On 25 June 2020, Liverpool FC were crowned Champions of the English Premiership football league, adding to their already enviable current titles of European Champions and Club World Champions. If there is a case study of inclusion and success to be written, it would be of the determination shown by the club owners, Fenwick Sports Group, its manager, Jürgen Klopp, and the players themselves; how they have worked to blend together as unique individuals, each respected for their skills, and all dedicated to the club ethos of successful, attacking football. Alas, the source materials to do this are not available, and all we can do is make a brief observation on how a team of 22 core players and manager, boasting 14 nationalities, are currently hailed as the best football team in the world. It takes a Liverpool fan to make the connection between Mr Klopp’s insistence on only recruiting players who have the right mentality, and team success. His emphasis on finding players who thrive on being part of a community is well known, as is his focus on creating a team climate where every player works for their team-mates rather than individual glory. At a mid-season training camp in 2017, he spoke of the importance of feeling like a family. “They all feel comfortable, and if you feel comfortable it is more likely you can perform”. It is as good a quote on the benefits of inclusion as I can find anywhere.
This article is the fourth in my series on diversity and inclusion. In the preceding pieces, we discussed why the D&I is of such importance, not only generally, but especially at this particular time. We have tried to understand the nature of prejudice and exclusion. We have taken stock of the size of the challenge that overcoming discrimination and what achieving inclusion represents. We have considered the three necessary conditions required to succeed with any culture change project, especially one that challenges deeply ingrained behaviours; namely leadership, trust and a living dialogue.
Many firms are doing good work currently to improve their inclusion cultures, and each story is both individual and no doubt experiencing progress and set-backs simultaneously. We are going to look at two companies from the outside. Our purpose is not to evaluate the success or otherwise of their initiatives, but to use them as examples for debate and inspiration. These companies are Microsoft and Ernst & Young.
In an email on 5 June 2020, the CEO Satya Nadella emailed all staff. It starts: “Seeing injustice in the world calls us all to take action, as individuals and as a company. Sometimes this action is personal – what do I do to change? Sometimes it is organisational – what changes do I need to make around me? And sometimes it is reflected into the world – what can we do as a company to accelerate the change we desire?”
On the official Microsoft Blog, on 23 June 2020, Satya announced what was called “three multi-year, sustained efforts” dedicated to:
- Increasing the culture of inclusion within the firm.
- Engaging the ecosystem; impacting business relations.
- Strengthening Communities by supporting black and African American citizens in the communities in which they live.
We shall look at the measures that Microsoft advertise that they will take within each of these focus areas.
Microsoft intends to improve what it believes is already, at least partially, an inclusive-oriented culture. The intention is to achieve this by deepening the company-wide understanding of what it means to be a minority, provide additional assistance for Black Americans to enjoy successful careers within the firm, and raise the profile and importance of achieving diversification targets at various levels within the organisation.
On culture change
Megan Carter is a Corporate and Executive Communications Officer at Microsoft, specialised in diversity and inclusion. She expresses what appears to be a typical response these days from communities under attack from discrimination: “We are tired. I am tired. I am tired of the fear. I am tired of the hate. I am tired of feeling helpless. I am tired of worrying about the physical safety and freedom of the Black people in my life, every single day. But I am also tired of people who say they don’t get it, that they don’t know why we are making such a big deal out of this race thing, that they thought this was all in the past.” These are sentiments that lead to workers disengaging with their employers, lead to talented individuals adopting low profiles, losing self-confidence and the will to grow. In her article, Megan highlights the importance of what Microsoft calls “Allyship”.
Lindsay-Rae McIntyre is the (White) Chief Diversity Officer at Microsoft reminds us that “the brain processes exclusion the same way as physical pain.” She goes on, “The reality is that when it seems like people don’t understand or relate to what individual communities are facing – that in and of itself can be experienced as exclusion.”[ii] Together these two Microsoft authors explain that this is a moment when “exhausted” minorities need the active efforts of “allies” within the privileged communities to reverse the direction of exclusion and, through “relentless” empathy, share the burden and bring the two communities together. In terms of the previous article in this series, Microsoft has adopted our “Imperative #3”, a policy of continuous living dialogue: encouraging the more privileged within the company to view their actions and circumstances as part of one work community, not separate from the problems facing minority groups.
