Inside the Diversity-Equity-and-Inclusion Industrial Complex

Photo-Illustration: by Intelligencer; Photos Getty Images

As the sun went down on May 31, 2020, Kellie Wagner was packing up her Brooklyn apartment when she heard a roar: the chanting of thousands of Black Lives Matter marchers arriving in Fort Greene Park from a nearby rally at Barclays Center. It was the sixth day of nationwide protests in response to the murder of George Floyd, and the NYPD had already made several violent arrests.

Wagner was about to move to California, expecting a slow summer: The pandemic had caused half a million dollars in future business to dry up virtually overnight for Collective, the workplace-diversity consultancy she founded. Companies told her they no longer had the budget for her services. Wagner, who is 35, thought she might have to close up shop for good. Just before she left for the airport, she passed the remnants of a burned-out cop car, broken glass glittering on the sidewalk.

Two days later, Wagner was in Palm Springs — and her in-box was overrun with more than a hundred inquiries from prospective clients. Companies that had canceled on her two months prior were now desperate for help. There were a lot of white CEOs crying on the phone, Wagner recalls, because they had crash-read Robin DiAngelo’s White Fragility and were racked with guilt. There were heads of fashion and beauty brands whose Black employees had begun speaking out on social media about their companies’ racist cultures. What should the CEOs Slack to their staffs? What should they tweet to their customers? What wouldn’t get them criticized but would seem humble and aware — but not so humble and aware that they’d get criticized regardless?

It went on like that for a week, with Wagner in back-to-back-to-back intake calls. Another rush occurred on June 2, #BlackoutTuesday, when two Black entertainment executives called on companies, celebrities, and influencers to post a black square on their Instagram feeds to show solidarity with Black Lives Matter. Brands wanted Wagner’s advice on how best to participate in the campaign — and then, when many of them were excoriated for the low stakes of the gesture, they wanted her advice on how to apologize for it. “They were calling and saying, ‘Well, the black square didn’t work,’ ” Wagner says. “But when you make external statements and you haven’t cleaned up your own house, it’s so inauthentic. You’re asking to be dragged.”

Collective was even courted by the notoriously vulgar media company Barstool Sports, whose founder, Dave Portnoy, was known for provocations like comparing Colin Kaepernick to Osama bin Laden. Wagner said she would consider taking on Barstool as a client if Portnoy agreed to executive-leadership training. She never heard back. (Barstool disputes this.)

Across the country, consultants in the diversity business felt that same whiplash of pandemic bust turning into protest boom. Practitioners who were collecting unemployment received calls from the CEOs of major corporations looking to spend tens or hundreds of thousands of dollars publicly and fast. An in-house diversity professional in San Francisco who had been laid off in a five-minute Zoom meeting in March saw the company re-list his job in a lengthy, solemn Medium post. In Seattle, Tali Lavarry, a former corporate-event planner who had opened her consulting business a few months before statewide shutdowns began, was surviving on instant noodles and peanut-butter sandwiches when her phone started ringing; soon, she took on so many clients she had to hire four employees.

The onslaught was a jarring combination of exhilaration and chaos. One white male executive told Lavarry, “I think I handle colored people all right.” She politely disagreed. Wagner, who is Black, says she had “a kind of breakdown” a few weeks in. “I was having to exert all of this emotional energy to hold space for these white people, who were just waking up for the first time and being like, ‘Oh my God, racism exists.’ ” Still, the mad dash meant that within a quarter, she was able to scale up to 20 employees.

An explosion of fortune in 2020 is one of the few universal things in the amorphous industry of diversity consulting — a space as varied as its constellation of interrelated acronyms and ampersands implies. DEI and DE&I “diversity, equity, and inclusion” are more common than D&I, but many refer to the cause as I&D or DEIB (the B is for “belonging”). Portrayed by the right wing as a single-minded cult, DEI is in reality a loose federation of adherents, with a host of methodologies, competing for money and attention. DEI practitioners share a worldview — that workplaces can become more humane and just — but they are also rivals in a for-profit industry of their own making, with the same incentives of salespeople and marketers everywhere. Corporate America spends roughly $8 billion annually on diversity, according to a figure that gets passed around routinely — though that rough estimate was first cited in 2003, which means the true profitability of the market is uncharted.

