Posted on June 12, 2021

What Are Companies Desperate For Diversity Consultants Actually Buying?

Bridget Read, The Cut, May 26, 2021

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. {snip}


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. {snip}

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.” {snip} 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. {snip}


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.


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. {snip} 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.  {snip}


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.