Hi, it's Josh here.
Cast your minds back to 2020, when every Fortune 500 company suddenly discovered racism existed and pledged billions to fix it. Now, in 2025, we're watching those same companies compete to see who can backpedal fastest on their commitments.
So I find myself writing a newsletter I didn't think anyone would have to write in 2025. In defence of DEI.
My sister works for an amazing charity called Team Domenica, helping adults with learning disabilities get into the workplace - meaning I’ve seen up close the incredible impact having a workforce that reflects the community you serve can have. So it’s been particularly disturbing seeing this Trump-triggered ‘sunsetting’ of DEI initiatives across the corporate world.
But while the stampede away from diversity initiatives hits full gallop, here's a quick reminder: ditching DEI isn't just morally bankrupt – it's bad business.
Beyond equal: equity
DEI isn't about giving everyone the same starting line – it's about acknowledging that some runners have been competing with weighted vests. A 2023 study found that Black Americans still face an average $550,000 lifetime earnings gap compared to white peers. For college educated or higher black men, this rises to $1.4M, or 41%. Meanwhile, women still make up only 10% of Fortune 500 CEOs, despite representing over 50% of college graduates. The point isn't to lower the bar; it's to remove the systemic hurdles that keep talented people from reaching it.
It’s the economy, stupid
DEI doesn’t need to be a political issue, but it is a business one. And as luck would have it we already sit on a treasure trove of data that show us diversity is not only a source of power for businesses, but a real competitive advantage.
McKinsey’s latest diversity report found companies in the bottom quartile for executive team diversity are 66% less likely to outperform their rivals financially. More diverse teams report better EBIT margins, and are 70% likelier to capture new markets. The maths isn’t difficult. Diverse teams = more money.
So for those organisations able to row back these initiatives so easily it seems either a) you weren’t measuring the impact, or b) if you were measuring, you weren’t doing DEI right. Pick your poison.
The innovation imperative
We are seeing a huge surge in interest in our innovation capabilities recently, as categories feel crammed with ever diminishing space to play, and consumers aren’t responding to the arms race of incremental features and benefits. Whilst breaking this cycle demands new approaches, processes, and harnessing of new technologies, diversity can also be a secret weapon.
BCG's 2023 data shows companies with above-average diversity produced nearly double the innovation revenue of their peers (45% vs 26% of revenue from new products and services). We know innovation isn't about having the smartest person in the room – it's about having a diverse set of perspectives attacking the problem.
We see this time again. Until 2011, airbags were designed exclusively with male crash test dummies, resulting in women being 47% more likely to suffer serious injuries in car crashes. When Apple finally added female health tracking to the Apple Watch, five years after its launch, the feature generated over 70 million data points in its first nine months – a market hiding in plain sight. These aren't just oversight or mistakes – they're symptoms of a deeper problem that become more critical as the challenges we face grow more complex.
Tomorrow's challenges need today's changes
The challenges facing businesses, and humanity at large aren’t getting easier. They’re bigger, more complex, more interlinked than ever before, and require strategic imagination to decode and find solutions. They’re not going to be solved by rooms full of people who went to the same handful of schools and holiday in the Hamptons.
Early AI systems were great at recognizing pedestrians – as long as they had light skin and weren't using wheelchairs. Why? Because the training data and testing teams lacked diversity. The scientific community increasingly understands the power of diversity, as teams are becoming more diverse in demographics, international scope, and discipline. They seem to grasp what many businesses can’t - the solutions to complex problems won't come from teams that all share the same blind spots.
The biggest breakthroughs aren't coming from homogeneous teams iterating on what worked yesterday. They're coming from diverse groups who see problems differently, who bring different life experiences to the table, who question assumptions that others take for granted. When a team's collective blind spots align with the challenges they're trying to solve, you don't get innovation – you get expensive failures and missed opportunities.
Adapt or die
You can dismantle DEI programs today. But by 2045 $84.4 trillion in wealth will transfer to younger generations, who consistently rank DEI as a top factor in choosing brands and employers. Your competitors aren't just building more diverse companies – they're building companies that will capture the next generation of talent and customers.
It’s not about being perfect, but continuing to invest in broadening the talent pool you draw from, to bring diverse perspectives into the business. Because the data is clear: diverse companies perform better, innovate faster, and attract better talent. Continuing to invest in DEI isn’t just the right thing to do – it’s the smart thing to do.
The question isn't whether diversity matters. The question is whether you'll still be relevant when your customers, employees, and the world have moved on without you.
Josh Hedley-Dent
Senior Director - Client Growth at BeenThereDoneThat
Further reading:
Diversity matters even more: The case for holistic impact
How Diverse Leadership Teams Boost Innovation