Behind the PR Curtain

Hootology explores how 2020 impacted BIPOC’s perception of brands

By Melissa Lowery

The Corporate Diversity Index (CDI), an annual quantitative report from market research firm Hootology, measures the impact of corporate diversity efforts at the brand level. Brands that participate in the CDI are able to understand the influence of diversity and supplier diversity initiatives on overall brand perception among key demographics, what methods and initiatives have the greatest impact, how their brand compares to others in public perception and how their corporate diversity efforts translate to market share.

“We’ve learned over the past four years of doing the study that once people are aware of a supplier diversity initiative, they’re twice as likely to use the products and services of that particular corporation,” said Stefanie Francis, Hootology founder and lead innovator. “We also know that awareness is low; around 5% of the US currently know what supplier diversity is, but they’re over twice as likely to vote with their wallets once they do know. But it’s not just about supplier diversity, it’s about ensuring that there’s change in our country and in the world, and also within corporations. And so in addition to being able to measure the impact of supplier diversity on purchases, it’s important to note that once consumers perceive a brand as valuing diversity, separate from supplier diversity, they’re three times as likely to think favorably about that brand than those who don’t perceive that brand as valuing diversity. So there’s a justifiable business case, not just for supplier diversity, but for doing the things that authentically help your brand be seen as one that values diversity.”

With the study conducted in March each year, Hootology was in a remarkable position to measure consumer responses before and after what turned out to be a crucial 12-month period in our collective history. Data for the 2020 CDI was gathered just before the coronavirus pandemic arrived in the United States, and shortly before social justice became a national conversation. When the team conducted research for the 2021 report, which included 50 corporate brands, the data reflected the impact of the past year on corporate diversity metrics and perception.

The 2021 CDI revealed a consistent drop in certain key diversity and supplier diversity metrics among members of BIPOC communities compared to prior years. Specifically, the study showed a 3-5% drop in the general importance of diversity, the importance that corporations value diversity, the importance of hiring diverse people and the importance of supplier diversity.

“These are high-level metrics that we track every single year, and we noticed this consistent trend among these four metrics, that among members of the BIPOC community, all of them dropped,” Francis said. “They dropped just a little bit, but the drop is statistically significant. It’s not just by chance, or it’s not just how the sampling played out. It’s beyond the margin of error. And then the consistency across metrics was notable to us. If we just saw it in one metric, that would be something that we could easily dismiss or just say was a fluke, but seeing it across four metrics and seeing it, again, consistently in that three to five percentage point range was notable.”

Francis and her team of analysts and researchers decided to perform an additional qualitative study with members of BIPOC communities to understand the “why” behind these decreases. The additional study focused on the following topics:

• Perceptions around the corporate response to George Floyd’s murder
• Ways corporations are or are not getting diversity “right”
• Thoughts as to why these 2021 diversity metrics dropped
• Hope and direction for the future

The study identified five themes that contributed to the drop in those key metrics.

Corporate responses to George Floyd’s murder in May 2020 brought relief and then doubt.

While participants were hopeful that the terrible incident brought race conversations to the forefront in the United States and in corporations, there was overall suspicion and doubt about the corporate response to George Floyd’s murder.

“When we note ‘relief’ here, that had nothing to do with the passing of George Floyd, but it was this sense of relief that corporations finally were at least doing something,” Francis said. “It was a part of the conversation and granted it came on very quickly and it came on in a way that too many felt inauthentic, but it was sort of like a shoulder-shrugging, ‘Okay, finally, it’s being talked about.’ But then pretty quickly, there was this belief of, oh, this is just being done to ensure that profits don’t go down or be sure that we don’t get canceled or kind of a reactive bandwagon element. ‘Only time will tell’ and ‘follow the money’ were used frequently. So it was both doubt and relief, and a feeling of being unsettled in terms of having both of these feelings at once.”

Members of BIPOC communities are tired, exhausted and re-thinking all the things that are just “talk”.

The trauma of 2020 uncovered unhealed wounds, leading people to dig deeper into what all corporations are actually doing when it comes to diversity. As one participant said, “I think people begin to dig when trauma happens, and when the covers were ripped off, people began to research. People began to dig deeper and find out that BIPOC weren’t represented in the boardroom and they weren’t decision-makers. We were in lower-level roles within organizations.”

