Guest post from William McNally:
McKinsey has four studies that are used by DEI advocates to argue that diversity “is a powerful enabler of business performance.”
Here’s the 2020 study. McKinsey measure diversity as the racial variety of a company’s executive team.
A new paper by Green and Hand delivers a pretty thorough debunking. Here’s a synopsis of the criticism.
Here’s the journal article by Green and Hand.
McKinsey wouldn’t share its data (very suspicious) and Green and Hand couldn’t replicate the McKinsey results with a large sample of S&P firms.
Worse, McKinsey’s study design measures a reverse causality: that increased performance causes more diverse hiring.
That makes more sense to me, as I think that diversity is a luxury belief: https://www.robkhenderson.com/p/status-symbols-and-the-struggle-for
This fits into the Scott Adams category of “Backwards Science”.
To give an example, McKinsey’s 2015 study measures diversity in 2014 but looks at financial performance in the years 2010-2013.
Thus, the McKinsey results don’t provide evidence for the conclusion they are making. The results show that companies with high EBIT margins tend to hire more diverse executives.
Diversity, like environmentalism is a frivolity affordable only to the fortunate and prosperous.
And if they embrace it they soon won’t be fortunate or prosperous.
The cart before the horse, again. Temperature increase leads CO2 increase. The more money you have, the more money you throw around.
Le charure devant le boeuf as they say in French 🙂
Same scientific method too. Assign/define a conclusion, then collect and manipulate data to fit your conclusion.
Yep, the same old “policy based evidence making”.
The “social sciences” are full of this Blarney Science. It’s because the authors are politically and/or ideologically motivated.
“McKinsey has four studies that are used by DEI advocates to argue that diversity “is a powerful enabler of business performance.”
Like bud light and dylan mulvaney business performance.
https://nypost.com/2024/03/01/business/bud-lights-dylan-mulvaney-fiasco-spurred-sales-hit-of-more-than-1b-last-year/
It was horse piss anyway, but now, it’s not worth it even in the heat.
Exactly. That ain’t beer, its water.
Is the study on DEI accredited (not worth reading) if they won’t show their data?
” … more profitable firms may pursue diversity-hiring policies as a result of their profitability.”
In other words, the richer they get, the more likely they will start doing stupid stuff.
Man, you nailed it! It’s jello but you managed to nail it to the wall.
Related: excessive regulation favours very large entities with lots of descrerionary spending power and destroys smaller entities.
At root D.E.I. is just ugly * R E G U L A T I O N * dressed up with pretty language.
Maybe McKinsey is really dumb and promoted beyond his competence level because he’s black?
McKinsey is a management consulting firm that produces studies for pay to support whatever fad management at the company who is paying for the study supports.
If someone paid them to produce a study that showed DEI is a drag on a business, they’d do so.
the only question is what companies paid McKinsey to torture the data to get the results they wanted?
Having reviewed this very dogmatic and methodologically vague “study”, I’d agree with above comments i.e. irreproducible and, even by its own admission, unresolved as to which is cause and which is effect. The more money you have, the more you can throw around.
The most important line in the whole McKinsey 2020 report:
“Correlation is not causation. There are real limitations, and we are not asserting a causal link.”
Management consulting is the new Witch Doctor.
https://www.amazon.ca/Witch-Doctors-Making-Sense-Management/dp/0812929888
Studies!
Advocating and debunking studies!!
Necessary, I ‘spose for public policy change, but really, the truth of the apparently ground-breaking debunking study should have been easily intuited by ordinary Joes and Janes though admittedly not by the most highly credentialed among us whose intuition and simple organic logic skills are hampered by over-thinking and under-intuiting.
are often hampered by the idolatry of h of high IQ instead of intuition. Intuited by people with average IQs — more readily intuited than
So a firm took on the best talent, which just happened to be some diverse people.
The fake scientists turned around and proclaimed that was proof a firm needed to go with diversity instead the best talent. Typical government BS, which is due to the most talentless getting hired by government.
Most effective arguments against DEI are the basic principles of 6sigma’s management philosophy.
Worth checking out at 6sigma.com
I was going to start a consultancy called “Sick Smegma Management” but I realised it was misleading as well as in bad taste.