Episode Transcript
[00:00:05] Speaker A: Good morning, everyone.
[00:00:06] Speaker B: It's the third week of January, one week into the Trump administration. And I want to talk about a whole bunch of things on my mind in the next 20 minutes that are going to be really big issues throughout the year. And I'm not going to talk about AI or the super worker this week. We can talk about that next week. And if you come to my webinar on Tuesday or Wednesday the 28th, you'll hear the details and specific breakdown of the super worker research and what it means to you. Okay, so we're one week into the Trump administration here in the United States. I think most of you are aware of what's been going on. 200 executive orders on a variety of issues. The one that I want to talk about first is dei, the history of DEI in the United States. And, and by the way, I just spent 10 days in South Africa this month, which is one of the most.
[00:00:55] Speaker A: Beautiful places in the world. I was in Cape Town.
[00:00:58] Speaker B: I cannot express enough how beautiful and spectacular that city and area is. And I encourage you to go because there's all sorts of history there. And you can see what apartheid did to the society. And it's very, really kind of painful in a way to see, even though they're past that to some degree. So, anyway, so DEI has been around a long time.
[00:01:26] Speaker A: I was at IBM in the 1980s.
[00:01:27] Speaker B: When affirmative action was strong, and I'm about to publish a big article on this. The reason we have DEI programs is not for legal reasons, because there are laws in the EEOC that prevent discrimination in hiring, discrimination in pay, discrimination in promotion.
[00:01:45] Speaker A: Coca Cola was sued for $190 million.
[00:01:48] Speaker B: Google was sued for $100 million. You know, you get in trouble when you do stuff in the business world that discriminates based on hiring, pay promotion based on race, gender, sex, age and.
[00:02:00] Speaker A: So forth, including disabilities, by the way. But the DEI programs were designed to.
[00:02:04] Speaker B: Educate people and help them get past their personal biases when they come into the workplace. And they were really, and they really are good for the most part. And I went through many, many of.
[00:02:16] Speaker A: Them over the years.
[00:02:16] Speaker B: And I learned a lot about life, my particular life. I grew up in Berkeley, California, which was a very left wing area. I was bused to a black school for high school. I live in Oakland, so I'm very aware of all this stuff. I've kind of lived in this environment for most of my life. But what happened was during the George Floyd period of time, it went very far to the left. And as you know, DEI Leaders became, in some sense, social justice leaders, and.
[00:02:51] Speaker A: Companies were okay with this.
[00:02:53] Speaker B: And so we started to do training on oppression, white fragility, intersectionality, microaggression. You know, things that didn't really have a lot to do with hiring and pay practices, but were behavioral things. And people were very uncomfortable about it.
[00:03:09] Speaker A: Because it had nothing to do with the work practices.
[00:03:11] Speaker B: It was more personal stuff. So during that period of time, it was contemporary to do it. So companies wanted to be a part of it. Companies including, by the way, lesbian, gay, transgender, and other topics that were important.
[00:03:27] Speaker A: So companies went with the flow.
[00:03:29] Speaker B: And a lot of the companies we interviewed in the Elevating Equity study a couple years ago really felt strong about it for business reasons as well as for social reasons. And then, of course, the right wing kind of rose up in the United States. The Supreme Court overturned the affirmative action laws, and law firms grouped together with right wing politicians and started to sue companies. And Robby Starbuck, who's a famous social activist here, started to deliberately target companies to force them, using social media pressure to do away with these DEI initiatives.
[00:04:05] Speaker A: And for the last six months or.
[00:04:07] Speaker B: So, companies have done that. They have formally said, we're going to pull back. We're, we're, we apologize. Not a lot of companies, but enough that it's been sort of a fear tactic. Well, the end of all of this, here's where I am, and I think most of you are, and I just want to kind of discuss this. The reason we do these things in a company, not in our personal lives, is because it's a good business decision. Hiring and promoting diversity and equity and reaching out to communities of different colors and different backgrounds and different nationalities is good business, period. And when you don't do that, you limit your market. You limit who you can hire.
