DEI: A symbol of socio-political correctness or a catalyst to drive performance?

This week, Amazon and Meta announced their decision to join a growing list of global giants –McDonald’s, Walmart, and Ford – in scaling back funding for Diversity, Equity, and Inclusion (DEI) programs. As we step into 2025, this shift serves as a stark wake-up call: it’s time to reimagine how we approach DEI. These changes challenge us to reflect deeply on the true purpose of these initiatives – what outcomes are we striving for, and why? More than ever, we must confront the question: how can we ensure DEI evolves into something impactful, meaningful, and essential for the future of workplaces and society?

In many cases, organisations embark on DEI initiatives not out of genuine commitment, but to manage optics for shareholders and stakeholders, bolster legal protection against potential discrimination lawsuits, or project an image of being socially progressive and politically correct. These programs are often treated as ‘nice-to-have’ gestures or feel-good exercises, offering occasional educational value or insights into the lived experiences of others. At times, they serve as reactive measures – quick fixes to repair reputational damage after public missteps. A striking example is Starbucks’ 2018 decision to close 8,000 stores and put 175,000 employees through a one-day diversity training after the highly publicised arrest of two Black men in a Philadelphia location. While such efforts can be well-intentioned, their true impact often falls short of transforming the cultures that created the need for them in the first place.

The rationales behind such initiatives are mostly socio-political. They are therefore informed by the current socio-political landscape, and so when this landscape shifts, as it invariably will, so will the rationale and incentive for such programs.

And the socio-political landscape is undeniably shifting. Just five years ago, in the wake of George Floyd’s murder and the rise of the #BlackLivesMatter movement, organisations engaged in a period of profound introspection. It was a time marked by what felt like a genuine commitment to confronting systemic discrimination and inequity within the workplace. Yet, as is often the case, when societal norms shift too far too quickly without the capacity for thoughtful recalibration, the pendulum inevitably swings back. The pull of historical norms resurfaces, resisting change and reasserting old ways of thinking.

When DEI programs are driven primarily by socio-political motivations, their outcomes will naturally mirror those motivations. This approach risks reducing individuals to their social identities and politicising workplace dynamics – fracturing teams along lines of race, gender, or sexuality. What begins as an effort to unite can instead sow division, creating cultural fissures that, under pressure, deepen into chasms. These divisions not only create a fertile ground for conflict but also drain resources and distract from the organisation’s commercial imperative, undermining its ability to thrive in a competitive landscape.

This calls for a fundamental re-evaluation of how we think about DEI and the rationale behind these initiatives. It begins with de-politicising DEI programs and reorienting them to serve a clear and explicit purpose: driving core business. Instead of treating DEI as a political exercise, we must reframe it as a strategic tool for optimising workplace culture – a mechanism to enhance collaboration, innovation, and performance.

Building a truly inclusive culture requires leaders to actively identify and dismantle the barriers that prevent inclusion and belonging. It’s essential to recognise that these barriers are not solely tied to individual experiences or personal psychology – they are woven into the fabric of organisational culture itself. These barriers, therefore, are not the burden of the marginalised alone; they ‘belong’ to the entire organisation. Inclusion is not about ‘fixing’ individuals – it’s about creating an environment where diverse perspectives are valued and where every team member has an equitable opportunity to succeed. By focusing on cultural transformation rather than compliance, leaders can unlock the full potential of their workforce, fostering a workplace that is not only inclusive but also resilient and future-ready.

The harsh truth is that the current approach to most DEI programs is fundamentally disconnected from what should be their ultimate purpose: driving core business. These initiatives often fail to align with or support an organisation’s vision and strategic objectives, leaving their true potential untapped.

The unfortunate irony is that DEI programs, which hold immense potential to optimise performance, have become so politicised in today’s climate that their effectiveness has been eroded. This over-politicisation has rendered them nearly impossible to defend from a business perspective, turning what should be a competitive advantage into a divisive and ineffectual exercise.

Inclusion and belonging are the cornerstones of psychological safety – a critical foundation for high performance. The benefits of psychologically safe cultures are profound, as many key drivers of performance simply cannot thrive without it.

Consider this: nearly every leader would agree that optimal performance requires several essential ingredients. These include coaching as a tool for development; a culture where constructive feedback is not only given but actively welcomed; an environment that fosters innovation and creativity; shared accountability that empowers teams to have honest, uncomfortable conversations; seamless collaboration and the timely resolution of conflicts and interpersonal tensions; the ability to attract and retain top talent; and, perhaps most importantly, discretionary effort – where individuals willingly go above and beyond in pursuit of organisational goals.

These drivers of high performance are equally relevant whether we are talking about an elite sporting team, a well-established for-profit corporation, a not-for-profit, or a technology start-up. But here’s the key insight: the degree to which these competencies can fully flourish depends directly on the levels of psychological safety within the culture. Without it, even the best strategies will fall short of their potential.

This must become the guiding principle for how we approach diversity and inclusion. To truly unlock the power of DEI, we need to shift our perspective – from viewing it as a socio-political obligation to embracing it as a strategic driver of performance. DEI must be reimagined as a vehicle for cultivating the cultural competencies that fuel high performance and support core business. This reorientation will not only make DEI initiatives more effective but also firmly anchor them to the organisation’s mission and vision.