ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.
I first met today’s guest via email in May of 2020. Do you remember what was happening in the US at that time? The video of George Floyd’s murder by police had gone viral and protests against racial violence were sweeping the country. At HBR, we were wondering what advice we could give companies about how to respond. And Ella F. Washington, an organizational psychologist and professor at Georgetown University’s McDonough School of Business, stepped up to help. With co-author Laura Morgan Roberts she wrote the article, “US Businesses Must Take Meaningful Action Against Racism.”
But have they? It’s been two and a half years since those protests, and Ella has spent much of that time working with organizations to build more robust diversity, equity, and inclusion strategies. She’s here to report on how companies are faring, not only in the United States, but also globally since these issues arise, albeit in slightly different ways, everywhere. She’d like us all to start thinking about DEI progress in stages: aware, compliant, tactical, integrated, and sustainable because ambitious top down directives rarely work unless you’ve already built a foundation on scaffolding from the ground up.
In addition to Ella’s work as a consultant professor, she wrote the book, the Necessary Journey: Making Real Progress on Equity and Inclusion, and the HBR article, “The Five Stages of DEI Maturity.” Ella, so great to have you back on the show.
ELLA WASHINGTON: Thank you for having me, Alison.
ALISON BEARD: The last time I spoke to you for IdeaCast was right after you published that article during the George Floyd protests. So where are we now? Do you think that that moment sparked real lasting change in this country and even around the world?
ELLA WASHINGTON: So much has changed since that first conversation that we had. I vividly remember the helicopters outside of my window at the time because there were so many protests in Washington DC. And now looking two and a half years later, it seems like we’re in a different world. DEI is no longer kind of a question mark for companies. I think they are seeing it as something that they have to do, whether it’s because they truly believe in it or they know that now it’s an industry standard especially in the United States.
Time will still tell how much progress has truly been made and whether that progress will continue. I think we’re seeing a lot of fatigue and so many companies feel like, “Okay, we gave a great effort for 18 months or 24 months.” And for some companies, when they realize that progress is going to take more than two years, I do worry they’re going to take their foot off the gas.
ALISON BEARD: And so is that part of the reason that you want organizations to start thinking about this five stage process?
ELLA WASHINGTON: It absolutely is. I think there needs to be a mindset shift, especially for organizational leaders that are used to coming up with a plan, activating said plan, and usually seeing the results that they’re looking for, right? But DEI is about humanity, it’s about elevating humanity in the workplace specifically, and it doesn’t always work in that one-to-one ratio. So that’s the first mindset shift that has to happen.
Our second mindset shift has to be around the fact that DEI is always going to be an evolving part of who we are as an organization if it’s something we believe in, again, because we’re talking about humans. Humans evolve, the needs in the workplace will continue to change. And so once we decide that this is something that we’re going to be committed to for the long term, then we can start to really think about what stage of the maturity of DEI are we in and where do we need to go next? What’s our next step in the evolution? It’s no longer about rushing to the finish line, but more so taking time to understand truly where we are and where we want to go.
ALISON BEARD: So I ticked off those five stages. But could you briefly just walk us through each of them explaining, as quickly as you can, what you mean by each one?
ELLA WASHINGTON: Absolutely. So the first stage is aware. Aware is all about understanding what DEI is all about and more specifically, what does it mean to our organization? Now, this is beyond just defining what diversity, equity, and inclusion mean on paper. It’s about interrogating your mission and values and seeing where DEI plays in that and also what you’re trying to accomplish. We see many companies at this stage, not because they’d never had DEI before, but they’d never taken a step back to think about, “Why does this really matter for us? How does it connect to who we are and what are we trying to accomplish?” And so that’s the aware stage. Ideally though, especially for brand new companies becoming developed, they start at the aware stage, but many companies of course had to go back.
The second stage is compliant. And so this is about thinking about DEI in terms of doing it so we don’t get in trouble legally with ELC or other legal requirements. Unfortunately, it’s where many companies have gotten stuck as they’ve thought about, “DEI is something that we do because we have to, we want to make sure we’re not getting in trouble, we want to make sure that we’re not getting any negative headlines. So as long as we do X, Y, and Z, we’ll be good on the DEI front.” And unfortunately, many companies dialed it in like that for years, especially leading up to 2020.
But what we want to see companies move is to the tactical and integrated stages. And so the tactical stage is thinking about how DEI is connected to our business initiatives and outcomes. And it may be that we have wonderful DEI programming or we have wonderful training that talks about inclusive leadership, or we have wonderful grassroots efforts such as our ERG groups, or we’ve been really specific about our consumer base and how we can make sure that we are thinking about diversity and inclusion from our customers.