The pathway that Microsoft has planned to speed up cultural transformation is to encourage its workforce to adopt three specific behaviours, and to behave as supportive allies to those struggling for recognition of their competence or status.
- Engage with empathy and care, so that we are more aware of what motivates us in a given situation, but also what is motivating the other, enabling us to work towards solutions and outcomes that integrate as much of both as possible.
- Ask, don’t assume. In our second article, we discussed the impact of micro-aggression and prejudiced opinions on what motivates, or is expected by, those in a different social situation than ourselves. We project our generalised view of what the Black community is feeling or in need of and fail to recognise that each individual is unique, with different feelings, reactions and needs depending on the situation. The discipline to overcome this bias of approach is a large part of what Microsoft appears to be aiming for when they speak of “Allyship”.
- Take accountability for our own learning. “Accountability” is a call for employees to take responsibility for becoming more aware of the issues and challenges involved in dealing with prejudice and its outcomes. It is not for those in privilege to burden minorities with the task to educate them – they can do this themselves, and it will lead to a better, more informed living dialogue with disadvantaged colleagues, the result of which will be more “Allyship”.
As discussed in our third article, this Allyship initiative, or continuous living dialogue, will only succeed in the presence of inclusive leadership from the top and an otherwise trust culture within the firm. It is perhaps comforting that the CEO announced that as of 2021, live training on Allyship and privilege in the workplace will be mandatory for senior and executive management of the firm. On the other hand, the implication that executives usually consider themselves exempt from staff training requirements might indicate that the existing leadership style is less inclusive than one might hope. As mentioned before, if the leadership only walks the talk of inclusion, and fails to talk inclusion while they walk, then no programme will achieve the culture change we all desire.
Minority representation in the workforce
Microsoft intends to strengthen their career planning and talent development efforts throughout the workforce, but will pay particular attention to Black employees.
Microsoft is amongst a tiny minority of companies in the Fortune 500 that dare publish its full workforce demographic data.[iii] Against the backdrop of approximately 13% of the US population being made up by Black communities, and even allowing for the fact that these communities are disadvantaged in terms of education and self-development opportunities, the 4.4% (up from 3.8% in 2017) African American/Black representation at Microsoft still leaves room for improvement. Black representation is highest in retail roles and has been relatively stable at 18/19%, but the number falls dramatically in technical and management positions. At manager, director and executive levels of the company, the representation is consistently around 2.6% having risen only very slowly from 2.1% in 2016. Microsoft has a challenge on their hands.
To succeed, Microsoft will need to apply meaningful diversity targets in terms of representation, promotion and hires. A recruitment drive of this nature needs to avoid raising the hackles of those who will claim that “preferential treatment” of minorities is “unfair”. It is hard for most people to accept that the introduction of quota-like targets is an attempt to even the playing field for the careers of minorities struggling under prejudice; more often it will be perceived as an attack on the “acquired rights” of the self-perceived “elite”. Such career development plans need to be viewed as being for the greater good of company performance, and greater diversity an enrichment for all employees. Fighting the outcomes of past privilege with the imposition of a new privileged class of employee will cause resentment. The problem needs fixing but the price must not be too severe, otherwise social cohesion and trust in the organisation will be lost. A programme to increase minority representation in the senior ranks of the firm needs to be applied with careful attention to organisational justice – transparency in objectives and methods needs to be a priority.
The Microsoft Ecosystem
The company recognises that prejudice within the firm will only be improved if business and society in general also understand the need for change. A major global company, Microsoft recognises its potential as a driver of such change. Consequently, it is looking towards its business stakeholder groups and partners amongst suppliers, bankers, distributors and more to join Microsoft on this crusade for change. In this endeavour, Microsoft has declared its intent to:
- Double the number of Black-owned approved suppliers over the next three years, and increase scrutiny of supplier demographics to favour companies with greater Black representation in the supplier evaluation and selection process.
- Grow Microsoft’s portfolio investment activity with Black and African-American owned financial institutions, doubling the (unspecified) existing relationship business volume channelled through Black-owned institutions to help develop their market presence.
