Business, not government, is taking the lead on diversity

I decided use the time I had spent on a government advisory group opening more restaurants instead

Businesses can significantly increase the work we do to fix society’s problems, which are often created and neglected by governments. We no longer necessarily do this out of a sense of social conscience or guilt. We do it because it is good for business, and I believe this so strongly I am launching a new restaurant growth company into which I am risking everything – my savings, my investments, my reputation.

The London dining scene is hugely competitive with many more failures than successes. So I hope I am right. Let’s look at the situation of Britain’s ethnic minorities to prove my point. A couple of years ago, in my capacity as chair of the Government’s Ethnic Minority Advisory Group, I called a Work and Pensions minister to ask what she was going to do about the just-published statistic that 49 per cent of young black men were unemployed.

“Iqbal,” she said. “The Work Programme will sort that out.” I was staggered. I’d chaired that group under the previous government and this one, and constantly despaired at how politicians failed to get things done if it didn’t have immediate impact and the chance to get them re-elected. I decided then that enough was enough and told her that I would step down and use the time I had spent on groups like that opening more restaurants – and that way I would at least be getting more black people into employment than any government initiative had directly done. In that moment it dawned on me that it might actually be true.

In Marketing 3.0, Philip Kotler describes how the consumer is no longer the back-foot recipient purchaser of the goods and services that businesses produce – they actively define what it is that they want, and the savvy business is the one that is in tune with their expectations and delivers that. He calls it “human spirit marketing”.

Here’s an example of what I mean. When Gordon Ramsay filmed his TV series on teaching prisoners in Brixton how to cook, I got invited to be part of one episode where he got inmates to cook lunch for a group of us. I was very impressed with one of them and said to him that if he wanted some work experience when released, we could offer him something at Roast, my restaurant in Borough Market.

To cut a long story short, he ended up being offered a permanent job with us – without my interference. He was so thrilled he told Gordon’s guys, who got an article printed in the London Evening Standard about it and we received a huge number of letters and e-mails saying roughly the same thing: I’ve never been to your place but now that I know you do things like that, I will. Unconsciously, I was undertaking human spirit marketing.

By more proactively and more concertedly confronting ethnic inequalities in the labour market, two members of that advisory group have set up businesses that have stepped in where governments have failed – and have made money doing so, which is crucial to their sustainability.

One is a small but successful social enterprise in Croydon. Called Mum’s The Chef, it spotted a consequence of the introduction of the benefits cap which stipulated that families with more than two children in council homes would be left with a rent deficit which meant they would either have to leave London (thousands have already been displaced as a result) or get a job. The latter isn’t easy in areas of economic blight like Croydon – especially given that families with larger numbers of kids are almost invariably of ethnic minority backgrounds, where mothers are often abandoned by abusive husbands and left to fester with no language or work skills.

The creator of Mum’s The Chef, Sahara Quli. recognised their one major skill – they knew how to cook – and so got them enrolled into the local catering college. Some of the 40 women who passed and won their qualifications went elsewhere to get work as cooks, some stayed with the project which runs street food stands and also now does private events and company catering (including ours at Roast). Not only has the project empowered those women economically and personally, it has saved the public purse millions in benefits they no longer need to claim.

At the other end of the commercial scale, a huge multinational has set up a multimillion-pound business on the back of repeated government failures to enable people from ethnic minority backgrounds to gain access to companies that are looking for new talent and that – going back to Kotler’s point – don’t wish to suffer either reputational or commercial risk by being seen to be at best an uneven employer and at worst a discriminatory one.

Arun Batra had spent many years working with the Greater London Authority trying to boost diversity within its own and then in other organisations’ supply chains – only to come up against repeated barriers of resistance. Out of his experience there, and the frustrations he shared with me at the advisory group level with government, he approached the business services giant EY and easily convinced it to make a million-pound investment in creating a new service for existing and potential clients.

The National Equality Standard advises clients (and it had a waiting list of clients as soon as it was launched) on practical measures to fix ethnic inequalities in their workforces, not just because it is morally the right thing to do but also because in reputational and commercial terms it is good for their businesses.

So it’s the market that’s stepping up where governments have failed. Of course we can’t fix everything and we should hold any government to account for not being able to deliver what the private sector in these cases has, so it can expand the initiatives we have taken.

We need to move away from the old two-coin approach where one makes money and the other gives it away to good causes. We now know there is only one coin – a coin that delivers on all fronts.

Iqbal Wahhab is the founder of The Cinnamon Club and Roast restaurants in London