business news in context, analysis with attitude

by Kevin Coupe

Fast Company has a story about how billionaire entrepreneur Mark Cuban responded when another billionaire entrepreneur, Elon Musk, disparaged the value of diversity, equity and inclusion (DEI) programs.

The story notes that Musk recently "reposted a thread from hedge fund billionaire Bill Ackman, a frequent critic of DEI programs, adding his own comment: 'DEI is just another word for racism. Shame on anyone who uses it.'  He later added, 'Discrimination on the basis of race, which DEI does, is literally the definition of racism,' in a follow-up Tweet."

Fast Company writes that the posting "caught Cuban’s eye, who replied with a show of support for the programs, saying taking people’s race, ethnicity, sexual orientation, and more into account helps businesses 'find people who are more qualified.'

"'The loss of DEI-Phobic companies is my gain,' he wrote. 'We live in a country with very diverse demographics. In this era where trust of businesses can be hard to come by, people tend to connect more easily to people who are like them. Having a workforce that is diverse and representative of your stakeholders is good for business.'

"Cuban called equity a core principle of business, adding that successful managers recognize the differences among workers and play to their strengths. And inclusion, he said, reduces workplace stresses and increases productivity. (A study by Paradigm research found that 72% of employees want their employers to invest in creating inclusive workplaces.)

The story notes that Cuban "likened DEI to a company’s healthcare benefits, saying it’s something many CEOs just see as a box to check. But by not paying attention to it, employees will not be comfortable, he said, and that can create resentment.  'DEI is not seen as a core competency in most companies,' Cuban wrote. 'It’s just a huge expense. Intellectually, [CEOs] see the benefit of DEI. But they don’t have time to focus on it, [s]o it turns into a check box that they hope they don’t have to deal with. . . . When companies do DEI well, you see a well run, successful company'."

To be clear - and MNB readers won't be surprised by this - I agree with Cuban.  I think businesses generally are better off when the people running them reflect the diversity of their customers, and/or bring different perspectives to businesses that may have been doing things the way they've always been done.

Not every company is going to embrace DEI, and that's okay - that's up to leadership.  They have to make their own decisions on this, and then based on those decisions, people can make their own judgements about where they want to work or what companies they want to patronize.  That's okay.  That's capitalism.

I am somewhat amused by the notion of billionaires arguing about DEI, so I did a quick online check.  The Brookings Institution says that there are 492 billionaires in the US (a number higher than I would've expected),and that 90 percent of them are male, 65 percent are white, and 60 percent are 60 years or older.  (Full disclosure:  I am white, male and older than 60.  I am not a billionaire.)

A quick digression here…

Before I went to the Brookings Institution site, I tried ChatGPT, because I figured that would be a fast source of info.  The response I got was:

As of my last knowledge update in January 2022, specific data on the racial and gender demographics of billionaires in the United States may not be readily available, and it can be challenging to provide precise numbers. The composition of the billionaire list can change over time due to various factors, including changes in individuals' net worth and the creation of new billionaires.

For the most accurate and up-to-date information, you may want to refer to sources like Forbes, Bloomberg Billionaires Index, or other financial publications that regularly update their lists and may provide additional demographic information. Keep in mind that collecting such data might be subject to limitations and privacy concerns.

Really?  So much for AI taking over the world.

Digression over.

The Eye-Opening observation from Cuban is that when other companies don't invest in DEI, it is to his advantage.

I'm sure that Ackman and Musk feel that Cuban's investments in DEI is to their advantage.

Fine.  Let the games begin.  But I know where I'm placing my long-term bet.