Black History Month: Moving from Words to Action
Every year on February 1st, the start of Black History Month, our newsfeeds are flooded with promises to “do better” and “do the work” when it comes to diversity, equity, and inclusion efforts. As these posts quickly fade to the bottom of our newsfeeds, we often don’t get to see the results of these promises . . . more importantly, employees who put trust in their employers to follow through, are left wondering if there really was a plan and a commitment to “do better” and “do the work” or if this has just become another corporate cliché.
February 28, 2022
Every year on February 1st, the start of Black History Month, our newsfeeds are flooded with promises to “do better” and “do the work” when it comes to diversity, equity, and inclusion efforts. As these posts quickly fade to the bottom of our newsfeeds, we often don’t get to see the results of these promises . . . more importantly, employees who put trust in their employers to follow through are left wondering if there really was a plan and a commitment to “do better” and “do the work” or if this has just become another corporate cliché.
A few weeks ago, I had the pleasure of hosting a fireside chat for Transcarent employees with Ken Frazier, Executive Chairman of Merck, and formerly the Chief Executive Officer for more than 10 years, and currently Chairman of General Catalyst’s Health Assurance Initiatives. Ken is one of the most successful healthcare leaders of our time. He spoke about his remarkable experience growing up as a Black man in the United States during the civil rights movement. In a beautiful and balanced way, he shared the hurdles he faced as well as the bright spots, with shout outs to the people who brought him in and supported his success. During this conversation, he candidly expressed his disappointment about where we are today . . . it has been over 50 years since the civil rights movement of the 1960s and Black people are still underrepresented in positions of leadership. Moreover, companies often don’t consider the importance of diversity when it comes to external partnerships and vendor selection, or when creating plans for diversity, equity, and inclusion efforts for their employees. And he highlighted the fact that while some companies are quick to build plans for diversity, they lose focus on equity and inclusion, which are key factors in longer term advancement.
In our conversation, Ken suggested that when business leaders say that they want to do better, he believes this to be true, but sometimes they just don’t know where to start. He explained how mentorship, being offered a seat at the table during meetings, is what made the greatest difference in his success. His observations are worth watching and reflecting upon.
At Transcarent, we have made a promise to do the work and encourage others to join us in our equity and inclusion efforts. I like to say, ‘innovation begins by doing something’, emphasizing that meeting about innovation doesn’t make progress. Action propels us forward.
In that spirit, we’ve begun and will hold ourselves accountable for our progress. Our first initiative was to invest in Black-owned banks. Historically, Black Americans and Black businesses have found it harder to conduct routine banking transactions (loans, credit, checking accounts, lower interest rates, etc.). Black-owned banks have stepped in to fill this gap, but there are too few and they don’t have enough money to lend to meet the need. And we’re heading in the wrong direction – only 18 of the 50 black-owned financial institutions that existed in the 1970s remain today. Additionally, when it comes to corporate banking, Black-owned banks are often used for small businesses and non-profits, rather than corporations, leaving them at a higher risk during recessions and housing crises . . . only one of the 18 institutions today manages over $1 Billion in assets. This is why when Transcarent closed our Series C funding round earlier this year, we decided to invest a portion of the assets into smaller Black-owned banks. About midway through Black History month, we decided to take action and do more. Our simple idea was to invite others to join us in our efforts and we set a goal of investing $100 million, along with our partners, in Black-owned banks by the end of 2022, and work to reach a $1 billion invested in 5 years. I believe we can change the status quo so that these institutions can continue to serve those who need them most, support Black-owned businesses, and take one step in closing the financial equality gap. It’s not hard to do. We just have to do it. That was the first action.
During Ken’s talk, we also heard him share two very troubling facts: the first was that 76% of Black adults in the United States do not have a four-year degree. The second, 79% of family-sustaining jobs require a four-year degree. Instead of just talking about it, Ken Frazier took action, along with Ken Chenault, former CEO of American Express and now Chairman of one of the industry’s most successful venture capital firms, General Catalyst. Recognizing the opportunity gap Black individuals face, in 2020 the two Kens partnered to create OneTen, with a mission to, “Hire, promote, and advance one million Black individuals who do not have a four-year degree into family sustaining careers over the next 10 years.” The skills-first approach of OneTen emphasizes competencies needed to be successful in a role instead of their educational background, which is 5 times less predictive of a candidate’s future performance. Transcarent is proud to be a new partner, and we are committed to evaluating our current hiring requirements and taking a skills-first approach when hiring, upskilling, and promoting Black talent more aggressively than ever before.
Just like we did, there are hundreds of individual actions that companies can take, and while no one company can do all of them, every company can do some of them. And you don’t have to lead every effort . . . just support them and join in. Pete Kadens, a well-known Chicago entrepreneur, launched Hope Chicago. His goal . . . to invest $1 Billion and send 10,000 Chicago high schoolers and one of their parents to college. The first 4,000 were announced last week. It was an idea less than a year ago. When Pete called me to ask for support, the answer was an easy yes. Pete will most likely be remembered more for Hope Chicago than all of his business successes.
So, while today is the last day of Black History month, tomorrow is a perfect time to commit to do something important and meaningful. I am calling on business leaders, especially those in health and care, to take action by making a lasting, measurable commitment to key objectives that will begin to move us forward including hiring and mentoring Black employees and ensuring that once you hire them, you provide the support and encouragement they need to advance; investing in Black-owned financial institutions and joining our $1 Billion campaign; buying from Black-owned business partners; and sharing your progress with your team.
Business has demonstrated its capacity to lead when there are big problems to be solved. After 50 years of promises and a new generation of employees looking for principled leadership, it’s time to act . . . it’s good for business, it’s important to all of our employees, and it’s the right thing to do. Today, more than ever, that matters.