The equity imperative - The need for business to take bold action now February 2021 - Deloitte
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The equity imperative The need for business to take bold action now February 2021
Contents
Introduction 3 About this document
We created The equity imperative with the goal of inspiring better understanding,
deeper insight, and more meaningful action now toward greater racial equity. It
Part I: Assess 6 is composed of three linked sections that acknowledge the legacy and realities
of racism in the United States, imagine various potential futures for racial equity
in the United States over the next decade and beyond, and suggest specific
Part II: Look ahead 20 steps leaders can take to promote more equitable outcomes, both in their
organizations and more broadly. Each section can be read separately, but they
are intended to work together to build the case for urgency and new action.
Part III: Act now 37
The ideas, insights, and perspective in The equity imperative were informed by interviews with a diverse group of
“Changemakers”—leaders in the public, private, and social sectors committed to driving racial equity—conducted
in fall 2020. Many of those ideas were further enriched with input from dozens of practice leaders across Deloitte,
whose practical experience in the realities of business today helped guide these recommendations.
While our research centered around the United States and its unique history, culture, and challenges, we believe
it is broadly applicable to leaders of global organizations. Its focus on the unique experiences and history of Black
people in this country is not meant to suggest that other racial or ethnic communities, not least the indigenous
peoples of North America, do not also have long histories of bias and exclusion in US history that should
be addressed. And while this perspective focuses on private sector business and their leaders, many of the
recommendations can be applied across public and social organizations.
A note from our Board Chair | February 23, 2021
Last summer, following the death of another Black equitable future looks like, and beginning to take the challenges that are disproportionately impacting Black
man at the hands of police, Deloitte CEO Joe Ucuzoglu bold actions needed in order to reach it. communities and other marginalized communities.
and I spent significant time listening to the serious
While diversity and inclusion efforts are clearly And we should build together: within our own
concerns of our Black colleagues. It was a humbling
necessary to create that future, our current focus is organizations, and as business leaders, sharing what
experience, and a galvanizing one, reaffirming just
on equity. Because equity isn’t just about efforts, it’s we know, and gleaning what we don’t, from colleagues
how much we don’t know—and just how much we
about results: measurable and meaningful outcomes across markets and communities.
have to do.
in the lives of our people, our communities, our
We know this work won’t be easy. It will take empathy
In the months since, we have seen Black Americans country, and our world. Systemic bias and racism are
and vulnerability, tough conversations, and constant
die from COVID-19 at far higher rates than their White what we are against; equity is what we are for.
self-reflection. But the stakes are too high to settle
counterparts;1 we have watched the pandemic take
Fighting systemic bias and racism—tearing down the for inaction. The rewards of our efforts, measured in
an outsized economic toll on Black communities;2 and
age-old systems and challenging the long-held beliefs every meaningful way, will be truly transformational.
we have felt racial disparities in connection with the
that harm the Black community—is necessary to
insurrection at the US Capitol.
achieving equity. But dismantling alone is insufficient.
These experiences have crystallized the urgency of To reach equity, we also must build it.
deepening our understanding and taking meaningful
As we build, we should consider the environment Janet Foutty
action. That is why we have dedicated ourselves to
around us and take a holistic view of the issues we Executive Chair of the Board
learning about the systemic bias and racism that
face. Today’s leaders are confronted with enormous Deloitte US
plague the Black community, reimagining what an
Introduction / Assess / Look ahead / Act now
Racial equity: Beyond diversity and inclusion
For decades, diversity and However, while many businesses have become specifically equity for Black people, who have suffered
inclusion have dominated both more diverse and inclusive, their efforts have the consequences of systemic racism in the United
yet to change the economic and social outcomes States for more than 400 years.
the corporate response to for millions of Black Americans. That is why a focus
racism, and those initiatives on equity is critical. Equity is not an initiative or a Many Americans recognize that the status quo is
have, most notably, helped program—it is an outcome. unacceptable. Our perspective is that organizations
and business leaders have an opportunity and
many organizations recruit Equity will be the result of many mutually reinforcing responsibility to do more. With bold action and
and retain new talent. actions that dismantle systemic racism and inequity. sustained commitment, they can challenge beliefs,
And while equity for all identity groups is important, change behaviors, and create a more equitable future.
a critical place to start is with racial equity, and
Introduction / Assess / Look ahead / Act now
Part I: Assess Part II: Look ahead Part III: Act now
Why racial equity now? Visions of the future, lessons for today Actions to drive systemic change
We examine the problem of inequity in American We describe four scenarios created to imagine We challenge the orthodoxies holding back
business and society and make the case that the very different potential futures for racial efforts to achieve racial equity, introduce our
business community should lead the way equity in the United States. These stories about Equity Activation Model to help organizations
toward racial equity and, more specifically, the future can help leaders consider the impact of identify how they can exert their influence to drive
equity for Black individuals living in the US. their actions and some of the variables that would racial equity, and offer specific suggestions
help determine how far along on the path toward for action across an organization to effect
equity we might get over the next 10 to 15 years. measurable and sustainable change.
Introduction / Assess / Look ahead / Act now Part I: Assess Why racial equity now?
Introduction / Assess / Look ahead / Act now
VOICES OF CHANGE
Why racial equity now?
