Fearless Futures Podcast Episode 4: Business Case Brigade [Transcript]
Hannah Naima McCloskey: Hi, you’re listening to the Fearless Futures podcast. I’m your host, Hannah Naima McCloskey, the CEO and founder of Fearless Futures, and this is the show where we unpack and interrogate mainstream methods for equity and inclusion. I’ll be sharing new perspectives as well as alternative approaches we have developed and deployed working in daring companies across sectors around the world. Each week, we will explore a new angle you won’t want to miss, so stick around.
If you’ve spent even a millisecond engaging with companies on diversity and inclusion, you’ve almost certainly heard somebody ask about the business case. Why, when we’re thinking about inclusion and equity work, does the business case even feature in the conversations we’re having? In this episode, we’ll be talking about why people invest so heavily in the business case and the implications of this, the dangers of relying on research when we’re involved in inclusion and equity work in our organizations, the conditions that it creates for those who are experiencing marginalization and are hired into companies where the business case is the primary goal or reason for doing diversity and inclusion work in the first place.
And also, touching on the fact that the business case, as many will have seen, doesn’t even work, yet seems to have this compelling hold on business leaders and others who are seemingly engaged in doing inclusion work in their companies. One of the reasons I think that the business case holds such sway in companies, where they’re making the case as it were, for the inclusion and diversity work that they’re doing is because there’s this idea that business people are rational, and therefore profit and loss is the way to communicate with them.
This provides the backdrop and the context where we find report after report, demonstrating the benefits of diversity in organizations. It’s going to improve performance, your bottom line is going to be better, your profitability is going to increase and all will be well in the world. This has been going on for a really, really long time, there are more reports, pieces of research on the benefits of marginalized people being included within organizations and the benefits that can be accrued to that business by engaging in that pathway.
There’s a whole industry rooted in research, demonstrating and trying to prove the business case for diversity in companies. I recently wrote an article for Sifted in which I started off by sharing the following: A new peer review article demonstrated in a 50 years longitudinal study assessing 350,000 companies that white people are detrimental to business’s bottom line. It concluded that with fewer white people, companies could increase their profitability by at least 25%.
Now, before any white people listening panic, you might want to note that I followed this up with the words, just joking. Why did I do that? Why was I joking in the opening of an article for Sifted? Because clearly this was falsified information. There is no such study, no one has ever commissioned research to evaluate and determine whether white people are detrimental to business’ bottom line. And that’s because it’s a truth widely believed that white people are entitled to run companies and funds. And of course, no one needs research in an area where they already know the answer.
What are we communicating to the world? What ideas are we perpetuating, when we lean on research to justify why certain groups who experience oppression are actually in fact, legitimately worthy of being included in our organizations? What is that saying about the ways we think about the world and the logics that we’re engaging with and the logics that we’re committed to? What’s clear is that there is no demand for proof that white people or men or middle-class people or non-disabled people, or cisgender people or any other groups that are not the subjects of oppressive systems. No one’s demanding research that they have a right to participate fully in the companies where otherwise there’s pervasive volumes of research, apparently trying to convince people that those who experience oppression should in fact, be included.
What does it mean to have this burden, this burden of proof on one’s shoulders? When they are engaging within their companies knowing that that’s the sole reason: that there’s a material benefit that’s going to accrue to those who already are within positions of power in the organizations and companies where they work? And what does it mean for inclusion work? When we’re thinking about the paradigm of this business case, if it’s focused on prioritizing those who are already materially benefiting and have done for centuries?
In the Fearless Futures paradigm, inclusion and equity work is ultimately rooted in a principle. It isn’t subject to the whims of research agendas. And I think that’s a really, really important point for those who are very invested and wedded to the primacy of the research that does demonstrate that diversity apparently improves profitability in companies. Because if we do rely on research about team performance, what are we to do with the following: A 2017 Harvard Business Review article with the title of “Teams solve problems faster when they’re more cognitively diverse.” Now, I found this article and I began reading it, and I was extremely alarmed. So, for those who don’t know, cognitive diversity, as defined in this article is the following: Cognitive diversity has been defined as differences in perspective or information processing style. It is not predicted by factors such as gender, ethnicity, or age. And I want to quote another section of this very article. It says, “Received wisdom is that the more diverse the teams are in terms of age, ethnicity, and gender, the more creative and productive they’re likely to be.
