What Businesses Can Do If Black Lives Matter
Multiple companies have shared their statements publicly that “Black Lives Matter” and their commitment to diversity through various press releases and social media platforms in response to the killing of George Floyd. The events over the past month have provided a catalyst for self-reflection and research. Naturally, systematic racism, by definition, is not something that one individual can change. The business community, however, is different. Through creativity, financial prowess, invention, technology, etc., businesses have generally exerted an outsized influence on everyday culture, government policies, and social norms. For those business leaders and companies that believe what they shared, I offer three steps to act on your words: educate yourself and your staff, assess and make changes to your corporate culture, and leverage your influence.
Educate Yourself and Your Staff
“Without Knowledge, action is useless and knowledge without action is futile.” – Abu Bakr
Racism has existed in our country prior to its founding and is perpetuated more subtly today. With respect to discrimination faced by African Americans, much of what many of us were taught in schools, at least here in the southeast United States, was subverted by The Lost Cause. Though I attended the top, non-magnet public high school in Tennessee, my 11th Grade history teacher began the discussion of the causes of the Civil War with the phrase, “Regardless of your opinion of slavery. . .” The conclusion reached in that class was that the Civil War was a conflict about taxation and states’ rights. It was not until college and thereafter that the unending list of atrocities committed against racial minorities throughout American history was fully revealed.
Do not assume your executive staff has a deep understanding of the effects that racism has had culturally, economically, politically, and socially on minorities today. The state of Texas didn’t modify its history curriculum away from The Lost Cause narratives until 2018, beginning in the 2019-2020 school year. Just as my education was biased, the predominance of C-suite executives grew up believing that everyone operates from a level playing field and that your effort is the only obstacle to your achievement. If that were only true.
Financial leverage is a financial concept that businesses and consumers utilize regularly. In corporate finance, many of the theories regarding debt assume that all options are available to all market participants. As recently as 2006, at the height of the housing boom, black and Hispanic families making more than $200,000 a year were more likely on average to be given a subprime loan than a white family making less than $30,000 a year. Another study, from the National Bureau of Economic Research, concluded race and ethnicity were among two of the key factors that determined whether or not a borrower would end up with a high-cost loan, when all other variables were held equal. Earlier this year, an Air Force veteran had the police called on him for suspicion of fraud as he was trying to deposit and cash racial discrimination lawsuit proceeds at his now former bank. The country’s financial institutions have collectively paid over $1B in racial discrimination settlements over the last decade, including some repeat offenders.
Homeownership is generally the largest single wealth-building asset that many people have in their lifetimes. If denied the opportunity and benefits of homeownership over multiple generations, as has been the reality for so many in our country, not only is generational wealth not transferred, but educational, social, and entrepreneurial opportunities have also been eliminated. In business, a company’s weighted average cost of capital can either be a key driver of growth or an impediment. For a consumer, it can change the trajectory of their financial well-being and that of future generations.
You cannot, unfortunately, avoid a discussion of political influence when discussing the issue of racial discrimination in our country and in our businesses. For full disclosure, I am not now, nor have I been, a registered member of any political party. I have not contributed to any political party, organization, or candidate seeking elected office, save my own candidacy as an independent/unaffiliated candidate for a non-partisan position. I believe that the best solutions, both short and long-term, are based on the most relevant information available in the present, not hard-and-fast positions, to which political parties fundamentally rely and to which they do not consider better alternatives.
Much of the discourse discussed politically on the topic of race today can be traced back to an altered Southern Strategy. Many of the individuals and sources of political influence have been around for years. Lee Atwater was a name to which I was not familiar growing up and largely due to his death from cancer in 1991, at the end of my eighth-grade year in middle school. His activities and insight has had a profound impact on the reality of our political landscape today.
