Pepsi and Corporate Diversity: What You Can Learn

* Note: This blog post was originally published on LinkedIn on April 6, 2017

By now, many of you have seen the Pepsi commercial that featured Kendall Jenner and attempted to show the company as a supporter of activism. The outcry and criticism on social media was immediate. After at first defending the ad, within 24 hours of its release Pepsi decided to pull it, creating what I now call, "PepsiGate." A Google search shows nearly a half million pieces have been written on this story, the overwhelming majority critical of the ad and Kendall Jenner. However, I write this piece from the perspective of a racial equity and inclusion expert to offer thoughts on how diversity staffing in corporations contributed to this problem and how even in missteps there is an opportunity to learn and build your brand.

But before we talk about diversity staffing, let's review (in short) the history of the concept, and what the term means in companies today. The concept of diversity has shifted over time. Executive Order 11246 issued in 1965 required government contractors to take "affirmative action", meaning positive steps, to reverse past patterns of discrimination. Diversity's primary function was to include groups who had previously been excluded. In the decades that followed, affirmative action became the target of public outcry, prior rulings were reversed by courts, and it was deemed insufficient to create inclusiveness in organizations. In response, management teams began to promote a different kind of "diversity" - one that was more acceptable to Whites and that shifted the focus from issues of race, ethnicity, religion, and gender. In today's corporate environment diversity the word "diversity" has no limitations. In a departure from what diversity once meant, today it essentially includes everyone in an attempt not to offend anyone. The lack of specificity and ambiguity of the term is why I refrain from using it in my consulting work, but for this sake of this discussion I will use it. The lack of specificity and ambiguity of the term "diversity" is also a problem for corporations and it is how you get "PepsiGate."

To illustrate the harmfulness of this change, I will use examples of a few companies I have had the pleasure of working for. What if Hallmark Cards created one card that attempted to express the sentiments for all types of individuals? What if Johnson & Johnson patented and sold pharmaceutical drugs that claimed efficacy regardless of disease state? What if Ford Motor Company sold one vehicle to all of its customers? I believe that most of us can see that any of these situations would have catastrophic consequences for the organization.

However, this is exactly what has happened to the concept of diversity and it is a key contributor that led to Pepsi's recent marketing misstep. A diversity that doesn't properly recognize the challenges and struggles of different groups, that insists that all groups are the same, attempts to "plug and play" by using a white woman in the place of a Black woman will have catastrophic consequences for an organization. It isn't diversity at all, but a faux, colorblind diversity that is guaranteed to create the kind of outcry we have seen targeted at Pepsi in the past few days.


By and large, companies staff diversity positions with individuals with human resource backgrounds. Many progressive companies have moved away from this staffing model, however, it remains far too prevalent. The problem with this staffing model is it assumes that diversity and inclusion is best achieved through hiring. This is flawed reasoning. What Pepsi got right is they understood that their best public testament to diversity was what they said publicly through their advertising. So, they did what all major companies do, they turned to their outside agency of record. But statistics tell us the advertising industry is sorely missing the mark when it comes to inclusion. According to a 2015 report from the Bureau of Labor and Statistics, African-Americans make up only 5.3% of the workforce (vs 11.7% of the total workforce) in advertising and PR. Madison Avenue agencies lack cultural competency. This fact can be mitigated by companies by having diversity professionals with an advertising, marketing, and or communications background. While I understand that companies have Multicultural advertising teams, departments, and/or initiatives, these teams work with agencies on campaigns targeted at specific groups; Black people work (internally) on advertising to Black consumers, Hispanics work (internally) on advertising targeted at Hispanic consumers, Asians work (internally) on advertising to the Asian community. But what happens when the new and all-inclusive definition of "diversity" suggests that a general market campaign is the way to go? The work is assigned to the general market agency with almost no African-American representation and you get PepsiGate.

Perhaps, then companies would do well to make sure their diversity professionals have strong marketing, advertising and/or communications backgrounds AND their marketing, advertising and communications professionals have experience and exposure to different groups and cultures. This kind of "diversity" goes beyond what someone looks like and reflects what they believe and what they advocate for. However, the conservatism of many corporations results in hiring individuals who are of a different race, ethnicity, religion, and/or gender, but have the same views of many mainstream Whites; views that while not hostile, are harmful due to their absence. Had someone in the room had a true understanding of Black Lives Matter and felt safe sharing that knowledge in their professional environment, this commercial would have never been launched in the form we saw it. The lack of diversity teams that understand marketing, advertising, and communications failed Pepsi and it will fail other companies unless it is intentionally countered.

The other illustrative aspect of this saga can be found in the company's response. As previously stated, Pepsi initially defended the ad. This defense compounded the problem and caused Pepsi to lose an opportunity. The opportunity lost was the opportunity to learn. Pepsi presented itself as an ally in the work of racial and social justice, however the most important thing for an ally to do is to learn from the groups they claim to be in solidarity with. When the first criticisms of the ad began on social media a company with diversity embedded in its communications team would have called for a forum for the people who were most offended to teach them where they went wrong and be involved in the process to do something different - something better. This is the opportunity that was lost.

I applaud companies and individuals who take risks in what should be our shared attempt to eradicate racism. Taking any risk always comes the possibility of getting it wrong. I hope these two suggestions 1) having diversity professionals with marketing, advertising, and communications backgrounds, and 2) looking for the opportunity to learn in the face of a misstep will increase the chances that the risk will be rewarded.