For the last ten years, corporate America has been all about Diversity, Equity, and Inclusion, or DEI. Extensive amounts of training have been provided. Highly paid executive roles were created to implement and maintain DEI programs. DEI was promised as a way to higher profits and better workplaces. The result: A dismal failure.
Companies that embraced DEI have seen their profits decline as they have turned off customers. Their best employees have left for other jobs. Their focus has been turned from delighting the customer to social engineering. Storied restaurant chains that once dominated their markets have been turned into generic monoliths designed to please everyone but that instead please no one. It was all doomed to fail from the start. In this article, we’ll look at the flaws in DEI and why its failure was inevitable.
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What is DEI?
If you’ve been living under a rock, you may have not heard of DEI. But most people have been inundated with DEI training at work, seen posts and debates on it on social media, and even seen the products made with it in movies and television shows. But if you’re unaware, here’s a synopsis:
Diversity, Equity, and Inclusion, or DEI, is a philosophy that leads to a way of doing things that values Diversity, Equity, and Inclusion. Diversity ideally means differences in culture, life experiences, and skills. The idea is that by having people with different skills and knowledge, a team can be more effective and better products can be made.
Equity is like equality, but after-the-fact. It is a belief that all should have an equal outcome. Those with fewer natural abilities or advantages early in life, or who simply didn’t put in the effort to learn skills and build up their capabilities in the past, should be given assistance to increase their capabilities now. Resources are allocated to the less prepared and less gifted. Those who are naturally gifted or have built themselves up should not be given assistance, they already being at an advantage relative to the average. In the end the idea is that everyone will have the same capabilities and ability to “win,” some with great assistance, some without. For example, in a boat race a strong rower might be given a short set of paddles, an average rower a longer set, and someone who is poor at rowing a motor boat.
Inclusion is the idea of involving everyone in everything regardless of suitability and capability. It is also the idea of giving everyone a chance in all of the roles, including leadership in critical production roles. The idea here is that everyone should be “part of the club” and have the opportunity to contribute. The advantage advertised is that by involving everyone, more can be accomplished.
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So, this is good, right?
On its face, DEI principles seem to make a lot of sense. Having diverse people means you get diverse ideas, which means you’re more likely to get good ideas, right? Helping out those who need it means more people can contribute, yes? Making everyone feel welcome and that they can contribute also more gets done, am I right?
But with a deeper look one easily sees the flaws. Putting it into practice quickly leads to issues and decay of the fabric of the organization.
DEI pushes out the traditional ways of doing things:
- Utilizing people as individuals based on their skills and experience without concern about aspects of their backgrounds like culture and eye color that don’t affect their performance in their jobs,
- Providing tools to those who have the most capability to use them to accomplish the most, and
- Assigning positions and duties based on merit and capabilities, sometimes not choosing some people at all.
These ideas are replaced with new goals. Goals focused on the people and not the work to be done. The workplace becomes a place to right previous wrongs and engineer a “better” society. Let’s look at how diversity, equity, and inclusion are implemented individually and what the effects of that implementation are.
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Diversity
Championing diversity means segregating people into groups and then selecting people as uniformly from each group as possible for the organization. And the aspects typically chosen when forming the groups: race, gender, religion or lack of religion, sexual preferences, and presence of a handicap; really are not aspects that are important to many roles. The process fails to find groups that are diverse in ways that would matter when they would matter: in thought process, experience, and skills.
Diversity could help with teams involved in brainstorming and developing new products. A marketing team that was diverse might be better are crafting ads that would appeal to more people. A diverse team might also have more ideas to choose from and, as a result, find a better way of doing something.
But a diverse team that was effective at any of these things would be chosen based on cultures and experience. A marketing team would want people from each of the cultures they are marketing to so as to understand how people in their different markets would want to do things and to what they would be attracted. A group brainstorming would want people with different experiences and different ways of doing things to come up with more ideas.
But what diversity under DEI becomes is diversity of traits like skin color. Things that can be seen visually. If it is true that people had experiences or built up a culture based on their skin colors, gender, or sexual orientation, this would be effective way to achieve diversity in an organization. In some cases, this has happened, particularly if people were segregated based on these traits in the past. But often these traits are not the best to use to create a group with maximum diversity of thought and culture. A group with different skin tones who all went to the same school in Los Angeles, CA would be far less diverse than a group of all Caucasians who came from all different countries.
