DEI Isn’t Working. Inclusive Economics Might

Ideas
By John Hope Bryant
September 20, 2024 7:00 AM EDT
Bryant is the founder & CEO of Operation Hope

Grow the table.

In a world of disruption, the traditional approaches to diversity, equity, and inclusion (DEI) are no longer sufficient and have become something to attack. It is time for businesses to embrace a more comprehensive and impactful strategy: something I call Inclusive Economics (IE). This next stage goes beyond ticking boxes and complying with rules and regulations; it is about integrating diversity into the core of our economic systems and for purely good business reasons. For those who have long admired the goals of DEI, IE is the natural evolution, transforming social justice ideals into economic realities.

The history of DEI efforts has been noble and necessary. These initiatives have opened doors, raised awareness, and set benchmarks for inclusion. However, to truly drive change and realize the full potential of these efforts, we must view diversity through the lens of economics. This is where Inclusive Economics comes in, focusing on economic participation and empowerment. It is about ensuring that diverse individuals have real opportunities to contribute to and benefit from the economic systems in which they operate.

The business case for IE is compelling. A diverse and inclusive economy is not only a more just economy but a more prosperous one. By fully integrating diversity into our economic practices, we create a robust and resilient economy capable of innovative growth and sustained success. IE fosters an environment where all individuals, regardless of their background, have the opportunity to succeed and where businesses can thrive by tapping into the full spectrum of human potential.

When people from different backgrounds and experiences come together, they bring distinct perspectives and ideas. This diversity of thought leads to more creative solutions and more effective problem-solving. Companies that embrace IE will find themselves better positioned to innovate, adapt, and grow in an increasingly competitive market. 

Studies have shown that diverse teams outperform homogeneous ones. McKinsey & Company’s research consistently finds that companies with greater gender and ethnic diversity in their executive teams are more likely to outperform on profitability. This is not merely correlation but causation. Diverse teams challenge each other, push boundaries, and avoid the pitfalls of groupthink. In a world where the pace of change is faster than ever, the ability to innovate and adapt is critical. IE equips companies with the tools they need to stay ahead of the curve.

Read More: DEI Is Not the Monster Here

Despite the overwhelming evidence supporting the value of DEI, there has been growing pushback against these initiatives. Critics argue that DEI efforts are often performative, costly, and ideologically driven, rather than rooted in practical benefits. Some see DEI as a form of reverse discrimination, suggesting that it unfairly prioritizes certain groups over others. This criticism has led to efforts to disband DEI programs in a growing number of companies and institutions, driven by a belief that these initiatives are divisive and detract from the primary business objectives.

However, Inclusive Economics offers a pathway to address and put aside these concerns. IE is not about imposing quotas or making token gestures. It is about creating genuine economic opportunities for all. It is not charity; it is a strategic business approach that recognizes the value of all human capital. By focusing on economic empowerment rather than symbolic gestures, IE moves beyond the ideological debates that often surround DEI. It reframes the conversation around shared prosperity and the practical benefits of inclusion for everyone involved.

DEI programs which can trace their roots back to the Civil Rights movement in the 1960 were reactive to the social inequities that exist in society. Companies committed significant financial and human resources to unsuccessfully try to fix these problems. In doing so, they unintentionally created a significant backlash from both employees who weren’t included in these programs and by investors who viewed DEI as unnecessary and added expenses that negatively impacted financial performance and returns.

In contrast, Inclusive Economics is proactive, impacts a much wider group of employees, enhances productivity, attracts more customers, and drives revenue growth. As a result, IE efforts increase corporate profitability, stimulate economic activity, increase tax revenues, and strengthen the financial well-being of individuals, companies, communities, and America.

Or said another way, DEI was seen by some as “costing the company money,” and inclusive economics will undoubtedly “make companies more money,” through a simple case of expanded, deepened emerging market engagement. Better employees, better communities, and more customers make for better brands. Inclusive growth. Social justice through an economic lens., as we say here at Operation HOPE. 

Inclusive Economics is also a powerful driver of employee engagement and productivity. When employees feel valued and included, they are more motivated and committed to their work. They bring their whole selves to the job, which leads to higher levels of productivity and creativity. IE creates a culture of respect and belonging, where employees are encouraged to share their ideas and perspectives.

This culture of inclusion is particularly important for attracting and retaining top talent. The workforce of the future is more diverse than ever before, and employees are increasingly seeking out companies that reflect their values. Companies that prioritize IE will not only attract the best and brightest talent but will also retain them. By fostering an inclusive environment, businesses can reduce turnover, lower recruitment costs, and build a more stable and committed workforce.

Inclusive Economics is not just about internal dynamics; it is also about external opportunities. A diverse workforce enables companies to better understand and serve a diverse customer base. As the demographics of the world continue to shift, the ability to connect with and serve diverse communities will be a key differentiator for businesses.

By embracing IE, companies can expand their market reach and tap into new customer segments. They can develop products and services that resonate with a broader audience, enhancing their brand and driving growth. This approach is not just about doing the right thing; it is about doing the smart thing. In a globalized economy, diversity is a strategic advantage.

At its core, Inclusive Economics is about achieving social justice through economic empowerment. Social justice for all though an economic lens. It is about creating an economy that works for everyone, not just a select few. By focusing on the economic aspects of diversity, we can drive meaningful change and create a more just and equitable society.

This approach aligns with the broader goals of DEI but goes a step further by directly addressing economic disparities. It recognizes that true equality cannot be achieved without economic opportunity. By empowering diverse individuals economically, we not only improve their lives but also strengthen our communities and our economy 

The case for Inclusive Economics is clear. It is a win-win for businesses and society. By integrating diversity into the fabric of our economic systems, we can drive innovation, enhance productivity, expand market reach, and achieve social justice. It is time for businesses to move beyond traditional DEI initiatives and embrace the power of IE.

By adopting Inclusive Economics, businesses can respond to the criticisms of DEI by demonstrating that inclusion is not about political correctness or ideological battles but about real economic value and opportunity. Let us build a more inclusive, prosperous, and just economy for all.