- Invest $50 million in Black-owned businesses to increase the number of Black-owned partners in Microsoft’s US partner community by 20% in the next three years.
A global firm like Microsoft has a lot of financial power to influence the behaviours and choices made by its business partners. It cannot ordain change, but it can communicate its intention to integrate D&I policy objectives into the business relations evaluation and selection process. How far this will affect business relationships will depend on the balance of power between the firm and its business partner – who needs who most. However, making clear that such objectives exist, and committing to promote those in Microsoft’s “ecosystem” can only help to increase awareness and the reactivity of business partners. Furthermore, “talking the talk while walking it” will help convince employees that their employer is sincere and authentic in its desire to right past wrongs and strengthen the integrity of the firm in its stated mission.
Microsoft recognises that it cannot change society, but it is a stakeholder and can influence certain parts of it. A large part of the discrimination against Black minorities, in particular, is the unavailability of clear education and work opportunities that enable Blacks to climb the social ladder. Indeed, even within minority ethnic, religious, or other communities themselves, breaking ranks with the mainstream destiny of its members will meet resistance – leaving the aspirational amongst them isolated even from their original “roots”.
Leaning strongly into their industrial expertise, Microsoft is committing to expand their work to help Black students develop the skills needed to succeed in the digital economy. Over five years, Microsoft will expand its industry volunteer programmes to bring computer science education to an additional 620 high schools (from around 900 presently) primarily serving Black communities in 14 States. They also promise to do more to help retrain Black adults for the digital industry and provide cash grants to community-based nonprofit organisations.
It makes sense for companies facing a recruitment bottle-neck to make specific efforts to help schools produce the right kind of skills in the communities from which they wish to hire. Other possibilities might include targeting:
- traditional Black majority universities for graduate hires and
- minority groups for paid internship opportunities and
- scholarships to enable talented students to more easily emerge from their social restraints.
Initiatives like these are long-term investments that would increase the corporate brand profile as an ally against prejudice and discrimination amongst the general public, including consumers.
The immediate problem facing Black minorities in the USA today are systemic problems within the social justice system. In other regions, such as Europe, there are similar problems, but arguably less severe and on a par with education and employment challenges. Microsoft has been working on this subject since 2017 and is expanding its funding budget by $50 million over five years. Using their technology and expertise, Microsoft will focus on the use of data and digital technology to improve transparency and accountability in the US justice system.
Likewise, Microsoft is committing to help expand the availability of quality broadband services in regions and cities where Coloured communities are poorly served, and to provide technological support for nonprofits that support, and are led by, people of Colour.
Charity still begins at home
Microsoft appears to have conducted a stakeholder-led strategy in its various actions, aligning much of their social engagement initiatives with their direct business needs and skills. Other companies might choose to broaden their efforts to help their minority community stakeholder groups from a more holistic perspective; related to their businesses both directly – like Microsoft – and indirectly.
Ernst & Young
On 11 June 2020, EY USA released a short video outlining the anti-racist actions they were committing to undertake. Coinciding with my research on the impact of #BLM protests on the governance of Diversity & Inclusion, I decided to include their example to illustrate what established and resourceful companies are doing.
EY has a valuable place in the public debate about integrity and ethics in the workplace. They sponsor conferences, advise on compliance topics, and conduct workplace reviews on corporate culture. Before looking at how EY approach D&I within their own walls, we are going to look at the general recommendations they provide clients on their website. To do so, we shall reference their work on LGBT+ inclusion as a proxy for the seemingly absent equivalent on racial inclusion.[iv] Their basic premise is that “diversity paired with inclusion drives business success and better outcomes.” EY also identifies some of the key obstacles to effective implementation of D&I policies in an international organisation as the degree of diversity itself. Social, legal and company culture layered on top of personal beliefs, opinions and fears creates a hotbed for conflict. In a consultancy group where members are independent partnerships, this is evidently even more of a challenge than a multinational conglomerate of subsidiary and sister companies.
Do as I say …
The EY approach alternates from the three-thronged Microsoft approach of “Culture, Ecosystem, Society” by applying a somewhat comparable, but more prudent step-by-step method of “When-in-Rome; Embassy; Advocate”. EY makes the point that this is a progressive model that requires getting your house in order first, before moving through Embassy and Advocate Cycles.