But having run the execution exercise around the world more than 100 times over the last 12 years, we found no correlation between this type of diversity and performance.” They then go on to say, the following, “We work with a startup biotechnology company. When its R&D team members tried our strategy execution tasks, they performed terribly. The team mixed in terms of gender, age, and ethnicity was homogenous in how it preferred to engage with and think about change.”
So, we have a bit of a problem here. We have some research, making the claim that diversity improves performance and therefore profitability of companies, which we know the business case brigade really hold on to and introduce when they’re trying to compel their leaders to care about these issues. But we also have this other bit of research that says, actually, gender and ethnicity mean nothing in the context of improved performance. It’s actually this other dimension, what they termed to be cognitive diversity that’s to do with information processing styles that holds the most weight.
We’re in a bit of a pickle here, because it turns out that cognitive diversity, they say, is not connected or informed by gender or ethnicity. So, we don’t even have a proxy there at all. In fact, ethnicity and gender sort of fly out of the window. We end up making solutions that are going to be quite different, if our goal is to create the conditions where those who are cognitively diverse are going to be hired and recruited and so on. Those are very, very different solutions than if we’re in fact trying to challenge the oppressive conditions that prevent and disenfranchise those who experience marginalization from being a part of our workforces, we’re in a very, very different space.
And inclusion and equity work, in the Fearless Futures conception is ultimately about challenging oppression. What does this article tell us about the business case and how it can be used? Well, my first reflection is that the research paradigm, this idea that we must draw on research to prove the need for action when it comes to ensuring the participation of marginalized people, people who are marginalized historically and in the present in our companies, it tells us that this is a really, really dangerous terrain to engage in, because research can be weaponized.
When we go down there, my research says the following. And somebody else says, my research says the following and we end up with competing research cases. What we’re actually doing is engaging in a battle about which research has the most validity. It’s no longer about engaging in action to ensure that those who are historically and presently disenfranchised have what’s rightfully theirs and what they should have access to. It also ignores the fact that research is not neutral. Who does the research, who pays for research? What agenda is deemed researchable and valuable in the case of doing research and what’s pursued is all informed in any case, by the power asymmetries that are at the root of the inequity that supposedly inclusion and equity work is meant to be rectifying.
So, we end up in a sort of catch 22, if you will, where we really are within the context of this research paradigm that the business case brigade, ultimately, are really wedded to. And that’s also why we don’t have any research on whether or not white people are detrimental to business bottom line. Because nobody with any power influence is going to fund such a question because of the very default assumption that white people along with other privileged groups have an innate and entitled right to be within those contexts. The other dimension to the problems with the business case paradigm is, of course, that there is in fact a business case for injustice. And that this is something that often sort of miraculously disappears from the context. As though most businesses, when committed to the profit motive, don’t actually have a very, very strong rationale to perpetuate injustice in the first place.
And to that end, I want to, to kind of highlight that slavery was profitable, it’s why it lasted so long, and why white slave owners were desperate for the institution to remain. What’s more, when slavery was eventually abolished by the UK, it was British slave owners who received government reparations in 1833, to the tune of 16.5 billion pounds in today’s money. So, slave owners receiving government reparations, rather than people who had been enslaved, is what occurred in the middle of the 19th century. The priority in that context was those who had already been materially benefiting from this violent institution. This is what they demanded in that context. It’s audacious, it’s arrogant, it’s entitled, and yet exactly what we can expect when we have a deep understanding of the ways in which oppression operates.
When we’re thinking about inclusion and equity work in our organizations, and this example that I’ve just shared might feel very distant from what we’re doing in the modern day in our organizations. What I think it really highlights for me is that the ways in which we go about doing things are just as important as the outcomes that are produced from the inclusion and equity work that we might be doing. That’s to say that this isn’t a traditional approach that says the means justify the ends.
I think what we really need to honor is the fact that the means and the ends must have the same principle at the root that everyone is working towards. Ultimately for businesses, it is profitable not to pay people a proper and dignified wage, there’s no two ways about it. And that is of course, totally not in line with inclusion and equity principles, but it is something that is common practice across many, many companies. Also, they might say that they’re deeply committed to diversity and inclusion.