“There’s a difference in this
moment. This is a time when
Calls for action against systemic racism and racial Many leaders recognize the imperative to respond to companies can lead the
injustice are not new. But recent events—from the these demands for change. A January 2021 Fortune/ change. If we get them to take
COVID-19 pandemic and ensuing economic crisis Deloitte CEO survey found that 94% of CEOs report a comprehensive approach,
that have disproportionately hurt Black Americans3 that diversity, equity, and inclusion (DEI) are strategic it will expand the pie of their
to numerous public killings of Black people—have priorities for them as CEO, and 72% plan to disclose business and widen the
sparked a new era of heightened awareness, DEI metrics to the public.6 road for People of Color.”
understanding, and expectation for action, including John Rice, founder and CEO,
by the business community. Despite agreeing that change is needed, many leaders Management Leadership for Tomorrow7
have come to realize how difficult it will be to create
Sixty-one percent of Americans now believe the meaningful, measurable, and sustainable change.
United States needs new civil rights laws to combat They are left with the question: How can we make “There is a power in changing
discrimination against Black Americans—a nearly real progress toward racial equity? the narrative, where we can
threefold increase from 2011.4 all believe and imagine things
being different from the past.”
An even greater number of Americans—77% Cathy Engelbert, commissioner,
—say companies must respond to racial injustice Women’s National Basketball Association8
if they expect to “earn or keep [public] trust.”5
Introduction / Assess / Look ahead / Act now
Racial equity is an outcome VOICES OF CHANGE
To start, organizations must move from focusing on on racial and ethnic minorities and other marginalized “The most harmful notion that
good intentions to focusing on good results that can be identity groups. And just as business leaders focus on humanity has is that power is
measured against a demanding standard: equity. Racial financial and operational outcomes rather than just finite. Power is not finite, it is
equity for Black individuals will exist when they have the inputs, they must also focus on the outcomes of their infinite. Empowering others
same power, access, and influence as White individuals. efforts to drive systemic change. doesn’t reduce your power.”
Dr. Freda Lewis-Hall,
Equity necessitates an intentional focus on the needs To achieve racial equity, organizations must be former chief patient officer
and chief medical officer, Pfizer9
of the historically marginalized. It requires deliberate willing to transform their beliefs and values and then
and often courageous actions that acknowledge and change their decisions and behaviors. That work
eliminate the societal inequities ingrained in people, should start inside the organization, but also extend
processes, and systems. It takes commitment to to the full range of their external relationships in the “We need leaders transcending
examining and redressing the bias and racism built marketplace and society. their own short-term interests
into everyday decisions, which may appear fair on the for the greater long-term good.”
surface, and which may have even been designed with Steven Olikara, founder and CEO,
good intentions, but ultimately have disparate effects Millennial Action Project10
Introduction / Assess / Look ahead / Act now
Inequity in American business by the numbers
Among all US-based companies Black men, on average, earn Enrollment in American postsecondary Yet, Black individuals with
87%
with 100 or more employees, institutions will climb a college or advanced degree are
15% 1.3x
Black people hold just
3% of executive or
senior-level roles.11
of what the average White12
male worker earns,13 while
Black women earn only
from 2014 to 2025, with larger
proportional increases among
more likely to be underemployed*
than their White counterpoints.16
Today, 1% or less of Fortune 500
63%
minority students than white
CEOs are Black.
students.15
of this same amount.14
* i.e., their potential available time underutilized, whether through unemployment,
involuntary part-time work, or marginal attachment to the labor force.
Introduction / Assess / Look ahead / Act now
Inequity in American business by the numbers
61%
Only Black employees are overrepresented In just the first two months of the
1%
in low-paying frontline jobs and COVID-19 pandemic, the number
non-technical industries.18 of Black-owned small businesses fell
41%
of White households own
equity in the stock market
of venture capital-backed
(median investment: $51,000),
entrepreneurs are Black.17
compared with
compared with
31%
of Black households
17%
for White-owned small businesses.20
(median investment: $12,000).19Introduction / Assess / Look ahead / Act now
Racial equity will create business value
Racial inequities remain The Black population …as is Black
visible in much of the data is growing purchasing power
about business and the
workplace today. But there As of 2019, Black Americans Despite the widening racial
is hope: The organizations numbered 43.9 million people— wealth gap between Black and
or around 13.4% of the US White Americans,23 Black buying
that work to right injustices population.21 That number is power is rising—from $320B in
and cultivate equity have estimated to grow 38%, to more 1990 to $1.3T in 2018.24
enormous potential to reap than 60 million people, by 2060.22
the benefits. That’s because:Introduction / Assess / Look ahead / Act now
Consumers,
especially younger Racial equity is
ones, expect action ...as do workers ...and investors good for everybody
Ninety percent of all Gen Z support Sixty-seven percent of job seekers Public and private investors are Not addressing key racial gaps
the Black Lives Matter movement.25 (and 89% of Black job seekers) increasingly demanding that is estimated to have cost the
Additionally, 94% of that generation report that a diverse workforce is organizations take action on American economy $16 trillion
expect companies to take a stand important when considering a job racial equity and requiring that over the past two decades. If
on important social issues, and 90% offer.27 Nearly 50% of Gen Z believe companies disclose annual data on the gaps are closed today, it is
are more willing to buy products that employers should be doing more the composition of their workforce estimated that $5 trillion can be
benefit the environment or society.26 to promote inclusion, and 72% by race and ethnicity. For example, added to US GDP over the next
believe racial equity is the most Vanguard Group, the world’s five years alone, including tens
important workplace issue today.28 biggest mutual fund company, and even hundreds of billions
has published expectations for more dollars spent on food,
public companies to disclose board housing, apparel, transportation,
diversity measures and make and entertainment each year.30, 31
progress toward increasing the
diversity of their boards.29Introduction / Assess / Look ahead / Act now
Racial equity These seven principles can
help guide the way
VOICES OF CHANGE
requires a “The equity imperative requires
new approach 01 The business
bold and active engagement of
the most senior leadership of
organizations to effect change.
community
Boards and CEOs must probe
Achieving equitable outcomes will
must lead Equity is a core 02 and challenge leaders to drive
business issue
require coordinated and sustained better results. Delegating
effort across the business community, 03 Equity requires responsibility to chief diversity
as well as a mindset shift. While past sustained officers is no longer an option.”
