Why Did John Deere Abandon Its Embrace of Diversity, Equity, and Inclusion?

The Business Perspective on DEI

In the vast landscape of business, certain companies choose to prioritize diversity, equity, and inclusion (DEI) as core values, while others find that these principles might not align with their primary business goals. This article explores the case of John Deere, a renowned American manufacturer of construction and agricultural equipment, as it appears to have reconsidered its approach to DEI in favor of other business priorities.

Customer Base Over Ideology

John Deere's core customer base is predominantly composed of rural, conservative farming families. These individuals expect a certain level of traditional values and conservatism in the businesses they engage with. For example, a salesperson at a John Deere dealership wearing a dress and using non-traditional pronouns might not align with the traditional values of such customers. Consequently, it makes more sense for John Deere to cater to the preferences and expectations of its primary customer base to retain business.

If a customer like myself were faced with the choice between a dealership that prioritizes DEI principles and one that prioritizes traditional values, I would choose the latter. Last time I visited a John Deere dealership, I spent nearly a million dollars on equipment. Stockholders have no interest in alienating such a significant customer base, especially one with substantial purchasing power.

Focus on Performance Over DEI

In the context of John Deere, the company likely evaluates its initiatives based on their impact on key business goals. John Deere has two primary goals: to do no harm and to increase shareholder value. Any action or decision that might interfere with these goals should be carefully evaluated to ensure that it aligns with them.

It is plausible that John Deere recognized that their DEI initiatives might compromise some of their hiring decisions, leading to the hiring of less qualified or less capable individuals over those who are more skilled and meritorious based solely on race or gender. This realization could have spurred a shift in their focus towards policies that prioritize performance and merit.

Consumer Feedback and Business Strategy

The feedback from rural customers, who make up a significant portion of John Deere's customer base, likely played a role in the decision to prioritize business goals over DEI principles. Recognizing the predictability of how explicit racism coded into DEI initiatives affects consumer behavior, John Deere may have decided that maintaining happiness among the majority of their customer base is more critical than addressing the concerns of a smaller group.

From a business perspective, keeping 95% or more of your customer base satisfied is critical for long-term success. Addressing the needs and values of a majority of your customer base is more effective than trying to cater to a minority with different priorities. This decision reflects a pragmatic and customer-centric approach to business.

Conclusion

John Deere's decision to focus on doing no harm and increasing shareholder value over DEI principles can be seen as a strategic business move. In a highly competitive market, prioritizing core customer values can lead to long-term success and sustainability. However, this shift in focus does not mean that DEI is not important; rather, it highlights the need for companies to carefully consider how their values and initiatives impact their business goals.

Ultimately, the balance between DEI principles and business goals is a nuanced and complex issue. For businesses like John Deere, it is about finding the right balance that aligns with their long-term objectives and customer satisfaction.