The reason why people aren’t paid proper and dignified wages in many companies where they might have their inclusion and equity claim is that there are material benefits to the ways in which value is organized in their companies. And ultimately, there is profit to be had from paying certain people within an organizational context, wages that are not dignified. The people that benefit in those contexts are the white people, the men, middle class people, non-disabled folks and beyond, who are simultaneously demanding business cases to allow when to let in those who have been historically and who are presently on the margins of those resources and that power.
It’s also why low paid insecure work is often at the center of the companies who have highly valued technology platforms. For example, where they couldn’t survive or exist without that low paid insecure work. The low paid and secure workers are essential to the business structure that makes it possible for other more valued staff to take home big salaries. And there’s no surprise, I’m sure, in thinking about the identities of those within companies that rely on low paid and secure workers. There’s no surprise I’m sure, for us to articulate that they’re most likely to be white, middle class, non-disabled, and to be men.
So once more, there’s an incompatibility, perhaps at the heart of the commitment to deploying a business case, and the fundamental principles of what it is to do inclusion and equity work. The other area that I think it’s really useful to touch upon is, what it means to know that your existence within a certain context is dependent on producing the profitability that everybody’s relied upon to even have you in a company in the first place. So, what does it mean to be somebody in an organization where your presence is articulated through wider company communications by your CEO, as being rooted in whether or not you’re going to deliver some magical increase to the company’s profitability in line with various research that might be located on the company internet. That is a burden that doesn’t create the conditions for people to thrive.
One of the things I think that’s most important to being able to thrive is in fact to be able to fail without it being weaponized and used against you or worse. One person’s individual failure because they belong to a marginalized group, being used as a reason to prevent other people from that group ever being permitted to be within a company context again. Needless to say, that one of the ways oppression works is to attribute negative behavioral characteristics to a marginalized group as a whole while individualizing that very same negative behavior characteristic or attribute to those who don’t experience oppression but rather benefit from that very system. That’s something that’s really important to hold on to when we’re thinking about the wider dynamics of this work.
And of course, one of the things I often think about is, you know, after the financial crash of 2008 and the significant regulatory and institutional failures, for example, from multiple financial institutions, almost all run by men, almost all who are white; Nobody declared war: “we can’t hire white people again and we certainly can’t hire men again, because they’re simply too risky, too dangerous, and they might bring the world economy to its knees again, that simply was not a conclusion that was widely held or acknowledged by anyone who you know as far as business cases go, bringing the global economy to a standstill probably doesn’t meet the criteria of a good business case.
Of course, we also need to think about who really suffered and was made vulnerable in the context of the financial crash of 2008. And it certainly wasn’t those who ended up with payouts upon exiting companies that they’d ultimately failed. It was those who are in communities very much outside of that, whose prospects were deeply damaged through subprime mortgage lending, for example. And I’d go out on a limb and say, those are going to be people who come from marginalized backgrounds, as well. No one listens to the business case, anyway. When you look at some of the data that the business case brigade are able to present, it’s really compelling data, like the increases that people could see in their EBIT margin, their return on equity, their return on investment, is extremely high often.
And there are very few other things that companies could do when you kind of look at those performance metrics to improve their companies and yet, despite this being churned out, sort of weekly almost it feels in many mainstream platforms, and people writing blogs and articles all about it. Despite this, we’ve seen almost no progress. We’ve not seen companies reorganize themselves in line with the kind of potential benefits of having more diverse communities included within the companies where they work.
So, the business case hasn’t even done what everyone is very committed, for those who use it anyway, they’re very committed to doing, which is apparently communicating something very rational to business people because apparently they are rational people. But of course, it’s really rational, actually, not to be invested in any sort of change when the status quo already really, really works for you.
And the issue we have, of course, is that self interest in any case probably isn’t a useful departure point for inclusion and equity work. Precisely because to do inclusion and equity work deeply and truly means, ultimately de-prioritizing yourself. We have a totally irreconcilable situation. If to do inclusion and equity work as somebody that currently benefits from the status quo, the only way through in doing this is of course, not to be accruing those benefits. This irreconcilable position is probably why the business case has failed.
