Shades of gray isn’t the diversity Minnesota needs

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There’s a national debate raging over diversity in business right now. And wherever you fall on this overly politicized matter, it’s going to mean impact to Minnesota businesses — and their employees.

But think about it this way: What if we walked into a buzzy art gallery we’ve heard about, expecting to be blown away by creativity, color and engaging expressions of ideas? But then we noticed that every single work was the same dull, uniform gray? Worse still, that new artists were being turned away at the door by guards. Far-fetched? Maybe not. That’s the dynamic playing out in federal workplaces across the country as the new administration, armed with Executive Order 14151, throttles back diversity, equity and inclusion (DEI) programs it sees as wasteful and preferential. And some businesses are now following suit.

Don’t get me wrong. I’m not here to tell people what to think. Far from it — in my job as a marketer, diversity of ideas and differing opinions are essential. That’s true for any business. But now, as consumer activists have called for boycotts starting last week on retailers that roll back diversity, I wonder: Is it time for Minnesota marketers to do what we’ve always done, and represent? Here’s what we need to think about.

How far are we down the road on rollbacks?

The answer is pretty far — and very fast. Bank of America, despite a commitment to community, has reversed diverse recruiting practices. Walmart deleted DEI language from documents, and Meta, with influence over society, has significantly reduced its DEI commitments and rolled back hate-speech protections. On that last issue: Why? Now add McDonald’s, PepsiCo, Lowe’s, Amazon and even PBS to the list, and it’s an issue of enormous scale.

It’s also a huge financial gamble for businesses. When 76% of Gen Z consumers — with an estimated annual spending power of $450 billion — say DEI is extremely important in deciding which brands to support, the decision is going to affect dollars.

What losing diversity in Minnesota workplaces could do:

The lack of diversity has direct business impact. “Diversity Matters Even More” (McKinsey, 2023) shows that companies with diverse executive teams are 9% more likely to outperform others, and that the least diverse companies underperform financially by as much as 27%. Think about that — almost one-third of each dollar is lost to competition. Other research (Cloverpop, 2017) notes that representative teams are 87% better at making business decisions and do so 60% of the time, compared with more homogenous workplaces. Those numbers have one message — diversity pays.

The impact on brands and business:

A lack of perspectives in marketing means campaigns miss the mark — or worse, cause backlash. Without appropriate representation of lived experiences in the creative process, it can be easier for the final product to be tonally deaf. Case in point, Kendall Jenner’s 2017 ad for Pepsi, in which the star seemed to quash police brutality during a protest with a can of soda. The ad trivialized social issues for consumers and affected share price and reputation. Just a year later, H&M made a similar culturally insensitive misstep with a campaign depicting a Black child wearing a T-shirt emblazoned with “Coolest Monkey in the Jungle.” Would a more diverse, multi-perspective creative team have halted these blunders? It’s extremely likely.

Actionable steps for marketers:

We can’t represent consumers if we’re not representative. And we don’t need to be DEI crusaders, but common-sense steps can ensure that inclusive mindsets help put representative work into the world. Here’s how:

• Conduct representation audits: How well do your leaders and marketing teams reflect the customers you serve?

• Implement bias training: Businesses that train how to correct bias are three times more likely to outperform competitors.

• Insist on inclusive focus groups: Use racially, ethnically and gender-diverse panels to test campaign concepts.

• Set accountability metrics: Measure benchmarks, set goals and track progress against representation in teams and work.

• Hold internal listening sessions: Encourage employees to have their voices heard, especially those who are from underrepresented communities.

Final thought:

This isn’t a new problem. In the 1950s, the “Lavender Scare” saw the unjust purge of LGBTQ+ individuals from federal employment. And tokenism was rampant, if not the norm, in ’80s and ’90s businesses. All of this can happen again, but the risk in today’s connected, polarized world means there’s more at stake now. It’s up to Minnesota business leaders to continue representing wherever and whenever we can.

Lorenz Esguerra is CEO of Folklore, a digital experience agency in St. Louis Park that represents clients in retail, health care, finance, consumer packaged goods, recreation and other industries.