Diversity and Dilution
When The Network Journal held its first diversity roundtable on 2010, the very concept of “diversity,” with its race and gender association, was still struggling for respect. “Diversity, while still important in many organizations, has really descended on the priority list, where, perhaps publicly, people are talking about it, but where the rubber actually hits the road it’s not high on the priority list. If it doesn’t bring in some kind of revenue, or you haven’t linked it to the business, then it becomes even less of a priority,” said Sherry Snipes, at the time director of diversity and inclusion at The American Institute of Architects. Snipes, a participant in the TNJ roundtable, is now the founder and CEO of Global Diversity Collaborative and president and co-founder of the Diversity Academy Awards + Leadership Institute.
Yet, the shift away from diversity to the broader concept of “inclusion” had already begun. Jackie Glenn, at the time chief diversity officer in the Office of Global Workforce Inclusion at EMC Corp., described this shift during the roundtable. “When you hear ‘diversity,’ a lot of the time it comes with a negative connotation, like, ‘Here we go again; here comes the woman.’ You really want to move the needle and really light a fire under people so they know that it’s not just about race and gender. There is so much that makes up diversity: race, gender, religion, sexual orientation —just a myriad of things. Inclusion helps you to take a broader brush of the entire program. So more and more companies are shifting to include “inclusion” either in a title or in everything they do.” Glenn now is vice president of global diversity at Dell Technologies Inc.
Two years later, the shift to “inclusion” seemed complete. “Our goal is to build a larger, diverse pool of contractors who can build our projects safely, timely and on budget. The more contractors we have bidding on our projects, the greater is the downward pressure on pricing. So we don’t view this as an expense; we view it as an investment,” Heide Gardner, chief diversity and inclusion officer at The Interpublic Group of Companies Inc., said at TNJ’s 2012 diversity roundtable.
In the years that followed and in recent weeks, interviews and conversations with Black executives and business owners reveal frustration with what some describe as a dilution of the original intent to end discrimination against Blacks in the workplace, including in C-suites and board rooms, as well as in the procurement of public and private sector business contracts. Most acknowledge progress in terms of the number of Black professionals in corporate jobs — albeit predominantly at junior levels — and in the number of corporations and government agencies buying goods and services from Black-owned businesses. However, they contend, the evolution of “nondiscrimination,” “equal opportunity,” and “affirmative action” as they applied to Blacks from the 1950s through the 1980s to “diversity,” “diversity and inclusion,” and even “corporate social responsibility” has meant many more players competing essentially for the same opportunities. “The ‘inclusion’ word is brought in a lot more in recent years,” says Allen Love, executive vice president and deputy global anti-money laundering (AML) officer at TD Bank.
After more than half a century of struggle or change, and despite examples of remarkable success for professionals and entrepreneurs alike, Blacks still are underrepresented at the top, and at any level in some industries, both in the workplace and in supply chains. The struggle for parity continues. It is one that Benjamin E. Jones knows well. “Although the pool has increased over time, you have more players taking advantage of the pool. Before all the other groups came into play, it was minority — mainly Black — business,” says Jones, president of Lightning Supply Co. “The impact of adding the other groups definitely has a diluting effect because you didn’t increase the pool of opportunity. Yes, in time you have increased the pool to the extent that more corporations were beginning to buy more, were entering into the pool of procurement. But every time you add another player, it does dilute.”
Jones’ history in diversity harks back to the 1960s, when he worked for the Interracial Council for Business Opportunity (ICBO), a private sector group created in 1963 with financial backing from philanthropist/venture capitalist Laurance Rockefeller, Exxon Mobil and others to foster minority business growth through education and mentoring. He later served as president of the National Minority Supplier Development Council (NMSDC), which was preceded by the National Purchasing Association, and now serves as chairman of the National Minority Business Council Inc.’s board of directors.
“In the late 1960s into the late 1970s, many of the Black corporations, in particular the Black oil distribution companies, were able to get contracts under the 8a program, especially to distribute to military institutions. Those contracts were lucrative,” Jones says, referring to U.S. Small Business Administration’s business development program for economically and/or socially disadvantaged business owners, which was created under Section 8 (a) of the Small Business Act. “If you look at the entrance of women into the program from 1980 going forward, when corporations really entered into women programs, women got almost half the business out there within five to six years. In effect, if you had a procurement program and had minorities and then you added a women program, the dollar value that has gone to the women has increased tremendously over a short period of time.”