DEI initiatives have made progress for commitment Every enterprise 04 Valerie Irick Rainford, CEO, Elloree Talent
some people in some places, the data should be a social Strategies
make clear that US business still has a
05 Beliefs drive enterprise
long way to go on the road to equity.
behavior, behavior
changes beliefs
The power to 06
spend is the
07 Collective action power to change
amplifies impact01
Introduction / Assess / Look ahead / Act now
VOICES OF CHANGE
“Government’s job is to set the floor,
The business
the minimum standards to which
we all must adhere, but business’s
community Equity is a core
job is to strive for a high ceiling.”
Valerie Jarrett, former senior adviser to President
must lead business issue
Barack Obama; board member, Walgreens
Boots Alliance, Ralph Lauren, Lyft, 2U, Ariel
Investments, and Sweetgreen32
Business plays a central role in the journey Traditionally, organizations have siloed DEI
toward racial equity. Businesses have the power “It needs to be part of the personal
efforts in human resources or have made them
to effect meaningful change internally while accountability for all leaders and
discretionary (e.g., philanthropic donations). In
influencing social behaviors, rules and every individual in an organization
order to drive meaningful change, organizations
standards, and government policy. to institutionalize new systems and
must view equity as an imperative for its
expand their thinking.”
business strategy and all parts of growing
the business, incorporating it into every aspect Dr. Sally Saba, chief inclusion
and diversity officer, Medtronic33
of what they do (e.g., marketing, procurement,
finance, technology), at every level of the
organization. Workers must hold leaders
accountable, and vice versa, rewarding outcomes
over activity and valuing impact over intent.03
Introduction / Assess / Look ahead / Act now
VOICES OF CHANGE
“With DEI work, unlike many
Equity requires
other parts of a business, it can
seem like you get a medal for
sustained
just trying. This work is strategic,
requires investment, initiative, and
commitment Every enterprise headcount. We need to apply the
same level of rigor to DEI that we
should be a social apply to everything else we do.”
enterprise
Bahja Johnson, head of Customer Belonging,
Equity requires much more than a Gap Inc. 35
one-off initiative—it must be embedded
into how a company does business, and it
must be sustained over time. Organizations “In the long run, companies are
Organizations will benefit from considering
must provide the education and dedicated better served thinking about
their role as a “social enterprise,” 34
resources leaders need to continuously build stakeholders. Shareholders will, in
measured by their impact on all stakeholders—
toward, and hold to, equitable outcomes. fact, make more money if business
including shareholders, the workforce,
customers, and society as a whole. leaders focus on all stakeholders.”
Stakeholders expect businesses to make Doug McMillon, CEO, Walmart;
this shift; shareholders will benefit from it. chair, Business Roundtable 3605
Introduction / Assess / Look ahead / Act now
VOICES OF CHANGE
Beliefs drive “There is a strong American belief
that people are poor because they
behavior, behavior The power to
don’t work hard enough, that if they
worked harder they could get out of
changes beliefs spend is the
poverty. We need to change that.”
Dr. Beverly Daniel Tatum, president emerita,
Spelman College
To achieve equitable outcomes, organizations power to change
must overturn common beliefs and “When you think about how
behaviors that get in the way. Organizations businesses spend money and
can help individuals adopt new behaviors Organizations have the power to drive
who we spend it with, there is a
and actions. Those behaviors can shape new equity through all the ways they spend
significant economic impact that
values, and those values can reinforce new money. Directing funds in pursuit of
flows out of the items that we buy.”
behavior. The result, over time, will shift the equitable outcomes through everyday
organizational culture toward one that more business operations can yield great Shelley Stewart, chairman,
Billion Dollar Roundtable; former chief
consistently supports equity in practice. immediate and downstream impact. procurement officer, DuPont3707
Introduction / Assess / Look ahead / Act now
Collective action We believe equity is
everyone’s responsibility.
amplifies impact VOICES OF CHANGE
Expectations should be highest
on those with the most power
and influence to drive change—
Positive change can be reinforced and amplified today’s leaders—and as most
“It’s an ecosystem, so there has
through collective action—organizations leaders know, “tone from the
to be systemic change in the
uniting to challenge each other, learn from one top” is key to setting priorities
public, private, and nonprofit
another, change outdated rules, and mend broken and guiding action. At the
sectors. We have the opportunity
systems. Organizations can create feedback same time, leaders should
to make more progress in the
loops that promote change and reinforce action tap into the expertise and
next few years than we’ve made
at the individual, market, and societal levels. lived experiences of Black
in the last 50 if we galvanize the
individuals and members of
broadest coalition of engagement
other marginalized groups—
on racial equity we’ve ever had.”
leading the way while elevating
David Clunie, executive director,
others’ voices and contributions.