Certainly, after Floyd’s murder, the business became astronomically larger than ever. But instead of an industry finally coming into focus, thanks to unprecedented funding and momentum, what composes DEI feels even more dizzyingly diffuse, and its true beneficiaries remain in question. “It really is the Wild West,” Lily Zheng, a consultant in San Francisco who has amassed more than 23,000 followers on LinkedIn, tells me. “One of the major challenges of DEI is there’s no quality control. Anyone can call themselves a DEI practitioner. When your clients are these companies that are desperate to do anything and don’t quite understand how this works, ineffective DEI work can be lucrative. And we’re seeing cynicism pop up as a result, that DEI is just a shitty way in which companies burn money. And I’m like, Yeah, it can be.

If you work in an office, virtual or otherwise, chances are high you’ve been required to take a diversity-related training course. Recently, workers at a multinational company clicked open one such module and encountered “Case Study No. 3: Ethnic Stereotype,” with a photo of a heavyset white man. This was “Michael,” a security guard who “clocks out for lunch from his post on the Upper East Side of Manhattan and sits down to eat in the employee lounge,” where Cindy, his colleague, notices he has only a small sandwich and some apple slices. Cindy needles Michael: “What kind of Italian are you?” she says. “That is the smallest sandwich I have ever seen! Throw some meat on that bread or bust out some pasta and gravy, you big paisan. You’re gonna be starved by the end of your shift!” The module invited workers to consider the ramifications of Cindy’s actions: “How do you think this makes Michael feel? Is Cindy implying that Michael needs to eat more food because he is Italian? Do you think Cindy’s comment could have offended others in the lounge?”

There is a saying among professionals that HR is where DEI goes to die, and when they say it, they usually have something like these two characters in mind. Cindy and Michael are diversity training as bad pornography: low budget, nonsensical, poorly written, too funny to be taken seriously. No one is learning anything meaningful or relevant about bias from this scene. (On Twitter, where it went viral, one user mockingly worried about the “italianx community.”) Its absurdity undermines the entire enterprise. DEI consultants argue (out of self-interest, but persuasively) that the generalists in HR, tasked with organizing everything from commuter discounts to holiday parties, don’t have the skills to set norms around the most sensitive interactions in the office. A security guard who actually took the Cindy-and-Michael training looked into it and told me that he’s pretty sure the video was created in-house by his company’s HR wing — specifically by a white woman from Pennsylvania named Jordyn.

The sandwich incident hearkens back to the origin of the corporate diversity movement: Title VII of the 1964 Civil Rights Act, which barred certain forms of discrimination at work. The earliest corporate training consisted of short sessions, led by HR departments, to remind managers of company policies. The goal was to protect corporations from litigation. In the late 1980s, as women and people of color entered the white-collar workforce in greater numbers, diversity efforts shifted. The advent of “sensitivity training” concerned the well-being of these newcomers in a variety of common scenarios that went beyond legal liability into the realms of appropriateness and respect. This evolution of the work required more than just knowledge of the law and gave way to a niche industry. Companies began hiring outsiders to tell them how to behave.

Doug Harris, the CEO of the Kaleidoscope Group, became a consultant during this wave and has witnessed every subsequent trend in the diversity Zeitgeist. In 1989, Harris was working in minority-talent recruitment when a white woman asked him to join her diversity-consulting firm. (He remembers thinking, “Wow, you can make money doing this?” It seemed like a natural extension of what he had been doing his whole life, as a Black man navigating nearly all-white environments, ever since he first got a scholarship to a prep school in Connecticut.) In 2006, he bought her out. “When I first started doing this work, people were staying out of trouble,” he says, describing the field’s iterations. “Somebody told a bad joke or something happened. And then it went to ‘being nice’: Don’t say anything wrong. Here’s all the dos and don’ts. And then it went to valuing differences, and that’s when the work really changed.”