However, at the tactical stage, even though really great opportunities for DEI are being seen, unfortunately in many organizations, they are not connected. They don’t talk to each other. So one department like marketing may be blowing it out of the water, but another department, someone is having a totally different experience in terms of how included they feel.
And so tactical stage is great. It means we’re getting things accomplished, we’re setting goals that are connected to our business objectives. However, we want to see companies move into the integrated stage and at the integrated stage, those efforts start to talk to each other. There is a more integrated strategy that goes throughout the whole organization internally and externally. And so at the integrated stage, a company is able to think about, “We do DEI as part of everything we do as an organization. We look across our entire sphere of influence both internally and externally and can truly say we are making progress.”
Now this is hard but this is what is required for organizations to move through that next stage of their DEI maturity. And then the fifth, but not final stage, is sustainable. This is where you see if organizations have viable DEI efforts that can remain over time, over ups and downs in the economy, over changes in leadership, over changes in generational needs in the workplace. How do we make sure that our DEI efforts are not just tied to one leader, for example?
Now, the reason why I said it’s the fifth but not final is because, as I started with, DEI is never done. And so part of this maturity is thinking about evolution. How do we continue to evolve even once we’ve gotten to the integrated and sustainable stage? We should always be interrogating our efforts to make sure they’re meeting the moment for what is needed now.
ALISON BEARD: And why, in your experience, do some companies get stuck in the awareness and compliance stages?
ELLA WASHINGTON: Well, the awareness stage is really hard because you’re having to look internally. You’re having to ask yourself the hard questions of, “Not what we say on paper on our website as far as what are our values, but what do we truly stand for and how are we prepared for our actions to meet those wonderful values that we put on our website?” Many companies, especially in 2020, reached out to me and said, “We want to have a visioning session. We want to figure out what DEI means to us and where we are on the journey.” Great. Awesome.
So we get into a room with the senior leaders of many companies, and it’s the first time they’ve ever had an explicit conversation about what diversity means to them personally and as a company and how they even imagine diversity, equity, and inclusion showing up in their company. So all of a sudden you have leadership teams that maybe have worked together for 10 or more years and they never talked about these topics, they’re afraid to say these things even amongst each other. And so we can’t move forward on our DEI journey if we can’t even have those tough conversations.
I think compliant becomes hard because you’re checking a box, right? You feel like you have done something worthy because you have checked off whatever the EEOC requirements are for your organization and your industry, maybe other legal, state, or federal requirements. You feel like there’s something tangible, “I’ve done this thing and now especially if it’s not truly in the fabric of our organization, I can move on to the other business imperatives.” And so I think those are the reasons that those two stages really are places that organizations get caught, even if they don’t want to be. But it’s what I’ve seen time and time again.
ALISON BEARD: Do you find that progress varies considerably based on the size or maturity of the company? I imagine that, at large organizations, there’s the money to invest, but they’re also more bureaucratic and slow. Whereas a small business can probably move a little bit faster, but then it also doesn’t have the time or cash or manpower to devote to it.
ELLA WASHINGTON: I don’t think DEI maturity is solely connected to resources. I’ve seen companies that have limited resources and maybe they’re focused on grassroots efforts within the company to implement their DEI strategy, be able to be more effective and impactful than companies that are spending hundreds and thousands of dollars a year. Now, certainly companies should create a place for resources for their DEI efforts. I’m not trying to say that’s not important. It’s actually critically important, especially at larger companies. But if a company is saying, “Well, we don’t have X amount of dollars to give to this this year,” that doesn’t mean they cannot make progress. First of all, they have to really be clear on what they mean by DEI because it’s not just about programs. It’s not just about those things that take a lot of resources. It’s about the experience that employees have every single day.
And so that could be a matter of making sure your managers are having individual touch points. That’s a resource of time, but it doesn’t take a lot of money to have those things be part of your everyday culture. Now, where I see larger companies really struggle is at that tactical stage. They do have the resources, and so many of them have thought of DEI as programming only for so many years. They have amazing programs that celebrate certain parts of the year, like Black History Month or Women’s History Month or Pride Month. They’re able to put people in positions to make sure those programs go well, and they may even have some learning and development opportunities internally. But because of all these things that are happening, many of them haven’t taken a step back to take stock of, “How are these things interconnected? How does the programming that we have connect with the leadership development that we have, connect with what we’re telling our customers that we stand for?”
