Innovating for Diversity: Lessons from Top Companies Achieving Business Success through Inclusivity

Introduction: How the Concept of Innovating for Diversity Was Born

The origins of this book date back to March 12, 2020, exactly one week prior to the first Stay at Home Order issued in the U.S. as a measure to prevent the spread of COVID-19. It was March 12th that then-Governor Cuomo proclaimed as Women of Color in Tech Day across New York State. To commemorate the day, staff from NPower, the sponsoring nonprofit for the proclamation, as well as numerous community and corporate partners gathered to ring the closing bell at NASDAQ in Times Square.

One of the guests invited to celebrate the day, Dawn Michelle Hardy, just happened to be the publicist of the author and technologist, Susanne Tedrick. During the event, Dawn introduced herself to NPower CEO Bertina Ceccarelli, and mentioned, "I know the woman who literally wrote the book, Women of Color in Tech!".

Susanne's first book had just been published by Wiley earlier that month. Bertina knew then she couldn't pass up the opportunity to meet Susanne and learn about her work and experiences, especially since NPower was seeking expertise on new ways to increase the number of minority women in the organization's IT skills training and job placement program. At the time, less than 4 percent of those working in U.S. tech jobs were Black, Brown, or Indigenous women.

Our first meeting led to numerous reflective and candid conversations about the state of diversity across U.S. businesses, large and small. While we come from two different perspectives, set of lived experiences, and career journeys, we both share common concerns as well as a similar sense of optimism as more inclusive talent management practices take hold in a wide range of industry sectors. Our concerns, like those of some of the leaders we interviewed for this book, stem from a belief that successful efforts to increase diversity, equity, inclusion (DEI), belonging, and accessibility require unwavering commitment and senior executive focus. As economic cycles and labor market supply and demand ebb and flow, history suggests that sustained efforts to improve diversity can slip down the priority list.

Our optimism, however, is fueled by numerous observations, interactions, and interviews with leaders who, frankly, give a damn. That statement may not be common corporate DEI-speak, but we have uncovered that some of the most powerful and effective DEI strategies are instigated by individuals who are fearless about tapping into their own experiences and tackling the root problems preventing inclusive practices in a division or entire company from thriving. They are leaders—sometimes middle managers and sometimes CEOs—who are willing to be creative, take risks, galvanize colleagues, engage human resource counterparts, and pilot new approaches to diversity and inclusion that often inform changes to underlying systems and processes. They are doing anything but simply checking the box to advance diversity principles. In short, they are leaders who are innovating for diversity.

Why We Wrote This Book

Throughout our own careers over the past three decades in technology and business, we have both witnessed the power of innovation to transform entire industries. We have read the research and seen first-hand how diverse teams catalyze new lines of inquiry and inspire invention. But in recent years, we have met remarkable leaders who are addressing business challenges through innovative solutions that build, develop, and retain diverse teams.

In other words, just as diverse teams drive innovation, innovation principles can be applied to advancing practices that build diverse teams.

We wrote this book to tell the stories of the leaders and companies that are succeeding by applying an innovation lens to diversity. Few of the leaders we interviewed would readily call themselves DEI innovators. In fact, most would say they were simply doing what they do in their businesses every day: solving problems by addressing root causes. When we deconstructed their solutions—whether apprenticeships or reinventing mentorship—we found they used tools and principles characteristic of innovation. Each set of leaders we profile had the courage to question established practices and put their reputations on the line for what they believed would be dramatic improvements to the status quo.

Something else emerged from our interviews that struck us as worthy of exploration: personal, intrinsic motivation. The individuals at the center of our case studies often shared deeply personal experiences that shaped their own values and beliefs about the need for diverse, inclusive work environments. They exemplify leaders comfortable with vulnerability, humility, and the acknowledgment of others who believed in them and supported their own career objectives. Some define their personal motivation as paying it forward, others by a sense of purpose or moral imperative. All unquestionably believe richly diverse teams and equitable cultures are, at the core, a business imperative, and produce superior outcomes. None expressed the sentiment that DEI was somehow someone else's job, primarily an ESG or charitable endeavor, or that it was something that could be solved in the short term without persistent commitment. Each was unafraid of accountability.

We also take care to present interviews of those who emerged as full partners following the implementation of practices described in the case studies. In some instances, these are individuals who may not have been hired under prior practices, or who may not have been considered candidates for promotional opportunities. Their voices and stories are essential to the notion of a virtuous cycle between innovation and diversity, and for continual improvement.

