Why diversity and success are inextricably linked
When a military helicopter crashed into a civilian airliner at Washington, D.C.’s Reagan National Airport, sending all 67 souls aboard both aircraft to icy graves in the Potomac, President Trump immediately blamed diversity, equity and inclusion (DEI).
Trump deployed not a single fact to support his attribution of responsibility. He didn’t need any, proffering instead what he called “common sense,” which is more important to Trump than facts or evidence.
The president failed to adduce an iota of evidence implicating DEI in this horrific tragedy, but there is a vast body of facts making clear that what the president regards as “common sense” is flat wrong.
Diversity improves decision making.
About two decades ago, Scott Page and Lu Hong of the University of Michigan demonstrated mathematically that a diverse group of able problem solvers outperforms a group of the best problem solvers. A diverse group of competent people working together makes better decisions than a team comprised only of the very best. Diversity beats homogeneity, even when the homogenous team is made up of only the very best.
Since then, an array of studies have demonstrated that diversity is good for business. In fact, companies with greater levels of diversity generated more revenue, more customers, greater market share and greater relative profitability.
McKinsey examined 366 companies and found those in the top quarter for racial and ethnic diversity were 35 percent more likely to enjoy profits above average for their industry.
Another study revealed diverse teams of investors in venture capital firms made smarter real-world investment decisions, scoring a 26 percent higher success rate than homogeneous teams.
An analysis of 7,615 firms revealed that enterprises run by diverse leadership teams were more likely to develop new products, to innovate, than those with homogenous management.
A study by the Boston Consulting Group found that companies with above average diversity derived 45 percent of their revenue from new, innovative products compared to 26 percent among those with below average diversity scores.
These and other such studies are merely correlational, however. They don’t prove that diversity causes success, but they cast serious doubt on the president’s proposition that diversity causes failure.
Experiments can, and do, demonstrate that diversity leads to better decisions. An experiment with mock juries found that racially diverse juries led to more focus on the facts of the case, fewer factual errors in recalling the evidence and more effective deliberation.
Another experiment asked college students to solve a murder mystery. Those groups with outsiders were twice as likely to reach the correct answer.
In a more recent experiment, diverse teams were 58 percent more likely to price stocks correctly than homogeneous groups, which were much more prone to errors in pricing.
The World Economic Forum — the folks who bring you Davos — summarized the data by stating, “The business case for diversity in the workplace is now overwhelming.”
That’s not to say that working as part of a diverse team is easier. Many of these studies found diversity made for difficulties. In homogenous teams, collaboration can flow more smoothly, while diversity can cause friction, and that friction can be painful as well as fruitful.
Friction makes diversity feel like an impediment to success and homogeneity like a soothing balm on the road to achievement.
However, as uncomfortable as friction of this sort may be, it happens because diversity brings richer information to the table, reduces the tendency to rely on ingrained assumptions, leads to more use of facts and promotes original, innovative thinking.
It’s easier for a team to quickly agree on the same facts, arguments and conclusions, and then move on to toasting themselves at the bar, but that’s seldom a formula for excellence.
In short, diversity causes both some pain and improved outcomes.
The current wholesale degradation of diversity in American government, commerce and education may make some people feel better, but it will impede our national performance, leaving our children and grandchildren worse off.
Diversity didn’t cause death in the air just above D.C.’s airport, but ridding ourselves of diversity may well cause more suffering in the future.
Mellman is president of The Mellman Group a political consultancy. Mellman served as pollster to Senate Democratic leaders for over 20 years. He is also president of Democratic Majority for Israel.
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