To hell with the business case, again
by Matt May
I told you so.
One of my first posts to this newsletter was titled To hell with the business case. It begins:
I’ve had a lot of positions on a lot of issues over my career, but there’s one that I’ve been consistent on from the beginning.
You do not sell product inclusion and equity, including accessibility, on business cases.
That’s it, that’s the tweet. Don’t do it.
Late last month, the Wall Street Journal just proved my point in great detail. James Mackintosh penned an op-ed titled Diversity was supposed to make us rich. Not so much. Here’s what he says (emphasis mine):
There are obvious benefits of diverse corporate leadership for society, both in providing role models and in showing a commitment to promoting the best people, irrespective of skin color or gender. But doing it because it is the right thing is not the same as doing it because it makes more money.
Since 2015, the approach has been tested in the fire of the marketplace and failed. Academics have tried to repeat McKinsey’s findings and failed, concluding that there is in fact no link between profitability and executive diversity. And the methodology of McKinsey’s early studies, which helped create the widespread belief that diversity is good for profits, is being questioned.
Mackintosh is referring to a 2015 report by management consulting firm McKinsey, which claimed to show a correlation between executive race and gender diversity in an organization and profit. Naturally, such a claim was a big deal. Even the Wall Street Journal covered it. And McKinsey has certainly dined out on it from then until now.
But the worm has turned, and DEI itself is now in the crosshairs of many companies who used to claim to support it. Just last week, SHRM, an HR management society, dropped “equity” from its stated goals, complaining of “societal backlash and increasing polarization” stemming from the term. My take on this is fairly uncharitable: loud rich assholes prosecuting anti-DEI campaigns has provided cover for quieter ones to follow suit, and SHRM is just following the herd.
Companies who buy into a concept because someone else says it’s profitable are engaging in a behavior known as ritual mimicry. This can be a principle like DEI, a methodology like Six Sigma or Agile, or something as simple as hanging fake cameras or making eye contact with customers can reduce shoplifting. Sometimes you can successfully replicate someone else’s work without understanding everything that went into it. That’s how most of us learned to play guitar. But when it’s boiled down to a simple statement—if x, then y—what tends to happen is that people fixated on y give a half-assed attempt at xing. And when they fail, well, I guess x must not work!
Last time around, I cited the consequences of relying too heavily on the business case:
The moment you frame the case for any kind of inclusion or equity around the money an organization stands to gain (or save), you have already lost. What you have done is turn a moral case, one where you have the high ground, into an economic one, where, unless you have an MBA in your pocket, you are hopelessly out of your depth.
If you win a business-case argument, the users you wanted to benefit are no longer your north star. It’s money. More cents per share, more closed deals. You may be forced to determine which excluded populations are the most cost-effective to include. If you can’t deliver, your investment will be short-lived. And if the corporate balance sheet takes a turn for the worse, you’ve got more to worry about than your project.
Less than a year later, we can already see this happening. Profitable companies are suddenly turning against DEI at least conceptually, and sometimes structurally, and that’s no accident. I think we’re in the tail end of what’s been over a decade of economic expansion, and a half-hearted token investment in DEI has emerged as a convenient scapegoat as they wring out the dishrag for every last drop of profit.
It’s convenient to believe that business owners taking a flyer on DEI because of a business case argument is something you can build on, but the proof is in surviving the first contraction. We’ve seen where companies have been cutting in the last year: first to go are the recruiters, who tend not to be needed when companies have stopped hiring. But the next wave has consisted disproportionately of DEI resources, including accessibility professionals, and so-called diversity hires, wiping out much of the progress that’s been made toward an equitable workforce. (Which for some reason reminds me: if anyone is looking for experienced accessibility product managers, I know one highly-profitable Fortune 100 company who’s laying half of its team off this week, and I’d be thrilled to connect you.)
This is precisely why your job is not done simply getting new resources in the door. Because if you don’t get them stuck in, and make them essential to the culture of the business, they’ll get slashed as soon as management starts looking for spare change between the couch cushions. Rarely does someone tell you that the project you proposed to create structural change is only really viable as a high-profile PR opportunity. The way many people find this out is by being the first to be let go.
Before starting my new gig, I laid out what values I want to see in the company and how I’m going to run my part of it in line with those values. I believed this as an employee of a large corporation, and more so now as a startup executive: it is not up to me to convince companies they’ll make more money if they create a more equitable organization. It is up to them to convince me that their values align with mine.
To be clear, there are a lot of people out there who have to choose between a moral absolutist stance and putting food on the table, and I’m extremely privileged not to have to make that choice. That said, the difference between making a difference and thinking you’re making a difference is vast, and not one we really want to look at that closely in the moment.
I don’t know who needs to hear this, but it is not a moral failure for someone who has tried to create this kind of change in a corporate setting, only to see it washed away. It is the corporations, not the DEI representatives, who are failing us.