And often creating “diverse” teams just becomes about giving an advantage or favoring people of a skin color or other trait that was discriminated against in the past or that is more rare. In the most absurd cases, individuals who have an unusual skin tone are thought of as being “diverse” in and of themselves. How can one individual be diverse?
Even if teams are made up with individuals of diverse cultures, having diversity is not always an advantage. People who inherently understand each other and believe things should be done the same way can work together more effectively than those who disagree on what to do and how it should be done. For many tasks and processes, having individuals that work well together and believe in doing things the same way is often more important than having a wide variety of ideas. Sometimes you just need to get the task done or get the products out-the-door.
Having everyone with a different idea of how things should be done can be a severe hindrance to this. Bringing different cultures together can also cause conflict. Notice that societies that include many different cultures often have more conflict than those that are of one unified culture.
Equity
Equity involves giving resources to people based on their needs. A person who is short would get a ladder to reach things, while a person who was tall would not. A person who was strong might be left to carry heavy bags on his back, where a person who was weak might be given a motorized cart.
Again, on its surface this seems like a good idea. Obviously someone who is short would need a ladder to reach things and by providing it the organization allows him or her to do a better job. Someone who is tall would not need a ladder and therefore, why not allocate resources where they are needed?
There are two issues with this. The first is that this approach means that there is no one that is a superstar. Instead, everyone is mediocre. In the past resources were allocated to the best performers and the most capable. A fantastic salesman was given a staff to help coordinate his schedule and fulfill orders and tools like a company car and phone since that salesman could utilize those tools to create far more sales. A brilliant scientist was given resources and a staff to help him since she could then focus on implementing her great ideas. By instead giving out resources to those who are less capable, the performance of the natural superstars in the company are diminished.
Note that this is not done in the sports world where winning is everything and there is a desire to see just how far individuals can go. The best football players are given special weight rooms, trainers, transportation, and especially nice stadiums to play in while mediocre football players are given none of these things. The best cyclist are given ultralight bikes, a support staff, and the best trainers where the so-so are left to fend for themselves with heavier bikes and lesser equipment. If equity were practiced in the sports world the best would be given lesser equipment and be left on their own to train while those who weren’t so good would be given better equipment and coaching to make them play better. They are not.
The second issue with equity is that it punishes hard work and commitment and rewards laziness and poor choices. An individual who has trained himself and put in time to build up skills gets fewer resources and rewards than someone who has chosen not to do so. This creates an incentive to not work to better oneself and to choose the path of least effort. In the end, you’ll end up in the same place, so why work hard? You get the same salary whether you are producing 80% of the company’s products or 10%, so why work harder and improve your capabilities?
Extreme equity, where resources are given only based on need and everyone gets the same pay will drive out the best performers. Those who choose to stay will do less because they get the same reward by doing so. Rather than focusing on excellence because that is how you are rewarded, it all becomes a game of putting in as little as possible because then you receive the most reward for your effort. Really equity is socialism by a different name and we’ve seen that socialism does not work well when compared to a meritocracy.
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Inclusion
Inclusion means involving everyone and also giving everyone a chance at all roles. Certainly it is not pleasant to be shut out of things and everyone likes to be able to have a role in things. Inclusion is great, right?
Of the three ideas, diversity, equity, and inclusion, inclusion is probably the least destructive but it also has issues. Certainly organizations need to be wary of shutting out those who could make valuable contributions. They also need to avoid favoritism or including less capable people because of connections or other advantages. Because companies always have limited resources, however, allocating those resources to those who can perform the best is often the key to success. Putting the most capable people in critical roles and selecting people based on their capabilities is more effective than giving everyone a chance.
Decisions made by committee are also usually poor decisions. The best ideas are often not the most popular and certain individuals will make better decisions than will a group. Having a committee also means needing to convince a whole group, so politics becomes a factor. There is also a lot of work involved in convincing a group to take an action, so having a few people making the decisions, with adequate advice, is usually the most efficient way to get things done. Another effect of doing things by committee is everyone is responsible so no one feels responsible. Lack of ownership can mean no one really makes an effort to make sure the best decision is implemented.
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Disclaimer: This blog is not meant to give financial planning advice, it gives information on a specific investment strategy and picking stocks. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.