Diversity, equity and inclusion (DEI) experts, practitioners and academics have recognized that effective DEI practices at organizations require CEO commitment. But what happens when a CEO of a Fortune 500 company has made a commitment, yet claims there's a lack of Black talent for leadership roles?

Let me explain.

As protests for racial justice took place around the nation following the killing of George Floyd in May, companies began re-evaluating or creating DEI initiatives at the request of employees. In June, Wells Fargo CEO Charlie Scharf told staff in a memo that the company would soon tie executives' pay to progress in DEI, according to Banking Dive, and that the bank intended to double its number of Black leaders. However, in September, it was revealed that Scharf made the following comment in a memo during the summer, according to reports: "While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from." 

"I was just floored when I saw the comment," Angelique Hamilton said. Hamilton is an HR practitioner and diversity and inclusion consultant advising small businesses and startups. She has 20 years of HR and operations experience. "I was really dismayed that someone in the C-suite, specifically a CEO, would make those types of remarks." It's a "longstanding myth" that there is a lack of Black talent for leadership roles, Hamilton said. 

"I do not believe that it's true that there's a lack of Black talent, especially on leadership levels," Courri M. Brady, director of training and people development at Paradigm, a consulting firm headquartered in San Francisco, said. Brady said he supports the design and execution of data-driven training programs and works with companies to implement DEI initiatives.

As news of the CEO's remarks circulated and backlash ensued, Wells Fargo tweeted an apology by Scharf, which said the comment was "misinterpreted," and that both the financial industry and Wells Fargo does not reflect the "diversity of our population," something the company is working to change. 

Any change to DEI requires deep commitment and introspection — and it certainly takes more than a statement to rectify past failures, Hamilton and Brady said. 

Network, network, network

One of the best resources for career development and professional success is networking, according to Indeed. That's the advice job seekers and even those employed are often told. But some companies, especially in the finance and technology industries, may need to re-examine their networking skills to attract diverse talent. 

"What I have talked about with a number of clients within the finance and technology industries is that there tends to be habits of looking for candidates within the same places," Brady said. To increase diverse hires or Black hires, particularly at the leadership level, companies often try to recruit from the same universities. And, they also try to find talent within other financial institutions or tech companies — but these places also lack diversity, he said. 

"The other thing I often think of when I hear there's a lack of Black talent in tech and finance, is my own personal diverse network," Brady said. "I can go to my LinkedIn [account]. I can pick up my phone and find a lot of great Black talent in these industries. And the question is, why aren't other leaders able to do that?" Paradigm conducted research, which found that personal networks tend to be more homogenous than an overall applicant pool or candidate pool, he said. Academics have also conducted research that suggests that the diversity of one's social network reveals viewpoints on diversity and inclusion. 

"There is a wealth of candidates that are available, talented and would meet the criteria of all of the positions that Wells Fargo actually offers," Hamilton said. "What type of sources are they referencing?" 

Growing leadership within

Diverse leadership can develop within an organization. But oftentimes, high-potential Black employees aren't mentored, sponsored or promoted for leadership, Hamilton said. 

"Typically what happens in corporate America is Black Americans, we are left out," Hamilton said. "We're often not considered promotable. We're siloed. We're not asked to contribute to project plans or great initiatives that corporate will create. So when you limit the exposure of individuals to those opportunities, you actually create a limited talent pool."

Many Black, Asian and Latinx women are considering leaving their corporate jobs within the next two years for entrepreneurship citing barriers to profit-and-loss or core operation roles, which are typically stepping stones to top corporate positions, according to a recent Working Mother report. 

"Women of color account for the highest educated group," Hamilton said. Oftentimes when comments are made that there's not a diverse candidate pool, qualified individuals are just not being considered, she said. "I think we're coming to a pivot in corporate America where individuals are really demonstrating their capabilities and what they can do independent of a company," she said.

A focus on creating an environment for advancement can help with retention, Hamilton said. Many "development programs are created specifically for a select sector or a select group of individuals and Black Americans are often not a part of that dichotomy," she said. Make it an equal playing field for all individuals within the organization, she said.

Rely on data, not your gut

Support of DEI incentives should start at the top of an organization, according to Brady. HR or DEI leaders should "take assessment and stock" of where the company is in diversity numbers and talent pipelines, and note that a lot of those methods "can't exist without analyzing the employee lifecycle and uncovering where there's opportunities to grow within all levels of the organization," he said. 

A study by Clutch, a B2B rating and review firm, published in May found that as businesses engage in efforts to become more diverse, HR professionals may build overly diverse perceptions of their companies. Data is crucial in successful DEI programs as opposed to relying on one's gut, Brady said. 

"It's a combination of quantitative and qualitative data, but you need data to make informed decisions," he said. "When people just rely on their gut, they may be prone to let their unconscious biases come into the decision making." Give the data points to leadership, and based on the level of commitment, decide where to prioritize putting energy, efforts and resources to drive change, he added. 

Examining the entire recruiting process is vital, he said. "We have clients that are focusing so much on getting diverse candidates at the first part of their candidate tunnel," Brady explained. "They're doing a good job recruiting but not making it through the full recruiting process. Ask the question, 'Is there a potential for things like unconscious bias showing up, which negatively affects people of color?'" he said.

Making sustainable changes to DEI plans "can't be ... a flash in the pan;" it requires a level of longevity, Brady said. "If you think about tying someone's compensation or bonuses for the year to their ability to bring in diverse talent, people can take a lot of intentional steps to bring in those diverse populations," Brady said. "They get their bonus and then it's kind of done."

"But that doesn't ensure that the talent you worked hard to bring in will stay," he added. "And it doesn't pay attention to the importance of retention efforts and making sure that those diversity numbers are consistent or rising year over year."

If CEOs don't make a real commitment to diverse leadership, companies will ultimately lose out on top talent, Hamilton said.

"As we go on, even with this pandemic, more individuals are starting to become self-employed and working for themselves, and really recognizing the true talents that they have," she said. "I've seen that the world has changed in the last six months."