Today, SBA statistics show, Black-owned businesses receive just 2 percent of the loans the agency awards to diverse businesses, while women-owned businesses get 14 percent of those loans. Federal contracts to Black-owned small companies declined about 1 percent in the year that ended Sept. 30, 2012, from the previous fiscal year. In fiscal 2011, awards to the Black-owned businesses plunged 6.5 percent from fiscal 2010, more than four times the decline in all contracts. The declines incensed the National Black Chamber of Commerce. “At the beginning of the Civil Rights Act of 1964, the federal government was doing less than 1 percent with Black firms. As of fiscal year 2010, the federal government is doing 0.3 percent with Black-owned firms,” the group notes in an official statement. “Fortune 1000 firms have done no better. There has been a lot of public relations and expositions, but true competitively won contracts remain rare and few,” it adds.
Even so, the number of Black-owned businesses is increasing faster than any group, ethnic or otherwise, growing more than triple the national rate between 2002 and 2007 alone. In 1993, there were just 300,000 Black-owned businesses doing $33 billion in annual sales. The advent of diversity and inclusion notwithstanding, by 2012, there were 2.6 million Black-owned firms, doing $150.2 billion in business, up 9.2 percent from 2007 when Black-owned firms numbered 1.9 million, according to the U.S. Census Bureau’s most current figures. At the same time, the capacity and range of industry sectors of Black companies expanded tremendously, spawning billion-dollar enterprises like TLC Beatrice International Holdings, World Wide Technology and Act-1 Group. The National Black Chamber of Commerce argues that this growth is hardly the result of government legislation or programs and private sector interaction. Rather, “it has basically come from Black firms linking with their respective communities and ingenuity,” the chamber says.
Indeed, community pressure led to the emergence of Black companies doing hundreds of million dollars worth of business with major corporations in the 1970s and 1980s, affirms Jones, whose Teaneck, New Jersey, company distributes safety and cleaning solutions and products and back then made millions a year from Con Edison contracts. “If you look at procurement from an evolution basis, the effort evolved from 1972,” Jones says. Corporations purchased about $85 million from minority — mainly Black — businesses every year because they got more involved in dedicated programs, joining the NMSDC and local efforts such as BLEDCO in Brooklyn, the Chicago Economic Development Corp., National Business League and Urban League, he explains. In buying more from minorities, they hired more people, leading to programs within the purchasing departments and subsequently dedicated departments for doing business with minorities. “One company, a $350 million company, sold leather seats to General Motors. It took a concerted effort on the part of corporations. But that’s not what corporations are doing today,” Jones says. “The effort changed as we got further on. Diversity is the latest in that change. There’s a total dilution of the effort.”
In the workplace
In 1987, Clifton R. Wharton Jr., Ph.D., became the chairman and CEO of TIAA-CREF, making him the first Black CEO of a Fortune 500 company. More than 10 years later, Franklin Raines became the second Black person to lead a Fortune 500 company when he became the CEO of Fannie Mae in 1999. Ten years after that, Ursula Burns became the first Black woman to head a Fortune 500 company as the CEO of Xerox. At the time this issue of TNJ went to press, only five Blacks headed Fortune 500 companies, down from the all-time high of seven in 2007. Women, meanwhile, headed 21 companies on the 2016 Fortune 500 list.
As it relates to Blacks, there is more diversity and inclusion at lower levels within an organization than there are at senior level, many say. “Organizations do a very good job of attracting diverse talent, but the development of that talent is not as robust as it should be. There’s usually a cliff. After three to five years, a lot of diverse persons who were brought in fall of the cliff because they have not been developed,” says Love, who also chairs TD Bank’s Minority Leadership Subcommittee. “What happens is, your midlevel employees in that pool has shrunken. You want to be active in promoting senior people, but you don’t have it in your pipeline. People get frustrated and leave. They take those three to five years’ experience somewhere else and you don’t have that pipeline of talent to put people in those senior roles. In my [anti-money laundering] industry, the individuals of color to take on those roles have not been developed.”
When the minority subcommittee he chairs meets, the biggest concern discussed is “moving the needle” — ensuring opportunities are available for minority employees within the organization at all levels, not just the junior level. Love says, “I’ve heard people say it’s one thing to be invited to the dance, it’s another to be asked to dance.”
Michael Welp, co-founder of White Men As Full Diversity Partners, a diversity process-consulting firm to Fortune 500 companies, says the annual estimated cost of replacing the more than 2 million workers who quit their jobs due to unfairness and discrimination is $64 billion. Replacing an hourly worker costs companies somewhere between $5,000 and $10,000, and it’s more than 10 times that amount for executives, he says. Welp’s firm is on a mission to “inspire leaders, especially white men, to examine their mindsets and assumptions, in order to shift behaviors that create sustainable and inclusive work cultures, which in turn drives business results.”
Meanwhile, concerns about Black underrepresentation being subsumed under inclusive diversity are being discussed in quiet conversations. “I do hear those concerns. As you attend different conferences, those concerns come up in the hallway or at the table, not in the main agenda. I think we need to make sure we continue to push for the traditional minority — that we continue to push and make sure people recognize that, ‘no, it’s not over. The journey for us is not complete. There are things we face,’ ” Love says.