E, and I officers to more central roles or created new D, E, and I focused positions. But, with that said, we still have to acknowledge that this idea of diversity in D, E, and I as a whole is very trending. For instance, Gartner has found that there has been an 800% increase in diversity job postings over the past few years. And 40% of companies discuss diversity and inclusion in their Q2 2020 earning calls compared to only 4% the same quarter in the prior year.

Back to your original question, why does diversity matter? There’s some really clear research that’s linked diversity to some KPIs, right?

I know that was a long answer, but I hope I still answered your question. Again, diversity is critically important to break down these systematic barriers, but it also is related to some really important KPIs that matter to companies.

Sarah Larson: Right. You mentioned KPIs and that’s one of the things I really want to focus on. Our agency works mostly with professional services companies. Lawyers, accountants, primarily lawyers, accountants, businesses, bankers, but we also do biotech, we also do behavioral health. We’ve seen an increase in people talking about diversity, elevating diversity officers as you’ve said, making them more senior leaders and really talking about how inviting more people to the table makes a difference in the bottom line.

Talk a little bit about some of the data that we’re seeing. This really does matter to businesses. It’s a good idea.

Right. There are actually two parts to this, right? While businesses targeting diversity is flourishing, actually diversity is not. I think it’s interesting that some of your customers are lawyers because we actually, or I was able to pull some information about this that I think will really resonate with your target audience. Like I said, we’re seeing a growth in these diversity related initiatives, but from a growth in diversity in the workforce, we’re actually not seeing a lot. People of color in general remain acutely underrepresented in key areas. It appears that these diversity initiatives have become more symbolic than anything. For example, only 10% of law partners across the United States are people of color, although people of color make up 40% of the nation’s population. And then when you dive deeper and you look at employment of black people in US companies, what you’ll find is that black people make up 12% of entry level jobs, but less than 7% of your managers, senior manager, VP, and SVP roles.

Again, you’re seeing that this group is being pushed out of these top-level roles. And at the current rate of promotion for black workers, McKenzie projects that it will take 95 years for them to reach or to create a racial balance and to reach attainment similar to their white counterparts. And even when you look at academia, a field where I work in, you’ll see that there’s a lot of racial imbalance. So only about 5.5% of full-time faculty members are black, but 14% of higher ed students are black. What I want you all to understand is while we’re seeing this uptick in diversity initiatives, we’re not really seeing it translate from a hiring standpoint. We can touch on this later, but why does diversity matter and let’s answer this question.

One, considering the societal expectations and the societal pressures that many companies feel they are facing, diversity seems to be important and seems to be an area that they need to emphasize. But there are also some key performance indicators that say diversity is important. For example, gender diverse companies perform 21% better than the national average and ethnically or racially diverse companies have 43% higher profits than their more homogenous counterparts. When you’re talking about these big Fortune 500 companies and you’re saying, “Hey. You can potentially increase your profits by 43%.” That’s a huge difference. In addition, we know that workplace diversity provides a competitive advantage from a hiring perspective and this is particularly important as Gen Z enters the workforce.

If you know anything about this generation, they are more ethnically and gender diverse than their previous generations and they reflect that diversity and they bring it to the workplace and they want to make sure that they’re working for organizations that value this diversity. In addition, more diverse companies have higher employee satisfaction, higher feelings of safety, willingness to speak up, better alignment with the customer base, improved decision making, and my favorite KPI, innovation and creativity. So needless to say, beyond being a feel-good exercise, diversity actually matters. It can positively impact a company’s bottom line.

Sarah Larson: Thank you so much for pulling some of those stats specifically related to law. I want to go back and touch on that because obviously that’s a huge part of our business. There was a story on law.com literally two days ago, the headline is “They used me for a pitch then excluded me: How major law firms are using their black lawyers to mislead on diversity.” It really feels like there’s some growing frustration, rightly so, about talking a good game and not following through with actions.

How can companies change to really foster action within their organizations?

My friends and I have a running joke about a company, I will not name it, but this company loves to reach out to us on LinkedIn and loves to say, “We have jobs that would be perfect for you and your skill set,” and they’ll do a preliminary interview and then they’ll say, “We no longer feel you’re a good fit.” And between my friends and I in 2021, this has happened no less than like 20 times, okay? Yeah. Which is a lot to the point that one of my friends sent a note to the head of HR at this company. This is a big company. He has to be purposeful about finding the head of HR and said, “Please do not contact me again,” because he felt that they were just using him to just say, “Hey. We have interviewed a black person,” and just checking a box in that way.