[00:04:49] Speaker A: You limit where you could go, who.
[00:04:50] Speaker B: You can sell to, what you can sell. In fact, Jamie Dimon, who I admire just tremendously, just made a comment that bring them on. He's not stopping any of the DEI.
[00:05:02] Speaker A: Programs in JPMorgan Chase, and good for him.
[00:05:05] Speaker B: I hope the rest of you will.
[00:05:06] Speaker A: Make those kinds of comments publicly inside of your companies.
Because even though the Trump administration is.
[00:05:13] Speaker B: Trying to demonize these programs, they are not obviously demonization problems. These are really perspectives that maybe got a little bit too strong and the social regime and maybe overreached where we were in business. So I'm talking about the implications of that in a minute. So those of you that have DEI missions, roles, jobs, opinions, I don't think any of your Work is going to go away. I think the work you do is going to continue.
[00:05:41] Speaker A: You may be less publicly visible about.
[00:05:44] Speaker B: It, but a high performing company is a diverse, inclusive, psychologically safe company. I can guarantee that. I've done a lot of research on it. You know, unfortunately, in the middle of all of this firestorm, One of the McKinsey reports on DEI was discredited, which leads people to think, oh, all these DEI studies are wrong. They're not wrong. I know this from our research. And we have no political bias at all.
[00:06:10] Speaker A: The companies that have more inclusive and.
[00:06:12] Speaker B: Diverse practices perform better. They respond better, they're more dynamic, they're better for customers, they're better for employees. They have higher attention. And you know this. So we're going to ignore the political stuff in the business world and we're going to push ahead. And we'll do more on this at the Big Reset and we'll talk about.
[00:06:30] Speaker A: It at Irresistible and by the way.
[00:06:32] Speaker B: Irresistible the third week of May, put it on your calendar because we're going to announce some really big things there and I would like most of you to come if you can. We can only support 450 people, but please come. Okay, so stay tuned for an article from me on that. But lots and lots of difficult decisions going on in the federal government on these topics. Second thing I want to educate you about is the trust index from Edelman. Edelman, which is a very large, successful, very highly esteemed PR firm, does a trust barometer every year. It's really, it's a gigantic global survey. 200, 300,000 people take it in multiple countries. It's not biased towards the US and the trust barometer that came out last week is frightening, to be honest. And what I mean by that is over the last decade that I've been studying it, we've had this steady decline in trust among the population, citizenship and workers, of course, towards distrusting politics, distrusting the Supreme Court, distrusting media, of course, and now distrusting business. And, and throughout these studies, year after year, business was always the most trusted entity of these other entities because we business people have no social agenda. We're just trying to do the right thing for customers and employees to make a good profit and take care of our organizations and our shareholders. So we don't have any real bias at all. So people did trust us. And even though there's companies that behave poorly for a whole bunch of reasons.
[00:08:11] Speaker A: It'S a minority of companies.
[00:08:13] Speaker B: So it was always kind of a nice thing to be on the business side. Of all this, well, that has plummeted. Absolutely plummeted.
[00:08:20] Speaker A: 67% of the people who did the.
[00:08:22] Speaker B: Survey this year believe that rich people don't pay taxes. Almost 70% believe that CEOs lie about their financial information. And I'm not making this up. I'm just sharing it with you.
[00:08:34] Speaker A: You can read the survey.
[00:08:36] Speaker B: I'll send a link in the podcast notes. And I believe more than half, but 40% in general, with different dimensions of groups being higher than that, believe it is okay to retaliate against your company. And that means violence or other forms of poor behavior to make up for the unfairness or injustice or pay inequities of your employer. 40% of the people.
