Why Diversity Is More Important Than Meritocracy: Quotas, Talent, Wall Street | Sallie Krawcheck

Why Diversity Is More Important Than Meritocracy: Quotas, Talent, Wall Street
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We need to rethink our diversity strategy, says Sallie Krawcheck. What we've been trying for the last decade hasn't been working, but what exactly is the problem? Research reveals that diversity is actually worse in meritocracies. Managers—and particularly middle managers, Krawcheck points out—fall into the cognitive trap of hiring people who "remind me of a young me" (i.e. look like them and think like them) instead of more cognitively diverse people who would bring a missing skill set to a team. This is as important now, under the almost all-white male Trump administration, as it was in the 2008 Financial Crash. Wall Street is one of the most homogenous institutions in America, and Krawcheck has no doubt that having a more diverse set of minds in finance would have lessened the severity of the global crash. In addition, risk-taking and the poor decision making that results can be tracked to fluctuations in one hormone: testosterone. Whether it's the housing bubble, America's healthcare, or foreign policy, these are mistakes that affect millions of lives. As a CEO, Krawcheck's approach and advice on diversity is changing. The current strategy has been a failure, but what if companies paid their managers, in part, based on the diversity of their hires? What if we thought of diversity as more important than meritocracy? Sallie Krawcheck is the author of Own It: The Power of Women at Work.
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SALLIE KRAWCHECK:

Sallie Krawcheck is a financial feminist, CEO and Co-Founder of
Ellevest, a recently launched innovative digital investment platform for women. She is the Chair of Ellevate Network, the global professional women's network, and of the Pax Ellevate Global Women's Index Fund, which invests in the top-rated companies in the world for advancing women. She is also the best-selling author of Own It: The Power of Women at Work.

Before becoming an entrepreneur, she was CEO of Merrill Lynch Wealth Management, of Smith Barney and of Sanford Bernstein. Krawcheck has also been named among the top ten of Fast Company's "100 Most Creative People" in business list, as well as one of Entrepreneur Magazine's Entrepreneurs to Watch. and she has also been referred to as one of the most successful and influential executives in financial services.
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TRANSCRIPT:

Sallie Krawcheck: In my experience, most CEOs and boards “get” the power of diversity. There may be some who are giving it lip service still out there but in my travels these individuals understand that not only is it the fair thing to do, and it’s really the tenet upon which our country was built, but it’s really the smart thing to do.Financial results, reaching different customer bases—I think they get it. Sadly, middle management is where diversity goes to die. And I’ve been thinking about this a lot recently because there’s research I’ve recently come across that says that diversity is actually worse in meritocracies. It’s really surprising, right? You’d think, you know a meritocracy, people will search out the best person, will search out the best strategy and we'll judge them later, and the capitalism, the market forces, will decide. Huh.

But it’s worse in meritocracies and I think it is exactly that sort of hands-off perspective, that if you’re a CEO you get it, you’re hiring all the time, et cetera.But if you’re in middle management, you’re hiring, what? Once a year, twice a year, four times a year? Once every few years? It’s not a regular part of the job. And the research tells us that while there are these supposed benefits to diversity that we tend to retreat to the comfortable. We tend to overvalue products that we already have. We tend to overvalue environments in which we already exist.

And by the way the longer we have it or exist in them, the more we overvalue them.And so what you see in the middle management is, "I like working with people like me. Maybe I read some research report one time that said diversity was better but gosh, I like Jim,” right? “Gosh I like him.” Compound that with that we tend to allow ourselves in this country to ask the wrong question. And the question we usually ask when hiring people is, “Can you help me find the best person for the job?”

The “best person for the job” — our cognitive shortcut is, typically, someone who reminds us so darn much of ourselves. Whereas what we should be asking is, “Can you help me fill out the...

[jamesbrooks]

This is the definition of racism. If you are judging people based on their identity instead of their individual merit and abilities that is unfair discrimination. This is a very intellectually dishonest video for you to post and I expect better from a normally good channel.

[andreasbergqvist]

Krawcheck getting heart surgery: "I don't want the best surgeon, I want the most diverse!" Krawcheck flying: "I don't want an airplane built by the most competent engineers, inspected by the most competent airplane safety inspectors and flown by the most competent pilots. I want muh diversity!" Krawcheck buying a car: "Was that high-grade air bag built by white men? I want it replaced by an air bag sown by indigenous women!"

[Tychnaut]

Giving the job to most qualified person no matter the race is optimal.

[HWK]

Diversity is the opposite of finding the best person for the job, its putting before anything else, its stupidly regressive.

[Flornmonk]

Diversity of ideas is important. Diversity of skin color and gender is not.

[rwatertree]

"We know intuitively" = I have no proof or reasoning but you should believe me anyway.

[FirstRisingSouI]

Watched the whole video. Still waiting for when she explains why diversity is more important than meritocracy.

[Honkarakiri]

Came just to see the dislike bar, wasn't disappointed.

[Dxploitation]

Diversity is your weakness. Face it. Unsubed

[facelift]

White wiman speaking on diversity as a ceo. Give your position to me. Never owned a business but I’m black. Think about the benefits of your company. Email me back lady

[EmoEmu]

Proof we don't have enough meritocracy: Sallie Krawcheck.

[HainanXu]

This is the first time I heard that the financial crisis is caused by meritocracy. This is mind blowing.

[LeeboProductions]

IQ has the best predictive validity and capability of success. She keeps saying "the research shows..." and then never references her sources - quite telling.

[tommyt]

Every sane person watching needs to hit the dislike bar. we can't allow this nonsense to just become normalised and accepted.

[robertflury]

Citations? How is hiring for anything other than ability a good thing?

[BirdieDev]

This is infantile, prejudicial thinking, not "big" thinking, get this garbage off this channel.

[divergentevolution]

Listen, if racial equality means that the color of your skin doesnt matter, then why does the color of their skin matter?

Forced "diversity" is literally racist. You cannot define, judge or limit a person based on the color of their skin for any reason, especially such short sighted and redundant ones like this.

[nebxan]

Meritocracy is not "hiring the person who looks like me" it's using objective standards to select the most qualified people.

I find your arguments against meritocracy unpersuasive because you have not correctly defined the word.

[heatherfeather]

I worked corporate for twenty five years and she is an example of why I hated working for women....and I am one. The men at least knew they were kind of BS'ers, and therefore, more receptive to new ideas just as long as you didn't make them look bad. The women actually believed their BS and were just hard nose and vindictive. I listened to this twice, it is all confirmation bias, "we intuitively know", "there is no doubt in my mind" how can she see any opposing view if she is so decided.

[mrgraves]

spends more time about the inclusion of women rather then talking why basing job hires off of merit is bad. of course she has to throw in trump and abortion issues. with a channel like big think you should make people question their ideas, but instead you get this inclusive bullshit that just isnt logical.