We knew this would happen. But it still hurts like hell.

In the summer of 2020, many of us wondered if the racial justice protests and ensuing pledges to do better were a moment or a movement. Today, we have our answer.

Not only has workplace momentum around diversity, equity, and inclusion waned, it’s done so precisely at a time when DEI work is urgently needed. There are now even more active assaults against our very existence as people of color. Five states—Florida, North Carolina, South Dakota, Tennessee, and Texas—passed legislation banning DEI programs. Other bills, some in those same states, limit discussion of race and gender in class. It’s been a record-breaking year in the US for anti-trans legislation. And in a historic decision, the US Supreme Court effectively ended the use of race-based affirmative action in college admissions.

Even though many of us saw this coming, guided by decades of two steps forward and one back on civil rights, the regression has massive implications for the workplace, from product innovation to customer acquisition to employee satisfaction.

Where we are

“First, they came for affirmative action in colleges. Then, they set their eyes on Black businesses.”

These are the introductory words from a recent article outlining challenges to the Fearless Fund, a venture capital firm co-founded by Black women that invests in female entrepreneurs of color. It was sued in August by the American Alliance for Equal Rights, led by litigious conservative Edward Blum, a regular at the Supreme Court with numerous anti-affirmative action cases, including the most recent.

The Fearless Fund has been temporarily blocked from running a contest that awards $20,000 to businesses majority-owned by Black women, among other requirements; the Fund hopes to prevail as the case moves through the legal system.

Regardless of the legal outcome, there’s already been a chilling effect on those who blend diversity and business as a practice. Some entrepreneurs tell me they are seeing a shift in contract language and pitch decks—”diversity,” for example, is now “multicultural.” Others I talk to say specific funds to support local, community, or BIPOC-owned businesses are drying up, or that they’ve been advised to broaden language so anyone can qualify.

This is especially disheartening because it threatens to reverse a hard-won trend: Minority entrepreneurship, specifically among Black business, has boomed in recent years. Between 2017 and 2020, the number of Black-owned businesses rose by almost 14%, compared to 0.53% gain for new businesses in general over the same period, according to Brookings. And a Gusto survey found that 9% of new business owners in 2022 were Black and 5% in 2023, up from 3% in 2019.

And yet their economics are fragile. The latest hits compound the myriad challenges Black businesses face just to survive. Government programs designed to support women and minority-owned businesses often require two years of tax returns, but these businesses close at twice the rate (and sooner) than their white counterparts, with most not even making it to the 18-month mark. Oftentimes, the leg up comes too late.

In one positive glimmer last week, a US appeals court upheld Nasdaq’s requirement that publicly traded companies have women and minority directors on their board or explain why they don’t. The lawsuit challenging the requirement was brought forth by the National Center for Public Policy Research and the Alliance for Fair Board Recruitment, a group also formed by Blum.

This victory has gotten much less press than the case of the Fearless Fund, and that’s unfortunate because the New Orleans court made a distinction affirming diversity as an important component of business decision-making. “…Regardless of whether investors think that board diversity is good or bad for companies, disclosure of information about board diversity would inform how investors behave in the market,” the court wrote.

Chief diversity officers, unite

Another bright spot has been the wave of honesty about the last few years of lip service, and somewhat perfunctory efforts in the inclusion space. In a bombshell op-ed in the LA Times, Jeanell English, former head of inclusion and impact at the Academy of Motion Picture Arts and Sciences, detailed her decision to leave.

“Often, I was more influential when diversity was not a part of my job title,” she wrote. As diversity chief for the organization running the Oscars, “I sat in the crossfire between the communities I was advocating for and those I was calling on to champion change. On both sides, there was fear. … Fear created an impasse. It fueled a scarcity mind-set, as opposed to one of abundance. It prevented artists, executives, advocates and allies from being able to sincerely listen to understand without becoming defensive. And it provoked resistance to collaboration and creative thinking, a stance that has slowed or halted shifts not only at the academy but across the entire industry. Prioritizing DEAI is not the zero-sum game it is often perceived to be.”

English was among four DEI executives in Hollywood who left their posts in a 10-day period in late June, underscoring a perception that such positions were a public-relations exercise and reaction to #OscarsSoWhite versus a commitment to real change.

Fights for crumbs

Economic uncertainty, too, plays a role in the scaling back of inclusion efforts. I asked people working in DEI to point to the moment they noticed a shift or a less welcome reception. Overwhelmingly, they mentioned the March weekend when it looked like Silicon Valley Bank might collapse. The government stepped in, but the damage was done. Indeed, the majority of small businesses believe we are already in a recession.

The rollbacks to DEI come as a response to this uncertainty and, as English noted, the scarcity mindset that uncertainty creates. Another trend among businesses I spoke to: fighting for the crumbs of funding that white institutions might still set aside for diversity initiatives. But it goes against the very definition of diversity for these programs, businesses, and entrepreneurs to be lumped together.

“Believing the myth of scarcity serves only the opposition,” says Monique Aiken, the managing director of The Investment Integration Project, a research firm, and co-founder of Make Justice Normal, a nonprofit devoted to narrative change. “It is only through solidarity, and collective action, that we will overcome.”

Indeed, the affirmative action case itself is an example of communities pit against each other (Blum infamously said he “needed Asian plaintiffs”). We should recognize the tactic, and not fall for its divisiveness. The most disruptive and productive thing we can do is to continue to band together.

The path forward

I’ll get to more solutions in my upcoming panel on DEI’s future at the Charter Workplace Summit later this week. But experts agree that acquiescing to fear or watering down DEI initiatives are not it.

“In the face of these attacks what is required is clarity of purpose and mission and the mounting of a countervailing force that can withstand skirmishes and setbacks,” says Gillian Marcelle, founder and CEO of Resilience Capital Ventures. “This is a time to keep our eyes on the prize, not to capitulate.”

In her LA Times piece, English numerates some questions for those who employ DEI individuals to assess how far they have actually come:

  • What purpose do these roles serve in your organization?
  • To whom do these roles report?
  • What authority are these leaders given to make decisions that directly impact the business?
  • How are they and their teams being funded?
  • Who is tasked with coming up with solutions?
  • Who is responsible for implementing solutions?
  • How is the accountability for achieving these solutions shared across leadership? How are you taking the weight of this work off the shoulders of a select few?
  • How is success being measured?
  • How are you ensuring that individuals in these positions are given the grace and gratitude to try, fail and try again?

She reminds us that the goal is not perfection but progress. But unfortunately, even that grace means little if the very tools to effect change are being eroded, one lawsuit, one supplier contract, one chief diversity officer at a time.

That’s the hurtful part. As an entrepreneur whose business launched exactly three years ago, I rely on lessons from previous DEI challenges and very real threats to our identity and existence in America. I struggle with these concepts not just as a business owner but as a mother, the product of immigrants, and a citizen of a diverse neighborhood.

I remember the advice my father gave me and my daughters during the hate-filled Trump years. We had just witnessed someone telling someone else to go back where they came from. He remained calm, as though he understood this country better than us natives. I found myself repeating his advice this week, as our schools, social media feeds and workplaces grow ever more polarized.

“There will always be those people. But they are the minority in America. You have to believe that.”

I’m clinging to that idea to keep on.

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