Black Economic Alliance38Introduction / Assess / Look ahead / Act now
A call for collective action
The status quo within Leaders must challenge their own assumptions about take shortcuts—to settle for one-off efforts or focus
organizations needs to change. what works, and try new, and perhaps even more on superficial actions. And there may come a point
courageous approaches. Most importantly, they must where the benefits seem intangible, the work seems
That is why organizations shift their focus to equity, treating it the same way formidable, and willpower seems to wane.
need to reimagine DEI— they would any other business outcome: with careful
from development planning, clear metrics, and continual actions to meet But the future of racial equity hinges on whether
the objective. businesses will leverage their immense power—
through implementation to both individually and collectively—to make progress.
measurement—and regularly As organizations embark on this journey, there will A more equitable future is possible. And it will be
update and adapt actions to inevitably be roadblocks. Leaders may be tempted to determined by the actions we take now.
enable equitable outcomes.Introduction / Assess / Look ahead / Act now
Definition of key terms
Anti-oppression: The theory, strategy, and active practice of Equity: The outcome of diversity, inclusion, and anti- PEER: Acronym for Persons Excluded due to Ethnicity or
confronting individual and institutional power and privilege to oppression actions wherein all people have fair access, Race, a term used to unite people who have been historically
consistently challenge and dismantle exclusionary and oppressive opportunity, resources, and power to thrive, with consideration oppressed without insinuating that those individuals are
systems, policies, practices, and organizational values. Anti- for and elimination of historical and systemic barriers and less than or that their sole identity is one of exclusion or
oppression recognizes the pervasiveness and seriousness of privileges that cause oppression. Equality, by comparison, is oppression. This term shifts the focus to the acts of exclusion
oppression and actively seeks to challenge, eliminate, and prevent when all people are treated identically, without consideration and oppression while enabling individuals to disentangle their
it. Anti-racism is a type of anti-oppression. for historical and systemic barriers and privileges. identity from it, unlike the terms “underrepresented minority
(URM)” or “oppressed people.”
DEI: The acronym DEI (for diversity, equity, and inclusion) Equitable enterprise: An organization that works to remove
represents the summation of activities and/or the formal systemic disparities internally and externally to promote Systemic racism: A form of racism expressed in the practices
function within an organization that focuses on supporting equally high outcomes for different groups regardless of their of social and political institutions. It is reflected in disparities
diversity, anti-oppression, inclusion, belonging, and equity respective circumstances. regarding wealth, income, employment, housing, health care,
aspirations and outcomes. Diversity, inclusion, and anti-racism political power, education, and the criminal justice system,
are distinct, but related—they can each exist without the others Inclusion: The actions taken to understand, embrace, and among other factors. Individual, interpersonal, institutional, and
but are mutually reinforcing. leverage the unique strengths and facets of identity for all structural racism together form a system, referred to herein as
individuals so that all feel welcomed, valued, and supported. “systemic racism” or “racism.”
Diversity: The representation, in a group, of various facets of
identity, including (but not limited to) race, ethnicity, nationality,
gender identity, LGBTQ+ status, socioeconomic status, ability,
religion, and age.Introduction / Assess / Look ahead / Act now Part II: Look ahead Visions of the future, lessons for today
Introduction / Assess / Look ahead / Act now
Four potential futures for Note to the reader
These scenarios describe the
racial equity in the United States world as it might be in the 2030s.
By then, at least some efforts
on behalf of Black Americans
could change US society more
Though many organizations committed to racial In late 2020, we developed scenarios designed to broadly, so some of these
equity in 2020, the path to get there will likely be better understand what that path might look like. scenarios describe dynamics
a winding one. Without meaningful action taken These scenarios propose a range of responses to not just for Black Americans, but
now to address racial inequity, specifically for Black the question: How will the journey toward racial also among a wider group some
people, there is no guarantee that the future will equity in the United States evolve over the next refer to as “PEERs”—Persons
be substantially different than the recent past. 10–15 years? Excluded due to Ethnicity or
And even with meaningful action, the path toward Race, which includes people
equity could take many unexpected turns or who identify as Black, Latinx,
unintended switchbacks. and people indigenous to the
United States and its territories.
In at least some of the futures
we can imagine, 10 to 15 years of
change could have measurable
impact on this broader group.Introduction / Assess / Look ahead / Act now
What are scenarios and why do we use them?
Scenarios are stories about what the future Even though scenarios are fictional, leaders The four scenarios are Weary Years,
may be like, created through a structured often use scenario-based thinking because Loud as the Rolling Sea, Silent Tears,
and Our Bright Star.
process and designed to challenge scenarios can help them see how the future might
conventional wisdom, stretch thinking, present unexpected opportunities and risks. Each of these scenarios has a name taken
and help drive better decisions today. They from “Lift Every Voice and Sing,” a poem
written in 1900 by James Weldon Johnson, set
are not predictions about what will happen, Many readers may be familiar with scenarios
to music by his brother, J. Rosamond Johnson,
nor do they express our expectations about created to help leaders identify good options for and adopted by the NAACP as the “Negro
what should happen. Scenarios describe a variety of plausible futures. The scenarios here National Anthem” in the 1920s. As noted
imaginative possibilities that could happen are different. The goal is not to understand how to in a recent essay in Smithsonian magazine,
the song refers to “key symbols from Black
under different conditions, and the details thrive in any future, but to explore options to create history and culture … honoring the painful
included in each are added to suggest a much better future. And, practically speaking, past and articulating optimism for the
potential events or trends one might see they help us challenge our own assumptions and future.”39 That combination—acknowledging
what has been and looking forward to
in a future with these characteristics. legacy practices in order to focus on actions that
what could be—inspires these scenarios.
could progress toward a more equitable future.Introduction / Assess / Look ahead / Act now
What might shape the future?