It's absolutely astounding. And I'm not making this up, so you need to read it yourself. And if Edelman's data is wrong, we'll find out. But I think what this points out is not that 40% of your workers are going to go out and break things and do bad stuff. But the issue I mentioned in the beginning, as well as others, including income inequality, including the kinds of things going on in the United States political system, are really getting under people's skin now. You know, I know a lot of you in the US probably have seen this, that the way the income inequality works here we are now in a generation where it is not clear if the American dream is true anymore. It is not clear if your children will have a better standard of living than you. For many, many people, particularly immigrants. By the way, we are an immigrant country, so we're all immigrants. My family came from Eastern Europe. But so this idea that you come to the United States to make your life better for your children. Well, first of all, we don't really like immigration around here at the moment. But that is not turning out to.
[00:10:19] Speaker A: Be true financially when you look at the data.
[00:10:21] Speaker B: Raj Chetty from Harvard has done a lot of studies on this, and it's a fascinating amount of research on why that is. So we have a lot of people, particularly workers in their 30s and younger, who are saying, you know, maybe I won't be able to buy a house. Maybe I won't be able to put my kids to school. Maybe I won't be able to afford to have a family. And by the way, what about all.
[00:10:45] Speaker A: These CEOs that are making hundreds of millions of dollars?
[00:10:48] Speaker B: How come I'm not making more money? Why do they need to make some money? Et cetera, et cetera. So take that with a grain of salt. We'll talk more about the implications. As most of you know, I've talked about this. The way I look at the corporate response to these kinds of surveys is very simple. Your company is a society. Your company is a collection of people.
[00:11:11] Speaker A: Just like a country or a city.
[00:11:13] Speaker B: Or any other group that you're in. And it has norms and cultures and behaviors that are built up over the years. And when people feel disaffected or that they're treated unfairly or that there's inequalities in your society, your company, they behave differently, they slow down, they check out, they misbehave, they might denigrate the company publicly, other things like that. And you know, nobody wants that to happen.
[00:11:41] Speaker A: Right.
[00:11:41] Speaker B: I mean, that's not. That's kind of counter to our whole strategy as organizations, as business people. So for that research, to me, just accentuates why a lot of these equity.
[00:11:52] Speaker A: Policies and civility, by the way, SHRM.
[00:11:54] Speaker B: Did a study of civility are really important to us as business people. And of course, the problem we have in HR is we're always caught in the middle because we're hr. So it's easy to demonize HR and say, oh, those, you know, silly HR people are proselytizing dei. No, we're not doing that. You know that we're here to make.
[00:12:14] Speaker A: The company more effective and to make.
[00:12:15] Speaker B: The employees more productive and happy and.
[00:12:18] Speaker A: To help the company grow and change.
[00:12:20] Speaker B: And evolve and adapt.
[00:12:22] Speaker A: That's what we're here for.
[00:12:23] Speaker B: So read that when you have some time. Third thing I want to talk about, which I'm going to discuss in detail at the webinar, is the PwC CEO survey. So every year, the largest CEO survey that I ever see is from PwC. 4100 CEOs took it all different sizes of companies, all different geographies. Please read it if you have time. I'm going to talk about it a lot. It's.
[00:12:49] Speaker A: In a sense, the rise of the.
[00:12:50] Speaker B: Superworker is completely aligned with the data that came back from that survey. But a couple things I want to point out, number one, is that reinvention is the theme.
[00:13:00] Speaker A: Reinvention is the problem.
[00:13:02] Speaker B: Reinvention is the strategy in 2025 and beyond. Because we have two colliding factors impacting businesses. Number one, industry convergence technologies and overlapping businesses colliding with each other and companies trying to get into businesses that are adjacent to theirs, whether that be batteries, ev, other forms of energy services and so forth. And you can read our GWI studies about this. Our GWI studies are perfectly designed to explain that. Or go into Galileo and ask Galileo to explain it to you, and it'll explain it to you.
[00:13:35] Speaker A: The second is AI.
