DEI Without Backlash: Making Money Through Inclusion

Paolo founded this company because he wants to help business owners realize that they can make more money by including , you know , being more inclusive and having more happier and diverse employees . Elyria is a DEI tech company . Paolo has advanced degrees in aerospace engineering as well as neuroscience , and he says he jokes .

You know that he has already went through rocket science and , you know , performed that before coming to the complex problem of helping these business leaders realize that they can make money by , you know , being inclusive and including diversity in their workforce . So we're going to be talking to Paolo about everything that he's up to .

So , paolo , thank you so much for joining me today .

I'm the white elephant in the room because I'm not . There are not a lot of people like me who work in diversity , equity and inclusion . I mean , there are some .

I come at it from a very unusual angle in that I developed an interest in diversity and inclusion from my first arrival to this country when I saw some of the very what I considered initially to be very strange and very upsetting ways in which people were treated differently because of their race primarily , and then later also realized , because of gender and

disabilities . But I always felt that , as a white guy , what can I possibly do ? So I went on and created a career . I was a professor , as I mentioned in my bio . I actually started out doing aerospace engineering for my advanced degree , my master's degree .

Then my PhD was in neuroscience , but with a really strong computational angle , and I became fascinated with the idea of how do you understand the way that lots of neurons in the brain can help you to do things like see or speak , or move your hands and things of that sort ?

And then eventually I moved to a different realm where I thought well , maybe I can use the same ideas to help figure out how people , when you put them together , they can do some pretty amazing things .

And that's how , eventually , about 10 years ago , after working in the space as a consultant entrepreneur for about 15 years or so , after I was a professor for 10 years , I saw an opportunity to apply my work to diversity , equity and inclusion and , in particular , I thought that there was a way to provide a quantitative demonstration for business leaders that it is

in fact possible for them to treat their employees better and make more money in the process . Because one of the things that I realized about diversity , equity and inclusion or back then , 10 years ago , it was just diversity and inclusion and before that it was just diversity .

But in that space a lot of the work focuses on fairness and justice and kind of aspirational goals .

But often what we need to acknowledge is the fact that most business leaders care about one thing primarily and that is making money for other companies , and I feel that a lot of the discrimination that I've learned about in this country is driven by motivation , is motivated by economic motivators , and so I felt that if I could come up with a good economic

motivator to make people behave better , that might actually have an impact , and so that's kind of a long-winded way of explaining how I got into doing what I'm doing . Both you know , my geographical background as well as my identity have really shaped the kind of work that I do .

However , because of the unique nature of my work and because of the fact that I approach it from a point of view of really making things happen in a material , tangible , measurable way , and I focus first and foremost on inclusion , I have a way of saying this , that I say that inclusion is what you do and diversity is what you get .

Because of that , what I'm finding is that , although some companies are retreating , putting projects on hold , at the same time , I'm getting tremendous demand for both for the work that we do at L'Area , but , more importantly , I'm getting a ton of invitations to speak at conferences , events , corporate gatherings , some universities .

I've been doing quite a number of podcasts recently , and part of that is also due to the fact that I published a book about six months ago . It was in September of last year and one of the things that I discussed in the book aside from how you actually can manage diversity , equity and inclusion in a more effective way .

I talk specifically about the backlash , and I talk about the fact that , as early as 2018 , I was writing articles in which I essentially predicted that this kind of backlash was going to happen , and so the work that I do tends to attract a lot of attention right now , because I think that I'm one of the few people that comes at it from an angle that avoids

the backlash . It avoids that sense of discrimination that white men mostly white men are now complaining about .

It avoids some of the legal issues that are being raised by the Trump administration and , as a result of that , I'm in this very strange situation where , yes , some work is being delayed and I'm seeing , unfortunately , a lot of my colleagues that are having to shut down their companies or losing their jobs , but , at the same time , I'm getting a huge amount of

demand for the specific nature of the work that I'm doing .

But I think , conceptually , most people understand that what some people are saying . I think that people that are identified , as I do , as white people think of discrimination as something that has been primarily impacting certain groups of people and others saying , well , we've gone overboard with DEI and it's now causing discrimination against white people .

I happen to think that a lot of that is completely overblown , but I also understand why , from the point of view of even well-meaning white people , it may sometimes feel that way , and one of the things that I said and I mentioned I wrote this article in 2018 , and the article I was writing for Forbes quite regularly , and the article was titled Companies Need

to Stop Focusing on Diversity Alone is that taking kind of a diversity first approach was going to create problems . Because if you go to the employees of a company and you say , hey , right now we have 20% women and 80% men and I want to , you know we see the value of diversity . We want to , you know , achieve 30% women .

