Why Inclusion Starts in the C-suite

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Wharton’s Stephanie Creary speaks with global diversity expert Gwen Houston about why senior executives must lead inclusion efforts.

When Gwen Houston tries to explain just how deep the diversity chasm is in corporate America, she pulls out a statistic so astonishing that it does much of the talking for her: Among the CEOs of Fortune 500 companies, less than 1% are Black, and they are all male. There are no Blacks on the senior executive leadership teams at CVS, Bank of America, JP Morgan Chase, Wells Fargo, Facebook, Google, Microsoft or Amazon, she notes.

“When it comes to talking about the whole issue of racial equity and Black professionals in the workplace, what strikes me in terms of how severe and how bad it is, is that even after a generation of very well-educated and extraordinarily talented Black professionals have forged a path through corporate America, and with another generation following, we still don’t see significant and sustainable progress,” Houston said.

A former chief diversity officer for several large corporations, including Microsoft and Campbell Soup, Houston dedicated her career to the cause of workplace inclusion. Now as a consultant and advisor, she’s still advocating for it. Her June op-ed published in Medium, “Corporate America’s Black Equity Gap: CEOs Must Take the Lead,” resonated with Wharton management professor Stephanie Creary, an identity and diversity scholar. Creary invited Houston for a deeper discussion on the topic for the Knowledge@Wharton podcast series titled Leading Diversity at Work. (Listen to the podcast or watch the video at the top of this page; you can find more episodes here.)

The news about diversity, equity and inclusion (DEI) isn’t all bleak. According to Houston, many companies have made significant strides by embracing DEI as a value proposition, because research has shown that diverse teams are more innovative and adept at anticipating marketplace changes. These firms have implemented unconscious bias training, minority recruitment initiatives and mentorships for minority employees. But that’s not enough.

“What’s missing and what causes companies to lose the progress they’ve made is that the commitment from the top is not there.”

“I think what’s missing and what causes companies to lose the progress they’ve made is that the commitment from the top is not there,” she said. “What you and I both know is that effective DEI engagement is [company] leader-led. To be the most progressive, it has to be led from the top. This work has to be central to a company’s culture as well as mission-critical for driving significant and long-term business progress.”

The Role of the CDO

Renewed attention to the Black Lives Matter movement in the U.S. has drawn sharp focus on racial disparities in the workplace. Some firms are responding by rushing out to hire chief diversity officers, although many do not understand the role that CDOs should fill. Creary asked Houston to explain what makes an effective and engaged CDO, and whether that position should report to Human Resources or the CEO.

Houston said it depends on the maturity and dedication of the chief executive. She once reported to a CEO who “couldn’t care less” about her work and barely noticed she was there. Without consulting her, he attended a business roundtable about diversity and was called out by colleagues on his lack of knowledge and commitment to DEI. Calling it an eye-opening moment, the CEO met with Houston and asked her to help him change the workplace culture and aggressively pursue diversity goals. She immediately assigned him some reading material on race and connected him with diversity mentors. His re-education had begun.

“Boy, was that a turning point. Probably one of the best experiences and relationships I ever had with a CEO was in that scenario and the aftermath of it,” Houston recalled. “A CEO’s empowerment, endorsement of this role and what it can become can be the difference between a highly effective DEI engagement, commitment and progress versus one that can hardly get off the ground or is fleeting at best.”

Both Houston and Creary said that kind of re-education – unlearning old assumptions about race – is one of the toughest challenges to achieving a more equitable workplace. Many white people are uncomfortable talking about racism or believe that it is a problem for minorities to solve. Or they rely on the excuse that they simply cannot find qualified minority or female candidates for the job. Houston said she often counters that argument with demographic data that shows there are plenty of diverse candidates in the pipeline.

“By the way, when we talk about diversity, there’s no substitute for quality,” she said. “One of the phrases I’d love for people not to say is ‘qualified, diverse candidates.’ Do you really think I want to go after unqualified talent? That’s not who I am. But those terms are not mutually exclusive, and those are some of the microaggressions that people of color, Black people, experience all the time, that we’re lowering the bar, lowering the standards to hire them. And that couldn’t be further from the truth.”

“One of the phrases I’d love for people not to say is ‘qualified diverse candidates.’ Do you really think I want to go after unqualified talent?”

A Post-racial Society?

Both women, who are Black, expressed uncertainty about where the outpouring of support in the last few months for the Black Lives Matter movement will lead. Spurred by the killings of Breonna Taylor and George Floyd at the hands of police, citizens of all ages and races have taken to the streets and to social media to demand change. That outcry has also spread to the workplace, where systemic racism has often kept people of color from advancing in the same numbers and with the same speed as their white colleagues.

“I really haven’t known what to make of it, and I think part of it is deeply personal for me because I’m so afraid to get let down,” Houston said of the widespread call for social justice. “If I allow myself to get emotionally invested in the power of these voices, even though I do believe in them, I’m still not sure where this is going to go and if we’re going to hit a freefall.”

Houston harkened back to 2008, when the U.S. elected its first Black president. When Barack Obama defeated John McCain by nearly 10 million votes, many believed it signified that America had moved beyond its painful past of slavery, segregation and struggle and transformed into a more peaceful, post-racial society. But that was more wishful thinking than reality.

In her piece on Medium, Houston cited an incident involving a woman named Amy Cooper as an example of how systemic racism persists. Cooper made headlines in July for calling 911 when a Black man in New York City’s Central Park asked her to leash her dog while she was in an area reserved for birdwatching. In cellphone video taken by the man and viewed more than 40 million times online, an agitated Cooper tells him that she will call police and say that “an African American man” is threatening her.

“We’re not on a level playing field. This is not a post-racial society.”

Many have argued that Cooper’s conscious decision to use the man’s race as a descriptor demonstrates a flagrant use of white privilege. But what’s even more concerning to Houston is that Cooper was a head of insurance portfolio management at Franklin Templeton (she was fired after the incident). How did her attitudes about race — blatant in the video — filter into her actions at work, even subconsciously?

“Our workplaces are a microcosm of broader society. What’s happening in the world finds its way into the work environment,” she said. “So, we’re not on a level playing field. This is not a post-racial society, not when you have a 40-year-old white woman doing what she did.”

Creary agreed, saying that people don’t leave their attitudes behind when they walk into the office. “We actually bring those same selves to work. Whether it’s Amy Cooper or somebody else, you see people acting and engaging in racist, sexist, homophobic ways outside of the workplace, and it’s very hard for us to imagine that they wouldn’t be doing those same things inside of the workplace. And when that happens, that’s why we have inequity and lack of opportunity.”

Houston said sometimes the problem stems from a lack of perspective. An ambulatory person does not experience the world in the same way as someone in a wheelchair, for example. “The truth is, when something isn’t your reality, you don’t see it,” she said. That’s why education and empathy are so important, especially at the top of the organizational chart. Once the unconscious bias is exposed, acknowledged and understood, change can begin.

“You cannot unsee it, and it should stay in your mind, and it should cause you to look at things with a new filter,” Houston said. “It should change the way you view things going forward.”

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