Scenarios illuminate possibilities for the future The first uncertainty is the extent and Table 1
by focusing on large, macro-level issues that characteristics of social cooperation across
Extent and characteristics of social cooperation
are important but fundamentally uncertain. the United States. Will people primarily look
Extensive / broad-based
Understanding how those uncertainties could out for their own self-interest, and—believing
play out over time allows us to imagine how the that opportunity is ultimately a zero-sum
trends we see today could generate different game—create a fragmented society of conflicting
realities tomorrow. interests? Or will they find broader and more
extensive bases for cooperation, believing in more
Deloitte research identified a variety of mutual benefit?
uncertainties likely to shape how the future of
Limited / fragmented
racial equity in the United States may unfold. Input Rather than think of the two as an opposed pair
from “Changemakers”*—leaders in the public, of pure absolutes, consider this uncertainty as a
private, and social sectors committed to driving continuum that could tend more toward one side
racial equity—helped identify several important or the other over time.
uncertainties, two of which stood out as being
Low High
particularly consequential.
Degree of economic growth
* You can find a full list of Changemakers on page 68Introduction / Assess / Look ahead / Act now
The second uncertainty is the degree of or decreasing racial equity in the future. But Table 2
economic growth over the next decade. The combining these uncertainties allows for richer,
Extent and characteristics of social cooperation
level and distribution of economic prosperity more varied, and, in some ways, more challenging
Extensive / broad-based
across regions, communities, and socioeconomic narratives about the journey toward equity over
backgrounds remains unknown and will likely the next decade—especially when a handful of
have significant implications for whether and how other important uncertainties are also woven into
American society might progress toward a more the scenarios, including:
equitable future. • Public expectation of organizational/
corporate behavior
The simplest way to measure this is by asking
• Primary measure of business performance (value
Limited / fragmented
whether macroeconomic growth over the next
for shareholders vs. value for all stakeholders)
decade will be relatively high or low, which in turn
suggests whether or not economic opportunity in • Ambition and efficacy of public policies
the aggregate will grow. addressing inequity
• Deployment of and access to digital Low High
Understanding the implications of either one of technologies and skills
these uncertainties on its own could illuminate Degree of economic growth
useful stories about the conditions for increasingIntroduction / Assess / Look ahead / Act now
By framing the scenarios around the two fundamental Table 3
uncertainties—and then layering in some of these other
Extent and characteristics of social cooperation
Extensive / broad-based
uncertainties into each scenario to fill out the picture—we
discover four very different visions of where the United States Our Bright Star
might be on the journey toward racial equity 10 or more
years from now. Loud as the
Rolling Sea
Limited / fragmented
Silent Tears
Weary Years
Low High
Degree of economic growthIntroduction / Assess / Look ahead / Act now
Weary Years: Economic decline and Loud as the Rolling Sea: Climate Silent Tears: Rapid technological Our Bright Star: Public awareness
periodic outbreaks of deadly violence, stress is felt everywhere, but the innovation, light-touch regulation, of systemic inequity reaches a tipping
combined with enduring populism and impacts are most pronounced for and persistent low interest rates point, with sustained demand for
partisanship, create a house divided low-income individuals and PEERs. The lead to absolute economic growth, change and accountability from
against itself. Public concern for safety result is a new consensus forged by a the benefits of which are enjoyed organizations. New federal and
creates demands for stronger law new generation of political leaders to disproportionately by just a few state legislation, while modest,
enforcement capabilities and more rebuild industries and communities industries and communities. Workers raises expectations. But the private
sophisticated security technologies with a greater focus on equity. Thanks are displaced by technology without sector ultimately leads the way.
in daily life. While some companies to the large and increasingly powerful sufficient reskilling. Culture becomes Companies adopt new standards
make strides to advance Black cohort of voters that have rallied increasingly individualistic, as people of transparency and are measured
individuals and other PEERs, there is around a commitment to more inclusive prioritize their own economic security. on their equitable outcomes. Talent,
less urgency for racial equity. Progress prosperity, policymakers increasingly Organizational leaders make symbolic consumers, and investors migrate
across business and government link economic renewal and public commitments toward equity, but to companies that “walk the walk” by
is fragmented and inconsistent. investment to greater racial equity substantial gaps remain between racial focusing on all stakeholders over a few
at work and in the community. and ethnic groups in wealth, health, shareholders. Powerful new alliances
opportunity, and social mobility. form to drive collective impact.Introduction / Assess / Look ahead / Act now
Weary Years
Uncertainties
Extent and characteristics of social cooperation
Limited / Extensive /
fragmented broad-based
Degree of economic growth
Low High
Public expectation of organizational / corporate behavior
Low accountability / High accountability /
demand for change demand for change
Primary measure of business performance
Value for shareholders Value for stakeholders
Ambition and efficacy of public policy
Limited / ineffective Substantive and
policy changes effective reform
Deployment of and access to digital techologies and skills
Uneven / Broad-based /
limited widely sharedIntroduction / Assess / Look ahead / Act now Weary Years
Imagine a future in which…
…some of the most challenging and divisive tensions of Black activists and other PEERs protest deepening Many big urban centers contract as people move
2020 accelerate over next decade, spreading further inequities in their communities, but are fragmented in to smaller, more homogenous communities they
and entrenching deeply into American life. Economic their calls to action. recognize as “their own,” further cementing division.
decline and hardened partisan divides create sustained
political turmoil and periodic outbreaks of violence in Some companies have advanced opportunities for The urgency and energy for greater racial equity seen
communities across the country. Black individuals and other PEERs, but economic at the beginning of the decade is a distant memory,
inequality has worsened steadily, in part due to the and the frustration many feel about the lack of
Widespread doubts about the electoral system lasting effects of the COVID-19 pandemic that hit Black progress threatens to boil over at any time.
mean a growing number of Americans question the households, communities, and businesses especially
legitimacy of their political opponents. High levels of hard. Many people withdraw to focus on security
populism and partisanship lead to political swings as for their family and those closest to them. Money is
groups fight for dominance every election cycle, but scarce; trust is even scarcer.
