Racism and inequity are systemic problems that require a systemic response. In order to build an equitable future, leaders must activate the full breadth of their control and influence across all parts of their organizations and beyond: from relationships to products, services to spend, governance to external interactions.
Recent survey results, though, suggest many of those options are too rarely used. In an October 2020 Fortune/Deloitte survey of 125 CEOs, 91% said they are investing in their talent life cycle to promote racial equity, but only 22% said they are in investing in their products or services to advance that same goal. 1
The Equity Activation Model is a systems-based view for 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, includes multiple activators—key areas of activity and everyday choices such as talent advancement; products and services; and standards and policies—through which organizations can exert their influence to activate equity, including racial equity. Within each activator, organizations take specific actions in pursuit of equity.
Across these spheres of influence, organizations need enablers that serve as structural support. Enablers drive accountability and support the actions an organization takes. Enablers include leadership; governance; resource allocation; legal, risk, and compliance; data and analytics; infrastructure; workplace; and technology. Without these foundational enablers, efforts to drive equity may yield few if any lasting results.
Set expectations and accountability of the executive team; executive hiring and compensation; investment strategy; board diversity; community engagement
Set organizational priorities; establish leadership commitments and drive internal and external signaling about aspirations and purpose; ratify strategic priorities around Diversity, Equity, and Inclusion (DEI); authorize build, buy, borrow decisions (M&A)
Set investment strategies and portfolio management; consider and approve internal and external funding requests; establish wage and compensation practices; prioritize tax considerations and practices; set real estate strategy.
Formulate corporate and business unit strategy; gather customer and consumer insights; identify and evaluate potential new markets; commission market sensing and trend analysis; develop M&A strategy and identify and screen M&A transactions; develop and launch strategic partnerships (JVs, corporate venturing and investments).
Identify and approve partnerships and sponsorships; set strategy for social media, ad platforms, and other channels and communications platforms; design brand influence strategy; commission and conduct customer research, including marketing analytics and trends; set standards for messaging.
Set vendor and supplier diversity and strategy; create and manage contracts; set location strategy and office structure; adopt and enforce health and safety protocols; design and monitor sales strategy and analytics and supplier/vendor analytics.
Select and deploy technologies; design and collect data reports and transparency; design and monitor information flow across organization; consider biases and ethics in technology; prioritize design and user experience and accessibility; create and assess data analytics.
Define workforce experience strategy to inform talent strategy and processes; design and deliver on financial, physical, mental, and emotional wellbeing through rewards and other programs; monitor pay equity; lead succession strategy and planning; enable a culture that embeds and values diversity, equity, and inclusion in all business operations.
Set strategic DEI priorities with board and CEO; collaborate with CxO’s to enable DEI in all spheres of influence; initiate and promote DEI programs; establish, evolve, and publish diversity analytics; encourage transparency and accountability on DEI ambitions and results.
The Equity Activation Model suggests the essential role of organizational culture as the background or context in which priorities are set and choices are made.
Organizational culture is “the way we do things around here”—the sustained patterns of behavior supported by an organization’s shared experiences, values, and beliefs.2 Culture both influences and is influenced by an organization’s workforce, the marketplace, and society. It provides the context in which actions are prioritized and enablers are expressed.
Organizational culture is enduring, but it’s also always evolving, the result of an ongoing feedback loop between beliefs (subconscious, taken-for-granted assumptions), values (stated strategies, goals, and philosophies,) and behaviors (people’s decisions, actions, and processes). As a result, it can adapt to new needs and changing conditions.
Of course, as every leader knows, shaping an organization’s culture toward a specific goal takes real effort. Organizations should take a two-pronged, concurrent approach: challenging assumptions—including deeply-held orthodoxies—and changing behaviors that stand in the way of meaningful, lasting change. Continuously innovating and initiating new behaviors and beliefs will fundamentally change an organization’s culture, which will, over time, reinforce those behaviors and reflect those beliefs.