Well then , clearly , it means that you're going to be eliminating some of the men from the equation , and , even though there are ways of avoiding that , the mathematics is very , very difficult to avoid and it creates a sense of a zero-sum game , what I call , you know , the zero-sum game mindset you win , I lose , and so when I predicted that it was because ,

again , I saw that the way that we were approaching DEI and the fact that we were putting the emphasis on the diversity first was likely to create these problems .

Unfortunately , what I've seen happen in the last few years , after we had this very strong wave of enthusiasm following the murder of George Floyd in May of 2021 , sorry , may of 2020 , what ended up happening is that there was so much interest in DEI that a lot of the initiatives were not thought out as carefully as they could have been , and it led ,

unfortunately , to some people experiencing situations that felt a lot like discrimination and it felt like , well , I'm being discriminated against because I'm a white man , and that , unfortunately is . You know , you can argue that it's unfair for people to complain about that .

You can argue that there's been so much discrimination against people who are not white for such a long time that that's not fair . But unfortunately , when you're dealing with the reality of how people feel , you cannot go and tell them . Well , you shouldn't be feeling bad just because I used to feel worse than you feel right now .

And I think that when you couple that with the fact that a lot of the work in DEI has been not as clear as it could have been , I would argue that if you ask people to define diversity , you will get pretty much the same definition from a lot of people .

If you ask people to define inclusion or equity , you're going to get ask 10 people and you're going to get 10 different answers .

And so what's happening in the last couple of years is that the conservative forces and I believe firmly that there are some very , very strong forces that are purposefully trying to undermine the progress that has been made They've taken advantage of this lack of clarity to insert their own definitions in a way that resonated with these people that were now being

confronted with issues like oh you were going to get promoted , but we have to wait six months because we have to promote a woman before we promote you . And so they took advantage of that to create these definitions that are actually , in my opinion , they're wrong .

They really go counter to what the AI is actually trying to do , but unfortunately , that doesn't matter . What matters is that if you have a large population that believes these definitions and these definitions align with their experiences or what they hear from their friends , then those definitions become reality , and so that's really , you know .

So , to go back to your question is DEI creating reverse discrimination ? Well , I think that some of the specific techniques that people have used to foster inclusion and diversity , and by focusing primarily on diversity , they have inadvertently created a situation in which people felt

legitimately discriminated against . Now , as I said , is that a valid complaint or not ? That's a different story . I think the reality is that it has created the opportunity for people to feel that way , and that has led to a lot of the complaints .

As I said , I believe that , with the best of intentions , a lot of people who jumped into DEI , especially after the murder of George Floyd , did so with a deep understanding of the problems , based on their own experiences , and , unfortunately , not necessarily as much understanding of how to drive change within a business .

And when I hear people talk about the business case for DEI in the space of DEI supporters or promoters or consultants , what I hear a lot is reference to studies , like the famous studies by McKinsey , that suggest that there are correlations between the degree of diversity of various aspects of the company , whether it's the board or the executive team , and the

financial , or some of the financial , kpis . There are two problems with that . One of them is that a correlation simply means that two things happen together . It does not mean that one calls the other .

If you were a cynic , you might argue that the fact that there is a correlation is because companies that have more money can afford to hire more diverse people , which I think it's wrong . But you can't argue with that , just like you cannot argue that by being more diverse , you cause the company to perform better .

And then the second problem is that , even if you believe that those correlations actually represented a direct link where diversity is causing performance , as a CEO you don't ever use correlations to run your company . Think about the way that you , you know .

Imagine a CEO saying oh , we did a study and found that , across every product on the planet , red products do better than blue products , so let's make all of our products red .

That's just simply not the way that you run a business , and so what was happening was a disconnect , where DEI supporters were arguing about the business case in a way that really didn't make any sense to the people that they were trying to convince .

The way that I discuss business case and the way that I prove it is actually by showing that , as a company , if you have a group of people that is being treated differently than another group of people such that their satisfaction declines , what will happen to those people is that they will be less productive and it will also be the case that they will be more

likely to leave your company . And if those two things materialize , you're losing money because you have a portion of your company that is not producing as much , and when these people leave , you're going to have to pay to rehire them .

And so those kinds of reasonings are actually much easier to quantify in a way that makes sense to business leaders , because they actually show the business case for the specific company , not on average over hundreds of companies , but specifically how you run your company and how that will impact the success of your organization .

And then that leads me to the second part of your question , which is that you know , would I hire somebody that is less qualified ?