But going back to your question, I think that there’s so much work that needs to be done to make our diversity efforts feel authentic. The first thing I’d say is diversity efforts don’t need to be reactionary because that automatically negates the authenticity of the effort. When you think of companies like Gucci and Prada that all appointed these diversity czars and said, “Hey. We’re going to allocate scholarship to diverse people.” After they did something bad, it’s like, “Well why did it even have to get to this point? Why didn’t you realize that diverse people needed to have a seat at the table before this?” Now that you’re in “trouble” and people are upset with you and you’re trending on Twitter, you’re now saying, “Oh, diversity matters.” That is the first key.

Another key that we need to recognize is that we can’t simply approach diversity through HR and we can’t simply appoint these diversity czars and say, “Hey. They’re going to make all of our issues go away.” Diversity or the lack thereof is rooted in systematic issues. So there have been institutions, the way structures in government and even policies have been written, that have created an inequitable society. We have to recognize that we can’t turn a blind eye to that, but more than anything we have to recognize that solving these issues can’t just land on one person or one department. If you think of, let’s say, a law firm like what you reference, so while part of the issue may be getting more diverse or hiring more diverse lawyers, another part of the issue is making sure that these people get the same opportunity at billable hours as their counterpart. Another thing is making sure that they progress and they have the mentorship and they have the advocates in the way that their counterparts do.

Like the person you referenced in the article said, “Another part of the issue is making sure that the seat at the table is not removed once they have accomplished a goal.” I say that to say, we can’t just attempt to silo diversity and confine it to one part of our business. We have to recognize the institutions and the policies and the structures that have created a lot of monolithic businesses and be willing to rework our businesses, rework our business structures, rework our policies, rework recruiting, rework relationships with suppliers, but more than anything, dive deep as an entire organization instead of trying to silo it to part of the organization. I hope that answered your question.

Do you have any good examples in your head of companies that are doing this successfully yet at this point or is this still really a growth point for all leading businesses?

I think that it is a growth point, but when I think of champions of diversity, I often think of Ben & Jerry’s.

One of the things that I love about Ben & Jerry’s is that this idea of diversity and specifically breaking down inequity is rooted in their values and the way the company was built. Right? It’s part of the company’s DNA and that way it is not reactionary, in that way diversity and breaking down inequity permeates through all parts of their business. They are not doing it to be trendy. It is authentic to who they are and in doing so, they are able to build relationships with customers through their initiatives in ways that other companies simply cannot.

When I look at the pinnacle of success, I look at Ben & Jerry’s, but again, what we must recognize is that they have built diversity into their business model. And so instead of being reactionary, instead of saying, “Hey. We’re just going to simply add this on to what we’re already doing,” they’re saying, “No. This is critical to everything that we do and it’s going to touch every part of our business.” And that’s a lesson that I think all businesses can learn, right? And again, instead of trying to silo diversity and just say, “Hey. It’s going to affect this part of our business,” take a step back, tear the business down, and build it back up with diversity being central to it.

Sarah Larson: You touched earlier on this idea about Gen Z and their values as they move into the workplace. And I think attitudes really are changing, and to an extent, every generation says that, right? Like the old folks are like, “Oh, kids these days,” and the kids are like, “Oh, burn it all down!” And then they get a mortgage and three kids and a dog and they’re like, “Oh God. Okay.” But I really do feel like things are changing and that people, especially younger people, are making more wallet decisions, voting with their wallet, for companies that they want to support and not supporting companies that they don’t want to support, who don’t have these ideals baked all the way through their organization.

Are you seeing that from a marketing perspective? Are you seeing that sort of attitude as well, sort of generational differences?

Absolutely, and I think one thing we have to remember about Gen Z is that they are actually the most diverse generation to date. Nearly half of Gen Zers come from an ethnically diverse background. And so while their predecessors’ intensity or excitement about diversity may have waned as they aged for this generation, that’s likely not going to happen because they are diverse. And in addition, not only are they diverse, but they wield more power than their white counterparts, for lack of better words. They are the thought leaders, they are the trendsetters, they are the ones who are influencing their white counterparts. And so when you look at not only the size of Gen Z, which is the biggest generation today, when you look at their diversity and you look at who is really wielding power within this generation, that’s why I said it’s critically important for marketers and businesses as a whole to listen to these diverse consumers and black consumers in particular because they are really leading the way for the world’s biggest generation today.

While, let’s say, millennials and baby boomers got lazy about some of these issues, because these issues directly affect such a large proportion of Gen Z, I don’t think we can expect to see the same. And like you said, they are really buying or they’re voicing their opposition and support for companies with their wallets and they stick to it and they believe in it and they can see when efforts are not authentic. I don’t know if you remember, but I think it was in 2018 Starbucks had this huge racial profiling issue.

