Column: DE&I good for the car business, and we will keep covering it

This article was originally published HERE

image

It has been 14 months since we at Automotive News launched our first monthly report dedicated to diversity, equity and inclusion within the industry, DE&I at Work. And in today’s issue, we are honoring 18 difference makers with our second annual Notable Champions of Diversity.

While all corners of the automotive industry, including corporate offices, factories, showrooms, service and repair shops, and financial institutions that underwrite car purchases understand why creating a diverse, equitable and inclusive workplace environment benefits the bottom line, such efforts are still sometimes met with resistance.

We hear arguments suggesting that DE&I policies are a form of reverse discrimination that might violate the rights of other people. I’m no legal expert, but I’m sure the multibillion-dollar corporations that each have an army of capable attorneys would swiftly refute the supposed illegalities of DE&I.

Most companies that are serious about DE&I — General Motors, Honda Motor Co. and Mercedes-Benz, just to name a few — have issued publicly available reports detailing the demographic makeups of their work forces and executive ranks, and have set goals to do business with vendors owned by minorities and women.

Let’s make one thing abundantly clear: Discriminatory and exclusionary treatment is not the point of DE&I. The point is to open the door to capable people of different races, genders, religions, sexualities, geographic regions and professional backgrounds who otherwise would not even get a foot in because of decision makers’ implicit biases. Why is having a diverse group of workers so darned important? Because customers and business allies and rivals also come from a broad variety of backgrounds, and understanding them is good business.

Countless studies have analyzed the business case for DE&I. “Diversity Wins” by McKinsey & Co. in 2019, which examined more than 1,000 large companies in 15 countries, found that “companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile — up from 21 percent in 2017 and 15 percent in 2014.” McKinsey also found that companies with more than 30 percent female executives were more likely to outperform companies underneath that threshold, and the top-quartile companies in ethnic and cultural diversity outperformed those in the fourth quartile by 36 percent in profitability.

For a company’s decision makers, it is hard to argue with hard numbers.

However, a June 15 Harvard Business Review article, “Stop making the business case for diversity” by Oriane Georgeac of Yale University and Aneeta Rattan of the London Business School, both professors of organizational behavior, views corporate diversity from a different perspective. The article argues that making a business case for diversity is merely a means to an end. The research found that “underrepresented participants who read a business case for diversity on average anticipated feeling 11 percent less sense of belonging to the company, were 16 percent more concerned that they would be stereotyped at the company, and were 10 percent more concerned that the company would view them as interchangeable with other members of their identity group.”

Instead, they say, businesses should present the “fairness case” for diversity, meaning a justification of diversity on moral grounds of fairness and equal opportunity.

The Harvard Business Review article does make a compelling point about the business vs. fairness case. But it doesn’t have to be an either/or argument.

The business case can be used to convince investors and bankers — and maybe even those who are anti-DE&I — while the fairness argument can be used to lead employees and the organization.

When a company opens up opportunity to all, in a fair and equitable way, without having to justify itself, that is the ideal nexus between the business and fairness cases.

Here is a sampling of how this year’s Champions of Diversity are positively impacting their businesses.

  • Rosa Estrada, corporate controller at Michigan supplier Gentex, is helping recruit and retain applicants who primarily speak Spanish in a competitive job marketplace.
  • Phil Sadler, the quality control general manager who oversaw Toyota Motor Manufacturing Canada’s response to the discovery of unmarked graves at residential schools in 2021, engaged with Indigenous leaders to find ways for employees to learn and take part in reflection and mourning.
  • Megan Stenquist, director of culture at Mark Miller Subaru, completed two pay equity studies that fixed some unintentional disparities and improved morale at the dealership.

We will never convince everyone that DE&I is an overall positive force. And we don’t have to. There are enough people and institutions of great influence determined to drive change.

As long as the auto industry is committed to DE&I, we will remain committed to covering it. And that’s the bottom line.

Uncategorized