no faction stays in charge for long. The country feels
ever more like a house divided against itself.Introduction / Assess / Look ahead / Act now
Loud as the
Rolling Sea
Uncertainties
Extent and characteristics of social cooperation
Limited / Extensive /
fragmented broad-based
Degree of economic growth
Low High
Public expectation of organizational / corporate behavior
Low accountability / High accountability /
demand for change demand for change
Primary measure of business performance
Value for shareholders Value for stakeholders
Ambition and efficacy of public policy
Limited / ineffective Substantive and
policy changes effective reform
Deployment of and access to digital techologies and skills
Uneven / Broad-based /
limited widely sharedIntroduction / Assess / Look ahead / Act now Loud as the Rolling Sea
Imagine a future in which…
…the destruction unleashed by climate change Demographic shifts in the past decade have physical and digital infrastructure—is accepted, if not
accelerates and overwhelms everything else. Raging accelerated the power and visibility of communities always embraced, in response to the severity of the
wildfires, devastating storms, rising waters: The threat of PEERs, even as they have borne the brunt of challenge. Taxes on corporations and the very rich
is felt everywhere. climate stress. As a result, a new generation of rise to support an expanded social safety net. The
political leaders seeks to build the economy and government actively directs investment and enforces
Climate stress has displaced millions from their restore communities with a greater focus on equity. regulation in support of these goals.
homes and jobs. Many businesses and even More equitable outcomes, they believe, are critical
whole industries are suffering. Formerly vibrant to achieving better economic results. This leads In response to new mandates, larger businesses
places struggle. Unemployment rises, and the to new policies to address the enduring effects of are making gains in promoting Black talent and
economy sinks. Americans demand action, and the past discrimination, as well as significant investment PEERs, diversifying their boards, and expanding
country faces a crossroads: Will it be everybody in communities of PEERs as part of the broader their supplier bases. It is progress, and there is hope.
for themselves, or will people band together in the energy transition.
face of a fundamental threat to the economy, their Still, given all the challenges business leaders need
communities, and their homes? By the mid-to-late 2020s, government regulation— to balance, it sometimes feels like there isn’t much
to manage resources, shift the economy toward to celebrate.
more sustainable energy, and direct investment inIntroduction / Assess / Look ahead / Act now
Silent Tears
Uncertainties
Extent and characteristics of social cooperation
Limited / Extensive /
fragmented broad-based
Degree of economic growth
Low High
Public expectation of organizational / corporate behavior
Low accountability / High accountability /
demand for change demand for change
Primary measure of business performance
Value for shareholders Value for stakeholders
Ambition and efficacy of public policy
Limited / ineffective Substantive and
policy changes effective reform
Deployment of and access to digital techologies and skills
Uneven / Broad-based /
limited widely sharedIntroduction / Assess / Look ahead / Act now Silent Tears
Imagine a future in which…
...rapid technological innovation, light regulation, and encouraged by new federal policies created to manufacturing and many relatively low-skilled jobs—
low interest rates lead to real economic growth— mitigate effects of those inequities. Over time, and lack of access to reskilling opportunities, the
but its benefits are distributed disproportionately though, the deeper changes many had wished for economic prospects for poorer Americans and Black
to just a few industries and communities. Market never materialize, while a deeply divided electorate communities shrink even as financial markets thrive.
consolidation empowers a handful of increasingly makes political compromise—and thus new law or
large businesses, which become more and more policy on contentious issues—all but impossible. While there are some success stories, and many
central to the daily lives of billions around the world. companies are proud of the commitments they’ve
Those companies reward their executives and While economic growth leads to absolute gains for made to promote equity in the workplace, the gains
shareholders handsomely. Meanwhile, workers in some, the macro statistics hide large differences in are relatively limited. Substantial gaps between
disrupted jobs feel it is “everyone for themselves” quality of life and access to opportunity. Educational racial and ethnic groups in wealth, health, and social
as they scramble to find new ways to make a living outcomes remain skewed, as wealthier school mobility turn out to be frustratingly hard to close.
in a world where work feels less secure than ever. districts provide more and better settings for
students to develop the technical skills employers
The COVID-19 pandemic had made some inequities need. Combined with technological changes to the
more stark, and companies took action to adapt, workplace—especially the automation of traditionalIntroduction / Assess / Look ahead / Act now
Our Bright Star
Uncertainties
Extent and characteristics of social cooperation
Limited / Extensive /
fragmented broad-based
Degree of economic growth
Low High
Public expectation of organizational / corporate behavior
Low accountability / High accountability /
demand for change demand for change
Primary measure of business performance
Value for shareholders Value for stakeholders
Ambition and efficacy of public policy
Limited / ineffective Substantive and
policy changes effective reform
Deployment of and access to digital techologies and skills
Uneven / Broad-based /
limited widely sharedIntroduction / Assess / Look ahead / Act now Our Bright Star
Imagine a future in which…
…the commitments made by a broad array of No company could do it alone—and no company At the same time, business leadership groups set
companies to promote racial equity in 2020 turn has to. Environmental, social, and corporate informal yet influential benchmarks for corporate
out to have been a real tipping point, accelerating governance (ESG) standards and requirements purpose, creating shared expectations for the iconic
equity not only in American business, but also in adopted in the early 2020s allow for more companies that define success in the minds of many.
