Not yet, but these are still pretty new to corporate environments. I've been in "harassment prevention" training sessions for years, but only within the last year sat through my first "diversity, equity, and inclusion" (DEI) training. (It was not an inquisition; quite helpful in the opinion of this middle aged white guy.)
There is research that shows that companies with diverse leadership and staff financially outperform the average. See for example:
The problem is, no one knows for sure how to take an existing corporate culture with low diversity, and transform it to one with higher diversity and higher performance. Cultures can be extremely resistant to change.
DEI trainings are just the latest attempt to find something that works. It will take a few years to see if they do.
I'm super suspicious of research like that for a couple of reasons.
One it would it be impossible to publish research that came to the opposite conclusion. Imagine seeing a headline that said "replacing female and black executive leadership with old white dudes increases profit" by McKinsey.
Second the magnitude of the impact seems insane. This seems larger than the difference most studies find between good leadership and average leadership. And while I wouldn't be surprised if diverse leadership is marginally better than non-diverse leadership I would be surprised if it's larger than the difference between average and good.
Three they're pulling from many different countries which could potentially create huge confounds.
In general "research" that comes out of a place like McKinsey and Bane is pretty suspect but something like this is even more.
Even if none of the other problems are real they still don't establish causation. It could easily be the case that diverse candidates are harder to find, so more competitive/better firms are able to better attract them.
I think diversity is great and there are lots of great reasons to increase it but I doubt the impact on profitability would be anything beyond marginal.
I wonder if the effect works backward - excellence attracts the best and remaining on top requires assimilating the best from all sources. Diversity essentially is a side effect of their paradigms and world views in terms of openness to new things and experimentalism.
On a related note successful Empires become more diverse over time - one of the few virtues of Imperialism and they need the edge to expand further while the most xenophobic ones tend to be shorter lived or more limited in their success. One insulting but true observation about national flags flown by white supremacists is that they are all flags of losers (Nazi Germany, Confederacy, Rhodesia).
I would expect a company with more diverse leadership to outperform, because they are able to access more talent.
White men are like 35% of the U.S. population in total. So on the back of the envelope, a corporate culture that inclines toward hiring white men, also inclines against hiring from 65% of the population. That's a lot of talent available for your competitors to hire.
And the numbers get even more dramatic the younger you look. Non-hispanic white U.S. residents under 16 made up less than 50% of the population at that age as of last year. And the trend direction is obvious. Source:
If a company does not figure out how to hire, retain, and promote people who are not white men, they are going to see a shrinking talent pool for decades to come. The data is obvious to corporate leaders, which is why so many companies are treating diversity as an issue for management of the business.
> If a company does not figure out how to hire, retain, and promote people who are not white men
Agreed. Not hiring the best talent is always bad for a company. If you are biased against your best talent, you've selected worse talent.
However, diversity goals keep moving - they are well past bias issues. Note that tech companies aren't hiring mostly white men at this point - they are in fact outnumbered by Asian men (Google was at 30% and 39% in tech hiring respectively last year.). And yet, we are still talking about the lack of diversity in tech (women remain underepresented, but in terms of ethnicity it's a very diverse place)
Remember this research was done across the globe including countries like Brazil and Japan.
But to focus on the U.S. most really competitive institutions in the U.S. like medical institutions are not running into the problem of having too many white people. Medical institutions have too many Asians, and not enough Black and Hispanic people to have a representative graduating class.
> I would expect a company with more diverse leadership to outperform, because they are able to access more talent.
You implicitly assume that the performance of a leadership team is the sum of the talent of its members.
I'm sure that's important, but the more direct variable to study (somehow) would be how similar people's backgrounds are. If they are all precisely alike, then they'll miss perspectives and be blindsided. But if they are totally different, then they will struggle to communicate their assumptions, and also won't perform well.
So I'd expect honest research to show a U-shaped loss curve. Or more realistically, to have gathered cautionary tales of companies that fell apart for both of these reasons.
The issue a non-diverse team will hit is getting blind-sided by lack of perspective on emerging phenomena. Given that aspect, I don't find it surprising that the benefits from a diverse team could exceed the benefits between the difference in average and good leadership.
Both an average and a good leader will drown the same army if they lead them into a swamp because they've never seen a swamp before.
A blue collar factory worker, a harvard grad management consultant, and a business researcher who are all white males try to reduce car part inventory through logistical innovation.
A black woman, a white man, and Asian woman who all graduated from Harvard and worked for McKinsey try to reduce car part inventory through logistical innovation.
I wouldn't be surprised if the more diverse group came up with a better solution.
To take your contrived example regional diversity will have a much larger impact on making sure someone has encountered a swamp than racial diversity.
I think it's easy to overestimate the effect of racial diversity and underestimate the effect of other types of diversities on problem solving style because one is so easy to see.
No disagreement here, but if we're talking non-contrived examples, actual facial recognition cameras for video conferencing have gotten all the way to sold on store shelves with an inability to recognize black faces.
I think it's fair to assume that had there been at least one black individual in the development pipeline, the company that made that camera would have avoided an embarrassing mistake.
> There is research that shows that companies with diverse leadership and staff financially outperform the average
Ah, that looks like a nice bit of marketing from McKinsey. Huge companies that work on global markets with clearly recognizable brands are naturally more diverse (sourcing people from all over the world) and also care about their public image enough to increase their diversity in management positions.
Of course this doesn't mean at all that by increasing diversity your performance will improve, the causal arrow goes in the opposite direction.
There is research that shows that companies with diverse leadership and staff financially outperform the average. See for example:
https://www.mckinsey.com/featured-insights/diversity-and-inc...
The problem is, no one knows for sure how to take an existing corporate culture with low diversity, and transform it to one with higher diversity and higher performance. Cultures can be extremely resistant to change.
DEI trainings are just the latest attempt to find something that works. It will take a few years to see if they do.