Deloitte: The Future of Racial Equity Depends on Business Taking Bold Action Now has been saved
Deloitte: The Future of Racial Equity Depends on Business Taking Bold Action Now
New report explores the role of business in driving racial equity and four future scenarios that may unfold in the wake of calls to dismantle racism
- Deloitte conducted extensive research and more than 50 interviews with a diverse group of leaders in the public, private and social sectors to create “The Equity Imperative,” a future scenario-based view of racial equity over the next decade. Interviews with leaders include Valerie Jarrett, former senior advisor to President Barack Obama; Dr. Sally Saba, chief inclusion and diversity officer, Medtronic; and Dr. Beverly Daniel Tatum, president emerita, Spelman College. Deloitte’s research clarified the opportunity for business to play a more expansive role and the necessity to focus on outcomes, not simply efforts.
- As a result of the research, Deloitte puts forth future scenarios that may emerge in the next decade, imagining a world of enduring social divisions at one end of the spectrum to a future in which we see business leading the way toward racial equity. Deloitte’s four scenarios for racial equity over the next 10-15 years range from minor to significant and even startling outcomes: Weary Years, Loud as the Rolling Sea, Silent Tears and Our Bright Star.
- Racial equity is an outcome that will require deliberate and often courageous action, and business leaders can set the pace. Deloitte’s Equity Activation Model illustrates high-impact areas where business leaders can exert their influence across talent, products and services, suppliers and into the community and broader society to effect measurable change.
- Deloitte’s report centers on racial equity and specifically on the Black experience within the United States, with the hope that its focus on one of the most historically marginalized populations will have ripple effects to other marginalized groups.
New York, Feb. 24 2021
Why this matters
While calls for action against systemic racism and racial injustice are not new, recent events have sparked a new era of heightened awareness, understanding and expectation for change, including by business: According to a September 2020 Gallup poll, 61% of Americans now believe the U.S. needs new civil rights laws to reduce discrimination against Black Americans (almost three times more than in 2011). An even greater number — 77% — say companies must respond to racial injustice if they expect to “earn or keep [public] trust,” according to research from Edelman.
Yet most organizations continue to narrowly focus diversity and inclusion efforts on their talent instead of driving equity throughout their entire enterprise and external relationships.
In a recent Fortune/Deloitte survey of 125 CEOs, 91% of CEOs said they’re investing in their talent life cycle to drive equity, but only 22% are investing in their products or services, and fewer than half are prioritizing supplier relationships to do the same. The scope of actions needed to achieve equity will not be met by actions limited to talent or philanthropy. Real change requires action across the spectrum of the business ecosystem.
The future of racial equity in the United States: potential scenarios
Driving systemic change requires a clearer understanding of what the next 10-15 years could look like, and Deloitte’s research informed four potential scenarios.
- Weary Years, where economic decline and hardened partisan divides create sustained political turmoil and periodic outbreaks of deadly violence in communities across the country. Many people withdraw to focus on security for their family and those closest to them. Trust is scarce, and the call to action for racial justice becomes fragmented.
- Loud as the Rolling Sea, where climate stress is felt everywhere, but the impacts are most pronounced for minority and low-income individuals and communities. The result is a new consensus forged by a new generation of political leaders to rebuild industries and communities with a greater focus on equity and more inclusive prosperity. Policymakers increasingly link economic renewal and public investment to greater racial equity at work and in the community.
- Silent Tears, where economic growth from technological innovation, light regulation, and low interest rates disproportionately benefits only some industries and communities. To address societal racial inequities, companies adjust hiring practices and talent development programs, but gains are limited. After a decade, wealth creation and educational opportunity continue to occur unevenly, and the economic prospects for poorer Americans and Black communities shrink even as financial markets thrive.
- Our Bright Star, where the commitments that a broad array of companies made to promote racial equity in 2020 turn out to mark a real tipping point, accelerating equity not just in American business but in American society. Legislative change is modest but raises expectations, and the private sector ultimately leads the way, gaining strength over time and showing real results. This is a world where there is a broad recognition of the importance of addressing racial inequities, and where organizational values become an even bigger determinant for employees and customers.
Powerful actions to drive change
Racism and inequity are systemic problems that require a systemic response. In its Equity Activation Model, Deloitte creates a systems-based view of organizational influence across three pillars — Workforce, Marketplace, and Society — that traditionally lead to financial and operational outcomes in business but have the power to create racial equity as an outcome.
Deloitte’s call to action is for business leaders to think beyond their workforce and look across the full scope of influence. In the marketplace, that includes, but is not limited to, how they go to market, develop products, and engage suppliers. On a societal level, that extends to community engagement and partnership, and advocacy for social change and creating more equitable grounds on which every organization can operate.
This model recognizes organizational culture as the backdrop for a two-pronged, concurrent approach: Challenging deeply-held assumptions about equity, and changing behaviors that stand in the way of meaningful, lasting impact.
Deloitte’s approach includes examples of actions intended to confront pitfalls and break current patterns; drive greater equity through a combination of baseline steps and courageous moves that can help organizations make bold, potentially pathbreaking strides; and set in motion changes that go beyond the organization to the benefit of all.
There is no guarantee that today’s commitments to racial equity and urgency will deliver meaningful change if business leaders don’t take a more comprehensive view of how change will happen. As challenging as it will be to tear down age-old systems and remake long-held beliefs, getting to equity requires that business leaders have a clear-eyed view of the society we want to achieve, as well as the risks that could arise if we fall short.
- Janet Foutty, executive chair of the board, Deloitte US
Corporate leadership means demanding — and ensuring — racial equity from this point forward. These seem like such simple words, but the reality is that for too long there has been too little accountability. There is no going back, and while change isn’t easy, I am both hopeful and optimistic that with a healthy mix of resilience and tenacity, we are on a road to a better and more equitable future.
- Valerie Jarrett, former senior advisor to President Barack Obama
We are together at a moment when we can pivot from the weight of the past toward a new legacy for the future. The motion must be continuous and the effort pervasive to increase access, equity, and fairness both within and outside of business settings. The challenges we face are deep and systemic, and so the effects need to be broad and societal. Only when we have achieved this will we be able to make a real impact in bridging the opportunity gap that has for too long faced Black Americans.
True momentum in racial equity will only come by taking action. New behavior will encourage new beliefs, and new beliefs will reinforce new behavior. Whether in an academic setting or in business, organizations have the ability to build bridges across race, and be the change that their communities expect and demand.
- Dr. Beverly Daniel Tatum, president emerita, Spelman College
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