Equity requires system-level change, starting with targeted choices that challenge old patterns and drive better results.
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 a January 2021 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
What bold actions can businesses take today to create a more equitable future?
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The Equity Activation Model
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.
ClickHover on the green copy to isolate each part of the model.
Download the Equity Activation Model
Enablers
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.
If your role is…
You can drive equity when you…
Board of directors
Set expectations and accountability of the executive team; executive hiring and compensation; investment strategy; board diversity; community engagement.
Chief executive officer
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).
Chief financial officer
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.
Chief strategy officer
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).
Chief marketing officer
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.
Chief operating officer
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.
Chief technology officer or chief information officer
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.
Chief human resources officer
Define workforce experience strategy to inform talent strategy and processes; design and deliver on financial, physical, mental, and emotional well-being 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.
Chief diversity, equity, and inclusion officer
Set strategic DEI priorities with board and CEO; collaborate with CxOs 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.
Download examples of responsibilities that can drive equity
Organizational culture
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.
“Remove the idea, philosophy, and construct of cultural fit…it’s the biggest hindrance to organizational shifts on DEI topics.”4
Elliott Robinson, partner, Bessemer Venture Partners; Founding Member BLCK VC
“You think the issue is you need more underrepresented people, but your culture may not be designed to nurture that talent, and that’s the problem.”
Dr. Stephanie Creary, assistant professor of management, organizational scholar at the Wharton School3
“We are an unbiased meritocracy.”
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.
“We don’t have a racism problem here.”
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.
“Advancing Black professionals will mean fewer opportunities for others.”
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.
“Diversifying means lowering the bar.”
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.
“Taking bold action around DEI is too controversial or risky for our business.”
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.
“Taking bold action for PEERs,* and specifically for Black individuals, alienates other segments of our workforce.”
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 benefit all members of the workforce and all within the spheres of influence of the organization.
*Persons Excluded due to Ethnicity or Race
“We can’t find Black talent or suppliers.”
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.
“We measure individual performance on objective metrics.”
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.
“Equity is important, but we have a lot of demands for our attention and resources, and we need to focus on our business.”
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.
Download the orthodoxies
Actions
Equity requires system-level change, starting with targeted choices that challenge old patterns and drive better results.
Spheres of influence
Activators
Actions
Enablers
Which actions could have the greatest impact on racial equity? ClickHover here to reveal.
Workforce
Marketplace
Society
Each highlighted action includes
- A definition
- Common pitfalls: Self-imposed limitations that may get in the way of effective action
-
Two types of actions organizations can take:
- — Baseline actions demonstrate that organizations are taking initial steps toward equity
- — Courageous actions demonstrate that organizations are taking bold, potentially pathbreaking strides toward equity
- An equitable outcome: “What success looks like” when equity is activated in this area
- Bright spots: Examples of organizations thinking creatively, making commitments, and taking courageous action to drive equity
A racial equity transformation:
Our call to action
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.
Deloitte’s commitment to racial equity28
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.
“Until the rules of the game change, this moment of true transformation will just be lip service.”30
Dr. Richard Besser, CEO of the Robert Wood Johnson Foundation
“We need leaders transcending their own short-term interests for the greater long-term good.”31
Steven Olikara, Founder and CEO, Millennial Action Project
Changemakers
- Dr. Richard Besser | CEO, Robert Wood Johnson Foundation
- Dr. Robert Brown | President, Boston University
- David Clunie | Executive Director, Black Economic Alliance
- Dr. Stephanie Creary | Assistant professor of management, organizational scholar at the Wharton School
- Cathy Engelbert | Commissioner, WNBA
- Valerie Jarrett | Former senior adviser to President Barack Obama; Board member, Walgreens Boots Alliance, Ralph Lauren, Lyft, 2U, Ariel Investments, and Sweetgreen
- Bahja Johnson | Head of Customer Belonging, Gap Inc.
- Dr. Freda Lewis-Hall | Former Chief Patient Officer and Chief Medical Officer at Pfizer
- Doug McMillon | CEO, Walmart; Chair, Business Roundtable
- Steven Olikara | Founder and CEO, Millennial Action Project
- Valerie Irick Rainford | CEO, Elloree Talent Strategies
- John Rice | Founder and CEO, Management Leadership for Tomorrow
- Elliott Robinson | Partner, Bessemer Venture Partners; Founding Member, BLCK VC
- Dr. Sally Saba | Chief Inclusion and Diversity Officer, Medtronic
- Shelley Stewart | Chairman, Billion Dollar Roundtable; Former Chief Procurement Officer, DuPont
- Dr. Beverly Daniel Tatum | President Emerita, Spelman College
Additional thanks
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.