Well , and again , there I think that what's happened is that it was a combination of using the wrong wording and , unfortunately , a few companies that took missteps where they literally did that , where they literally were unable to find qualified candidates , but because they wanted to check those boxes , they would hire people that were maybe not as qualified , or in

some cases , they hired people that were maybe not as qualified , or in some cases they hired people that were qualified but they were not necessarily able to succeed in the environment into which they were brought .

And so , as a result of that , we have a few people that come into a company that maybe underperform , and in some cases it's because they're truly less qualified . In many cases it's just because of the environment not welcoming them .

Unfortunately , the way that our brains work is that when we see someone who looks different from us and they behave in a certain way , we tend to generalize to everybody else that looks the same way .

So if , all of a sudden , you hire a woman and the woman does not succeed , instead of asking ourselves , well , did we maybe create an environment that made it difficult for the woman to succeed ? And instead of saying to ourselves , well , have any men ever failed in this job ? We don't do that , we simply say , oh , this woman failed .

Therefore , women are less qualified , and so I think that there's a fallacy in the very question of asking that , and really , it also points to the fact that focusing on diversity is a mistake , and what you should really focus on is on creating an environment where people are able to succeed , whether they're new people that you're hiring or whether they're people

that are already in your organization .

If you make the effort to ensure that everybody is able to succeed , your company will make more money , and so that's how those two things are related , and that's why , by focusing on the inclusion and specifically what a company is doing to ensure that everybody is able to succeed , you're much more likely to have a company that performs better , and the company

will be more diverse , because now you will no longer have these low levels of satisfaction that causes people to leave . And if you look at most companies , when you see that there is a low level of representation of some group , you always find that their retention rates are very low for those groups . So it's like a leaky bucket .

You're losing water out of a bucket that's full of holes , and simply pouring more water from the top is just going to make a big mess on the floor . It's not going to fix the problem . You need to figure out why these people are leaving . What are the conditions in the workplace that are causing them to be less satisfied ?

And that's where this whole idea of inclusion is what you do and diversity is what you get comes from in my book .

But the subtitle , which actually to me was almost the more important part , is Higher Profits and Happier People Without Guesswork or Backlash . And , as you can see from the subtitle , I was really trying to hit four points .

First , higher profits , and I purposefully put that first , because ultimately , I want business leaders to look at this book as a guide on how to maximize their success as a company . And how do you do that ? By having happier people , which is the second part of the title . And then I talk about without guesswork or backlash .

Without guesswork , because I propose a way of measuring inclusion which has not really been done before , which provides you an incredible clarity through not just data , but a combination of data and experiences that people share that can tell you , without any guesswork , exactly what is happening in your organization , how much it's costing you and what you can do about

it .

And I said no without backlash because I could see already when I started writing the book which was , you know , I started writing it almost two years ago , I could see the backlash coming and I knew that it was going to be a big problem and I had to ask myself do I want to write a book about diversity and inclusion when that particular sector is on fire

in a negative way ? But I wanted to head that on , take that head on and I actually write in the book about the backlash , and I talk very clearly toward the back of the book .

I have two chapters one in which I talk about what I believe are some of the mistakes that we have made collectively in the field of DEI , and then the other one I talk about some of the mistakes that the kind of DEI opponents make and some of the flawed arguments that they use , like when they talk about oh , I don't want to lower the bar , I don't want

to hire somebody that's unqualified , we are a meritocracy

All of those concepts . They sound appealing but they're actually deeply flawed and I help people to see why and how they're deeply flawed . And so the book as a whole .

Really it's a combination of telling about how I came into this work , talking about exactly what I mean by inclusion , how you can measure inclusion , showing some case studies with a variety of companies and organizations for whom we've done some of the work of measuring inclusion , then sharing some of the data that we've collected and the stories that we've heard as

part of the data that we collect , and then we have again those two chapters where I talk about some of the problems and the flawed assumptions before concluding the book . So it's really meant to be a combination of introducing an entirely new way to do something , but it's also really a very , very different way to think about diversity , equity and inclusion .

So you would describe it as a mission-driven for-profit . And when I started the company , my background , as I mentioned , was a lot of .

It was engineering , computers , neuroscience and I have this approach of building computer simulations that literally replicate the day-to-day experiences , in this case of people in the workplace , to understand how the people and their interactions ultimately lead to what the company is doing as a whole and , conversely , how the way the company behaves impacts the people within

it . And so the company , initially , was supposed to develop software to help make strategic decisions for leaders about how to manage their personnel with an eye to diversity , equity and inclusion .

