Systemic Racism vs Profit: Why the Conflict?
Photo credit - Peter James Hudson, Author: Bankers and Empire: How Wall Street Colonized the Caribbean (2017)
There is a perception that dismantling systemic racism is at odds with making money, particularly in for-profit organizations.
This is a misguided notion, yet a prevalent one. Decision-makers are still struggling with how to balance a focus on tackling racism, with the day-to-day running of their businesses, believing that one is separate to the other.
Capitalism and racism
In simple terms, one can argue that capitalism has often been associated with the exploitation and oppression of racialised individuals and communities. Unpleasant as it may be, colonialism, chattel slavery, and indeed modern-day slavery have and continue to be built on forms of forced labour. This is the multifaceted and complex link between capitalism and racism.
There are some industries that rely heavily on the subjugation of Global Majority communities as a way of extracting cheap labour and the exploitation of their natural resources, to maintain a system of systemic inequality that benefits the wealthy and powerful. Who benefits, will vary in degree, but it isn’t just the top 5%.
It is not my intent to take you down the rabbit hole of intellectualising this, and I’m aware that very few corporate executives will want to reflect on this too deeply, because to do so is to raise some difficult issues that may contravene stated values and ethics around how you do business. However, just because it’s uncomfortable doesn’t mean we should shy away from it.
Cognitive dissonance
Decision-makers may be grappling with balancing their views of the world, how they have benefited from systemic inequality, and what does and doesn’t feel right. It’s the discomfort we feel when we believe or value two things that are at odds with each other, a psychological term called cognitive dissonance.
Even the most purpose-driven organizations, are struggling to balance different stakeholder expectations, knowing that their primary existence necessitates being profitable.
I’m not for a second suggesting that the average debate about what to do or not to do is driven by exploring these themes, but around many executive boardroom tables, there is this perception that any focus on dismantling systemic racism takes time, attention and resources away from making money – and there may be several reasons for this:
A lack of understanding about systemic racism. Leaders may understand how it affects individuals, through overt forms of racism, discrimination, and bias, yet they may not understand (or care) about the covert forms of racism that play out in their culture and day-to-day operating model.
Protecting positional power. Addressing the issues head on, means that behaviours and the way decisions are made will need to change. It is inevitable if you are genuine about your desire to make a difference. However, some people fear it means giving up of power, of being able to do what they want, how they want, and when they want, and therefore will do whatever they can to passively or actively resist any attempts to change.
Anti-racism is a distraction. The fact that many senior executive teams, leadership teams, and managerial teams are made up of an overrepresentation of white people, means that little is felt in terms of how systemic racism impacts them. It is a very difficult subject to navigate because there is not the lived experience and often a lack of professional expertise in helping them connect the dots. Therefore, it is easier to either dance around racism by emphasising inclusion and belonging, for example, or commit to only making surface, performative gestures – symbols – that ease the symptoms, but do very little to address the root causes.
You can be successful without addressing racism. As unpalatable as this may be, companies in the FTSE100, Fortune 500 etc have gotten there without having to address systemic racism, so business cases that are touted have little to no impact for them, because their counter argument could be "our company has existed for decades, if not centuries, we’re happy with the money we're making, the increase in market share, so what's the incentive for me to change?" It's also proven time and time again that leaders can hold on to exclusionary beliefs and discriminate against employees who don’t look like them, and still get promoted, reaching the upper levels of positional power, without having their behaviour challenged and or feeling any obvious consequences for racist behaviour.
Racism, bias, and prejudice still exist. These deep-seated attitudes will shape how leaders engage with this individually and collectively. They may feel attacked, judged, and shamed even by honest conversations about racism and seek to alleviate this discomfort by actively resisting change or attempting to silence the voices of individuals who seek to do something about it.
What do you mean we have a problem with racism?
Is there a way forward?
It depends.
Anyone who is doing the work internally within their organizations, can attest that this is a very difficult landscape to navigate. Particularly if you are personally impacted by this issue and you are the only or one of a few Black colleagues or leaders within the business.
We are seeing more and more research that speaks to the:
Opportunities that organizations are missing out on by failing to cater to Black and Global Majority consumers.
Economic impact of failing to address systemic racism on a global scale. Including Senior Aide to President Biden most recently outlining that failure to address racial discrimination has cost the US economy $16 Trillion in the last 20 years.
Changing attitudes of employees who are willing to walk away from organizations who fail to showcase strong values related to society and the environment.
Creative industries are struggling to retain employees. For example, last year the UK ad industry recorded the biggest annual rate of staff turnover in more than a decade, as problems including burnout, pay, gender and racial inequality cited as the biggest challenges.
Impact investors seeking to ensure their investments are made in organizations that positively progress society as well as deliver against their strategic profit-driven objectives.
Exploring the root causes
It is helpful to explore why some of your leaders believe it must be the maximisation of profit for shareholders or dismantling racism.
What makes them believe it can’t be both? That you can’t be a profitable company that also seeks to take substantive action is dismantling racism.
Is the overt focus on profit an excuse to continue with “by any means necessary” mindset when it comes to attracting and retaining new customers?
Is it because they fear that to address systemic racism is also to question the behaviours of clients, who may also exhibit problematic behaviours and views? It’s easy to turn a blind eye to all of that if you stay quiet and/or do very little. It’s harder to feign ignorance if you continue to take bold and transformational action.
Are they worried it might turn off the clients who are opposed to changing the way things are? Who holds strong views about the role of organizations in righting society's wrongs?
There may be many things influencing their thoughts, it’s up to you to decide whether you will hold space and challenge where these perspectives come from.
It is not a zero-sum game
It is possible to do both, yet there will have to be some sacrifices. Some leaders are prepared for that, under the guise of "the greater good’ and others may feel differently.
Therefore, to reconcile these seemingly opposing standpoints – to be anti-racist versus to maximise profit - is dependent on your vision and ambition for your corporation and what it means to be a sustainable company that is still relevant when demographics shift and stakeholder expectations continue to evolve.
It is dependent on whether you treat this topic as a one-off intervention or a systematic programme that provides every department with the opportunity to be part of the solution.
It is predicated on whether you work around resistant leaders and make this the responsibility of the passionate few or whether you directly confront behaviours and decisions, that preserve the status quo for the benefit of comfort, ease, and convenience.
It is about choice and asking yourselves the ultimate question:
How far does doing something about this matter?