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DEI and Business Success

By April 3, 2024Commentary

McKinsey is supposedly the pre-eminent business consulting firm.  My exposure to them has suggested that they actually are pretentious dunces.  Among other accomplishments, the firm is responsible for pimping DEI into businesses on the theory that it would make them more successful.  Let’s see, hiring and promoting people purely on the basis of their race, sex, etc. will make the products and services a company offers and the firm’s operations better?  Boy, that sure makes a lot of sense.  And McKinsey produced some papers which it claimed provided data to support this obviously anti-common sense proposition.  Turns out the research was bogus.

Other researchers have re-examined these claims.  They wanted to re-evaluate the data McKinsey supposedly used but McKinsey refused to share it; a sure sign that the data didn’t show what McKinsey claimed it did, or was outright fraudulent.  The authors compiled their own similar dataset and found no correlation between diversity at a firm and business results.  Worth a read in full.  (EJW Article)

Some of these authors also conducted a second piece of research which also did an extensive examination of any link between the diverse composition of a company’s management team and financial results and found zero evidence that DEI made any difference.  A pretty significant demolition of the “business case” for diversity.  (SSRN Study)

I am completely supportive of true equal opportunity.  I am supportive of efforts to identify groups or persons, of any race, ethnicity, religion, gender or whatever, who have been disadvantaged in educational and other opportunities and helping those groups and persons to develop the knowledge and skills that make them good workers and managers.  It is obvious nonsense to hire and promote people who clearly aren’t qualified for the job and that practice will clearly lead to worse products, services and operations and financial results.  And given the constant stream of stories about the shoddiness of products and services from US companies, I think we can assume that DEI is at least partly responsible.

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