But as I started to do that work , I realized that I felt like I was building a space station for people still riding their bicycles down on Earth and that we were still really far behind in understanding some of these concepts .

And along the way , one of the things that I realized is that measuring diversity alone was not sufficient , and I needed to understand not just how many black people , how many people you know , how many LGBTQ plus people , how many people with disabilities , how many women . That was not enough .

I need to know how are these people experiencing the workplace as a function of their the workplace as a function of their identity and as a function of how everybody else is behaving around them . And so we came up with this way of collecting information and realized very quickly that essentially that's what we were doing . We were measuring inclusion Literally .

We're actually measuring exclusion , if you will , although that's not entirely correct , but we're measuring experiences in the workplace , and then we're using the data to tell us where the company's being more or less inclusive . And so that's what Aleria does primarily , although , as I mentioned earlier , we are doing these days a lot of training .

I do a lot of public speaking , we do webinars . We also offer these what we call inclusive leadership training and inclusive management training , and we're seeing a lot of demand for that , precisely because people are scrambling and trying to figure out what to do .

But so think of Aleria as a combination of a technology company that has a platform to collect and use inclusion data , but also as an educational platform for people to learn about a new way to think about diversity , equity and inclusion that really avoids a lot of the backlash and a lot of the problems that we've seen in the past .

And about a year ago , we actually expanded our technology platform to include a calculator that actually estimates for any given company the amount of money that they're losing right now invisibly , simply because of the fact that they're not able to treat all their employees the same .

And initially we thought , oh , this would be kind of a cool little sales tool , help to do sales . And what we realized is that when people saw it , they were blown away . First , because it literally shows the business impact for their company and it's no longer .

Oh , let's sprinkle some magic diversity dust and these wonderful things will happen , which , unfortunately , have not actually materialized . Instead , we're saying you are losing money right now and we're going to help you figure out why and where you're losing money and what to do to stop losing that money .

And it turns out that those numbers are actually quite significant . We see that a typical company will lose somewhere between 20 and 30% of their net profits invisibly ,

or put a different way If they were able to treat everybody the same , their net profits could go up by 20 to 30% , and so now what we're doing is that we're actually connecting that to the data itself , so that we're starting to work with companies where they use either our data , if they measure inclusion the way that we do it , but if they've already

collected data through engagement surveys or satisfaction surveys or inclusion surveys of their own , then we can take their data , plug it into the calculator to give them significantly more accurate estimates of what specific issues are causing them to lose money , and that means that they can also estimate the return on investment , or ROI , of taking steps to fixing the

problems that they identify , and so that is kind of a new thing that we've been working on .

We're seeing a lot of interest from companies that really have already spent a lot of money collecting data , and then , lo and behold , the data tells them oh look , people of color are less satisfied than white people , and women are less satisfied than men , and people with disabilities are less satisfied than people without disabilities .

But they don't know what to do with that information , and so we're helping to take that same data they've already collected and turn it into information about their financial success , which they can then use to make decisions about what to do .

So that's an exciting new turn and an additional direction that makes it even clearer how to link DEI to financial performance , and we're very excited because that's creating even more interest right now .

So then , pretty easy to find . And then , as I said , any bookstore , any online bookstore if you look up measuring inclusion , you can find my book quite easily .

not just an attack on di , but it's a you know dismantling our democracy . Basically , I think that the fact that what is happening right now is not just an attack on DEI , but it's dismantling our democracy . Basically , I think that the fact that they're using DEI as a wedge to make people hate other people is terrible , and I hope that those

of you that are listening whether your opinions are favorable or against DEI realize that a lot of the rhetoric is really just used as a political weapon . But ultimately , we all want the same thing . We all want to be able to get a job for which we're qualified .

We want to be able to have the same opportunity as everybody else , once we get into that job , to demonstrate our capabilities and to advance as a function of the work that we're actually doing .

And so I would really urge people to go beyond the rhetoric , beyond the inflammatory remarks , and realize that ultimately , we're all people and we all want the same things in life , we all want to be able to succeed , and that this idea that somebody's success means that it's going to be your failure is just deeply , deeply , deeply flawed , and so I hope that

people will take that into account and , whether they read my book or go to my website or just simply open their minds to the possibility that there are better ways of doing this work , I would find that to be really satisfying if people will do that .

Follow the show , share , review , rate us , check us out . Go to wwwcurveball337.com for more information on the Living the Dream with Curveball podcast and to keep up with everything . Living the dream . Thank you for supporting the show , paolo , thank you for all that you do and thank you for joining me .

Until next time , keep living the dream .