This new way of corporate thinking — that the thing called “diversity” was not a potential source of losses via litigation but rather a source of value in and of itself — led to the idea of “inclusion,” a necessary counterpart, through the late 1990s and early aughts. Companies were betting on an appeal to multicultural consumers as well as employees. Even some of the most staid institutions embraced new measures, like the NFL, whose Rooney Rule required every team with a head-coaching vacancy to interview at least one “diverse candidate.” (When the rule was instituted in 2003, there were three Black head coaches. Today, the number is still three.) Harris says that when he got started at what became Kaleidoscope, there were about 12 firms in the U.S. doing his kind of work; he estimates that there are now about 600 worldwide.

In 2014, Google famously revealed its hiring data, showing dismal racial and gender disparities: 30 percent of employees globally were women, and Black and Hispanic employees together made up just 5 percent of workers in the U.S. Facebook, Microsoft, and Apple soon published similarly stark numbers. The reckoning that followed, led by younger and more progressive tech workers, shaped the diversity-consulting industry as it existed when Floyd was murdered.

Many contemporary DEI agencies are now focused on helping companies that profess to have progressive values live up to those ideals. This is referred to in DEI parlance as “alignment”: The idea is to jerk system operations into sync with make-the-world-better branding, like a diversity chiropractor. Wagner’s Collective is one of these outfits. She founded the company in 2017 after working at several tech firms where she saw CEOs profess to care about making workers happy; invariably, the Black employees were not.

Compared with more corporate enterprises like Kaleidoscope, consultancies like Collective tend to have sleeker branding. The people in their stock photos wear T-shirts and clear-framed eyeglasses instead of bad suits, and their websites, in pastel hues, often list the names of the Indigenous tribes on whose ancestral land they do business. They tend to use more overtly political terminology like “anti-racism.” The divide is somewhat generational. “I’m not a fan,” says Harris, though he employs young consultants who use the more confrontational approach. “They tell me, ‘Doug, you old, man. You’re dry.’ But I’m not in that world.”

Both Harris and Wagner, who primarily do operations strategy, share an aversion to DEI work’s lowest-hanging fruit: programs that sound nice and can be sold to multiple clients quickly without much alteration. One popular trend at Fortune 500 companies is requiring employees to take “unconscious-bias training,” a generalized lesson in how bias can affect behavior, and it’s profitable for those consultants who offer it. Collective doesn’t because many DEI practitioners suspect it doesn’t really work. Zheng, the consultant from San Francisco, has a form on their website that asks prospective clients “How did you hear about me?” Zheng doesn’t sign on with the ones who write something like “Google.”

The work done by people like Wagner, Harris, and Zheng is granular and unsexy. It can be as contentious and awkward as therapy; one strategist recalls how, during a call on how bias impacts performance reviews, a white male CEO hung up when accused of potential prejudice, “like an angry teenager slamming the door on their parents.” If all goes well, the public results of consulting by Collective, for example, can look like this: A millennial media company ditches a logo that appears to feature a thin white woman. Or Peloton formalizes a structure for its employee resource groups to participate in marketing and branding discussions. The whole service, from assessment to implementation, can cost between $70,000 and $150,000.

Many corporate clients, of course, don’t really want to change; they just want to look as if they are changing. For the consultants, doing flimsier, higher-volume work is a constant temptation. “Speaking is so much more lucrative than project work, just infinitely,” says Zheng, who has become a kind of DEI influencer on LinkedIn, where a new crop of self-proclaimed experts has flourished. Zheng can command $15,000 for a corporate speech, as can Wagner, who is hiring a publicist. “The money that I’m making from even my biggest client right now, for a year-plus of work, I could make in ten one-hour talks,” says Zheng. “When I’m having a bad day, sometimes I’m like, What if I quit and then talked about unconscious bias once a day and just rolled in money?