Leaders
Andrew Blau
US Leader – Eminence & Insights
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, and Inclusion
Officer – Deloitte US Firms
Principal | Deloitte Consulting LLP
Team
Lauren Lubetsky
Strategy
Deloitte Consulting LLP
Ale Treviño
Customer & Marketing
Deloitte Consulting LLP
Devon Dickau
Diversity, Equity, and Inclusion
Client Service Practice
Deloitte Consulting LLP
Deshawn Adams
Diversity, Equity, and Inclusion
Client Service Practice
Deloitte Consulting LLP
Raj Tilwa
Strategy & Analytics
Deloitte Consulting LLP
Richard Jucks
Deloitte Consulting Platforms
Deloitte Consulting LLP
Additional leadership and thanks
Christina Brodzik
National Leader – Diversity,
Equity, and Inclusion Client
Service Practice
Principal | Deloitte Consulting LLP
Terri Cooper
Vice Chair of External Diversity,
Equity, and Inclusion
Principal | Deloitte Consulting LLP
Sarah Cuthill
Board Secretary
Senior Advisor – Diversity, Equity,
and Inclusion
Principal | Deloitte
Tonie Leatherberry
Chair Emeritus, The Executive
Leadership Council
Retired Principal | Deloitte & Touche LLP
Kwasi Mitchell
Chief Purpose Officer –
Deloitte US Firms
Principal | Deloitte Consulting LLP
Endnotes
- Fortune/Deloitte CEO Survey, October 2020 highlights.
- Ready, Set, Activate! Catalyze your culture for sustained results, July 2019.
- Interview with Stephanie Creary, September 2020.
- Interview with Elliott Robinson, September 2020.
- Interview with Dr. Freda Lewis-Hall, September 2020.
- The importance of challenging or “flipping” orthodoxies is outlined in Detonate: Why and How Companies Must Blow Up Best Practices by Geoff Tuff and Steve Goldbach (John Wiley & Sons, 2018), which defines an orthodoxy as “a belief or way of thinking that is accepted as true or correct” and “a pervasive belief that goes unstated and unchallenged” (pp. 14–15).
- Angela Glover Blackwell, “The Curb-Cut Effect,” Stanford Social Innovation Review, 2017.
- See, for example, Frank Dobbin and Alexandra Kalev, “Why Diversity Programs Fail,” Harvard Business Review, July–August 2016: “[S]tudies show that raters tend to lowball women and minorities in performance reviews.”
- Salesforce, “Become a Salesforce Pathfinder,” accessed December 2020.
- Apple, “Apple launches major new Racial Equity and Justice Initiative projects to challenge systemic racism, advance racial equity nationwide,” January 2021.
- Shelcy V. Joseph, “How to root out bias in performance reviews for good,” Forbes, December 30, 2019.
- Sylvia Ann Hewlett, “Too many people of color feel uncomfortable at work,” Harvard Business Review, October 18, 2012.
- Ibid.
- Satya Nadella, “Addressing racial injustice,” Microsoft, June 23, 2020.
- Eli Lilly and Company, “LGBTQ Employees Reverse-Mentor Lilly Senior Leaders,” January 1, 2020.
- National Institute of Standards and Technology, “NIST Study Evaluates Effects of Race, Age, Sex on Face Recognition Software,” December 19, 2019.
- Citi Consumer Businesses, “Citi Launches More Than $1 Billion in Strategic Initiatives to Help Close the Racial Wealth Gap,” September 23, 2020.
- Catalyst, “#BiasCorrect Install,” accessed November 2020.
- Juliet Chung and Dawn Lim, “Yale’s David Swensen Puts Money Managers on Notice About Diversity,” Wall Street Journal, October 23, 2020.
- General Motors, Diversity & Inclusion Report, 2017, accessed December 2020.
- General Motors, “Fostering Diversity, Equity & Inclusion,” in 2019 Sustainability Report, accessed December 2020.
- University of Georgia Small Business Development Center, “The Coca-Cola Company Supplier Development Institute (C3SDI),” accessed January 2021.
- Business Roundtable, “Business Roundtable redefines the purpose of a corporation to promote ‘an economy that serves all Americans’,” August 19, 2019.
- Pete Hammond, “Oscar Shakes Up Best Picture Eligibility Standards; Strict New Diversity Requirements Take Full Effect In 2024,” Deadline, September 8, 2020.
- PhRMA, “PhRMA Principles on Conduct of Clinical Trials,” October 14, 2020.
- World Economic Forum, Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation, September 2020.
- Qualcomm, “Wireless Reach,” accessed December 2020.
- Deloitte, “How we take action against systemic bias, racism, and unequal treatment.”
- Interview with President Robert Brown, September 2020.
- Interview with Richard Besser, October 2020.