What those of us who don’t experience inequities must confirm is that the system has been designed and rigged in our favor already, right? We are already, even if we don’t intend it to be or we don’t notice it, already reaping the benefits based on being white, for example, or a man or non-disabled, middle class, cisgender, heterosexual. And the problem we have is that when those of us with the power to redirect strategy, time, resources in our companies don’t experience inequities, are demanding a business case as proof that marginalized groups have a right to be in our place to work (because that’s what we’re ultimately saying, if we’re demanding proof), we’re saying we need proof that you can be let in. We are in fact, in doing that, continuing to perpetuate inequity and continuing to exclude.
And I think that’s something that needs communication, that it’s a terrain that people don’t have a right to be in until they meet the threshold that you’ve set and that that’s a threshold that’s only going to qualify when you materially benefit, that is a very, very, very concerning, ineffective and dangerous departure point for anything meaningful when it comes to doing inclusion and equity work. That we need further advantages to engage and acknowledge the humanity of others, is audacious and arrogant at a minimum.
Now, the business case brigade might well find this very tough to stomach. Even upon writing articles on this subject previously people still say: but how else can we get through to business leaders in our companies? This is all that they listen to! The first thing I’d say is that they’re not listening and this is something that we do need to kind of be clear about, they’re rarely listening to the business case for the reasons I’ve just shared. But also, it’s likely to be very, very short-lived interest. Because what we’ve certainly known is that the amount of energy, the amount of hard work, the amount of persistence, and connection to failure, that happens in organizations where there really is that deep commitment to challenging inequity in the workplace requires such an enormous amount of labor, and courage and kind of perseverance that some potential future increase in profitability is really unlikely to compel somebody to hold the line in their company when push comes to shove, because this is really, really hard work.
And they’re also likely, if you were a CEO, who in the first instance was sort of compelled by the business case, you’re also very likely to engage with teams or peers who are probably very, very profitable already and who you won’t want to necessarily upset. And doing inclusion and equity work might mean that some people are upset, it might mean certain people don’t like you, it might mean certain people don’t want to work with you. And all of those consequences can be considered challenging for those at the best of times who are very committed.
So, imagine if you’re only lured in by a series of reports, rather than a deep, emotional commitment to doing something because it’s right, knowing that there’s going to be significant personal and institutional challenge along the way. Because of the experiences that we’ve had across many, many organizations, I’m just not convinced that some numbers on a page are going to be sufficient to weather the various frictions that emerge, when, what we’re talking about here is the reorganization of power in the companies that we work in. We need to be working with people and we’re really fortunate as an organization that we do that where that alignment does exist. Where on some level there is a commitment, a personal commitment to engaging in the hard work of redesigning the ways in which our organizations exist.
The only thing we’ve ever seen, is the will, the will to do so and the courage to do so. What does that mean for business leaders who don’t have that? That’s probably a question for another episode, but it’s likely that we should be investing our time elsewhere if we can, or simply making the case within a paradigm that is about what’s right. And ensuring that that becomes our primary focus, and that we don’t lose sight of that and that we hold on to the fact that inclusion and equity work is about a principle. It’s not about competing research agendas, it’s not about whose research was the most compelling. It’s recognizing that businesses that are for profit, have a profit motive, and that injustice is profitable, has been, and currently is profitable and that that’s also irreconcilable with doing inclusion and equity work, so something has to give on that front.
The business case doesn’t create the conditions for people to be able to thrive when there’s a burden of proof hovering over their head about how they’re going to make people who don’t experience the inequities that they do more materially better off and we know it doesn’t, it doesn’t work at all. So, if you are in the business case brigade, hi, I hope that you’ve enjoyed some of these thoughts. And if you’ve been tempted by the business case in the past, perhaps it’s something to park for now, and to enter a more courageous space to say, let’s do what’s right because we believe in it and let’s be fearless as we do so.
Speaker: Thank you for listening to the Fearless Futures podcast. If you like what you hear, be sure to subscribe, rate and share this episode with a friend. If you’re interested in learning more about the work that we do at Fearless Futures, please visit our website fearlessfutures.org. ’Til next time.