We think the focus on individual stories, case studies, and the achievements of dedicated leaders across an organization is especially important in the context of the myriad corporate CEO proclamations in support of diversity announced after the May 2020 murder of George Floyd. As we discuss in Chapter 9, C-suite commitment is necessary, but not sufficient, for DEI principles to become integral to both culture and business operations. What cannot be overlooked is the importance of mid-level managers, in human resources and in business units, to the successful operationalization of specific actions and processes that make DEI a part of everyday practice. And, as we will see in the case studies, the innovations that lead to broadscale adoption are often fueled by the leadership of those mid-level managers.

This is not to say the leaders and companies we profile are perfect. Arguably, it is the willingness to confront imperfections and, as you will learn in Chapter 1, the readiness to challenge Fixed Practices and Fixed Attitudes that fuels breakthroughs in measurably improving recruitment, talent development, and options for career mobility that in turn yields better DEI outcomes. Possessing enough humility to acknowledge the imperfections of any system, product, or business practice is, in fact, a prerequisite for real innovation to flourish.

What we learned from our research and the dozens of interviews with leaders across industries and functions is that the cultural conditions required for innovation to thrive are not unlike those that support diversity, equity, inclusion, and belonging. Values such as courage, risk-taking, collaboration, and trust create an environment where employees are motivated to invent and drive continual improvement. When supported by the right culture and leadership this motivation extends to innovating for diversity. What that culture and leadership looks like is at the heart of the case studies we share.

How to Use This Book

Our objective is to provide inspiration and direction for business leaders reviewing their own DEI practices, perhaps feeling stuck, or just looking for a way to begin. The case studies are structured to present issues and problems that are frequently confronted by companies across industries and organizations of all sizes. While the solutions are specific to each company profiled, we believe they serve as approaches that can be tailored and applied more broadly. Importantly, how each team landed at their respective solution through inquiry, testing, iteration, and expansion is especially worth considering.

You will find we intentionally do not offer up an easy checklist of recommended activities. Rather, we lay out an innovation framework that will challenge readers to take a fresh look at their current DEI efforts and help guide the development of new initiatives that can be embedded across an enterprise. At the conclusion of each case study, we assess how both the process and solution were advanced by tapping into components of the innovation framework. We believe the framework and generalizable case studies will be far more useful tools, rather than a checklist with limited utility, for truly tackling DEI as a business imperative.

Because our own experiences and networks are closely connected to the technology sector, many of the examples we share highlight tech companies or divisions, or technology job functions. However, especially given that representation is historically weak in the tech sector, we believe leaders in other industries can readily borrow from the lessons presented.

Similarly, the scope of our case studies focuses primarily on diversity along the dimensions of race, gender, veteran status, and socio-economic and educational background. We acknowledge there are unique considerations for advancing equity and inclusion for those with disabilities, seen and unseen, as well as those who identify as LGBTQ+. At the time of publication, many of the companies we worked with were launching specific initiatives to support greater diversity defined broadly: working mothers and caregivers, white male allies, multi-generational teams, and those who recently immigrated to the U.S. We believe that approaching diversity and inclusion with an innovation lens is the right place to start, independent of the issue.

Before we dive into the innovation framework and the case studies, we believe it is important to first lay some groundwork. In Chapter 1, we provide a brief history of diversity advancement in the U.S. labor force, as well as a summary of demographic trends. While we consider the business case for diversity to be irrefutable, the changing composition of the U.S. population underpins a need for urgency. Real and more rapid progress requires challenging the Fixed Practices and Fixed Attitudes that today hold us back. We describe those practices and attitudes in some detail, some of which you may witness in your own organizations. Our groundwork continues into Chapter 2, where we establish definitions of common terms used throughout the book.

In Chapter 3, we introduce the innovation framework, which details a set of cultural conditions that must be in place for innovation to thrive—whether to address the challenge of improved diversity and inclusion or to tackle any other business challenge. We also present three roadblocks of those we interviewed repeatedly surfaced as toxins to innovation: lack of prioritization, inertia, and arrogance. Companies that innovate for diversity and, in turn, leverage diversity for greater innovation, benefit from a virtuous cycle that can help them outperform their competitors.

