Should I heed an investor’s concerns about diversity?

Q. A seasoned investor is upset about the diversity and inclusion program we just announced and says we should focus on returns. I see merit in the policy and want to continue, but don’t know how to proceed and not antagonize him.

–Founder of a collaboration software company

Dear Founder,

We’re in the most politicized time I’ve ever seen in this election cycle. It’s challenging to have any disagreement with an investor, and I can understand why this one feels like particularly high stakes. I’d encourage you to listen, and to find a way to keep the conversation dignified and respectful.

However, that does not mean you have to change your policy. You are the CEO. You should listen to other people’s ideas but then it is up to you to decide what to do with them and how you want to respond.

I would encourage you to politely listen to his input. Then you can tell him what you are doing–calmly–without getting into a war. The real goal here is to be able to move on to the healing. You will find this requires approaching the situation in a calm manner and engaging in more communication than you may expect. However, it is necessary, and it is worth it.

In relationships, just like in physics, energy gets built up and it has to go somewhere. Talking this out can help it dissipate. It’s possible the investor said things in the heat of the moment that are not entirely relevant to what has to be done now. Hear him out but focus on what you need to do to address what really matters.

We always encourage our founders to work on diversity and inclusion from the beginning. Data tells us that diverse teams and companies are more successful, and I’ve seen that repeatedly in the companies I’ve been involved with. By giving this some early focus, you’re more likely to create great returns for all of your investors and a great culture, which is a win for everyone.

The investor is ultimately focused on returns and that is something the CEO is aligned with. Show him how you are in sync on making the company better. Put him to work to helping you do so.

I’m sorry you are faced with this conundrum, but don’t spent too much time on this. Get back to work and make the business great.

Written by Investors Wallets

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