“In this moment of collective national and global trauma, there was this element of peeling back the onion and saying you know we’ve been hearing this for so long we’re tired of it,” Francis said. “When we talk about the ‘why’ behind these four diversity metrics dropping even just a little bit, it was not that these things aren’t important, which is what the numbers appear to be saying. The ‘why’ behind the drop is that members of the BIPOC community just don’t believe it anymore.”

Members of BIPOC communities are looking behind the corporate PR curtain for specific things that matter to them.

Another major finding from the follow-up study is that members of BIPOC communities want to hear about internal corporate programs and culture that demonstrate diversity in action. They want to see diversity in the boardroom and the workforce, ongoing service of diverse communities and support for causes that promote equality and sustainability. Marketing and advertising that embrace diversity are baseline; what participants really want to see are corporations that treat their employees well.

“Time after time after time, the number one thing that participants mentioned was, ‘How are you treating your employees?’,” Francis said. “It’s the belief that if you treat your employees better, and I know about that, then you must be good and be doing truly good things. I think companies tend to believe that treating their employees well only impacts their employees, but it impacts so much more because it’s the DNA of who your company or your corporation is.”

Digging into that response, Hootology asked participants what it means to treat employees well. The answers were thoughtful and informed, revealing what everyday people see as crucial to enact changes that will have generational impact.

“Reducing the wage gap was number one,” Francis said. “Reducing the disparities between diverse populations actively, with training and education, and then really being able to create ways to make up that systemic racism that we know exists. Tuition reimbursement, childcare, things that will really even the playing field and create an opportunity for upward mobility that doesn’t seem to be perceived as existing in a lot of corporations among the participants that we talked to.”

Members of BIPOC communities can easily tell when an effort is not authentic and a company is “phoning it in”.

While there is an overall view that “something is better than nothing” when it comes to corporate diversity efforts, the study showed that participants know when corporate efforts are not genuine. They are watching for follow through and transparent, actionable steps.

One participant said, “…taking a stand is stepping up, supporting the movement or the culture in genuine ways. So not some cookie cutter statement that suggests you support, but more so actions in what your company is doing to show improvement.”

Francis said four companies were mentioned frequently as examples of “getting it right”: Patagonia, Ben & Jerry’s, Athleta and Whole Foods. The latter surprised researchers, so they asked more questions.

“The participants that we talked to noted Whole Foods because stores opened in neighborhoods that weren’t ‘typical Whole Foods neighborhoods’ (in the words of the participant),” Francis said. “They weren’t in areas of Austin or suburbs of San Francisco, but in areas that were economically depressed, as one participant noted, ‘I can’t believe Whole Foods cares about me and my health enough to open in our community, where it’s not something that’s going to be necessarily instantly profitable for them. Because this isn’t something that we’re used to in terms of eating in a certain type of way.’ And it meant that these particular participants were looking more into the history of Whole Foods because of how welcomed they felt in the store.”

There is hope.

Francis stressed that while BIPOC confidence in these key diversity metrics on the 2021 CDI had dropped, all four still remain between 72-75%.

“I want to say that those numbers are still high overall,” she said. “So 70 to 75% of the BIPOC community felt that each of these four things were important, diversity in general, corporate diversity, supplier diversity and the importance of hiring diverse folks. But as researchers, we are used to studying trends. This is where things sometimes start to tip. And they tip slowly. So we’re interested to understand why we’re seeing this drop this year. What will happen next year? We’re listening to that information to ensure that our CDI clients can steer things in the right direction collectively, as a group of people who care about diversity and getting it right.”

This additional qualitative study highlighted the doubts and exhaustion some members of the BIPOC community feel about corporate diversity efforts, but it also revealed hope for the future. Participants are aware that change takes time and hopeful that corporations will use their enormous power for good.

“Corporations and government are the two kinds of major levers that we have for change,” said one participant. “So, I for sure believe corporations have the power to make a difference around diversity in this country.”

Photo Credit: Christine Catalano

Learn more about Hootology and the Corporate Diversity Index at hootology.com.

Melissa Lowery (she/her) is the Editor of BEQ Pride Magazine and a contributor to other publications focused on economic equality. A native of Kansas, she enjoys subverting stereotypes and is determined to maintain her status as World’s Greatest Aunt to her 13 nieces and nephews.