The murder of George Floyd in May 2020 and the resulting protests for racial justice caused organizations to examine the systemic and implicit bias in their strategies. The result is a renewed focus on Diversity, Equity and Inclusion (DE&I) initiatives related to race within many companies.
One year into that process, how are marketers doing on DE&I? How have they brought an increased focus on ensuring their organizations, talent and strategies are free from bias and as inclusive as possible? Where is marketing leading and where is it lagging? What challenges block forward progress in this important area? Results from the 26th edition of The CMO Survey offer some insights.
Marketing Increases Focus on DE&I, But There's Room for Improvement
Marketing leaders report spending 8.9% more on DE&I initiatives over the last year, with larger companies spending more. Situating that spending increase against the backdrop of an overall drop in marketing spending by 3.9% indicates that marketing did in fact prioritize these initiatives.
In terms of how marketers addressed DE&I, we observe a stark difference between internal and external aspects of the firm’s strategy. Marketers invested in and improved communications and branding, with 65.3% and 60.6% of companies reporting changes, respectively. On the other hand, internal initiatives associated with human capital, such as training (53.4%) and recruiting employees (50.3%), showed weaker change levels. Lagging even further, strategic marketing activities related to marketing partnerships, segmentation and targeting, and product and service design showed less than a 35% improvement.
When considering how DE&I is leveraged in marketing decision making, we again observe weaker performance. Specifically, when asked to rate the “degree to which your company has developed an inclusive approach to marketing decision making, meaning you have established steps to review and/or evaluate marketing decisions from a DE&I perspective, where 1 = not at all and 7 = very highly,” the average score was 3.6, with only 5.6% of companies reporting “very highly.”
Related Article: Why a Platform of Inclusion Is Vital for Data-Driven Diversity
10 Tips to Overcome Marketing's DE&I Barriers
Why is it so difficult to bring DE&I into the heart of marketing strategy and decision making? We identify ten barriers and offer advice regarding what marketers might do to move ahead in this area.
1. Show Bottom-Line Impact on Customers and Employees
DE&I initiatives are often met with resistance because they seem weakly related to firm performance. We think a good case can be made for the impact of DE&I on outcomes that improve firm performance. For instance, companies reporting above-average diversity in management teams experienced 19% more revenue from innovations, compared to companies with below-average leadership diversity. Further, because many current and prospective employees care about their employer’s commitment to DE&I, these investments can improve the likelihood of hiring the best employees, lower the costs of doing so, and increase the retention of current employees.
While not all segments of customers care about DE&I, many do, which should also improve customer acquisition and retention — key pathways to firm performance. While these latter points have not been examined in research, we think there is a strong rationale for these claims.
2. Build From the Inside-Out, not Outside-In
Marketers are typically advised to manage strategy from the outside-in, meaning to notice of what their customers want and need and to build the company around this. However, for DE&I to take hold in your marketing organization, you will likely need to build it from the inside-out. This means formal visible actions around company values and mission, strategic actions that go to the core of marketing, and process mechanisms for ensuring that marketing decision-making accounts for DE&I goals and criteria. This full strategic arsenal should equip your company with the best chance of making DE&I a permanent part of your organization. As Jochen Heck, VP of Sales and a sponsor of the DE&I Sales Initiative at Google, notes, “Critical steps must be taken to successfully prioritize DEI in your marketing strategy. Simply put: We must create stories that are inclusive and representative of your full customer base, produce authentic content that incorporates nuances (across all points of diversity), and ensure that what you ‘say,’ ‘write’ and ‘release’ reflects the mission of your organization. It’s truly an ethos across the full organization.”
3. Walk the Talk in the C-Suite
Leaders shape the future in every firm. For DE&I in marketing to take hold within firms, leaders must believe in it and live out a DE&I culture with their daily actions — day in and day out. If leaders do not actively show their teams when and how to prioritize DE&I, real change among the employee ranks is unlikely to happen. David Kenny, Nielsen Holdings chief executive officer is a great example here. He appointed himself chief diversity officer of the company in early 2019 as an insurance policy on DE&I success. As a result, every decision was considered from a diversity perspective, including involving diverse associates in every decision.
