Diversity and Inclusion < Diversion and Confusion
Over the past couple of years, the words diversity and inclusion have joined forces to define a business super trend, influencing processes from hiring and product development, to marketing. It’s everywhere. And while the tech purveyors of the world have pioneered the agenda, legacy giants like Coca Cola, Wells Fargo, even the NFL and MLB, are all following suite — implementing designated positions and programs for ‘diversity and inclusion’ into their company cultures. It’s also one of the hottest, fastest growing job titles in business — to the tune of 855 open positions for “Director of Diversity and Inclusion” or some variation thereof, currently listed on Indeed, alone.
With many of these positions carrying an annual salary of $140k or more — it’s clear that ‘diversity and inclusion’ has quickly worked its way into American business culture — leading many of us to question what, exactly, is the actual working definition of ‘diversity and inclusion’, anyway?
Diversity has evolved to represent more of a business strategy, than a solution.
‘Diversity and inclusion’ are so frequently used together as one buzzword, they’ve practically become interchangeable, or at least, one abstract definition including both words. This is misleading, and has the potential to create setbacks for the agenda it’s meant to promote. As the founder of a business accelerator and fund for underrepresented early stage businesses, the entirety of my work is built upon, relies upon, and cultivates inclusion — which is quite independent of diversity, and imo, far more important in terms of long-term economic sustainability.
For example, creating diversity can be as simple as adding a stock image of an Indian woman to a company website, or as committed as recruiting a Latino VP — which are both great — but have no real material impact in addressing the disparities in wealth creation opportunity.
While it’s empowering from a social acceptance perspective to see more people of color, LGBTQ and women in ads, in the office, on our favorite tv shows and in cinema — when it comes down to dollars and cents, we need to see more underrepresented folks in decision making positions around the allocation of money, and corporate support — to our businesses.
“We need economic empowerment just as much — more — than social acceptance. Yet, the trends we’re seeing in ‘diversity and inclusion’ are, so far, more social than economic.”
The real question is, do these trends begin with social empowerment and graduate to economic empowerment over time? I think the answer depends on whose economic empowerment you’re considering. According to a survey conducted by McKinsey and Company, businesses with a diverse workforce are 35% more likely to have financial returns above industry medians. Meaning, diversity is great for the companies implementing it — yet based on endless stats around investment and revenue for underrepresented businesses — these increases fall short of reaching the pockets of the demographics used to create them.
The trends we’re seeing in ‘diversity and inclusion’ are, so far, more social than economic. Perhaps we’re being queued, waiting our turn to see these increases on the back end of some trickle down diversity economics structure? (snark intended!)
Only 3% of VC funds employ Black and Latinx investment professionals.
Less than 1% of American venture capital-backed founders are Black.
As of q3 2017, women and minority led funds represented just 7% of all private equity firms in the market, combined.
In my own experiences starting businesses, I’ve celebrated successes, faced failures, and felt all of the everything that comes with being an entrepreneur — in addition to the extra everything that comes with being a female founder of color. It didn’t take very long for me to realize that finding the funding and support necessary to simply exist — leave alone scale — was like Hunger Games level hard (see the stats?!)
I also discovered that I was pretty good at it, and knew I wanted to help other underrepresented founders navigate their way to the resources needed to compete.
So I started, and acquired, underrepresented founder focused business accelerators Hillman and NewMe, and created Lightship Capital — a fund committed to the economic empowerment of other underrepresented founders. And I’m not alone. The number of women and minority led private equity funds in the US is growing at a rate of 16% year over year since 2017, in spite of the country club admission model of privilege based asset allocation — and in response to the fertile ecosystem of underrepresented, innovative startups committed to improving the world.
If ‘diversity and inclusion’ dollars aren’t deliberately being invested directly into underrepresented founders/businesses, the trend’s footprint on the collective ecosystem will be barely visible, at best — reducing a viable opportunity for material economic advancement among the underrepresented, to a marketing campaign for the continued advancement of the generational wealth and privilege plenty crowd.
And with diversity initiatives at more than 75% of Fortune 1000 companies, you have to wonder — who, at this moment, is ‘diversity and inclusion’ really meant to serve?
Written by Candice Matthews Brackeen, CEO, Lightship Accelerator & General Partner, Lightship Capital