“Everybody wants to do new things, but people don’t want to stop doing old things,” Harris says. “I’ll say, ‘You really need to look at your insurance policies and how you’re giving out rates.’ Clients will say, ‘I ain’t going to mess with that. Let’s talk about allyship. Let’s talk about white fragility — that’d be a great topic.’ ” He adds, “You can make a lot of money in diversity being abstract.”

In August, a conservative journalist named Christopher Rufo wrote excitedly on Twitter about an “explosive” leak he had received from inside Sandia National Laboratories, a nuclear-weapons research facility in New Mexico. The documents concerned an event called “White Men’s Caucus on Eliminating Racism, Sexism, and Homophobia in Organizations” that had been conducted with Sandia’s largely white and male executives at a luxury resort. It had been led by a DEI consultancy called White Men As Full Diversity Partners.

What Rufo published, under the headline “Nuclear Consequences,” was ultimately tame. There was an image showing the phrase WHITE MEN on a dry-erase board along with a word cloud of associated terms: MAGA hat, mass killings, beer, Founding Fathers, heart failure. Although Rufo referenced the participants being forced to “publicly recite” statements about their own privilege, most of the materials seem to have been generated by the participants themselves, including handwritten assessments about how much the workshop helped them feel as though they could be better people.

Tucker Carlson, funneling the story into right-wing panic about critical race theory, called the event a “reeducation camp” with “mandatory Maoist struggle sessions.” Senator Josh Hawley wrote to the secretary of Energy that the material was “deeply disturbing.” President Donald Trump signed an executive order on diversity training, partly inspired by what had happened at Sandia.

White Men As Full Diversity Partners is not, in reality, a shadowy cabal of fanatics. The group was founded in 1997 by two white men, Bill Proudman and Michael Welp, who had both been Outward Bound instructors for executive clients and shifted into diversity consulting. (Welp traveled to South Africa, doing ropes courses for newly integrated employees of mines, banks, and pharmaceutical companies, and later got a Ph.D.) They saw that women and nonwhite people bore the brunt of educating white men about race and gender and that there was value in white men being explicitly asked to learn on their own; it became the founding principle of their company.

Though they lead all kinds of sessions for companies and not all of their consultants are white men, their best-known offering is the caucus, in which “white men rediscover their sense of mutual self-interest in a more inclusive world,” as Welp puts it. First, white men learn that they have a shared culture. (Facilitators show clips from films like Apollo 13 and Gran Torino.) They do exercises to establish empathy: Standing on one side of the room, participants take one step forward if they belong to a members-only country club but take a step back if they lived in a mobile home growing up. The company’s three-and-a-half-day program can cost north of $50,000.

Shock value is the point of the “White Men” name — a “wake-up call,” in their words. Though they have been doing it for more than two decades, their explicit, emotion-triggering tactics are in vogue alongside recent trends in the anti-racist community. But WMFDP’s founders are far from radicals. They are certainly not Marxists. Instead, they are pointedly apolitical. “We don’t turn this into the PC police, where all of a sudden, to work here, you have to think like I do. What we have to do is behave,” Proudman says. “We have to be respectful. We don’t have to love each other. Some of my best clients were at opposite ends of the political spectrum, and I’ve seen them be incredible champions around equity and inclusion without having to change their belief systems.”

This is why WMFDP is repeatedly invited to work with the federal government and some of the world’s most prominent companies. Last summer, after Jacob Blake was shot by a police officer in Wisconsin, major sports leagues suspended play. The National Hockey League was conspicuously late to act. Afterward, the NHL announced a suite of initiatives, including that all employees would participate in an “inclusion learning experience,” to be led by WMFDP.

The night before the press release went out, Akim Aliu received a call while walking his dog at home in Toronto. Aliu, who was born in Nigeria, is the co-founder of the Hockey Diversity Alliance, an independent group made up of current and former Black and brown players; the league wanted to know if the HDA would agree to be named in the release. Aliu was insulted. Months earlier, the HDA had submitted an eight-point plan asking the NHL to commit to several measures, including a promise that the employment of Black non-player personnel would rise to 10 percent before the end of the 2020–21 season. Talks between the groups disintegrated. (The NHL says they couldn’t agree on timing and other specifics.) In the end, the HDA did agree to the release, but it later severed ties with the league, calling its efforts “performative” in a blistering statement.