[00:13:37] Speaker B: AI is a massive transformational technology. We are going to be going through a lot of AI transformation in every part of our companies, integrating different business functions. You'll hear about that next week. Read about the four levels of, you know, integration in the studies that we've just finished. So CEOs are saying reinvent, reinvent, reinvent. But a lot of them are not finding it's easy because the organization is having a hard time making clear decisions.
[00:14:06] Speaker A: Change is not sticking, the research shows.
[00:14:09] Speaker B: And I think PBC really did an astounding job on this, that the companies that have made reinvention decisions and have reinvented parts of their business, even in a small way, are upwards of 25 to 30% more profitable than those that have not.
[00:14:28] Speaker A: Now, the way we define this, we.
[00:14:30] Speaker B: Call this the dynamic organization. We actually have a whole body of.
[00:14:33] Speaker A: Research on this called the dynamic organization.
[00:14:35] Speaker B: With dozens and dozens of best practices on how you become ready for reinvention and how you enable yourself. I talked to Tanuj at Standard Charter about this on December.
[00:14:46] Speaker A: I mentioned her situation over there.
[00:14:48] Speaker B: We talked to lots and lots of companies about this. But what the PwC research actually proved is that you can see financial results of all the human capital practices we've been talking about for the last two or three years. The one that's the most interesting, and I'm going to talk about this on the webinar, is if you look at the percentage of roles that are redeployed within the company each year, and they have four categories, less than 10%, 10 to 20%, 20 to 30 and over 30. So there's four categories of companies, and based on the CEO survey, they categorize them into what percentage of your workforce is redeployed into new roles each year. The Companies that redeploy 20% or less of their workforce are upwards of 27% less profitable than those that redeploy 20% or more of their workforce. And so what that means is the.
[00:15:44] Speaker A: Talent marketplace, the talent mobility, the career.
[00:15:47] Speaker B: Reinvention, the academies, all these things we keep talking about with different language every year are directly related to financial performance. And PwC is not an HR research firm like we are. So they discovered this through statistical analysis.
[00:16:05] Speaker A: They didn't set out to prove something.
[00:16:07] Speaker B: That they thought was a good idea. So I'm going to talk about this next week. There's a whole bunch of other things in that report that are really, really.
[00:16:14] Speaker A: Good ways for you to frame your.
[00:16:16] Speaker B: HR strategy with CFOs and CEOs to get them to pay attention to the stuff we want to do. Okay, you know, that was 20 minutes. I don't want to spend too much time this morning, but many, many other things I want to talk about. So please come to the webinar next week or contact us. A couple of things from us Galileo users. You have to get Galileo. We just upgraded the user experience, added a bunch of new features. There's new data in there. It's growing very quickly. We're basically now saying to you guys, if you want to get access to our research, we'll put some of it for free download. But a lot of it's going to.
[00:16:52] Speaker A: Be in the Academy, in Galileo or.
[00:16:54] Speaker B: In the corporate membership. And we'll probably do more stuff on Galileo soon with a lot of announcements coming in May when we get some really cool stuff finished. Second thing is, please come to Irresistible Put it on your calendar. I know May's a little ways off, but things happen fast around here and I will be and we will be at most of the major HR conferences around the world. We have a pretty packed calendar, all of us.
[00:17:17] Speaker A: And we're going to be introducing on.
[00:17:19] Speaker B: February 4th a CHRO offering for CHRO's. I won't preview what it is on this podcast, but for all of you that are at the head of HR level in your companies, we've been spending a lot of time on this. We're going to introduce some things that are going to be really exciting for you. In particular, because your role has changed so dramatically over the last decade and year by year. We want to make sure we have materials and support and community things specifically for you. So stay tuned for that. Okay? Watch out for this article. I'll publish it soon. And anybody that wants to talk about DEI or fairness or equity, please reach out to me or Kathy or anybody on our team and we'll have a chat about it. Talk to you again soon. Bye, everybody.
