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The DEI rollback

Yesterday, Jason Fried, Basecamp’s CEO, shared an internal memo he’d written about changes at the company. In it, he details how political discussions are no longer acceptable at work, and how benefits he considers to be “paternalistic” - like gym memberships and farmer’s market shares - are being removed.

It’s weird to me that this is coming from a company that literally wrote the book on culture. I’ve always thought of Basecamp (and its predecessor, 37 Signals) as being the yardstick for how to run a great company. This blog post completely blew that out of the water.

Conor Muirhead, a designer at Basecamp, later noted that political discussion was limited to two opt-in spaces: a space called “Civil Solace”, and a recently-formed DEI council. He notes that it was rare for these discussions to spill out of those spaces, although they did when, for example, “folks shared thoughts on how mocking people’s non-anglo names is a stepping stone towards racism”.

As Annalee Flower Horne rightly pointed out, “here's a thing about banning political discussions from a space because they're divisive: that does not resolve the division. It just says if you feel marginalized or unsafe here, keep it to yourself, we don't want to hear it.” Indeed, the predominantly white, male discourse - the one that is still dominant - is not usually considered to be “political”, while equity for marginalized people usually is. The effect is to further marginalize people of color in particular.

Regarding “paternalistic benefits”, Fred Wilson points out that “If you care about the mental and physical well-being of your team, I believe it makes sense to support them by investing in that. Companies can do that tax efficiently and employees cannot. Paying employees more so that they can then make these investments personally sounds rational but I don’t believe it will be as effective as company-funded programs that employees can opt into or not.” Because these benefits enjoy a special tax status, removing them disproportionately affects lower paid workers.

Something must have happened behind the scenes at Basecamp to force this change. The smart money’s on management becoming uncomfortable with changes requested, and power gathered, by the DEI council. But if you don’t want to make those changes, why have the council to begin with, except as a superficial gesture?

Basecamp was emboldened by Coinbase, which previously enacted a similar policy. It’s a regressive trend that more tech companies, led by men who are already predisposed to this narrower worldview, are likely to follow. This is particularly true in the post-Trump era, when the stakes (from a privileged perspective) seem lower.

For many of them, it’s an intentional roll back of the clock. Code2040 CEO Emeritus Karla Monterroso shared that “I will never forget a Latinx VP at a big tech company telling me that one of their VC’s (big name) told him at a board meeting that they had become an inhospitable place for white men and they needed to fix that.”

The solution, for now, is to call it out, and for those of us with privilege to pledge never to work for (or start) an organization with these policies. Diversity and inclusion is more important than ever. And leaders who care about the culture of their companies should once again take note of the Basecamp team: this time as a lesson in what not to do.

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