Uber. Microsoft. Geofeedia. Home Depot.
What do these brands have in common?
They have not yet figured out how Diversity and Inclusion (D&I) programs make good business sense.
Diversity Directors find it tough to make the argument that Diversity can and does affect an organization’s bottom line — if not the company’s brand equity. Presenting how D&I programs should become part of a company’s risk management portfolio provides a proven channel and vocabulary through which to promote the importance of D&I initiatives at the C-level.
Branding: A Company’s Achilles Heel
Brand equity is the financial formulation of the impression a company’s image leaves on consumers. A popular MBA business example is that of the pasta sauces Prego and Ragu: Back in 2008 Ragu had been able to establish a loyal following that believed its taste merited the higher price of the two; Prego sales were driven by non-loyal customers. Ragu’s image as a premium brand granted it 46% of the market share for pasta sauces compared with Prego’s 25%.
Active D&I programs keep a company from making blunders perceived as racist, sexist, bigoted and all the rest. Mistakes like these lead to boycotts, loss of goodwill on the part of D&I groups, customers and sales.
D&I can also lead to the development of new markets for products and services for underrepresented consumer groups.
Real risks exist, though, that blatant missteps in branding cost companies millions of dollars in revenue from current and potential buyers. And considering the D&I group of consumers is worth billions of dollars in sales annually, branding is the most valuable and vulnerable asset a company has.
Uber during February 2017 became the poster child for xenophobia and sexism. Uber CEO Travis Kalanick generated a great deal of publicity joining President Donald Trumps Economic Advisory Council. With Trump’s first go at barring citizens of seven overwhelmingly Muslim countries Uber found itself under direct attack from customers AND employees. Users of the service perceived Kalanick himself as xenophobic. More than 200,000 users deleted their accounts with the company in the first week of Februrary 2017.
Uber further compounded the company’s perception of being dysfunctional when a former female employee blogged about the level of sexism and outright misogyny at the company. The media, customers and investors excoriated the company.
Uncivil Intent at Geofeedia
Another dramatic impact to a company’s brand image happened to the technology company Geofeedia in late 2016. The impact on the companys bottom line can be directly traced to its lack of D&I.
Geofeedia appeared insensitive to the rights of groups protesting police shootings of black men. The company offered law enforcement groups software and services to track the movements of individuals and groups through their social media accounts. The targets were mostly?black citizens.
Geofeedia quickly defended itself with an insipid blog entry and landing page professing how the company really did respect civil rights.
Despite its less-invasive offerings, the company cut half its staff in November 2016 when Twitter and Facebook cut their data feeds to the company, according to The Chicago Tribune.
The Artificial Intelligence behind Microsoft’s?AI
Microsoft during the summer of 2016 released a chatbot into the wild of the internet. A bot is a piece of software with a kernel of artificial intelligence (AI) meant to interact with humans. They armed it with its own Twitter account. As the MIT Review reports, ‘Within 24 hours, however, Tay was bragging about smoking drugs, asking for sex, and opining that ‘Hitler was right ‘ and ‘feminists should burn in hell.'”
The company deleted the bots account within a day of setting it free, according to the MIT Technology Review.
The incident helped in cementing the company’s image as an insular technology company that is a laggard in the development of AI. Investors and analysts consider AI development a strategic sector.
Drumming to a Idiotic?Beat at Home Depot
Home Depot during 2013 tweeted an overtly racist post of two black guys drumming on empty plastic buckets with a gorilla between them doing the same. The tag line was, “Which drummer is not like the others?” Within?minutes the company deleted the post and apologized profusely for the dumb tweet, according to Digdiday.
Building Your Own Case
Companies are gradually coming to an understanding that what they tweet, post and publish is coming up against increasing scrutiny in the wider social media landscape. So, if you want to make the case to decision makers in your organization about the dollars and sense behind increased participation of D&I groups in the company, take these steps:
- Start by further researching the examples above,
- Find additional examples in your company’s industry and estimate the potential cost of lost customers and goodwill due to Diversity-related branding injuries;
- Calculate the projected loss of income to your own organization should D&I-related vulnerabilities become actual harm;
- Present the D&I-related vulnerabilities, risk scenarios, project fallout and losses at the C-level succinctly and concisely.
Approaching Diversity and Inclusion programs as part of your company’s risk management portfolio can go a long way toward protecting the company, shareholder interests … and your own job.