Sarah Larson: It was in Philadelphia. I wrote about it afterwards from a crisis communications perspective.

Read 7 Crisis Management Lessons Organizations Can Learn from the Philadelphia Starbucks Arrest

Efua Obeng: In response, Starbucks said, “Hey. We’re going to shut down our stores for a day and we’re going to do this racially sensitive training.” And Gen Z was like, “Okay. And then they were like, “Well what else are you going to do?” And they found out that while Starbucks had this racial sensitivity training, Starbucks also issued an interior memo that said, “You can’t wear Black Lives Matter paraphernalia if you’re a Starbucks employee and you’re on the clock.” Gen Z revolted. They went on Twitter. They had all these hashtags. They were mad. They were organizing protests. Ultimately Starbucks had to come back and say, “Okay. We’re reversing this decision.” And in reversing it, they said, “We’re also giving out Black Lives Matter paraphernalia, but not only are we going to do that, we’re creating a $100 million social justice fund.”

We have to recognize this power. Previous generations, while we are amazing, we didn’t have that power. We didn’t, I dare say, create that fear in Starbucks and other companies that Gen Z did because these companies recognize Gen Z is large. They themselves spend hundreds of billions of dollars. They impact trillions of dollars in spending and while they are the children, they are leading everyone and we are following suit.

Sarah Larson: And they’re connected in a way that we never were. We didn’t have smartphones in our pocket growing … well, I didn’t at least growing up. I could have staged a protest for something in my little hometown, but there wouldn’t have been pictures of it on TikTok that five million people supported. I think their technological connection today gives them a real awareness of their power and they’re savvy and they know how to harness it.

Efua Obeng: Yes. And I love what you said about them knowing how to harness it and they know that they are powerful and they are not backing down. They’re embracing this power and they’re using it to drive decisions that they want to see.

Why should people who are from non-diverse backgrounds care about diversity?

Sarah Larson: Actually, I love the guy who interviewed you for the MarTech podcast asked it. He’s like, “I’m white, but I’m not racist. What can I do?” And you had such a fantastic answer to that.

Efua Obeng: Yeah. I think first you should care because whether or not you recognize it, it’s affecting you or like this inequity is going to affect you. It may not have, let’s say, a direct effect, but it’s going to indirectly affect you. I think it’s naïve to say that, “Oh, diversity does not matter to me,” but more than anything, as I shared with the guy from MarTech, you have to recognize the power that you have, let’s say, as a white person. In his case, a white man. You have to recognize that when you walk into a bank, because you’re a white man, you are treated differently than I am when I walk into a bank as a black woman and the irony of it, and he and I laughed about this off camera, is that if you looked at our resumes and you stripped our names away, mine far outshines his from an academic standpoint and just like these “objective achievement measures.”

But the fact that he is a white man gives him a certain amount of privilege, right? It gives him a certain amount of access, whether or not he wants to admit it. I think it is incumbent on people who have this privilege to invite others to the table, to open up these doors for others at the table. I think of Serena Williams’s husband Alexis Ohanian. When he stepped down from the board of Reddit, he said, “I know this board seat is now going to be open, but I want to make sure that it’s occupied by someone from a diverse background, specifically a black person.” He used his privilege and power to bring someone else at the seat of the table and someone who he knew could provide a different perspective. In doing so, elevate the business.

I think that that is the biggest thing. When I think about the Chanel’s and the Gucci and the Starbucks, what I think is that, “Hey. You had such a homogenous group of people with seats at the table that they were not able to see past their own biases, right? And they were not able to see how these actions or failures to act impacted others.” This is why you need to bring others along and open seats at the table for them. And this doesn’t just mean from a racial perspective, but think about gender, right? Think about religious diversity, think about ethnic diversity and where people are raised throughout the world. We need to make sure that all of these voices come to the table because that is the way that we have more sustainable businesses and we just make better decisions. And again, as I shared at the beginning, whether or not we like to admit it, all of these decisions impact us. When they’re subpar, they’re going to trickle down and impact us in one way or another.

Sarah Larson: Touching on that idea of sustainability, I want to go back to something you mentioned earlier about your friend getting the token interview, if you will. This idea of not a good fit, this idea of culture. It’s been very popular in workplace trends lately over the last 10 years or so to talk about, “We’re building culture, our workplace culture. Oh, they don’t fit in our culture. They just don’t fit with our culture.” It’s gotten to the point for me personally, and I’m going to ask you if you agree with this, where I sort of feel like culture is an umbrella that we’re using to shield ourselves from challenges of interacting and working with people who aren’t part of our culture. Like isn’t that kind of the whole point of diversity? You want to turn your culture upside down a little bit.

