Consumers and Employees Still Want Diversity — Here's How Businesses Can Get It Right For companies, the current backlash against DEI programs is an opportunity to refocus by addressing their flaws.

Something doesn't add up here.

This year, almost 40% of US companies planned to cut back on sponsorships and other external engagements related to Pride Week. But recent surveys show that — despite the apparent outcry — consumers and employees across the ideological spectrum firmly support DEI.

To me, it's a classic case of perception versus reality. Rather than listen to their stakeholders, companies are catering to shifting political winds, something that may prove dangerously shortsighted.

Flip-flopping is never a good look, especially when it comes to values. A business risks being perceived as not standing for anything and alienating the very people who build its value: employees and customers.

We've taken a different approach. From the beginning, before it was called DEI, diversity was part of our company DNA. The original team of four was LGBTQ+, and our location in Montreal's Gay Village helped us attract talent from a wide range of other identities and backgrounds.

For two decades, as we've grown to thousands of employees and $1-billion-plus in annual revenue, welcoming and celebrating diversity has made our business stronger. We're not about to stop because of political pressure.

That doesn't mean DEI programs are perfect — far from it. In fact, the current debate is an opportunity for companies to refocus by addressing those flaws. Here's why DEI has sometimes fallen short — and what I've learned about how to make it work.

Quotas and lip service: The challenges of DEI

Diversity is usually treated as just another corporate mandate — a box to be ticked in the name of compliance. And that's where problems start.

For starters, DEI at many companies has been reduced to quotas. Simply setting numerical targets for hiring people from underrepresented groups doesn't add up to diversity.

Not only do companies give opponents ammo to question fairness and effectiveness, but "diversity hires" often end up marginalized and isolated, limiting their effectiveness.

Equally damaging has been the lip service paid to diversity, going through the motions without deeper value alignment. Trotting out rainbow flags once a year is neither meaningful nor progressive. It comes off for what it is — window dressing — and turns off customers, employees and other stakeholders who are left wondering, "What does this have to do with the brand?"

Casual policy reversals have only further devalued DEI. There have been so many examples of businesses that "championed" DEI initiatives for years — only to abruptly remove info about diversity programs from their website, stop sponsoring internal and external events and shed employees linked to those efforts. The takeaway message: This work doesn't matter, and it never really did.

Related: DEI Is In The Firing Line - But At What Cost?

Rethinking DEI: A few learnings and insights

There can be a better way forward here for companies and leaders who truly care about diversity.

Every company is on its own journey and will have to learn its own lessons, but these are some insights we've gained over the past 20 years:

• Remember, diversity and merit aren't oppositional: Progress starts with understanding what DEI is and what it isn't. It's about giving people a fair shot, not an unfair advantage. Somewhere along the way, that got lost in translation. DEI isn't antithetical to meritocracy, as so many pundits insist — quite the opposite. By providing fairness of opportunity, you end up identifying and attracting the best people.
• Think 'candidate pool,' not 'hiring quota': When we're looking to fill a role, we take steps to ensure a diverse candidate pool, rather than picking someone merely to fill an arbitrary quota. That means casting the widest possible net during the candidate sourcing stage. For example, for engineering roles, we work with the Black Professionals in Tech Network (BPTN) to identify promising candidates. But hiring decisions always come down to the best person for the job.
• Employee experience (not slogans) matters: It's one thing to tout diversity in a values statement. It's quite another for employees to truly live that experience. Effective diversity initiatives enable people to bring their authentic selves to work — to feel comfortable, empowered and able to contribute. This is a metric that can and should be tracked. (More than 85% of our team members feel that way.) Equally important is leaning on employee-led networks (ELNs) to help identify and address diversity priorities from the frontlines.
• Leaders can (and do) set the tone: When the CEO of Marriott International spoke out publicly in support of the hotel chain's DEI programs, he got more than 40,000 emails from appreciative staff. At a moment when diversity is in the crosshairs, a clear message from the top makes a huge difference, tapping directly into employee concerns and priorities. I recently emailed our company to remind everyone that it's a place for all, and the positive response was similarly overwhelming. If you care about diversity as a leader, say something. People are listening.

All of these steps are valuable, but there's one critical element of effective DEI that's too often overlooked: business outcomes.

Related: Why Letting Go of Full Control of My Business Was the Hardest — and Smartest — Move I Ever Made

Why there's no DEI without ROI

DEI can and should be an end in itself. But cementing its place in corporate life requires a ruthlessly pragmatic step that too many companies avoid — drawing a direct line from diversity initiatives to ROI. Without making this direct link between "values" and "value," it's all too easy to dismiss diversity as a mere nice-to-have rather than a business-critical necessity.

That's too bad, because there's plenty of evidence that DEI is good for business. In one global study of some 1,200 companies, those in the top quartile for gender and ethnic diversity were almost 40% more likely to outperform financially than their peers at the bottom. Organizations with inclusive cultures are also six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.

Among the most palpable ways to tie diversity to business outcomes is by looking at the impact on employee retention and engagement. The upside of a truly welcoming culture? Companies attract and keep quality people who want to build their careers. When employees feel a sense of ownership and know they can make an impact, they're more invested in the business.

As a leader, I've seen how celebrating diversity and inclusion isn't just the right thing to do — it's also strategically sound. Ultimately, the best concepts come from a marketplace of ideas where distinct points of view are represented. It's no accident that companies with above-average diversity generate almost twice as much revenue from innovation as their below-average peers.

For any company navigating the current DEI minefield, it's important to remember that people haven't really changed. They still value authenticity and opportunity for themselves and their neighbors — hardly controversial concepts. Those are common truths that people share, no matter where the political pendulum swings. Companies that honor them will gather goodwill, attract the best employees, build customer loyalty, and thrive in shifting winds. It all adds up.