Mr. Atwater, during his career, was a campaign manager for several politicians, a member of the Reagan administration, a Republican National Committee Chairman, and a Senior Partner at the political consulting firm Black, Manafort, Stone, and Kelly (yes, Paul Manafort and Roger Stone). As the campaign manager for George H.W. Bush’s 1988 presidential campaign, he worked with Roger Ailes, the founder of Fox News, to produce “Revolving Door,” a commercial that many felt utilized racial bias to instill fear in voters. However, what is most disturbing to me is Mr. Atwater’s now infamous 1981 interview and how fortuitous it was in today’s political environment, in which he stated the following (racial slur edited):
“Y'all don't quote me on this. You start out in 1954 by saying, "N----r, n----r, n----r". By 1968 you can't say "n----r"— that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now, you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is blacks get hurt worse than whites. And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me—because obviously sitting around saying, "We want to cut this", is much more abstract than even the busing thing, and a hell of a lot more abstract than "N----r, n----r". So, any way you look at it, race is coming on the backbone.”
Whether in a negotiation or a strategic planning session, the more knowledge available (and correctly interpreted) the better the decision-making. Comprehensively educating you and your staff on the history of racism in America will arm your organization with the knowledge necessary to move to the second and third steps below. Three links to help you and your staff get started are below.
National Museum of African American History and Culture
158 Resources to Understand Racism in America
Assess Your Corporate Culture
“Make sure everybody in the company has great opportunities, has a meaningful impact and is contributing to the good of society.” – Larry Page, CEO, Google
How does your corporate culture reflect and align to your stated beliefs? The answer to that question can be both eye-opening and/or deflating. The assessment can either be a reaffirmation of the type of culture that you intended or will expose areas, people, and initiatives that are failing to meet expectations. Your corporate culture either attracts talent (and revenues) or sends it away, which has a direct impact on the success of your organization.
My wife works in information technology. She’s really good at what she does, but recently changed companies due to the culture of her now-former employer. That employer was very ‘progressive,’ having stated initiatives for women, minorities, sexual orientation, etc. Information technology as a field is largely dominated by men. The progressive nature of the company, its stated initiatives, and the initial group of co-workers were definitive attractors for my wife and she worked there for several years. However, as she ascended the corporate leadership ladder, the initiatives so prominently professed by her employer were not a cultural reality.
Unintended discrimination can exist implicitly even though companies have cultural initiatives in place. In my wife’s example, there was not a single event that prompted her motivation to exit the company. Small, seemingly trivial things can create a separation between employees and their respective employers. Examples include: management preferences for candidates (and employees, after hire) based on where they attended or didn’t attend school; the praise of one (or more) employees’ past experiences for former employers when not related to current or upcoming internal company/project objectives; the explicit or implied expectation that there be a homogenous logic of thought.
My wife’s poignant feedback of feeling like she was marginalized in strategy sessions “because she didn’t think like a white male” shocked me. She was one of the most well-respected individuals in the company and received no less than four-dozen plus emails and phone calls of surprise and sadness from colleagues around the globe when her voluntary resignation was announced. Bias existed within her employer despite its explicitly ‘progressive’ culture. Unfortunately, the company did not adequately support the promised culture through a perpetual re-assessment of its operational effectiveness, and she left.
My wife’s former employer is not alone in failing to create a corporate culture free of discrimination. The former Global Head of Diversity for Morgan Stanley has filed a lawsuit alleging racial discrimination. JPMorgan Chase has instituted mandatory diversity training as a response to its own class-action lawsuit of discrimination filed earlier this year. Walmart, General Electric, Southern California Edison, and Abercrombie & Fitch all have also been sued for racial discrimination in the past. All settled their cases, but spent over $10M on average in settlement fees. These are some of the same companies that now publicly espouse “Black Lives Matter” and are offering financial commitments to advance the cause. For businesses, not assessing your corporate culture ignores the opportunity-cost benefits of creating a welcoming environment for all versus the legal liability, financial liability, operational inefficiency, and reputational damage associated with a discrimination suit.