- When-in-Rome considers how to drive D&I improvements within the four walls of the company modified by local laws and norms relative to citizens and employees;
- Embassy considers the impact and risks of engaging with entities and stakeholders outside the firm;
- Advocate is targeting social, even legislative change in the host country.
Nine inclusive steps
In 2019, EY published a comprehensive report on LGBT+ D&I strategies entitled “Making it real – globally”. Although the report relates only to LGBT+ and the words “Black” or “race/racial” do not receive mention in the text, except for the current PR focus on #BLM, the challenge is the one and same in terms of D&I strategy. The report proposes nine ways to advance LGBT+ policy to practice within the firm, or international group, as follows.
- Conduct an opportunity and risk assessment and identify priorities for action. EY differs from several other sources by emphasising risk analysis that includes consideration of the general legal and social environment in which the company finds itself. Is the legal setting supportive of minority rights as in Scandinavia and the EU, or restrictive as in Russia and parts of the Middle East?
- Set policy globally, calibrate implementation locally. Whereas EY’s When-in-Rome approach promotes discussion and the raising of awareness levels within the firm of the impact on colleagues living under the shadow of taboos and prejudices of society, they advise a softly-softly approach to avoid the awakening of potentially damaging cultural rifts within the firm itself.
- Keep making the business case for diversity, promoting 360 education and storytelling. Many activists within ethics and civil rights movements dislike issues that they consider to be moral imperatives being discussed solely in terms of improved business outcomes. The evidence is there, however, and for certain individuals whose background is firmly rooted in prejudice and stereotype, it may be the only way to start a conversation. The danger is that a focus on the business case might lead the firm to pursue behaviours that the leadership do not, themselves, subscribe to. Permissiveness should not be confused for inclusiveness in terms of the establishment of trust cultures. Tolerance is no substitute for empathy if the objective is to promote the authentic confidence-building leadership required for real culture change.
- Engage LGBT+ advocates and allies at all levels of the organisation. EY underline the need for a real commitment of the firm’s leadership identified as “Imperative #1” in the third article in this series. The transmission of that leadership energy to empower role models, sponsors and “ambassadors” of the D&I cause throughout the organisation is essential if altered mindsets and behaviours are to happen.
- Build out strategies supporting successful career growth. Recognition that individual career development opportunities may prove more of a challenge for under-represented or suppressed minorities. This EY report does not address career planning for specific individuals working within a single business unit. Instead, EY addresses the problem of employee mobility, such as women or homosexuals moving to Saudi Arabia; an important concern for multinational firms.
- Create opportunities for reverse mentoring and education of management. This recommendation recognises that many executives and managers who have already achieved success in less tolerant times would benefit from personalised training and awareness sessions on new practices and behavioural expectations.
- Utilise social media and other technology, locally and globally. In a world of dispersed business units, and the Covid-19 practice of remote working, EY suggests conveying the inclusion message, and an invitation to engage, via social media networks that may, or may not, include external stakeholders like suppliers, distributors and clients.
- Develop LGBT+ networks and unify globally. In line with our contention that no inclusion can properly evolve without a continuous, living dialogue within the firm – or across the global group – EY stresses the need to direct this discourse, online or otherwise, in a manner that promotes solidarity, strength and cohesiveness.
- Measure, solicit input and celebrate success. On the argument that “what gets measured, gets done and what counts, gets counted”, EY recommends the establishment of two or three goals to “measure and celebrate.” Cultural change of mindset is the cornerstone of inclusiveness – and this is difficult to measure with any precision. As noted in an earlier article, reviewing the outcomes of initiatives, and evidencing success in advancing culture change is essential. To ensure awareness is increasing and micro-aggressions, a.o., are diminishing, there has to be transparency and data confirming that D&I strategy is making a difference. Culture change, however, involves behaviours that cannot be measured but can be observed. This effort to alter mindset must not risk being diverted by any obsession with monthly or quarterly, risk management style of reporting.
