The (very welcome) uptick in diversity-led private equity firms is prompting many in the space to look at themselves and their portfolio through a more diverse, equitable, and inclusive lens. Not only because it’s the right thing to do – it’s a way to give your firm a distinctly strategic value proposition.
Regardless of your PE firm’s make-up, if you haven’t had to consider DE&I yet, you will soon be getting hit by it on all sides – internally and across your business holdings. DE&I is a very real market reality, and more and more private equity firms are noticing that having diversity in their partners and portfolios isn’t only what’s right. It’s good business.
These firms see that having a better mix of experience amongst the executives in their groups increases their resiliency by addressing a broader range of problem-sets.
When it comes to managing a portfolio, you don’t just want people with a stellar background of success. You want people who’ve had to deal with really tough problems. In many respects, DE&I can help future-proof your firm and your portfolio.
Although the scales have not flipped yet, more capital is now available from a growing and increasingly diverse pool of PE firms. So in a choice between two equity firms, owners will undoubtedly consider whether their equity partner reflects who they are and the customers they represent.
Work from the outside in
Private equity firms have many opportunities to integrate DE&I internally and through the businesses they purchase.
We did this with a company recently purchased by a PE firm to integrate DE&I into its software experience. The creative wing of the product development team built and designed a diverse and equitable product design style guide that UX designers and software developers could adopt across the board.
We saw significant marketing results in this and improved adoption on the customer side. We had better customer service success in installation, and we saw an uptick in usage.
We also saw an uptick in presales, which was revolutionary for the marketing team. Anecdotes included a customer’s admiration in seeing a woman in a burka (a first). Another person appreciated imagery of a person using a wheelchair since they had a relative in a wheelchair.
Although that kind of feedback isn’t going to drive ROI at scale, it was an important moment for the team because it was someone experiencing the realization of the abstract brand promise in real-time.
That feedback was extremely validating, and the emotional impact inspired traction on a much broader scale, even internal to the business. And that’s a good thing to do in 2021.
Walk the talk.
When DE&I is addressed via marketing methods, customers get the message. But they easily see through it when using your products and services – creating an even more negative experience because of mismatched expectations.
It would be best to have a DE&I experience strategy rooted in awareness, adoption and centralized consumption that touches multiple parts of your business.
DE&I adoption of assets internally can be an approachable teaching moment. Like accessibility, have a plan for centralized consumption and digestible learning for teams. Organizational adoption and awareness will be key to making sure DE&I elements are used in the most natural way.
Thinking about how this is consumed downstream and translated across internal teams who may or may not have exposure or cultural backgrounds to DE&I. Take the time to understand how teams use the system and which teams will need the most support and understanding of “why.”
Understand what needs to change and why teams may not be ready or see value in new DE&I forward assets so that you can plan for the weak points in your adoption strategy.
An integrated perspective.
It doesn’t have to be intimidating. If you’re already supporting accessible and global experiences throughout your portfolio, then you can do broad DE&I, too.
That’s a great way to dip your toe in the water of DE&I within specific business units because it can simply become a question of accommodating a diverse audience with different ways of doing business.