Elliott Robinson, partner, Bessemer Venture Partners; Founding Member BLCK VC
Dr. Stephanie Creary, assistant Professor of Management in identity and diversity at the Wharton School3
To drive racial equity, organizations must challenge orthodoxies—unstated assumptions that go unquestioned—that are embedded into their culture, and that sometimes get in the way of pursuing equity.
An underlying assumption in a society in which Black people are systematically underrepresented in positions of power or authority may be that Black people are not as capable or ambitious as the White people currently holding those positions. But what meritocracies don’t often consider is that majority racial groups have had advantages over other PEERs (Persons Excluded due to Ethnicity or Race) for generations.
Rejecting the notion of an unbiased meritocracy would enable organizations to tap into talent that has previously gone unnoticed or unconsidered.
The underlying assumption that an organization with well-intentioned or well-informed leaders is unaffected by society at large may be willfully ignorant at best and deceitful at worst. Most organizations reflect the society in which they operate—and racism exists, individually and systematically, within our society. Workers do not leave society behind when they show up for work. “Society” is in the office, right alongside them.
Shifting this belief makes room to consider how organizational systems perpetuate societal biases, and to take action to acknowledge and address those biases to advance equity within and through the organization’s actions.
An underlying assumption is that there are limited opportunities, so gains for one identity group must come at the expense of another. An even more pernicious belief is that those who currently hold the most access to opportunity do so because of a natural right to them, rather than because of a historically unfair system. Advancing Black professionals doesn’t mean fewer jobs for non-Black individuals—it just means that the talent pool is larger and has more available, capable, qualified people
Shifting this belief enables organizations to access and nurture a broader, richer, and more competitive pool of talent, and to realize the “Curb-Cut Effect”7 —steps taken to address the needs of Black professionals will likely benefit many others as well.
The underlying assumption is that Black people are unqualified, which relies on two beliefs: a definition of “qualified” that remains consistent with historical definitions of what is required to be successful, and organizations considering narrowly defined and/or limited pools of potential talent, suppliers, and other business relationships.
Shifting this belief allows organizations to both evolve their understanding of “qualified,” and assess whether they are looking broadly enough, to include those who could apply their skills, experience, and capabilities if given the opportunity.
An underlying assumption is that it is “riskier” to take a stand and act than it is to stay silent. This orthodoxy masks racism as “risk avoidance”—that is, tolerating or enabling systemic and systematic racism is less harmful than the risk or controversy of dismantling it. Ultimately, it indicates a higher level of comfort with the potential for accusation of inequity by groups who may have benefitted from the status quo, than with addressing actual inequity.
Shifting this belief to embrace dismantling systemic and systematic racism and to drive equity positions organizations to attract top talent, retain consumers, and understand and lead in competitive markets.
The underlying assumption is that “other segments” do not value, and do not benefit from, an equitable organization. What’s more, it prioritizes those who have benefited from the current system, and the potential perception of “disadvantaging” historically advantaged segments, over addressing the actual disparate impact on PEERs.
Shifting this belief enables organizations to understand and address how bold actions for those most affected by systemic exclusion ultimately benefits all members of the workforce and all within the spheres of influence of the organization.
*Persons Excluded due to Ethnicity or Race
An underlying assumption is that an organization can maintain the status quo and new Black talent and suppliers will come to them. But attracting “hard-to-find” segments requires pursuing them outside of existing networks and offering a differentiated and appealing value proposition.
Shifting this belief pushes the organization to define an employer or supplier value proposition that is specific, compelling—and consistently evaluated for efficacy. Additionally, it increases organizational willingness to take new and creative approaches to sourcing—and, once talent and/or suppliers are engaged, provide infrastructure that mitigates systemic challenges within the organization.
The underlying assumption is that all workers show up at every given opportunity equally supported and that metrics are applied objectively. Neither are true.8 When organizations look solely at output metrics, they’re simply measuring the outcome of potentially disparate inputs.