EY’s nine recommendations are well worthy of study and consideration. Still, as their discussion of the need to tailor D&I strategy to each localised business unit implies, there is no single recipe of success. How then has EY applied their advice to their US operations?
EY in the real world of #BLM
As mentioned, EY in the USA published a document entitled “EY’s commitment to anti-racism in the US”. Their declared objective is to eradicate racism and discrimination against the Black community within EY by introducing strategic change with the firm, as well as influence the communities where they are active, and through public policy. Like Microsoft, they distinguish between their own culture, their “ecosystem”, and broader society in general.
Their list of intended actions includes the following (slightly shortened wording):
- Evaluating internal talent and business processes to further advance equity across race.
- Investing $3 million in organisations committed to fighting social injustices in law, health and economic inequality in the Black community.
- Contributing $4 million to four Historically Black Colleges and Universities.
- Funding an initiative to bridge the distance learning gap for underserved students.
- Expanding the EY Entrepreneurs Access Network focused on Black and Latinx entrepreneurs to help connect them to peers, sponsors, capital and customers.
- To drive policy change as well as lead actions for change in our communities with our vendors and others they do business with.
- Investing in EY-related communities through employee volunteer programs.
- Allowing EY staff to participate in the March in Washington, DC on 28 August 2020, commemorating the 57th anniversary of the historic civil rights March, in addition to observing Martin Luther King, Jr. Day on 18 January 2021, a Day of Service for our US professionals to participate in EY sponsored activities.
In writing this article, I have only considered the information I have found readily available on the Microsoft and EY websites. It is therefore not possible to conclude on neither the extent of the commitment promised by the two companies nor their success. There is the obvious danger that an organisation can talk a good game, yet do little in fact to enact change, or that a firm is quietly understated while earnestly implementing meaningful measures motivating culture change beyond the prying eyes of onlookers and commentators.
Do as I do …
There is a difference between perception and prejudice, although one might influence the other. Just as prejudice must be challenged, so it also needs to be clarified. Perception is an opinion based on what we observe rather than what we have been taught. If we do not pay attention to it, it can result in lasting “first impressions” that eventually evolve into prejudice. How others perceive your actions, as we have discussed, is an essential element in the communication of sincerity, commitment and authenticity. In this respect, Microsoft and EY differ significantly.
Satya Nadella, as CEO of Microsoft, has taken a personalised interest in the firm’s reaction to #BLM. By communicating a very personal commitment to improving D&I at Microsoft, and being transparent on his lengthy internal communications, he has introduced both leadership commitment and activated a broader discussion within the firm. In comparison, the short statement of Carmine di Sibio, EY Global Chairman and CEO, is far more reserved and limited to eight sentences, including one in acknowledgement that “words alone are not enough”.[v]
Of head and heart
Both companies provide suggestions and comments that are well worth the consideration of others. Their commitments reflect their overriding business purposes. Microsoft pledges to bring their digital competences and capabilities to bear on the internal and external focal points they identify. At the same time, EY promotes a very risk-based approach to their D&I strategy development recommendations, as befits one of the big four consultancy firms. Neither bow to the theologian’s purist ethics and inclusiveness preference for the arguments of moral imperative and, consequently, they may be running the risk of trying to instil cultural change through the head and not the heart when both are required.
Through their public reporting, Microsoft has revealed that it is measuring and working on the critical inclusiveness indicators recommended by EY; and that they still have some way to go. EY themselves, however, has not made such information easily accessible on their US website and when addressing inclusiveness, this is mostly focused on LGBT+ and gender diversity issues. The two companies have done their talking, but what counts remains what they say while walking the talk.
By Anthony Smith-Meyer, author of ”Surviving Organisational Behaviour” ©2018, Kindle Publishing
[ii] ”Relentless empathy: When hate demands critical leadership” by Lindsay-Rae McIntyre, 28 May, 2020, LinkedIn Pulse
[iii] ”Diversity and Inclusion Report”, Microsoft, November 2019
[iv] ”LGBT+ inclusion: Can you apply a globally consistent policy across an inconsistent world?” by Henry, Kida and Twaronite, ey.com
[v] ”Our commitment to address racial discrimination”, Carmine Di Sabio, 23, June, 2020, ey.com