By Andrea Hoffman, Culture Shift Labs
2020 was a cultural and professional inflection point, forcing a racial reckoning that was decades in the making. Ultimately, massive protests gave way to expansive promises as board members, c-suite executives, entrepreneurs, millionaires, and billionaires committed to doing their part to promote equity and inclusion.
At the same time, we’ve seen an uptick in the number of women and minorities serving on corporate boards, and the political influence of Black and Latinx voters has never been more pronounced. Even so, there is a lot of work to be done.
Less than 2% of VC-back entrepreneurs are Latinx, and even less are Black. Similarly, the percent of women founders remained stagnant for nearly a decade.
Fortunately, we may be on the precipice of meaningful change. According to a survey by Morgan Stanley, 61% of Venture Capitalists (VCs) say that the Black Lives Matter movement has impacted their investment strategy. Most notably, 75% of VCs know that it is possible to have an investment strategy that intentionally invests in women and multicultural entrepreneurs, while still maximizing returns.”
Awareness is good. Action is better. To move forward, VCs, CEOs, and industry leaders will need to move beyond diversity training and educational initiatives to take action that creates lasting change and tangible, transparent results.
In many ways, 2020 was a year of awakening, an opportunity to forge a better future that helps everyone thrive. If that’s the case, 2021 needs to be a time of action, requiring tools, playbooks, and connections to drive material change. Here are the priorities that can turn these aspirations into reality.
#1 Financial Commitment
Often, announcing significant financial commitments is a reflexive response to significant cultural moments. Last summer, dozens of companies made financial commitments to support minority-owned businesses and diversity initiatives. Culture Shift Labs is tracking these commitments, advising many organizations as they make bold moves to successfully implement their diversity initiatives and improve the processes necessary to achieve their goals.
Collectively, companies made more than $35 billion in financial promises for various racial equity efforts. While large corporations and financial institutions, including Apple, Google, JP Morgan, and Softbank, pledged the largest amount, many smaller players are getting involved as well. For instance, Broad Street Ventures, a $10 million venture capital fund created by a group of current and former NFL players, is supporting Black and Latinx founders to launch new companies.
At Culture Shift Labs, we’ve made commitments of our own. In addition to our consultant work, Denmark and I pledged to connect Black entrepreneurs and professionals with board and c-suite opportunities, investing opportunities, and more. In total, we are committed to connecting our growing community of #CultureShifters with $1 billion in capital.
In 2021, companies need to maintain their financial commitments while also investing in new processes to ensure that these bold initiatives actually translate into systemic change, serving as a foundation for an incredible legacy for future generations.
Simply put, companies will need to maintain or even enhance their financial commitments to follow through on their promises. Ultimately, people are looking for outcomes, not promises, in 2021.
#2 Process Development
New priorities and money-backed commitments alone can’t develop diverse teams. Rather, organizations need to develop internal processes and external partnerships for identifying, supporting, and promoting Black talent.
Some companies are taking a top-down approach to improving outcomes. This year, bonuses for Apple executives will be calculated, in part, using metrics unrelated to sales or valuation. Instead, environmental, social, and governance (ESG) reports will drive bonuses. According to CNBC, this structure will reach other companies as social pressures, activist investors, and other factors press for real change.
Of course, the executive bonus structure is just one way companies can change company culture and improve equity outcomes.
Black and Latinx entrepreneurs lack access to opportunities, in part, because of the industry’s reliance on personal relationships to build networks and establish promotion tracks. In 2021, companies can turn to established networks of highly trained and talented Black and Latinx talent to make the connection. For example, Debra Lee, the former CEO of BET Networks, launched a search firm to support diversity initiatives on corporate boards.
When relationships are an impediment, Culture Shift Labs Knowledge+Network Formula bridges the gap, providing companies with an immediate opportunity to connect with readily available talent that simultaneously supports racial equity efforts while building stronger, more competitive companies.
#3 Talent Acquisition
To follow through on their diversity pledges, companies will need to promote from within or make several strategic hires. Given the incredible demand for Black and Latinx talent, we will need additional networks to maintain across-the-board follow through.
Already the Onyx Initiative is helping make these connections by recruiting Black talent and major corporations to broaden exposure and create new opportunities for both parties. Similarly. TechPact is hard at work in the technology space, creating opportunities for Black, Latinx, and female professionals who are profoundly underrepresented in technology companies.
While the talent is readily available, recruiting is often challenging.
We rely on our proprietary database of more than 10,000 Black and Latinx executives and subject matter experts to support these efforts.For companies unable to make the connection, our efforts make it possible to establish diversity on corporate boards, in the c-suite, and among senior ranking positions.
We are undoubtedly in a time of unique disruption or “Forced Innovation.” That’s not a bad thing. The moves we make this year will determine if this racial equity moment will become a movement, something that produces systemic change.
Right now, many companies are asking, “how do we make this stick, and what does systemic change look like?”. For many, these questions are sincere. These priorities are the right place to start. Don’t let this opportunity pass by. We help CEOs and c-suite executives develop frameworks and roadmaps to achieve systemic change.
To learn more about Culture Shift Labs consulting services and our expansive community powering diversity and innovation outcomes, visit https://cultureshiftlabs.com/.
Andrea Hoffman is an advisor, dealmaker, strategist, speaker, author, and founder & CEO of the diversity and innovation management consulting firm Culture Shift Labs (CSL) and Culture Shifting Weekends (CSW). She’s the nation’s leading diversity and innovation expert and is a confidential advisor to Tech, F500s, Non-Profits, the Investor Community, CEOs, millionaires and billionaires. As the co-author of Black is the New Green: Marketing to Affluent African Americans and $50 BILLION Dollar Boss: African American Women Sharing Stories of Success in Entrepreneurship and Leadership, she has been at the forefront of, and personally dedicated, to racial equality since 1999.