Cultural change that lasts takes time, resources, and effort. The upside is that if the goal is a diverse work environment, the result will likely be a boost to profitability, culture, and public perception. As you are assessing your company’s culture, don’t rely solely on the explicit benchmarks of alignment with your stated beliefs. To properly assess your company’s culture, you need to consider implicit, unintended discrimination from within your organization. Three links to ideas of how to impact and measure your culture are below.
4 Ways Leaders Can Shape Company Culture To Impact Revenue & Profits
How You Can Measure Organisational Culture
Leverage Your Influence
“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” – Archimedes
Businesses have a platform from which to impact society on a large scale. Whether it’s how we shop (Amazon), the willingness of the masses to pay as much for a cup of coffee as it used to cost for lunch (Starbucks), or how we commute from point A to point B (Uber/Lyft), businesses can alter public behavior and cultural both directly and indirectly through their services, products, and messaging. In the case of “Black Lives Matter” messaging, the platform afforded to businesses is more important than ever.
Black Lives Matter began as a call to action in response to state-sanctioned violence and anti-Black racism. It’s a movement that has been misunderstood and vilified by those that don’t fully understand the scope of racism and repeated antagonism of racial minorities throughout American history or those that hold differing views on the underlying causes, characterizations, and outcomes of cited events. As more and more events occur, the movement is continuing to grow and for good reason.
It is not enough for companies to message support, assess and create internal cultural initiatives, and donate to organizations that advocate for equality. It is the responsibility of American businesses to directly advocate for cultural change across the vast spheres of influence that they command. This influence includes its customers, vendors, trade-associations, chambers of commerce, and the municipal, county, and state governments in which they operate.
What does that influence entail? Messaging is a large part of what customers and vendors can expect from you. For retail customers, this is most visible in their purchasing experience and in the branding of your products and services. For commercial customers and vendors, questions need to be considered such as “do their corporate values align with our company’s” and, if not, “is a long-term relationship in our company’s best interest” (assuming you have a choice of alternatives). Companies need to advocate for their trade-associations to adopt membership requirements and industry best-practices that incorporate mandatory non-discrimination policies in the workplace.
The advocacy for equality must include an elimination of the Confederate idolatry that has, and will always, diminish and thwart any efforts to unite our nation. If you truly believe that “Black Lives Matter” as publicly stated, then you understand that the ideals of freedom and equality in the United States of America are diametrically opposite to that of the Confederate States of America. If you truly believe that “Black Lives Matter” as publicly stated, you likewise understand the need for monuments and symbols of that ideology be exclusively housed in museums of history and not prominently displayed in the workplaces or in the public squares and buildings across the nation in which you operate.
This belief needs to be communicated and advocated in the chambers of commerce, to other business leaders, and to the politicians in the municipalities, counties, and states in which your business is conducted. If racial equality were to undergo a SWOT analysis, Confederate idolatry would be one of the top threats on the list. You cannot evoke change when the symbolism of racial inequality permeates the communities in which you operate.
This may seem a tangential issue, but I assure you it is not. Don’t be fearful. If NASCAR can do it, so can you. If our Marines can do it, so can you. If the city of Gulfport, MS can do it, so can you. All three organizations saw the need to end an impediment to equality and to expand their respective organizational missions.
I challenge the businesses that publicly profess “Black Lives Matter” to take action on your words. This will not be easy and there will be opposition. Resistance may come from unexpected sources, both internally and externally. Action means educating you and your staff, assessing and making changes to your corporate culture, and continuing to leverage your spheres of influence. The end result of your efforts will be a much needed, long overdue, lasting change to our collective culture, to our country, and, most importantly, to Black Lives.
Why Your Company Should Be More Socially Responsible
How Your Corporate Social Responsibility (Or the Lack of It!) Will Impact Your Business
Principal at SyndiGate Capital LLC
4yThoughtful piece and highly commendable! Bravo sir.