The Diversity, Equity and Inclusion (DEI) cult is now imploding - Jaguar is just the first casualty
Walmart dumps ‘diversity, equity and inclusion’ in woke crackdown. Boeing is terminating its DEI department, Microsoft has laid off DEI staff; Meta and Google have cut DEI employees and programs.
By Sam Ashworth-Hayes
December 3, 2024
Generally speaking, there are two approaches to business.
The first is to follow the maxim “the customer is always right”, listen to the market and sell things that people want to buy.
The alternative, bolder prospectus – followed by Italian waiters and a range of Western companies – is to adopt the idea that the customer is completely wrong and needs to be better educated about coffee and social justice, respectively.
Jaguar launched its new advertising campaign to a resounding chorus of disdain.
Jaguar backlash grows as it offers glimpse of ‘air conditioner’ electric car
Marketing push built around ‘copy nothing’ tagline has drawn widespread criticism
Jaguar has offered a glimpse of its “polarising” new electric car after attracting ridicule for its controversial rebrand.
The British carmaker has published a partial photo of the new model, which will be unveiled at Miami Art Week next month.
The image shows a sleek car in a metallic grey-blue with a lined grille across the back. It is accompanied by the tagline “Copy nothing”.
The image has attracted criticism from social media users, who questioned whether the vehicle was “even a car”. Others drew comparisons with air conditioning units.
After having a diverse set of models prowl around in bright clothing – nothing so passé as a vehicle involved – to slogans including “create exuberant”, the company was roundly mocked on social media.
Its response was to double down and insist that any criticism was “vile hatred and intolerance”.
Exactly what was going through the heads of the marketing team responsible will remain forever unknown.
And perhaps this will turn out to have been a brilliantly executed ploy to switch the customer base for a luxury vehicle brand from middle-aged career professionals to the lucrative students and creative artists segment.
I can’t quite shake the feeling, however, that Jaguar has slightly let the mask eat the face. Call me a cynic, but the point of diversity, equity and inclusion (DEI) from a corporate perspective wasn’t that it was the right thing to do.
It was that it was meant to be profitable.
The argument had three prongs.
The first – as anyone who’s done mandatory compliance training can attest – is that introducing certain policies and approaches serve as a firewall against expensive litigation in the event that someone feels discriminated against.
This part is going nowhere; thanks to years of legislation, the HR bureaucracy is firmly embedded in business practices across the West.
And if anything, the focus of Labour’s efforts in Britain will be to expand it.
The second – diversity as PR – is a little more mutable. The idea here is for companies to sell themselves as an extension of the consumer’s personality, emphasising the alignment in values as a means of extracting pounds from wallets.
By and large this works in easily observed and explicable ways.
Luxury brands market themselves as part of a luxury lifestyle; gambling firms try to pass as part of the fun of sports rather than as parasites enriching themselves at the expense of a small, troubled minority.
The issue is that when the consumer goes a bit mad, so too does the company.
At the height of the Black Lives Matter (BLM) frenzy in 2020 – when Tim Cook, the chief executive of Apple, could write a letter to employees declaring that their desire for “a return to normalcy” was actually “a sign of privilege” – Jaguar’s advert would have passed without comment.
Landing as it did after the re-election of President Donald Trump and amid a general backlash against woke excess, it felt outdated from the off.
Other companies have been quicker to spot the change in the wind.
Walmart – valued at $665bn (£525bn) – has announced that it is winding down its funding for the Center for Racial Equity, founded in 2020, prohibiting from its website the chest binders and books about transgenderism that third-party sellers were marketing to children and phasing out the phrase “diversity, equality, and inclusion” from its corporate lexicon.
Walmart dumps ‘diversity, equity and inclusion’ in woke crackdown
The world’s biggest retailer will no longer sell chest binders and books about transgenderism that are marketed towards children
In a similar vein, Boeing is terminating its DEI department, Microsoft has laid off DEI staff; Meta and Google have cut DEI employees and programs.
And the tech sector appears to be souring greatly on diversity initiatives in general.
DEI is dying, but the damage to the next generation has already been done
Across the pond, legions of bad people have been promoted in the name of diversity ideology. But America is waking up. Will Britain?
It wasn’t that long ago that founders were being attacked for daring to suggest they’d hire the best person for the job – and, by implication, that this might lead to a less than perfectly representative team.
Explicit meritocracy is back in vogue.
Again, the madness of crowds has undoubtedly played a role in this.
At the height of the BLM mania, companies made costly commitments to placate angry customers.
And once it abated, businesses appeared to have rowed back on them. But there’s also the collapse of the final rationale for diversity: performance.
Why even ‘woke’ companies are turning their backs on HR ‘snake-oil’ sellers
More bosses are pulling the handbrake on costly and inconclusive diversity initiatives
Behind office doors, HR departments at some of Britain’s biggest businesses have recently been feeling defensive and on the backfoot.
Increasingly laid at their doors is the blame for allowing toxic identity politics to enter the workplace, and wasting millions of pounds on pointless diversity, equity and inclusion (DEI) schemes.
Pointing the finger are belt-tightening senior leaders scrutinizing their returns amid soaring wage bills, with some even feeling betrayed for being shepherded by HR into the vicious culture wars.
The consulting giant McKinsey & Company conducted a series of studies between 2015 and 2023, trumpeting the findings that diversity made companies more profitable.
It was an employer’s dream: you could hire from the global market for talent – possibly at a lower price – and end up with teams that were more than the sum of their parts.
This was probably an over-extrapolation from a narrower set of conclusions about business leadership. But even so, companies took the message to heart.
As Dame Vivian Hunt – McKinsey’s managing partner in the UK – put it, diversity was “a business imperative” that was “driving real business results”.
Too good to be true
It seemed too good to be true – and it was. As a pair of academics have argued, the measurement McKinsey chose didn’t show that more diverse companies were more profitable.
It showed that companies that were more profitable subsequently chose to hire more diverse candidates.
Diversity in and of itself had no statistically significant relationships to profits, sales or a host of other metrics.
If the shift in the public mood explains the scale of the shift, it’s this factor that’s most likely to lead to permanent changes.
Economists tend to think of companies as profit-maximizing and, over a long enough time horizon, they generally are.
Even if individual firms fail to adapt to changing circumstances, the ruthless process of creative destruction will tend to winnow out those unable to hold their own as new contenders enter the market.
Over the short run, however, these forces can be held at bay.
As researchers at Princeton have noted, low interest rates tend to favor large and incumbent firms over small entrants, with the market power of those companies increasing as a result.
It doesn’t seem too great a stretch to consider the possibility that the worst excesses of the DEI industry were a response to a long period of historically cheap money in the US and elsewhere.
Companies were insulated from competitive pressure and internal, political games, which would usually be curbed by the need to make money, allowed to play out in full, potentially as a partial alternative to pay rises in a relatively slow-growth environment.
Now that borrowing is expensive again; diversity is expensive, too.
The PR motive has been weakened, the regulatory motive is unchanged and the profit incentive has collapsed.
As a result, DEI initiatives are being subjected to the scrutiny that had been held in abeyance since the financial crisis.
As ever, it’s useful to keep things in perspective. Woke isn’t dead, HR is going nowhere and DEI may make a return under another name.
The political forces that gave rise to the last few years of expansion remain – and considerably so – ahead of where they were prior to 2020.
But for now, the tide has receded slightly – and left Jaguar stranded.
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