American society. Talented professionals find new consistent and comparable reporting on diversity Not all small and medium companies join in, but
opportunities. Businesses grow with more racially measures and equity outcomes, not just in terms the culture is shifting unmistakably, led by the most
and ethnically diverse talent at every level. Investors of workforce composition, but also as a measure of visible and successful companies creating a new
are engaged and rewarded. New federal policy raises real organizational power. Soon, a leading business norm for what business success looks like. Investors
the floor and, as the nation’s largest employer, the publication uses ESG reports and other certification are funding more and more Black entrepreneurs
government’s efforts affect millions. But company programs to rank companies by their progress in the technology and health care industries, both
policies go further, gaining strength and showing real toward racial equity. The rankings—which sort public growing sectors in a changing economy. Black talent
results over time. Workers notice, and talent migrates companies by the number of Black people with Profit is increasingly featured in media, and more Black
toward the companies that “walk the walk” toward and Loss responsibility and business unit leadership, nominees are elected to local, state, and federal office.
equity. Consumers notice, supporting companies representation in the leadership/succession pipeline,
that reflect their values. And institutional investors attrition rates, supplier diversity, and more—grow It’s hard to believe the progress achieved in less than
notice, rewarding companies that make sustained to have a powerful effect, as talent gravitates to the a generation, but committed leadership, focused
efforts and show measurable results. companies that score well. action, and new standards change what people
believe and how they act, both within their workplace
and far beyond it.Introduction / Assess / Look ahead / Act now
Ten reflections on the scenarios
01 02 03 04 05
There are no guarantees
that the future will be
better than today.
Change at the pace
of demography won’t
deliver transformative
Social change should be
linked to economic change.
Economic growth and good
intentions aren’t enough.
The coming changes to
work through automation,
AI, and robotics could
results this decade. Efforts to increase equity need to A growing economy does not appear increase inequity.
Despite the energy, urgency, and account for the ways in which the to generate substantial change
commitment expressed by many economy could change and align toward equity without deeper action.
While demography is a powerful The transition underway could
companies today, there are plausible action toward the sectors most likely
force for change, and the create new barriers to equity if
futures in which few real gains to be engines of economic growth.
transition of American society the technologies likely to reshape
are made toward greater equity. toward a more fully multiethnic work disproportionately disrupt
Today’s hopes could easily become and multiracial society is well jobs held by Black individuals.
tomorrow’s disappointments. underway, current estimates
project that the country will not be
a “majority-minority” (e.g., White
Americans become the minority)
country until the early 2040s.
Equity is likely to lag demography
without concerted action.Introduction / Assess / Look ahead / Act now
Ten reflections on the scenarios
06 07 08 09 10
The game won’t change if
the rules don’t change.
In the futures with the most
It is difficult to imagine
federal policy alone fixing
issues of racial inequity.
Business has the power
to create a more equitable
future if systemic changes
To go far, go together.
Driving racial equity broadly is
beyond the power of any one
There may be opportunities
to link racial and social
equity to other issues (like
can be set in motion. organization. Working independently, mitigating climate change)
substantive gains in racial equity,
The US government is the nation’s organizations may achieve good and grow the coalition
success is incentivized and measured
largest employer, and its actions The legal and regulatory norms that results for themselves, but the
differently than it is now. In those committed to sustained
and priorities can have lasting the government sets are powerful, broader system may not change.
more equitable futures, greater
consequences for millions of but leave room for business to Acting together, whether in alliances and substantial action.
equity is a core measure of business
Americans.40 However, almost 95% lead the way. Businesses can act or ecosystems, will likely generate
success, and organizations with
of US workers are not in the federal quickly. They have strong incentives greater and more enduring change Tradition may cast issues as
high levels of it are rewarded.
workforce.41 Major new laws and to source and develop the best that raises the standard for all. competing, but traction may come
far-reaching government programs available talent. And, through their when those fighting them are allies.
are put into effect in only one of normal activities, they—especially
the scenarios explored, “Loud as the largest and most successful
the Rolling Sea,” in response to companies—influence the broader
the grave threat of climate change. ecosystem in which they operate.
State and local action, however, If oriented toward equity, those
could advance equity in specific dynamics can create lasting change.
places and likely contributes to the
positive results in “Our Bright Star.”Introduction / Assess / Look ahead / Act now Part III: Act now Actions to drive systemic change
Introduction / Assess / Look ahead / Act now
Racism and inequity are systemic problems that require
a systemic response.
In order to build an equitable
future, leaders must activate Recent survey results, though, suggest many of those options are too
rarely used. In an October 2020 Fortune/Deloitte survey of 125 CEOs,
the full breadth of their control
and influence across all parts of
their organizations and beyond:
from relationships to products,
91%
said they are investing
but only 22%
said they are in investing in
services to spend, governance in their talent life cycle
to promote racial equity,
their products or services
to advance that same goal.42
to external interactions.
Not every element of Part III will be relevant to every reader, and there’s no expectation to read it from start to finish. We hope readers in every part of an organization
will find ideas that are relevant to their role and the options they have to dismantle old systems and rebuild them to create greater equity.Introduction / Assess / Look ahead / Act now
The Equity Activation Model is a systems-based view for The Equity Activation Model
how businesses can activate equity within and outside of
their own organizations, structured around three primary
spheres of influence within the reach of every organization:
Workforce, Marketplace, and Society. Each sphere, in turn, Community
impact and
includes multiple activators—key areas of activity and Spheres of influence partnership
everyday choices such as talent advancement; products
Society
and services; and standards and policies—through which Products
Standards
and policy
organizations can exert their influence to activate equity, and services
Marketing
including racial equity. Within each activator, organizations and sales
Marketplace
take specific actions in pursuit of equity. See “detailed Ecosystems
and alliances
view,” page 48.
