Good morning.
“Change starts at the top.” It’s a recurring catchphrase I hear from chief diversity officers when touting their CEOs’ commitment to DEI and the importance of top-down tone setting.
To be sure, unlocking a CDO’s full potential requires collaboration, financial investment, and vocal, full-throated support from C-suite peers. But the reality is that the C-suite can be fully aligned on diversity’s business imperative and see little momentum on gender, race, or any other host of underrepresented demographics within their ranks.
Middle managers are arguably the most crucial determinant of the reach and efficacy of DEI efforts. They’re at the fulcrum of talent management, shape the daily experiences of employees, and make hiring, firing, and promotion decisions. When properly engaged, they can serve as strong champions for DEI and transform intention into action and measurable change. Conversely, when managers don’t buy into DEI, they can be a forceful hindrance to the implementation of DEI programs. In many ways, CDOs are at the mercy of people managers, hence its characterization in diversity circles as “ the frozen middle,” “the diversity bottleneck,” and “where DEI goes to die.”
To make diversity sustainable and widespread, it can’t exist solely within the DEI function, Microsoft’s chief diversity officer, Lindsay-Rae McIntyre, tells me. All employees must pick up the mantle and champion diversity.
About five years ago, the company decided to take a more structural approach to hold employees accountable to companywide DEI goals: All employees must set a diversity-related development goal in annual performance reviews.
Referred to internally as a DEI Core Priority, it’s a set of actions based on personal reflections that are meant to align with and promote the company’s DEI priorities for that year. They range from participating in learning opportunities, nurturing allyship behavior, facilitating critical conversations, or leveraging feedback to understand and improve.
Employees discuss their DEI Core Priority with their managers and, together, explore how they can make the company more inclusive. People managers are encouraged to lead by example by emphasizing the importance of the DEI Core Priority and sharing how they plan to reach their own set goals.
Employees personalize their DEI Core Priority by following three main steps:
—They select a focus area, such as building inclusive products and services or participating in an employee resource group.
—They define their success metrics. For instance, success for an employee who chooses to practice allyship could include completing a learning course on the topic and demonstrating how they applied the teachings.
—They share their impact during their performance and development conversations. An employee focused on building inclusive products, for example, could highlight their progress in creating AI systems that are less biased against people of color.
Since implementing the DEI Core Priority, Microsoft has seen a 270% increase in employees taking optional diversity and inclusion learnings, independent of required learnings, says McIntyre.
“The DEI Core Priority is one avenue to give employees curated resources and support but also to engage managers and stress their role in helping us affect change and be accountable.” She adds: “This particular motion doesn’t show up as a compliance motion. It shows up as a conversation that employees are really curious to have.”
Ruth Umoh
@ruthumohnews
ruth.umoh@fortune.com
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Capital dropped. Black founders received just 0.13% of all capital invested in U.S. startups in the third quarter, or about $39.7 million of $29.9 billion, according to Crunchbase. That’s a steep drop from the same quarter last year, which saw Black founders raise around 1.2% in venture dollars. TechCrunch
Wealth gap. Black and Hispanic Americans have amassed more wealth in recent years, with a median net worth increase of 61% and 47%, respectively, since 2019. But it still trails that of white Americans, according to the Federal Reserve’s triennial Survey on Consumer Finances released last month. The net worth of Black and Hispanic households last year was $44,900 and $61,600, compared to white households' median wealth of $285,000, up by 31% from 2019.
The Big Think
Companies have admittedly ramped up racial and female representation in their ranks. However, socioeconomic diversity is still severely lacking in corporate America and can be a greater obstacle to career progression than gender and ethnicity. One study of 16,500 KPMG employees found that those from lower socioeconomic backgrounds took nearly a fifth longer to advance to the next rung of seniority than their well-heeled peers. FT
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