By Stephen Koepp | June 18, 2020
This story first appeared earlier this month on the website of From Day One, a forum on corporate values. Reprinted with permission.
The NFL takes a knee. Juneteenth becomes a corporate holiday. NASCAR bans the confederate flag. The stereotypical product mascots Aunt Jemima, Uncle Ben and Mrs. Butterworth are suddenly retired. The Oscars promise to be not-so-white anymore. Band-Aid says it will start making bandages in darker shades. A parade of corporate press releases announces that companies will spend hundreds of millions of dollars to fight racial injustice and inequality. At companies with widespread complaints about toxic workplaces for people of color, heads roll.
All of these things could have happened over the course of decades, but they unfolded in a matter of days. Suddenly, Corporate America was promising to make the well-being of Black America a top priority. It was not necessarily a matter of courage. After the horrific police killing of George Floyd and the waves of protest that circled the globe, corporations could see which way the wind was blowing. According to many recent polls, a two-thirds majority of Americans support the protests against policy brutality and racial discrimination. Almost overnight, Black Lives Matter has gone from marginal to mainstream, from argument to consensus.
The corporate turnabout began earlier this month with a flurry of statements offering contrition about past neglect and support for the BLM movement. Many were filled with promises to “do better” and “do more,” with some offering pledges of money and proposing changes in corporate and public policy. Adidas, under pressure from employees of color and their allies, committed $120 million to programs that support black communities. As the company announced on Twitter, “First, we need to give credit where it’s long overdue: The success of Adidas would be nothing without Black athletes, Black artists, Black employees, and Black customers. Period.”
Johnson & Johnson CEO Alex Gorsky, whose company pledged $10 million to fight racism, wrote in a LinkedIn post: “As the CEO of the world’s largest health-care company, I must state unequivocally that racism in any form is unacceptable, and that black lives matter. And as a white man, I also need to acknowledge the limits of my own life experience and listen to those who have faced systemic injustice since the day they were born.”
From IBM came a letter to Congress by CEO Arvind Krishna, who said the company would like to work with lawmakers “in pursuit of justice and racial equity, focused in police reform, responsible use of technology, and broadening skills and educational opportunities.” IBM, as well as Amazon and Microsoft, said they would back away from selling facial-recognition technology, at least for now, bowing to concerns about its misuse or abuse by law-enforcement authorities.
While some of the declarations took flak for being disingenuous or too-little-too-late, they were generally welcomed as a potential turning point. “I think the statements and the additional efforts are extremely valuable,” Marion Brooks, VP of diversity and inclusion at Novartis Corp., told From Day One. Yet as dramatic as it all was, skepticism abounded too, given that “many of the same companies expressing solidarity have contributed to systemic inequality, targeted the black community with unhealthy products and services, and failed to hire, promote and fairly compensate black men and women,” wrote David Gelles in the New York Times. “Corporate America has failed Black America,” said Darren Walker, the president of the Ford Foundation and a member of the board of PepsiCo, who is black. “Even after a generation of Ivy League educations and extraordinary talented African-Americans going into corporate America, we seem to have hit a wall.”
Indeed, while African-Americans constitute about 13% of the U.S. population, their representation tends to be in the low single digits on corporate boards, at the C-Suite executive level, and in technical roles. Facebook has just a 1.5% black tech force, compared with Apple at 6%. Yet this inequality represents just the top of the income pyramid. Overall, since 2000, the wage gap between blacks and whites has grown significantly. That feeds the huge wealth gap. On average, white households have nearly 6.5 times the wealth of black households, reports Bloomberg. Inequalities in wealth and access to health care have contributed to the vastly disproportionate impact of COVID-19 on people of color.
As Corporate America began to reckon with these realities, here’s how the responses unfolded:
Statements and Gestures
One of the earliest statements, on May 29, came from Nike, which posted on social media a simple black square with a saying in white letters protesting police brutality and racial injustice: “For Once, Don’t Do It.” Alluding to its trademark motto, the statement was in keeping with the company’s voice on social issues, including its ad campaign in support of Colin Kaepernick with the line, “Believe in something, even if it means sacrificing everything.”
Before long Nike’s white-on-black design became the default format for corporate statements, as dozens followed the template, diluting the impact. It became an exercise applying corporate branding to popular sentiment. “Unfortunately, the reality of the groupthink, even if backed by the best of intentions, transformed these messages into homogenous–and largely meaningless–wallpaper,” opined Jeff Beers in Fast Company. (Nike, for its part, followed through by committing $40 million to social-justice organizations.)
Other companies attempted more original statements. Jamie Dimon, the CEO of JPMorgan Chase, the largest U.S. bank, knelt with staffers in a branch office, wearing shorts, sneakers and a mask. Chase says that it’s making multibillion-dollar investments to address racial and economic inequality, “particularly for the Black community.” Even so, advocates of social equity want to see results more than symbols. “There’s a lot of performative allyship going around,” Y-Vonne Hutchinson, CEO and founder of diversity consulting firm ReadySet told the Washington Post. “Nobody’s asking for a CEO to take a knee. You take a knee after you change your policies.”
Well then, at historic moments like these, what are the most important words and deeds for companies to get across? Business Insider, with the help of a PR veteran, analyzed 27 memos from business leaders responding to George Floyd’s death. The conclusions: “The strongest memos acknowledged where leaders and their organizations had fallen short. They confronted discomfort head-on, and invited difficult conversations. And they outlined concrete plans for cultivating diversity and inclusion, both in the workplace and in the U.S. more generally.”