Workforce Access Supply
Enablers chain
Across these spheres of influence, organizations need
Enablement
enablers that serve as structural support. Enablers drive
accountability and support the actions an organization
takes. Enablers include leadership; governance; resource Advancement
allocation; legal, risk, and compliance; data and analytics;
infrastructure; workplace; and technology. Without these
Enablers and
foundational enablers, efforts to drive equity may yield
organizational culture
few if any lasting results.
Denotes the activators within
each sphere of influenceIntroduction / Assess / Look ahead / Act now
Leaders could consider the following examples of responsibilities that can drive equity
If your role is… You can drive equity when you…. If your role is… You can drive equity when you….
Board of Set expectations and accountability of the Chief financial Set investment strategies and portfolio
directors executive team; oversee executive hiring and officer management; consider and approve internal and
compensation; review investment strategy; external funding requests; establish wage and
influence board composition and nominations; compensation practices; prioritize tax considerations
oversee community engagement. and practices; set real estate strategy.
Chief executive Set organizational priorities; establish leadership Chief strategy Formulate corporate and business unit strategy;
officer commitments and drive internal and external signaling officer gather customer/consumer insights; identify and
about aspirations and purpose; ratify strategic evaluate potential new markets; commission
priorities around diversity, equity, and inclusion market sensing and trend analysis; develop M&A
(DEI); authorize build, buy, borrow decisions. strategy and identify/screen M&A transactions;
develop and launch strategic partnerships
Chief diversity, Set strategic DEI priorities with board and (JVs, corporate venturing/investments).
equity, and CEO; collaborate with CxO’s to enable DEI in
inclusion officer all spheres of influence; initiate and promote
DEI programs; establish, evolve, and publish
diversity analytics; encourage transparency and
accountability on DEI ambitions and results.Introduction / Assess / Look ahead / Act now
Leaders could consider the following examples of responsibilities that can drive equity
If your role is… You can drive equity when you…. If your role is… You can drive equity when you….
Chief marketing Identify and approve partnerships and Chief human Define workforce experience strategy to inform
officer sponsorships; set strategy for social media, resources officer talent strategy and processes; design and deliver
ad platforms, and other channels and on financial, physical, mental, and emotional well-
communications platforms; design brand being through rewards and other programs; monitor
influence strategy; commission and conduct pay equity; lead succession strategy and planning;
customer research, including marketing analytics enable a culture that embeds and values diversity,
and trends; set standards for messaging. equity, and inclusion in all business operations.
Chief technology Select and deploy technologies; design and Chief operating Set vendor and supplier diversity and strategy;
officer/chief collect data reports and transparency; design and officer create and manage contracts; set location strategy
information monitor information flow across organization; and office structure; adopt and enforce health and
officer consider biases and ethics in technology; safety protocols; design and monitor sales strategy
prioritize design and user experience and and analytics and supplier/vendor analytics.
accessibility; create and assess data analytics.Introduction / Assess / Look ahead / Act now
Organizational culture VOICES OF CHANGE
The Equity Activation Model (page 39) suggests granted assumptions), values (stated strategies, “You think the issue is you need
the essential role of organizational culture as the goals, and philosophies), and behaviors (people’s more underrepresented people,
background or context in which priorities are set and decisions, actions, and processes). As a result, it but your culture may not be
choices are made. can adapt to new needs and changing conditions. designed to nurture that talent,
and that’s the problem.”
Organizational culture is “the way we do things around Of course, as every leader knows, shaping an Dr. Stephanie Creary, assistant professor of
here”—the sustained patterns of behavior supported organization’s culture toward a specific goal takes management, organizational scholar at the
Wharton School44
by an organization’s shared experiences, values, and real effort. Organizations should take a two-pronged,
beliefs.43 Culture both influences and is influenced concurrent approach: challenging assumptions—
by an organization’s workforce, the marketplace, including deeply-held orthodoxies—and changing
“Remove the idea, philosophy,
and society. It provides the context in which actions behaviors that stand in the way of meaningful, lasting
and construct of cultural fit…
are prioritized and enablers are expressed. change. Continuously innovating and initiating new
it’s the biggest hinderance to
behaviors and beliefs will fundamentally change
organizational shifts on DEI topics.”
Organizational culture is enduring, but it’s also an organization’s culture, which will, over time,
always evolving, the result of an ongoing feedback reinforce those behaviors and reflect those beliefs. Elliott Robinson, partner, Bessemer Venture
Partners; founding member, BLCK VC45
loop between beliefs (subconscious, taken-for-Introduction / Assess / Look ahead / Act now
Flipping “We are an unbiased
meritocracy.”
“We don’t have a
racism problem here.”
orthodoxies46
An underlying assumption in a society in which An underlying assumption that an organization
To drive racial equity, Black people are systematically underrepresented with well-intentioned or well-informed leaders is
in positions of power or authority may be that unaffected by society at large may be willfully
organizations must Black people are not as capable or ambitious ignorant at best and deceitful at worst. Most
challenge orthodoxies— as the White people currently holding those organizations reflect the society in which they
unstated assumptions that positions. But what meritocracies don’t often operate—and racism exists, individually and
consider is that majority racial groups have had systematically, within our society. Workers do not
go unquestioned—that are advantages over other PEERs (Persons Excluded leave society behind when they show up for work.
embedded into their culture due to Ethnicity or Race) for generations. “Society” is in the office, right alongside them.
and that sometimes get in
Shifting this belief to reject the notion of Shifting this belief makes room to consider how
the way of pursuing equity an unbiased meritocracy would enable organizational systems perpetuate societal
organizations to tap into talent that has biases, and to take action to acknowledge and
previously gone unnoticed or unconsidered. address those biases to advance equity within
and through the organization’s actions.You can also read