Chapters 4 through 8 dive into the case studies and the stories of individual leaders and teams that reflect innovating for diversity in action. We have grouped these studies by topics of keen interest to many of the leaders we interviewed: apprenticeships, mentorship, advancing diversity in resource-constrained environments, talent acquisition, partnerships, and talent development and advancement. At the end of these chapters, we provide a summation of the innovation principles that were applied within the case, as well as what steps each company took to mitigate potential threats to innovation in DEI. The case studies in Chapter 9 pay special attention to the role of C-suite leadership in prioritizing diversity and in operationalizing practices that define it as a business necessity, not a passing trend. Our final chapter summarizes lessons and takeaways.

We think you will be as inspired as we are by the leaders you will meet in this book and hope you will take away any number of ideas that are practical and actionable for your business. If after reading the following chapters, you are resolved to be more courageous, more open to risk and collaboration, more committed to building trusting partnerships, and more ready to lead fearlessly when innovating for diversity, then we will have succeeded.

CHAPTER 1

Why Are We (Still) Here?

Today, our country is more richly diverse than ever before. Yet, data shows that even 70-plus years after the passage of legislation to end discriminatory employment practices and significant investment in diversity, equity, and inclusion (DEI) programs, the United States labor workforce still does not reflect the diversity of the population as a whole. In fact, for certain demographic groups, their presence in the workforce has decreased in recent years.

Why have we not moved the needle more significantly in the last seven decades? What are the causes behind this? And where should we go from here? In this chapter, we will review current labor statistics and examine where change has (or hasn't) happened. We will also examine the underlying factors contributing to this stagnation: Fixed Attitudes, Fixed Practices, and seismic global events that have left long-lasting repercussions.

Key Concept: Limiting beliefs and ineffective systems and practices have contributed to the persistent lack of diversity, equity, and inclusion across many industries.

A Brief History of Diversity in the U.S. Labor Workforce

The United States is, at the time of this writing, 245 years old, and is a nation founded and sustained by diverse populations. It's hard to remember that our labor workforce did not always reflect our population, and it required years of painstakingly hard work and sacrifice to achieve progress.

One of the very first pieces of legislation to promote diversity in the workforce was in 1948, when President Harry Truman officially desegregated the armed forces with Executive Order 9981. The order made discrimination based on race, color, religion or national origin illegal for all members of the armed services and was a crucial victory in the Civil Rights Movement.

The next major piece of legislation was Title VII of the Civil Rights Act of 1964, which prohibited discrimination based on race, color, religion, sex, and national origin when making decisions regarding hiring, promotion, discharge, pay, benefits, training, classification, referral, and other aspects of employment. The passing of Title VII dramatically impacted the U.S. labor workforce, sharply increasing the labor force participation of women and people of color. It was amended over time to prohibit discrimination on the basis of sexual orientation and gender identity.

In tandem with Title VII, the Equal Employment Opportunity Commission (EEOC) was also created to enforce the provisions of Title VII. At the time of its creation, the EEOC's powers were fairly limited to only investigating claims of discrimination, but not to compel employers to comply with Title VII. That changed in 1972 with the Equal Employment Opportunity Act, which gave the EEOC the authority to file lawsuits against private companies to impose compliance.

The Age Discrimination Act (ADEA) passed in 1967, and prohibited discriminatory hiring practices against those aged 40 and older, while the Americans with Disabilities Act (ADA) of 1990 outlawed discrimination of disabilities. Finally, the Lilly Ledbetter Fair Pay Act of 2009 was an important piece of legislation to ensure equitable pay, regardless of gender.

The Current United States Labor Workforce

Let's now look at the current U.S. workforce. As shown in Table 1.1, in February 2020, at the start of the global COVID-19 pandemic, the total United States labor workforce was made up of approximately 164 million people, according to the Bureau of Labor Statistics.¹ Due to the effects of the COVID-19 pandemic, the labor workforce experienced a sharp drop, but was on the rebound beginning in February 2022. Compared to 2000, this represented a 15 percent increase.

Table 1.1: United States labor workforce in 2000, 2010, 2020, and 2022

Examining Labor Workforce Dimensions

Within the context of the protections put in place to promote diversity, persistent disparities in employment representation and income are at best surprising, and at worst, alarming.

For this exercise we reviewed data in several areas from 2000, 2010, and 2020. Figure 1.1 and Figure 1.2 examine representation of the working-age population and the labor workforce by race and gender, as well as income differentials per the U.S. Bureau of Labor Statistics (BLS) and the U.S. Census Bureau.

