The Hidden Costs of Scaling Back DEI

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In our journey toward more inclusive workplaces, we've seen many organizations embrace Diversity, Equity, and Inclusion (DEI) initiatives with genuine enthusiasm. Lately, though, some companies have begun scaling back these programs. While public conversations often focus on consumer boycotts when this occurs, I believe the true impact goes much deeper and touches the core of what makes organizations stronger, better, and more innovative.

The Human Side of the Talent Equation

When a company reduces its focus on DEI, it's the people who feel it first. This isn't just about numbers on a recruitment dashboard—it's about real human experiences:

The most immediate effect is often a sense of betrayal and disappointment, particularly among team members from underrepresented groups who may feel their presence and contributions are suddenly less valued. Many professionals describe this experience as having the rug pulled out from under them, leading them to quietly begin looking elsewhere for work.

HR professionals at large companies often notice decreased engagement of some of their most passionate team members after DEI programs are scaled back. Within months, organizations typically lose incredible talent who simply don't feel valued anymore.

Even worse is how these changes affect the sense of belonging for current employees and create invisible barriers that keep wonderful potential team members from even considering your organization as a place where they could thrive and contribute.

The Creative Spirit Needs Diverse Voices

There's something magical that happens when people with different perspectives, experiences, and backgrounds come together to solve problems. It's not just about having different opinions—it's about the beautiful interaction of worldviews that sparks innovative thinking.

When companies reduce diversity initiatives, they often lose:

  • The rich tapestry of ideas that emerge when people with different life experiences collaborate

  • Important questioning of assumptions that might otherwise go unchallenged

  • Insights based on lived experience that help products and services connect with people from all walks of life

Product teams commonly experience a decline in transformative moments after inclusion programs are scaled back. The frequency of someone pausing to consider how a product works for different users significantly decreases, leading to less innovation and more siloed thinking.

Connecting with a Beautiful, Diverse World

Our world is a beautiful mashup of cultures, identities, and experiences—and it's continuing to evolve. Companies that step back from DEI commitments risk losing their ability to truly see, understand, and connect with this beautiful diversity:

  • They miss the opportunity to create products that bring joy and solve problems for people from all backgrounds

  • They lose touch with the rich cultural nuances that make marketing and communications truly resonate

  • They abandon the chance to build deep, meaningful relationships with emerging communities

Business leaders often don't realize how quickly they fall out of touch when they stop investing in cultural understanding. Many find themselves creating products for a world that existed 10 years ago, not the one they live in today.

The Warmth of an Inclusive Culture

Perhaps the most profound impact happens in the day-to-day experience of working together. When DEI efforts diminish, the workplace atmosphere often loses some of its warmth and psychological safety:

  • Trust in leadership gently erodes as actions no longer match stated values

  • People become more hesitant to bring their whole selves to work

  • The sense of community and belonging that makes work meaningful begins to fade

The changes aren't always dramatic at first—just small things. Fewer conversations where people really listen to each other. Less celebration of differences. A growing sense that some voices matter more than others.

Finding a Compassionate Path Forward

I deeply believe that most organizations don't scale back DEI efforts out of indifference or callousness. Often, it comes from genuine questions about effectiveness, resource constraints, or uncertainty about the right approach.

The most successful organizations are finding ways to:

  1. Honor the spirit and importance of inclusion while evolving their specific approaches

  2. Integrate DEI principles throughout their everyday operations rather than treating them as separate programs

  3. Listen deeply to the experiences of their team members rather than making decisions based solely on metrics

Looking Forward

At its core, DEI isn't just about policies or programs—it's about creating spaces where every person can bring their gifts, feel valued for their unique contributions, and help build something incredible together.

Before making decisions to scale back DEI investments, I encourage leaders to sit with the potential impact not just on their metrics, but on the hearts and minds of their people, the spirit of innovation in their teams, and their connection to the beautiful diversity of our world.

I'd love to hear your experiences and thoughts. How have you seen organizations navigate these changes while still honoring the importance of inclusion? What approaches have brought your team closer together across differences? Reply to this email and share.

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