Aliu finds the dismissal of the NHL’s players in favor of outside consultants galling. “I’ll never understand how you can say no to players that are currently in your league and have been in your league,” he says, “but think you’re going to do it the right way with someone else that knows nothing about hockey, that knows nothing about being Black in hockey.”

That an organization with a name so rhetorically antagonistic to power is one of the most corporate-friendly DEI consultancies on the ground seems like an omen. I asked Proudman about Aliu and the HDA, and whether he ever felt like he, the consultant, was colluding — to use a DEI concept — with management against employees. “The whole notion that hiring a largely white company to go in to do that feels disingenuous — I absolutely understand the seeds of that,” he says. He had read about the HDA after the partnership was announced and some of its more “brutal” comments. “It’s part of the mosaic of how we have to come together and figure out how to do this work with one another,” he says. “This is what the work looks like.”

Another horrific cycle of death, protest, and corporate spending occurred in March, when eight people, six of whom were Asian women, were shot to death in suburban Atlanta — the apex of months of anti-Asian violence. There was a rush for consultants who could translate, sometimes literally, systemic issues of oppression and bias faced by the Asian American and Pacific Islander community. “Almost everyone I know who has even the most basic knowledge of Asian American studies got trucked out on MSNBC, CNN,” says Kim Tran, an equity consultant, a community organizer, and a writer with a Ph.D. in ethnic studies.

Corporations and brands seemed to react more nimbly to this spate of violence than they had to previous high-profile killings. “There’s a playbook now,” Tran says, “and it goes something like: A terrible thing happens to a marginalized community; then we put out a statement of outrage; then we do a listening session; and then we drop it until the next terrible thing.” After the shootings, Ad Age released a live blog “tracking how brands, agencies and media players are supporting AAPI communities and responding to anti-Asian sentiment.”

The diversity industry has evolved again, and one company at the forefront is Kindred. The start-up is more of a networking entity than a consultancy — it connects “purpose driven” leaders at businesses and nonprofits with experts in areas of environmental, social, and corporate governance. Ian Schafer, a co-founder, describes Kindred as a curation service and a platform. “A member said to me once, ‘You’re like the Peloton of corporate social responsibility,’ ” he says.

Schafer, who once worked in digital marketing for Harvey Weinstein’s Miramax (he says the toxic environment led him to leave and start his own creative agency), remembers thinking in 2015 that a new realm of possibility was opening in the corporate world. “Accountability was going to be the next great disruptor to business,” he says. The original idea was to create a kind of Davos-like event around that prediction. Kindred raised several million dollars and planned to hold its first major conference in the spring of 2020, with speakers including Chance the Rapper and the CEO of Ben & Jerry’s. Then came the pandemic. In October, Schafer and co-founder Elyssa Byck, who had worked in corporate strategy at BuzzFeed, relaunched the company with a new business model. Clients would charge “members” — entities from Casper to Wells Fargo — $3,500 to $7,000 annually for access to diversity experts (like Zheng) and their services, including speaker series and project planning. They also get to join a members-only Slack in which they can see one another’s contact information and collaborate. Companies like Verizon can purchase discounted “enterprise memberships” for large groups of employees. In December, in a joint effort with Kindred, Verizon’s Yahoo division announced a project called the “Allyship Pledge,” which connects “digital creators” with anti-racist activists and academics for four-hour talks. Participants received Allyship Pledge–branded swag, including a notebook and a water bottle.

Members can also access Kindred’s “Concierge” service and commission data analysis or research reports on “ESG topics.” They can appeal for emergency help via “Rapid Response Support” — say, if there is a brutal police killing and consumers or employees are demanding that management address it. Before the verdict in Derek Chauvin’s trial, Kindred members had the chance to book “office hours” with a former LAPD conflict-resolution specialist and mediator. “Where else can you get that?” Schafer says.