So, I mean, truly it’s not a one size fits all approach. And I think that’s another thing that’s hard for organizations to really come to terms with what works for another company will not necessarily work here. And so that’s why I encourage companies to really interrogate where they are using what metrics are important to them, what values are important to them, what their stakeholders are expecting, as opposed to just looking at what other people are doing.
ALISON BEARD: As you enter into these early stage conversations with organizations, is there still discussion of why it’s even important or have we moved beyond that and everyone acknowledges that a diverse organization is a smarter and more innovative organization? Or do you need to really start from square one?
ELLA WASHINGTON: I think most companies have moved past the talk track of why it’s important. They have their three bullets, “It’s the right thing to do, it helps our business grow, and we believe in it,” or something of that nature. But you have to peel the onion back a bit. What does that actually mean here at this organization? What does that look like on our teams? How does that help our specific business performance? And so I think it’s one step to look at those macro level reports that are out there from various sources like McKinsey or Catalyst, et cetera. But David Thomas wrote an article in HBR last year that talked about the need to bring that down a level to what is happening in our actual organization as opposed to just painting our DEI efforts with the broad strokes of what works in our industry or what’s working at the macro level.
ALISON BEARD: So you can’t just skip the steps and jump to integrated and sustainable because your solution will be so specific to your company?
ELLA WASHINGTON: That’s exactly right. And it’ll be better once you take that time to think about, “What does it look like for DEI to be integrated in everything that we do, not just lip service, but truly what does that actually look like on a daily basis? What does that change in the experience of our frontline employees? How does that change how our senior leaders are talking about DEI throughout the organization?”
And so the other important aspect of this is that it has to be both top down and bottom up. Many folks think of DEI strategy as the thing that the chief diversity officer, if they have one, or their head of human resources kind of sets for the organization, the senior leadership team signs off on it, and we’re good to go. We can do a report at the end of the year. And that’s one aspect and that’s important to have leadership and direction from the top, but you got to have those grassroots efforts. You have to bring employees and managers along on the journey. There has to be bottom up implementation because if not, you’re not going to see that long term progress.
ALISON BEARD: What are some of the biggest roadblocks that you see organizations hit when they’re trying to move from just aware and compliant or even tactical to integrated and sustainable, the true end goals?
ELLA WASHINGTON: So in my book I talk about the three Ps, purpose, progress, and pitfalls. And so those are the things that I think every DEI journey has to be aware of if you want to make progress. And so that first one is purpose. It’s all about that, “Why are we doing this and what is it that we’re trying to achieve for us?” So once organizations have that, that can be their north star, they should always be returning to that so they stay in alignment with the things that they said that are important to them from the outset. Or if it’s time for a shift in that North star, that’s okay too. But they have to acknowledge that. The thing that really holds organizations back is that second one, that pitfalls. Those pitfalls can be employees don’t trust what we’re saying because of things that have happened in the past or maybe we didn’t have a really inclusive pipeline effort in the past and we really haven’t changed where we’re recruiting from.
That is an area of opportunity. We must correct that if we want to see progress. And what I see is leaders often, they don’t want to talk about the things that aren’t so good within their organizations, especially out to their employee base or even externally. Leaders must be able to be honest about what is holding us back from reaching that north star. And then the third P, that progress, what does progress look like both quantifiably and quantitatively? And being able to find that in both short term and long term metrics is critically important because the challenge with those long term metrics is you’re not going to feel that overnight, but when you have those short term goals as well and metrics to hold you accountable, those are the things you can feel within six months and a year.
ALISON BEARD: What is a realistic goal in terms of timeframe for making it through all these stages?
ELLA WASHINGTON: I mean, it takes years. And, again, every company is different. So I think that’s where size and resources certainly comes into play, but it certainly is not a one or two year effort. I would say companies should really plan for a five year trajectory in their DEI strategy in order to see meaningful progress. Some companies have done it in shorter time, some companies take longer. But I think if your mindset is that, “Okay to see the macro level progress that we want to see, it’s going to take at least five years,” that is already a shift in mindset for the companies that thought this would be a 12 month or 18 month journey and then we’re done and we can move to the next thing.
ALISON BEARD: What do you say to people worried, either the executives at the top or the frontline workers who want things to change faster, about patience? How do you persuade them that this is all worth the wait and that they’ll eventually get to that end goal?
