Confronted with protests against systemic racism in the United States, companies are now working to ensure that their workforces and communities are more diverse, equitable and inclusive. But what does anti-racist business strategy look like in practice? There is no one-size-fits all approach, but you can focus on four foundational and four functional elements to stand up successful initiatives. This includes figuring out the purpose of the action you are taking, including many perspectives and people, and measuring how you perform against goals. You will also want to rethink the way you do purchasing and philanthropy, review your policies, and reengage with the places in which you operate.
The murder of George Floyd, just five miles from my Minneapolis home, sparked a new reckoning with systemic racism in the United States. Across the country — including in corporate America — people are seeking to better understand the disparities in education, home ownership, health, jobs, economic opportunity, law enforcement, and justice that have long shaped Black life in this country. The pandemic has magnified these disparities, motivating many Americans to take a stand for reform.
It’s increasingly clear to many that our systems are – problematically – performing the way they were designed to. We must choose to create anti-racist systems in our companies and communities instead. We need action plans and perseverance, across sectors, to turn this moment into a lasting movement.
Because every company is unique, there will never be a “one-size-fits-all” approach for taking action on racism. But a common framework and principles can help.
The one I rely on in my work at Target and with other groups is intended to complement, not replace, existing strategies. Built around eight pillars, it reflects insights curated from a variety of leading local and national organizations and thought leaders, as well as my own lived experience as a Black woman.
Four of these pillars focus on the foundational components that should exist in every company’s racial equity strategy. The other four focus on functional business areas that are important levers for driving impact.
As a baseline, leaders need to get the following right:
Purpose establishes your organization’s “why.” It helps you identify the problem you’re trying to solve and the impact you ultimately want to have. Make your commitment visible, and invest in and assign resources in the same way you would any other business strategy. Use your purpose as a filter for decision-making and to help build the will to have the uncomfortable conversations.
Perspectives represents the vital listening, learning, and collaborative development of solutions that all organizations must do with their Black employees and a broad ecosystem of partners. Start with this question: Do you know what the Black experience is like inside your company? It’s critical to ask — and listen — not just once, but consistently. Gather a range of perspectives to ensure all stakeholders understand the reality of your team’s experience. A survey by Boston Consulting Group found that while white men saw recruitment as their biggest barrier to diversity, employees of color pointed to unequal treatment and the resulting lack of advancement as a bigger hurdle. This disconnect happens all too often, resulting in well-intentioned leaders solving less important or non-existent problems.
People practices are a major factor in this work, and the need is dire. Black executives are greatly underrepresented in CEOs and C-suite roles, and the jobs that lead to that level. There are only four Black CEOs on the 2020 Fortune 500. Black women make up 7.4% of the population but only 1.6% of vice presidents and 1.4% of C-suite leaders. We need to be much more intentional about creating opportunities for Black talent to take on new and challenging roles, including assignments with P&L responsibilities. Just as important is mentorship and sponsorship for junior and mid-career Black talent so they are willing and able to seize growth opportunities.
Performance metrics are also key in advancing long-term efforts. Organizations need to measure the costs and benefits of existing and new initiatives, double down on what works, and hold everyone accountable for outcomes. The selection of meaningful diversity and inclusion metrics is an art, rather than a science. Your metrics should be guided by your purpose and should track your progress over time towards the achievement of your stated racial equity goals.
Every business leader should think critically about the next four Ps in an order and at a pace that matches their business and strategic intent for this work.
Purchasing power is one important way to address issues of wealth creation and jobs. Assess your supply chain from multiple angles and design a supplier diversity program that reflects your brand, your racial equity strategy, and the communities you serve. Ensure the right mix of BIPOC and local vendors — not just for raw materials or products but also for services like legal, marketing, and IT. Understand how much business you have with Black-owned companies and work to increase it.
Philanthropy and community investment should leverage the financial and strategic assets across your businesses. Make a commitment to long-term, sustainable support of time, talent, financial resources, and expertise, including pro-bono volunteerism and board service.
Policy – both inside and outside your organization – will be key to creating an equitable system. Examine your company’s policies and practices with an anti-racist lens. In addition to getting your own house in order, determine which regional and national legislation will be critical for you to influence or support. Remember: This is about policy, not politics — admittedly challenging these days.
Place is about focusing investments in the communities most impacted by racial inequity. The goal is to create sustained, positive cycles of economic development and regeneration, and remove the systems that have fostered inequities and disparities. Netflix’s commitment to putting 2% of its cash holdings in financial institutions that serve the Black community — thereby increasing access to financing in these areas — is a good example of a business taking a place-based approach.
Creating anti-racist systems and structures requires the combined power of business, NGOs, government and individual citizens. We have access to a range of important voices in the racial equity and social justice movement – from newer entrants like Black Lives Matter to longstanding entities like National Urban League (NUL). Marc Morial, president of NUL, outlines how the pandemic has exposed the naked face of institutional and interpersonal racism in the organization’s recently released State of Black America report.
And in corporate America, early signs of change are promising. Discussions about race, diversity, equity and inclusion are happening as part of environmental, social, and governance (ESG) strategies, and an increasing number of leaders, including my boss, Target CEO Brian Cornell, are not just making statements but real commitments to advance racial equity and social justice.
At Target, we established a Racial Equity Action and Change Committee (REACH) that builds on our company-wide D&I strategy with a focus on Black team members and guests. We are tracking racial and gender representation across the company and plan to increase the number of Black team members by 20% over the next three years through improved hiring, retention, and advancement. We’ll also make changes to the products we sell, our approach to marketing, our community involvement, and how we influence public policy.
Another example comes from pharmaceutical giant Merck, where CEO Ken Frazier, one of just four Black CEOs in the Fortune 500, is focusing on a range of actions, including joining the Year Up, a nonprofit that aims to help young adults of color find jobs, and participating in The Board Challenge, which promises to accelerate moves toward more boardroom diversity.
At Salesforce, CEO Marc Benioff has created a task force to drive change, and the company recently vowed to double the number of Black leaders it has in the U.S. and increase overall representation of Black employees in its workforce by 50% by the end of 2023.
While this work can be challenging and nothing is a panacea, these CEOs and their organizations are committed to create a more just and equitable society for all. Let’s not let perfection be the enemy of progress – or allow our concern for saying or doing the wrong thing keep us on the sidelines. Inaction is not an option. We need to keep moving forward, together.