I think it’s timely that I write my first blog a little more than a month from the beginning of a new political environment here in the United States. I am a diversity, equity and inclusion (DEI) consultant and pubic speaker in a time when companies are dropping their DEI programs left and right. Companies like Tractor Supply, Harley-Davidson, Toyota, Microsoft, Ford, Molson-Coors and others are either scaling back their DEI initiatives, restructuring them, or dropping their DEI programs entirely. Some companies are shifting to what’s known as MEI rather than DEI.

What is MEI?

You might be wondering, “What is MEI?” MEI, or merit, excellence and intelligence is a counter-DEI term coined by Elon Musk and Alexandr Wang. Yahoo Finance has a great article detailing what Wang means. Now you might be thinking, “But Teri, don’t we always want to hire our new employees based on these qualities? Isn’t that what we’re looking for in any employee?” The thing to consider is hiring new talent is much more complicated than just hiring the person who does the best job and is the smartest.

When a company is looking to hire for a new role, there are multiple factors to take into account and a person’s intelligence and merit are only part of that equation. Other things can include:

• Emotional intelligence: the ability to understand and regulate one’s emotions. This is especially important if the role is a manager, leader or public facing.
• People skills: A person may have amazing technical skills, but if they don’t have the people skills to go along with it, they may not be a good fit for manager, or public/customer facing roles. It doesn’t mean they aren’t hirable, just that they may be better suited for some roles than others.
• Corporate culture fit: As a company, you want to hire people that fit well within your corporate culture. It doesn’t make sense to hire a laid back person when your company culture is very formal.
• Role and skill fit: While it’s important that someone have the right skills for the job, making sure they are the right person for a role is much more of a balancing act. Just because a person checks all the skill boxes doesn’t mean they are the right person for a role. We’ve all heard the horror stories about a person with solid technical skills being promoted to manager and being terrible at it and miserable because while they are good in the technical role, they aren’t good (and more importantly aren’t happy) in the manager role.

In short, merit, excellence and intelligence might be great to consider in performance reviews and promotions or creating KPIs, they aren’t the only things to consider when building a successful business.

Why are companies dropping DEI?

Forbes has an excellent piece on “Why Business Leaders Are Pulling The Plug On DEI” I recommend you take time to read. The highlights include:

• Many companies made empty promises around DEI after the George Floyd murder
• Economic uncertainty
• The misconception of “wokeness”
• Companies lack clear metrics around the benefits of DEI and what it’s doing for their organization
• Ongoing racism, trans/homophobia and misogyny
• Executives unwilling to defend DEI initiatives in the face of backlash

I think it’s important to point out that yes, some companies are completely trashing their DEI programs, or even going so far to consider replacing DEI with MEI. However, some companies are realigning their DEI programs to better fit their organizations while publicly downplaying their DEI involvement. At the end of the day I think the results will be the same. They will lose valuable employees who feel their companies are no longer safe places for them to work and as a result their profits will go down.

Why DEI is Vital

Building and growing a successful organization is complicated. You need a solid product or service to sell to customers to start. That’s a given. I’ve always held the belief that when you take care of your employees, they will take care of your business. A McKinsey series of research beginning in 2015 has shown that companies with solid DEI programs outperform their peers by 39% who don’t have DEI programs. So you might be asking yourself, “What do DEI programs really do?”

DEI programs align the employees with the company’s goals into a single cohesive direction.

Now let’s look at how DEI does this. First and foremost, companies have to understand that DEI is a long-term investment. Trying to do something short and sweet won’t achieve the results.

Human Resources

Usually when you think of a DEI program you think of Human Resources first. I like to think of it as HR is the starting point of an organization’s DEI program. It includes everything from restructuring recruitment and hiring practices to be more equitable, reviewing benefits to ensure marginalized groups have appropriate coverage, changing employee recognition and feedback programs and provide opportunities for employee engagement and retention, and most importantly collect data about marginalized communities within the organization and how well the organization is doing in the eyes of those communities.

Legal & Ethical Compliance

Companies who bring in external training on different types of bias can improve their leadership culture’s ethical obligations. This translates not just into better managers/leaders, but also better relationships with customers, channel partners and vendors. DEI initiatives can identify and address discriminatory policies and practices which creates a more equitable workplace reducing the likelihood of discrimination lawsuits.

Innovation, Productivity & Financial Performance

The same McKinsey study mentioned earlier found that the top quartile of companies who are ethnically diverse are 36% more likely to financially outperform their less diverse peers. .Similar results were found with companies that hire women leaders. Companies that not only have a diverse workforce, but encourage that workforce to be authentic are found to be more innovative and productive thereby increasing financial performance.

Environmental & Social Governance

Environmental and Social Governance (ESG) is the framework businesses use to evaluate their impact on the environment, society, corporate governance practices and other measures around sustainability. DEI initiatives are part and parcel of an organization’s social governance. It’s important to remember that a company’s employees are its social fabric.

When an organization truly builds DEI into the very fabric of its DNA, then the goals of the organization become the goals of every employee, customer, and community that organization touches.

Incorporating DEI goals and supporting your employees frees them to live their lives authentically, which in turn increases their job performance. It’s important for leaders of organizations to understand that yes, delving into DEI can be scary, there can be backlash. But what is most important to you? Is it the fear of losing a few customers, or is it more important to take care of your employees?

Do you need help to understand how DEI can help you achieve your company’s goals? Kyanite Consulting is here to help you meet your goals, provide training and create a safe environment for your employees.