ELLA WASHINGTON: First, going back to those pitfalls, you got to be willing to be honest about what’s holding us back. That’s the biggest gap that I see. The second thing is I have to remind people, again, we’re talking about humanity, we’re talking about people. Culture, in any respect, does not change overnight. We’re talking about those cultural elements like inclusion and belonging, that takes time because people don’t always trust. We have to think about the feedback loop. And so one of the things that frustrates leaders is that they’re doing all these things, especially at the tactical stage, you’re doing great programs, they have a new recruiting effort, they feel like they’re fostering inclusion on their teams, however, they’re not seeing the progress. And a lot of the times I ask them, “Well, have you asked your employees the impact of those programs, for example?”
We see every June that companies fly their pride flags proudly and there are employees who get irritated by that because they’re like, “They don’t do anything else the rest of the year.” That is a gap between impact versus intent. You could have great intent with all these programs and changes, but if you don’t make sure that there’s space for a feedback loop to check back in with employees to see, “Is this actually working? Is this having the intended impact that we want?” If not, you’ll continue to miss the mark and continue to see stalls in your DEI progress.
ALISON BEARD: So tell me about a company that you’ve worked with that you’ve seen progress through these stages well, possibly hit a roadblock or two, and then make it to integrated or sustainable.
ELLA WASHINGTON: One of the companies that I talk about in the book is Denny’s, which is a restaurant here in the United States. And they are a great example because they truly started off in a really tough place. They were under a lawsuit for racial discrimination. Not only did they have to deal with those legal ramifications, but they actually also had a terrible reputation in United States. And so to see that in the ’90s and then see where they are today as am organization that is best in class, they’ve won many awards, they have shared their story far and wide about how they had their first diversity officer in the United States at Denny’s as a result of this tumultuous period that really caused them to interrogate who they are and who they wanted to be and what changes they needed to make. It didn’t happen overnight. We’re talking about 30 years of a journey.
ALISON BEARD: And then Uncle Nearest, what was interesting to me is it’s a Black owned business that was fully committed to diversity, equity, and inclusion, but had trouble executing on it in terms of hiring.
ELLA WASHINGTON: Absolutely. So Uncle Nearest, to me, represents all of the companies that we see that are minority owned or women owned or LGBTQ owned. And as soon as you see those labels, you’re like, “Okay, great. This is a diverse organization.” And I think subconsciously we think, “This organization does not have to work intentionally around DEI.” And what I love about what their CEO, Fawn Weaver, has done at Uncle Nearest is that she turns out on its head, she’s like, “Yes, this, I’m a black owned company, a woman owned company, but we have to be committed to DEI just like every other organization. And we’re going to do that not only by our values, but also how we are showing up in the world.”
And so I think it’s a lesson for all companies. No matter if you have great diversity to start with, awesome, you’re already one step down the path. But there are so many other elements that are important around creating equitable environments, creating environments of inclusion and belonging, making sure that, again, those efforts are sustainable beyond the CEO or whatever leader that is focused on it. And so Uncle Nearest started five or six years ago and they’re in a unique position compared to companies that are much older that are having to right the ship in many ways as opposed to being able to be clear about their DEI efforts from the start.
ALISON BEARD: I would imagine that for leaders, managers, HR heads, sort of within units and at a lower tier of the organization, that awareness, compliant, and tactical piece it’s not the ultimate goal but it’s really good to make progress in those areas when you’re not the CEO or the global head of HR, right?
ELLA WASHINGTON: A little known secret that I want to start to shout from the mountaintops is that managers are actually the most pivotal part of a DEI journey. And it’s because managers are those individuals that are on the front lines with their team members every single day. They have the opportunity to not only take the information from the senior leadership team and pull it down into their everyday departments and teams. But they also have the opportunity to create that feedback loop to get that information from their team members on what’s working and what’s not and take that back up to senior leaders.
And so I think if we can crack the code on how we get managers more engaged and involved in DEI, I think we’ll really be able to see progress much faster. And the reason why I say we have to crack the code is because most managers think of DEI as something to do at the end of their to-do list, not because they don’t care, not because they’re bad people, it’s because we know they’re burnt out, they’re overworked, their to-do list is so long. And so if you’re asking them to do something extra, even if it’s something they believe in, it’s still going to fall to the bottom. And so what we have to do, especially from a leadership level, is help managers understand that the things that we are trying to work towards, especially around equity and inclusion, they happen every single day. And not only are there things that we can integrate every day into our inclusive organizations, but we also should have accountability managers are worried about their bottom line, the thing that they’re accountable for their end of year performance reviews. And so if DEI doesn’t show anywhere up on that performance review, then how can we expect managers to make it a priority?