The data reveals that the aggregate labor force continues to be overrepresented by white workers and underrepresented by Black workers over the past two decades. As of 2020, working-age Hispanics participated in the labor force at a level equivalent to their numbers in the 16–64 population group, as has been the case for Asians consistently over the past 20 years. More startling is the continued income disparity between Black and Hispanic employees and their white counterparts. While we've seen modest progress over the past 20 years, especially for Hispanic workers, both Blacks and Hispanics earn, on average, less than 80 cents for every dollar earned by white workers. This is, in part, a reflection of Black and Hispanic workers disproportionately represented in frontline, lower-wage jobs and less so in managerial positions. Women have similarly continued to lag in their wages, earning on average 82 cents for every dollar earned by all men in 2020, making slight gains in a 20-year period. For women of color, the differential is even more stark: Latinas earned on average 49 cents and Black women 58 cents for every dollar earned by white, non-Hispanic men in 2020. This compares to 73 cents earned by white women compared to white men.²

Figure 1.1: United States employment and income disparity by race

Figure 1.2: United States employment and income disparity by gender

Some of the income differentials can be explained by educational attainment. Figure 1.3 and Figure 1.4 show educational attainment by race and gender during 2003, 2010, and 2020. Overall, Asians have the highest completion rates of four-year and advanced degrees, which in part drives average income levels that are 112 percent of their white counterparts. For Blacks and Hispanics, educational trends are similar to those for income: both groups are making gains in educational attainment but still complete four-year and advanced degrees at levels between 40 percent and 70 percent of white adults.

While education is one factor contributing to unequal earning potential, persistent racial and gender discrimination impacts access to stable jobs with good wages, health benefits, and retirement plans.

Figure 1.3: United States highest educational attainment by race

Lower earning potential combined with historic discriminatory practices that have reduced access to mortgages and tax-advantaged forms of savings have widened the wealth gap between white households and Black and Hispanic households. A 2021 report by the St. Louis Federal Reserve Bank showed that the median wealth owned by the average white family was $184,000 compared to $23,000 for Black families and $38,000 for Hispanic families. The gap for Black families was largely unchanged in 30 years and only marginally improved for Hispanic families. Of note, wealth gaps persist regardless of education level. For example, Black and Hispanic households where both parents have a bachelor's degree have an average family wealth at the 40th and 49th percentile, compared to white households with the same educational background that own wealth at the 65th percentile. This wealth disparity makes it more challenging for Black and Hispanic parents to support their children in paying for higher education, buying a home, or transferring significant resources from generation to generation.

Figure 1.4: United States highest educational attainment by gender

On the major dimensions just discussed, our progress in improving representation and income across race and gender in a two-decade time frame has been slow, even with new investment and the additional awareness of the benefits and need for diversity.

It should also be noted that even the collection of diverse labor workforce data by the BLS is limited. For example, the data available on these dimensions prior to 1965 is scarce. It also doesn't account for neurodiverse populations, workers with physical disabilities, or workers who identify as part of the LGBTQ+ community.

Other statistics of note:

For management occupations, Black, Hispanic, and Asian American/Pacific Islander (AAPI) workers held 8.9 percent, 10.8 percent, and 7.1 percent, respectively of these jobs in 2019. Women held 38 percent of these professions.

Looking at Fortune 500 CEOs, in 2021, only 4 were Black, and only 41 were women.

Only 23 percent of women have C-suite positions. Of that, women of color account for only 4 percent of that figure.

Hispanic workers are overrepresented in lower-wage occupations such as painters, construction labor, and housekeeping cleaners, while Black workers over-index in occupations such as security guards, home health aides, and bus drivers.

A large share of employed women across all race and ethnicity groups work in lower average wage occupations connected to education and health services: Black women (41 percent), white women (37 percent), Asian women (32 percent), and Hispanic women (31 percent).

Unfortunately, there are many more statistics that point to opportunity gaps and disparities that continue to exist along the continuum between educational attainment, employment, and household wealth. At a high level, too many efforts to reverse these disparities, while well-intentioned, produce underwhelming results.

The Murder of George Floyd, the Rise of the Black Lives Matter Movement, and the Corporate Response

There have certainly been a few notable social justice movements aimed at pushing companies and other institutions to evaluate how they address pervasive societal issues. In recent years, the MeToo movement gave organizations a moment to reflect on whether they were doing enough to protect their female employees from harassment (blatant and subtle), while the Occupy Wall Street movement highlighted persistent income inequality across the U.S. But perhaps no one movement in recent history has garnered as much attention and as strong a response from companies, think tanks, and governmental entities than the Black Lives Matter (BLM) movement.

Started in 2013, after the acquittal of