Talk a little bit about how this idea of culture almost helps sustain anti-diversity efforts.

Oh, I completely agree. I think it is the easiest copout and it’s a catchall phrase that you can, or companies can use, without clearly violating some law. And so that’s what I think it is and I think that it’s used to encourage homogenous environments and I think that it’s just created a problem and I often question, “Well, how, from a 30-minute interview, can you determine someone can’t fit in your culture or how, just by looking at their resume, can you determine that someone can’t fit in your culture?” I don’t think that … again, I just think that it’s a copout.

And something that I didn’t say, but I do want to just highlight, one thing that I think is important for people with privilege to recognize is that I can’t hide my black skin. Like I literally can’t hide it. When I walk into a store, people recognize that I’m black. And so in my inability to hide my black skin, I want you to recognize that I am judged for my black skin. Now some people may say, “Oh. She’s black like me and I’m celebrating her black skin,” but many of our institutions do not, right? And so again, going back to the guy from the MarTech podcast, he walks into a bank, I’ll walk into a bank. Because of my black skin and being a woman, I’m going to be treated disproportionately less favorably than he is. And that is because of institutionalized practices.

I want you all to understand that. I want you to understand that there are some things from a diversity perspective that we can “hide,” right? Maybe I can hide my gender identity. Maybe I can hide my religious identity, but my black skin is not something that I can hide. And people need to recognize that. In my inability to hide my black skin, it opens me up to prejudices and biases that people who don’t look like me don’t have to face. I’m hoping that that articulates the privilege that other people have that I simply do not benefit from.

What’s actions would you recommend our listeners take next to move the needle a little bit at their organization?

First, I would encourage them to reach out to whomever’s the head of diversity at the company where they work and ask how they can support this person. Because one thing we’re seeing is that a lot of these “diversity czars” feel under-resourced and feel that they do not have the information needed to make a change. Most of them are saying they don’t have demographic information and they don’t have salary information and if they do have these two pieces of information, they’ve been asked to match them themselves, which gets in the way of them actually doing their jobs. I think something else that people who do have a seat at the table should do is they should advocate for diversity to be linked to KPIs. What I mean by this is that diversity and inclusion ambition should be positioned in the same way that companies talk about sales, very new customer loyalty, net promoter scores.

Don’t just let it be an outcome or a low rank outcome, but let it be something that is centrally important to your company. And then I would also say, just from a personal perspective, challenge yourself. Get uncomfortable, right? Be willing to have some of these uncomfortable conversations. Be willing to go into environments where you are a minority, right, where you are visibly a minority. Experience what it feels like. Sit down and have conversations with people who you think you have nothing in common with because I dare say that that will begin to just break down some of these prejudices and biases that we have. I think it will encourage us to be more empathetic to see what it is like to be in someone else’s shoes. I remember a few years ago, I had three foreign exchange students or white foreign exchange students from France in my class.

And they said, “Oh. No one told us this was a black school before we came to Howard.” And I said, “Well, now you’re here.” And at first they were uncomfortable, but at the end of the semester, one of them said, “This is the best experience in my life.” And I was like, “Why?” Because I knew he had himself a girlfriend, he enjoyed homecoming. I just thought he was talking about it in that way. And he was like, “No because this is the first time I have to be a minority.” And he was like, “It made me so uncomfortable, but it also made me so much more sensitive to the fact that people live their lives like this every day.”

That’s what I would say. Get uncomfortable. Try to understand what it is like to walk in someone’s shoes who can’t erase their black skin or who cannot erase a disability that they have. Something that everyone can see and observe and people judge them by it. And I’m hoping in doing that, you will have more empathy and you will stand in these gaps and be encouraged to be an advocate for those and bring people to the table who are not at the table now.

Sarah Larson: Those are some good pointers. We will follow up on those. I would love to talk to you again in a year and just see if society has really made any more additional change because sometimes it’s frustrating. The pace of change is just slow.

Efua Obeng: Yes, Sarah. Like when I was preparing for our conversation and I was looking at how we have all these diversity issues, again, dating back to the 1960s, but we’re really not seeing change within organizations. I was so disheartened and I was so frustrated. I’m just hoping that we will see this change and that more diverse people will have seats at the table and that their voices will be heard and that diversity-related issues will authentically become more central to companies. I’m optimistic for the change, hoping for it, rooting for it, and we’ll just see you in a year.

Sarah Larson: And working for it. Thank you so much for joining me today.

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Efua Obeng

Learn more about Efua Obeng

LinkedIn: https://www.linkedin.com/in/efuabobeng/

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