When McDonald’s this week became the latest large company to end certain diversity initiatives, it was a powerful sign. The floodgates of opposition to diversity, equity and inclusion or DEI programs have opened. Some of the DEI efforts that gained popularity in recent years are now being washed away.
Other companies, including Walmart and Ford Motor Company, have recently pulled back on DEI initiatives. The programs they are leaving behind, however, take different forms. McDonald’s set numeric goals that aimed to fill “35 percent of U.S. leadership roles with underrepresented groups and 45 percent of leadership roles with women by 2025,” as The Hill reported. The company also had DEI expectations for its suppliers.
In its Monday announcement, McDonald’s explained that it had several reasons for ending these efforts. Among them was that the company considered “the shifting legal landscape” in the wake of the 2023 Supreme Court decision against affirmative action in college admissions “to anticipate how this ruling may impact corporations such as McDonald’s.”
Each time a business moves away from these kinds of typical DEI programs, some activists respond negatively with knee-jerk complaints. They insist that it’s a political backlash against America’s population becoming more diverse.
But while these changes are often cast as a matter of conservative vs. liberal or Democrat vs. Republican, they should instead be seen as potential moves forward that can help everyone. Halting misguided DEI programs makes it easier for businesses to hire the best candidates regardless of race or gender. It can also help companies do more to uphold the very principles of diversity, equity and inclusion.
Research shows that many DEI programs fail and even actively backfire, instilling forms of bigotry that were previously waning. Numerical targets — or, as McDonald’s called them, “aspirational representation goals” — have led to legitimate complaints of better qualified candidates being rejected because they didn’t fit into these groups. Meanwhile, members of minority groups have had valid complaints that these numbers are mere window dressing that fail to tackle bias.
Organizations thrive when people with different perspectives and experiences contribute. Employees should have equal opportunity, no matter their gender, skin color, sexual orientation or other factors. But this is not achieved through metrics. It’s achieved through culture design.
“Culture” has become a nebulous buzzword for businesses. But when culture is properly designed, it’s the key to high-functioning operations. Culture is a collection of beliefs, mindsets, mental models, principles and worldviews that inform behaviors. When political leaders reflect culture through their actions, masses of people in society follow suit. Similarly, when business leaders do so, employees follow.
This is why it’s so powerful for executives to demonstrate openness to two-way feedback; to reward innovative thinking that leads to improved outcomes; and to connect everyone, deeply, to a sense of a shared future. Equitable and inclusive thinking leads to these sorts of behaviors. Through observation and copying, employees follow suit, and the changes become part of the fabric of the organization. This is core to how humans learn the norms of any culture.
This does not happen through “diversity training,” as companies such as Starbucks have tried. It does not happen through simple professions of “values,” which can become clear examples of “talking the talk” without walking the proverbial walk. It also does not happen through rules around hiring. This is why a federal judge’s recent rejection of a DEI rule in a Boeing plea deal made sense, even for those of us who want to see companies become more inclusive.
The real change happens through tougher work — through cultures that are designed, relentlessly socialized and allowed to grow over time. This is DEI in practice, rather than in theory.
In a study, my team found that companies with these kinds of cultures averaged 11.5 percent in stock returns annually over a 17-year period, compared with an overall market average of 6.4 percent. And their employee-turnover rates were about 50 percent lower than that of their competitors.
Of course, bias still exists. In my work with private industries, the U.S. military and educational institutions, people regularly share experiences of facing bigotry, and leaders acknowledge it.
Tackling bias inside organizations requires this more complex work. Bias is an emergent quality of complex dynamics — and it takes equally complex work to counteract it. This way, the changes that ensue withstand judicial scrutiny, deliver the best results and offer everyone an equal shot.
Jason Korman is CEO of Gapingvoid Culture Design Group, which works with private companies and the public sector, including the U.S. military.