Many companies hurried to embrace a prospectively more durable gesture by recognizing Juneteenth, the day commemorating the end of slavery in the U.S. Nike, Twitter, Target and Spotify were among the small but growing number of companies designating June 19 as a paid company holiday.
Changing Positions and Products
The NFL, which has fought with its players for years over their rights to protest police brutality by taking a knee during the national anthem, did a complete 180-degree turn. “We, the NFL, admit we were wrong,” the league tweeted in an official statement. In a video accompanying the tweet, NFL Commissioner Roger Goodell said, “Without black players, there would be no National Football League. And the protests around the country are emblematic of the centuries of silence, inequality and oppression of black players, coaches, fans and staff.” The turnabout had resonance far beyond sports, given how President Trump had exploited the controversy as a wedge issue, painting Kaepernick and fellow protesters as unpatriotic. Shunned by teams as too controversial, Kaepernick has not played professional football since 2016.
Other organizations decided quickly to change policies that seemed discriminatory, culturally unaware, or dismissive of the different needs of diverse customers. Walmart said it would no longer place “multicultural hair and beauty products” in locked cases, which it had been doing in about a dozen stores. “Predominantly African American people are buying those products, so the assumption is we’re thieves,” a customer told NBC News. NASCAR, a bastion of the white working class, said it will no longer allow the Confederate flag to be displayed at events and properties, while driver Bubba Wallace, the first full-time African American NASCAR driver in decades, earlier this month raced in a car with a Black Lives Matter paint scheme.
The moment proved a catalyst for change in products that for more than a century had continued to display mascots that seemed to endure from the plantation era, despite complaints over the years. Aunt Jemima, Mrs. Butterworth, Uncle Ben and the Cream of Wheat chef were all retired or placed under review by the companies that produce them. Where did these stereotypical characters come from? “The images of placid, smiling African-Americans on commercial products were often created during times of racial upheaval. Characters like Aunt Jemima, who was first depicted as a mammy, followed Reconstruction when white people were scared of what it meant to live alongside newly freed slaves,” reported the New York Times, citing an interview with Kevin D. Thomas, a professor of multicultural branding in the Race, Ethnic and Indigenous Studies Program at Marquette University. (The Frito Bandito, by the way, made his exit in 1971.)
Band-Aids, a Johnson & Johnson product, have been made since 1920 in flesh color, which was fine as long as your color was a kind of soft pink. Earlier this month, the company announced that it will start offering “a range of bandages in light, medium and deep shades of Brown and Black skin tones that embrace the beauty of diverse skin.” Commented Ishena Robinson in The Root: “A whole damn century from the time it was first introduced, Band-Aid brand has finally come to the realization that black people exist, have skin, get boo-boos, and need bandages.”
Some companies started out on the wrong foot in their policy declarations. Starbucks, which in 2018 had closed its 8,000 U.S. stores for a day of anti-bias training after the misguided arrest of two black men, responded to the current upsurge in protests by stating in a memo that their baristas and other employees were forbidden to wear shirts or accessories declaring support for Black Lives Matter. When a backlash ensued, the company not only reversed itself, but for good measure said it will produce 250,000 corporate T-shirts promoting Black Lives Matter to be given to employees and sold to customers. That may have been a well-meaning gesture, but this company too was criticized for engaging in performative allyship rather than concrete measures to boost employees and community members.
Going Beyond Words
Investing large amounts of money to create equity and new opportunity for Black Americans is a welcome measure. Apple pledged $100 million, while companies including Walmart, Target, Home Depot and Levi’s were among the name brands promising financial support. Less recognized were employees taking advantage of already-established corporate matching-fund programs to help maximize their donating power. In the week following George Floyd’s killing, the matching-fund management company Benevity saw more than $100 million donated through such programs to civil-rights and related causes.
Even more direct efforts were shown by companies launching programs to train more young people of color for the skilled jobs of the future. Techtonic Group, a Boulder-based software developer, plans to add 100 black and Hispanic apprentices to its Techtonic Academy program, a paid, 14-week course sanctioned by the U.S. Department of Labor, the Denver Business Journal reported. “We came to the conclusion that everybody’s putting up platitudes on social media and that doesn’t really do anything for anybody,” said CEO Heather Terenzio. “So we starting talking about our apprenticeship program and what we could do to help.”
What other measures should companies pursue, beyond words of good intent? "Social statements mean nothing without real actions and investments," Elizabeth A. Morrison, VP of diversity & belonging for Live Nation, told From Day One. "I’m speaking specifically of commitments to increasing workforce diversity, tactics to drive equality and inclusion with clients (like diversity riders in contracts and supplier diversity), donations to social-justice organizations, and supporting legislation for equal justice. Ideally companies are doing many of these, and/or taking other action that is equally powerful and sustainable. Long-term commitment and partnerships are needed for this not to become the flavor of the month."
Indeed, the Black Lives Matter movement strongly suggests that corporations need to get used to a new dynamic of social activism. Jim VandeHei, co-founder and CEO of the news organization Axios, calls it a "bottom-up revolution" that presents a stark new reality for American CEOs. "Doing good is no longer a niche. It's a necessity," he wrote on Axios. "The judgment CEOs feared most in the past was pesky reporters or regulators. The judgment they should fear the most now is idealistic employees on the inside and the social media warriors on the outside." While this presents a new peril, there is a potential upside to embracing this change: "We have found the new generation will work as hard or harder than we did if we provide this clarity of purpose and rolling, unvarnished dialogue."
Steve Koepp is a co-founder of From Day One. Previously, he was editorial director of Time Inc. Books, executive editor of Fortune and deputy managing editor of Time.