The leadership dilemma: Evolve with change or resist the future
Diversity policies, flexible work models, and sustainability efforts are being rolled back in iconic companies and across Latin America. Is this a step backward in social progress—or the necessary rebalancing after the post-pandemic extremes?
Recent headlines are striking: iconic companies like McDonald’s, Meta, and Walmart are scaling back or eliminating their diversity, equity, and inclusion (DEI) initiatives. At the same time, the return to full in-office work is gaining ground in Latin America, led by countries like Peru and Colombia, where over 70% of companies require employees to be in the office five days a week, according to a report by real estate consultancy JLL. And it's not just diversity and flexibility at stake—sustainability is also being reconsidered in many organizations reevaluating their environmental commitments.
Are we witnessing a rollback of the social and labor gains achieved over the past decade, or is this change a necessary correction after the excesses of the post-pandemic era?
What is the Pendulum Theory?
In social sciences, the pendulum theory describes the cyclical swing between opposing extremes in policies, values, or societal trends. This phenomenon is often interpreted as a reaction to the excesses or shortcomings of a previous stage, in search of a new balance based on current circumstances. In this case, we've shifted from a surge in flexibility, diversity, and sustainability to a phase of rethinking—or retreat. But what's driving this pendulum?
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A natural burnout of the trend, whether due to cost, implementation difficulties, or market pressure. Many companies attempted hybrid models focusing on productivity and flexibility, but when a few failed to meet expectations, the narrative that “it doesn’t work” became generalized. The same logic is now applied to diversity and sustainability. But was there real fatigue, or were they simply poorly executed?
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These initiatives were never part of the companies' DNA—just messaging aimed at the market and investors. As lawyer Yoan Bitran, compliance director at Albagli Zaliasnik (AZ), recently noted in an article published in Diario Financiero, the key lies in distinguishing between "saying and doing" or "being and pretending." When a practice aligns with an organization's core purpose, it doesn't disappear with market fluctuations. So, does this mean that many companies adopted these initiatives as a superficial shell, now easily discarded under pressure?
A setback—or an execution adjustment?
The rollback of these policies is driven by several factors:
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- Legal and regulatory changes that limit the implementation of inclusive policies.
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- Pressure for immediate financial results, pushing aside initiatives seen as costly or with intangible impact.
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- Doubts about the effectiveness of DEI policies, questioned for their ability to deliver measurable outcomes.
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- A possible disconnect with the expectations of younger generations, who see flexibility and diversity as non-negotiable elements of any employment offering.
- Are business leaders setting a new trend, or are they the last representatives of a model that no longer resonates with younger generations?
If the issue is not diversity, flexibility, or sustainability per se, but rather the inability to execute them consistently, then the risk is that this pendulum swing could lead us to lose key learnings. The hybrid model, for instance, has a deep connection with employer branding and employee experience. Is it logical to scrap it completely rather than fix its flaws?
The same applies to diversity. Meta, for example, justified dismantling its DEI structure by stating that the new priority is to hire “top talent” regardless of protected characteristics like race or gender.
McDonald’s, meanwhile, suspended its aspirational representation goals and programs aimed at building a diverse and inclusive value chain.
But the real question is: are we learning from this evolution—or simply discarding all the progress made?
The responsibility of leaders
In Latin America, six out of ten companies require full in-office attendance—a figure that far exceeds other regions globally. This “normalization” of onsite work creates tension with the flexible models popularized during the pandemic. While projections suggest that by 2030 we could see a four-day hybrid model supported by AI and more sustainable workspaces, the current challenge is twofold: remaining competitive while attracting young talent that values flexibility and purpose.
In this context, business leaders face a critical challenge: avoiding the risk of the pendulum swinging so far back that we end up in a full return to the past—with no lessons learned. After World War II, extreme peace didn’t prevent future conflicts from arising. Could the same happen with diversity and flexibility?
Scaling back these initiatives may simplify short-term management but could negatively impact employee engagement and the ability to attract young talent. Gen Z and Millennials have made it clear: flexible, inclusive, and sustainable work conditions are not optional perks—they’re basic expectations.
Ultimately, the real dilemma isn’t whether flexibility, diversity, or sustainability survive or vanish—but whether they were ever truly integrated into the identity of organizations or merely reactive responses to external pressure. If it's the former, they will evolve. If it's the latter, they’ll be discarded just as quickly as they were embraced.
So, is this change an act of visionary leadership—or simply resistance to change? Only time will tell whether the companies abandoning these practices today are leading a new wave—or falling behind.
By Alejandro Goldstein, Partner at Olivia.