4. Start With Principles, Then Move to Processes
DE&I has to be rooted in the company’s values and mission to take hold. However, for lasting change, it should also be a distinct step in the company’s decision-making processes. For example, when making decisions related to targeting and positioning, does the company ask DE&I related questions and have benchmarks? Many DE&I efforts miss this important element, with only 5.6% of companies reporting “very highly” in response to whether their companies have an inclusive approach to marketing decision making. Walmart is taking action here with the establishment last year of a DE&I Review Board. The Board consists of 100 marketing associates within the firm who volunteer to review marketing strategy, campaigns and creative work before decisions are made.
5. Build DE&I Into Your Brand, Permanently
Segmentation, targeting and positioning tools can help your brand serve a diverse group of customers. Take Fenty Beauty, for example. By developing a cosmetics brand with 50 shades to match different facial tones and genders, its founding brand mission and strategy is based on serving a very diverse market. Other companies have made a concerted effort to expand their brands to be more inclusive over time. Unilever’s Dove, for example, has developed its brand to reflect women of all colors and sizes. Its recent #ShowUs campaign, which includes images of plus-size women, trans women and women with skin conditions such as vitiligo, is a recent expression of this brand evolution process.
Related Article: How COVID-19 Changed Marketing
6. Challenge Reluctant Stakeholders
Marketing is the function that interfaces with the company’s external stakeholders, including partners, shareholders, customers and employees. Chances are some of these stakeholders will not support DE&I initiatives. If so, the bottom-line evidence identified earlier should help. In addition, marketing leaders should actively challenge these stakeholders’ concerns and educate them about the importance of moving ahead.
For instance, Salesforce recently published its Equality Data report for all stakeholders — employees, customers, partners, local communities and society at large. The report stated goals to increase its underrepresented U.S. workforce from 47% to 50% and to double its U.S. representation of Black leaders (VP+) and of underrepresented leaders by 50% by 2023. By openly pledging to make these changes, Salesforce is leading the way. As Cristina Jones, Senior VP of Customer & C-Suite Marketing and Brand Partnerships at Salesforce said, “As creatives, as marketers, as humans, it’s time that we all recognize the value of our own voices to drive change. With authentic, inclusive storytelling from brands that are walking the talk, we can help bring about the change that we want to see. That has never mattered more than right now.”
7. Avoid Easy Street
Bringing DE&I into your marketing organization is a long-term process. Our results show companies prioritizing external activities over internal activities and leaving more challenging strategic questions on the sidelines. We don’t believe this is the route companies should take, and Proctor and Gamble’s (P&G) CEO David Taylor agrees. Taylor recently spoke to students at The Fuqua School of Business at Duke University, noting, “You need to make changes that are important, but give it time to change .… What we chose to do was to invest in a strategy that we thought over time would get stronger and stronger, versus injecting a lot of money to get a spike.” With this transformational culture change of prioritizing DE&I, P&G saw a market valuation of $350 billion, a credit to Taylor and to the success of these cultural shifts over time.
8. Beware the Accountability Band-Aid
A number of companies have published metrics and reports on transparency around DE&I touting change. Reports like these can effectively raise the visibility of DE&I. However, in the end, the best measure is looking at the company’s actions to see evidence of transformation reflected in its strategies and operations. It’s important to do the hard work — a band-aid or megaphone will not heal the wound.
Related Article: Why and How You Need More Diversity in Your Marketing
9. Build Partnerships for DE&I Impact
Silo-breaking is an effective way to deepen marketing’s contributions to DE&I efforts. Marketing and HR can work together to identify, acquire and retain a more diverse work force. Marketing’s strength is in creating strong narratives around the brand. HR should turn to marketing to do just that to increase employee engagement. A bonus of doing so is using these ideas to align with how the company reaches out to customers.
Marketing can also work with R&D to help expose limiting assumptions about current and potential customers that may restrict the development of new offerings. Importantly, marketing should drive these cross-functional relationships as its connection to the customer primes it for a leadership role in DE&I activities.
10. Question Algorithms and Go Deep
Marketers are using AI to collect and efficiently analyze large amounts of customer data. The data driving such learning is typically not free of bias. In the U.S., the Algorithmic Accountability Act of 2019 requires companies to assess their AI systems for bias and discriminatory decisions. Regular audits by objective external experts are an effective way to uncover biases. At the same time, don’t load your learning strategy fully into the AI basket. Instead, cultivate learning by going deep with underrepresented groups to discover unmet needs and more sensitive ways of approaching these customers.
Implementing DE&I and embedding it in a company’s culture, talent and strategies is no easy task. We know, based on findings from The CMO Survey, that companies have a lot of work to do. It’s time to roll up your sleeves and reimagine marketing into a truly diverse endeavor.