He is aware of the optics of running a business, he says, that focuses more explicitly on DEI so quickly after last summer. “I look like the problem that a lot of people have with the way that business does business just by the fact that I’m a cis straight white man. We aren’t here to be activists. We’re actually here to be very practical incrementalists.”

At least one consultant of color says they declined a partnership offer from Kindred. “It felt like they wanted us to do the heavy lifting and give them credibility,” the consultant says. “To have people with more resources and connections come in and take business away from us is really frustrating. It feels so opposite to the goal of equity — just because DEI is trending right now.”

As more money pours into the diversity industry, the products and services for sale are becoming ever more abstracted away from actual workers in pain. Steven Huang, a disillusioned consultant who wants to disrupt the field, plans to experiment with DEI and psychedelics, believing that CEOs who microdose might have an easier time opening their minds to accelerated change than sober ones. There is now DEI.AI, which reads emails for sensitivity, and DEI virtual reality. The right-wing nightmare is that militant “diversinistas” are taking over America’s most beloved institutions, changing the fabric of work life. The much more likely danger is that executives will become better at sounding as if they are onboard with a mandate of social transformation, while little material change happens for the people who need it most. Take Kroger, the grocery chain, which just released an update on its diversity efforts, noting that it had partnered with 107 new diverse suppliers in 2020, an increase of 91 percent. Chairman and CEO Rodney McMullen touted in a press release that “greater racial, gender, health, and wealth equity will drive true and long-lasting change and better outcomes in our country.” Three days later, the company revealed in a regulatory filing that McMullen made his biggest salary ever, $22.4 million, in 2020, while the median salary of workers fell 8 percent to $24,617. In the U.S., workers like stockists and checkout clerks are, of course, disproportionately people of color.

“Diversity, equity, and inclusion functions with the world as it is,” says Tran, “and not the world as we want it to be.”

There is one consultant with a small operation who has perhaps the best sounding board in the world for her efforts to improve it. Aida Davis’s aunt by marriage is Angela Davis, and she is the daughter of Alemayehu G. Mariam, an Ethiopian political scientist and human-rights scholar; her parents immigrated to the U.S. as political refugees, and she grew up in a working-class town near San Bernardino called Apple Valley. In college, Davis became an organizer with the Service Employees International Union and stayed in organizing for a decade. She runs her company, Decolonize Design, from L.A.

Davis founded the company in part as a rejection of DEI, she says, and created her own acronym: BDJ, for “belonging, dignity, and justice.” (There will soon be another J, for joy.) Instead of “tinkering around the edges” of the DEI industry, Davis says, her company is explicitly anti-assimilationist, with a worker-centric approach influenced by her time in the labor movement.

What does anti-assimilationist consulting look like? One example is Davis’s work with a well-known company. This chain’s locations are mostly owned by franchisees, who typically pick the music that is played in the stores — a practice that seems benign but can be overtly exclusionary. At one of these places, in the town where I went to college, the owners blasted classical music as a blatant attempt to deter local Black teenagers. No matter that the workers inside were also Black teenagers who might not have liked the music. The chain wanted to change the policy; at one point, Davis says, it considered devising a standardized playlist that would somehow represent artists from all backgrounds. Her company’s advice instead was to simply let the workers choose what they wanted to play. Now, everywhere in the country, they can.

The change Davis helped implement is remarkable in its specificity. In thinking about the freedom of that choice — to be able to play your own music in the place where you work — the buzzwords of belonging and community feel real again, reinscribed with meaning. They have a bearing on physical space. The strategy isn’t flashy, however; it isn’t a statement from the CEO or a huge donation. Nor is it scalable or something that can go viral. The company, on her recommendation, just gave something up.

Davis says she is still constantly in tension over what she does. She and members of her radical family have long conversations when she works with corporate clients. “I’m like, ‘Am I doing the wrong thing? Where do I stand? Am I selling out?’ ” she says. “They are philosophers, so I don’t get answers. I get more questions.”

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