Shifting this belief would entail rooting out the causes of inequality in all processes and at each decision point and providing the resources, tools, and support both leaders and workers need to recognize and eliminate existing inequities. In the meantime, any comparative metrics should normalize data for systemic disparities.
An underlying assumption is that “the business” is separate from and not affected by inequity in every facet of that business, or that driving equity and growing or sustaining the business are mutually exclusive. It ignores the many strong connections between “the business” and the changing context within which that business operates and that the long-term success of any business depends on its ability to adapt successfully to new and evolving environments.
Shifting this belief can enable organizations to identify, plan for, and address the short- and long-term impacts of inequity in all their spheres of influence and incorporate equitable practices to support the health and sustainability of the business.
Equity requires system-level change, starting with targeted choices that challenge old patterns and drive better results.
Organizations hold an immense amount of control and influence to drive racial equity—which means bold, sustainable progress is possible when organizations and their leaders commit to action. Doing so requires changing the way individuals at all levels think and operate—and it requires expanding their notion of responsibility to include drastically improving outcomes for the Black community and other PEERs.
Organizations must act now:
To go from…
…promoting DEI through isolated initiatives and symbolic commitments
To…
…diversity, equity, and inclusion as an integrated, continuously supported strategy and a measurable, rigorous approach.
…DEI efforts limited to hiring and talent
…diversity, equity, and inclusion driven through the entire culture and value chain of an organization (e.g., talent life cycle, supply chain, product, partnerships).
…a sole focus on driving shareholder returns
…a holistic focus on driving value for all stakeholders, including customers, employees, shareholders, and society as a whole.
Every person—across every sphere of influence, at every organization, in every industry—has both the responsibility and the opportunity to make a meaningful difference in both the short and long term. An equity-obsessed mindset requires thinking beyond a checklist of actions to take and finish. Rather, it takes constant, sustained commitment from leaders and team members, even when it is uncomfortable or unpopular.
And it takes all of us—working as a collaborative community—to build on these actions and discover or create new ones. The work is far too large, and the outcome far too urgent, for any one organization to go at it alone. So, we invite you to join us. To commit to taking courageous action, and to doing it now. And to call on others to do the same. Together, we can create the equitable future we wish to see.
Now, let’s get to work.
Taking action against systemic bias, racism, and unequal treatment
We have a responsibility—as a purpose-driven enterprise focused on diversity, equity, and inclusion—to take a stand and make a difference on important societal issues.
Dr. Richard Besser, CEO of the Robert Wood Johnson Foundation
Steven Olikara, Founder and CEO, Millennial Action Project
In addition to the writers, Changemakers, and other contributors cited within, the authors express their gratitude for the many people at Deloitte who provided input and supported the development of this report. The ideas and perspectives represented are informed by a diverse group of professionals and leaders who work across our different businesses, industries, and disciplines, each with unique experiences, thoughts, and visions of a more equitable future. We are abundantly thankful for their contributions.
Andrew Blau
US Leader - Signature Issues
Managing Director | Deloitte Consulting LLP
Joanne Stephane
Human Capital, US Leader —
HR Strategy & Solutions
Human Capital, Chief DEI Officer
Principal | Deloitte Consulting LLP
Janet Foutty
Executive Chair of the Board
Principal | Deloitte US
Kavitha Prabhakar
Chief Diversity, Equity & Inclusion
(DEI) Officer - Deloitte US Firms
Principal | Deloitte Consulting LLP
Lauren Lubetsky
Strategy
Deloitte Consulting LLP
Ale Treviño
Customer & Marketing
Deloitte Consulting LLP
Devon Dickau
Human Capital, Diversity,
Equity, and Inclusion Practice
Deloitte Consulting LLP
Deshawn Adams
Human Capital,
Diversity, Equity, and
Inclusion Practice
Deloitte Consulting LLP
Raj Tilwa
Strategy & Analytics
Deloitte Consulting LLP
Richard Jucks
Deloitte Consulting Platforms
Deloitte Consulting LLP
Endnotes