ALISON BEARD: What I love about the stages as a way to talk about this is you can say, “Yes, globally or in one part of the business, we’ve reached a pretty high level, but we’ve uncovered this new problem here.” So let’s jump back to awareness. Let’s talk about the problem and what we need to do to address it and then let’s make sure we’re fully compliant. So I think that ability to say, “Okay, it’s all right that we’re jumping backwards and we need to work through all of this again so that we can achieve integration and achieve sustainability.”
ELLA WASHINGTON: When I first drew this framework, it’s kind of like a stair step and then it’s a circular motion back to wherever you need to be in the stages to go through them again. And it’s not because you’re going backwards, it’s because you’re evolving. So think about a stair step that keeps going and going and just keeps going up.
To me, that’s the largest sign of success of an organization on their journey is they’ve shifted their mindset to think of it as a good thing that they’re now reevaluating something that maybe is not working or something that worked for five years. And now we’re seeing some different trends. And that shows that they’re not only committed to the long term impact of their DEI efforts, but they’re truly paying attention to what matters, that humanity aspect, and not just paying attention to checking the box.
ALISON BEARD: When we first talked about this two years ago, I know one of the questions was with the pandemic raging, how can companies find the time to focus on this? I think now it’s more of a question, though. The pandemic is still ongoing. It’s more a question of an economic slowdown, inflation, looming recession. So are you finding that there’s been a drop off in interest because of that at all?
ELLA WASHINGTON: I am so curious about what is going to happen with this economic downturn around DEI. And the reason why is because at the beginning of 2020, we saw a 60% decrease in the number of diversity roles. So like diversity manager or chief diversity officer, that role was cut from so many companies. Companies said, “Economic downturn, DEI has to go,” even more so than other HR roles that we typically see are cut in economic downturns. But then what was shocking, not much shocks me anymore in this space, is that roles had tripled by the end of 2020 and continue to increase going into ’21. So I am hoping that we have learned from that and will keep those roles, we’ll keep the resources in place understanding that this is integral to our business success, especially during an economic downturn.
ALISON BEARD: And just to circle back, in your opinion, that 2020 reckoning, how many of the companies that said they were committed to DEI then do you think have started this journey that you’re talking about in a way that feels as if they will eventually achieve that integrated, sustainable ideal at some point in the future?
ELLA WASHINGTON: That’s a great question, and I wish there was a metric that was universal that we could have every company answer. But unfortunately we don’t, especially from a global aspect. What I can say is there are clear indicators of progress. And the other thing I would say also is that every company is not necessarily trying to get to the integrated stage or even the sustainable stage. I wish they would be trying to do that. But let’s be honest, there were many companies that pledged money two years ago or pledged that they wanted to change their internal structures and were doing it because they were trying to meet the moment, and they didn’t think much further than that. In 2020, companies pledged 67 billion towards racial equity. However, a study from Creative Investment Research found that only 652 million of that 67 billion has actually been spent or devoted to specific initiatives as of January of this year.
So there’s a gap there, right? Many of them haven’t followed through on that. And then if we go a level deeper and we go for the companies that have spent money on racial equity or social justice or DEI more broadly, we don’t know the impact of that work. Did they just hire trainers to come in and do a company-wide training and then that’s it? Have they successfully thought about how they were going to make sure these efforts continue, how they were going to measure success? It’s really hard for us to know.
I will say, though, one of the pieces of data that does encourage me is the increased transparency of companies. For example, the share of Russell 1000 companies disclosing racial and ethnic data, it did increase by 23% to more than half of those companies now share their racial and ethnic data. That is progress. It’s not huge progress, it’s not progress that has changed the everyday experience of employees. But we should honor that progress and we should continue to push. We have to continue to move forward in our DEI journeys.
ALISON BEARD: As you said, it is a long and hard process, but it is very worthwhile. Ella, thanks so much for being on the show,
ELLA WASHINGTON: Alison, it’s been a pleasure. Thank you for having me.
ALISON BEARD: That’s Ella F. Washington, professor at Georgetown University’s McDonough School of Business. She wrote the book, The Necessary Journey: Making Real Progress on Equity and Inclusion, and the HBR article, The Five Stages of DEI Maturity.
If you like today’s episode, we have more podcasts to help you manage yourself, your team, and your organization. Find them at hbr.org/podcasts or search, HBR in Apple Podcasts, Spotify, or wherever you listen. This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Hannah Bates is our audio production assistant. And Ian Fox is our audio product manager.
Thanks for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Alison Beard.