Tuesday, March 17, 2015

Diversity Delusion

Welcome to the working week
Oh, I know it don't thrill you, I hope it don't kill you
Welcome to the working week
You gotta do it till you're through, so you better get to it

                        Elvis Costello 1977

          Like many bad ideas, the concept of diversity sprang from good intentions.  In this case, to combat discrimination.  Besides the usual reasons why discrimination is a bad idea, from an economic perspective it will never work.  It reduces the pool of capable workers, so it will always reduce efficiency.

So at first diversity just meant don’t discriminate, which was good.  But then it morphed into the idea that every group or organization should have representatives from different skin colors, genders, ethnic backgrounds, and religions.  It took on a life of its own.  It became the ultimate American value.  Within a few years every business, politician, religious leader, and speaker couldn't go five sentences without telling us how great diversity is.  “Diversity is our greatest strength”.  “We strive to have a diverse workforce”.  “We want our company to look like America.”

          There’s just one problem with this.  It’s not true.  It’s nonsense.  There is no evidence that diversity makes any group or company stronger either economically or otherwise.  I've yet to see an impartial study showing that businesses or countries are more productive or wealthier the more diverse they are.  There are two reasons for this.

First, just as discrimination reduces the pool of available talent, diversity reduces it.  Let’s use an example from my favorite small business: me.  I have 8 employees, six are black and six are women.  I chose everyone based on their ability to help me with my favorite business activity: making money.  Let’s say there was either legal or societal pressure to change the demographics of my workforce.  Could I do it? Yes.  Would I be less productive? Yes, and drastically so.  I would basically be saying that the people I thought were the most productive would be replaced by individuals that I did not think possessed as good a skills as the first group.  Almost by definition I would be less profitable. The odds that group 2 would have the same demographics as group 1 are between slim and none.

Second, all the factors that go into today’s diversity have no bearing on whether someone is a good employee.  I look for 3 main characteristics when hiring; brains, talent, and the ability to get along with coworkers.  How exactly does someone’s skin color affect any of these three? Or religion? Or sex? When you put people into business positions where anything except brains, talent, and personality are primary, the results are predictable.

I know some big companies have long-winded statements where they extol how they strive to be a wonderfully diverse place to work.  Since I’m a small fish I don’t have anything like that.  But if I did it would go something like this:

“Thank you for applying to my firm.  If you have a vagina, congratulations, but it will not help or hinder you in working for me.  I don’t care about your sexual orientation; trust me, we won’t be sleeping together.  Your skin color is irrelevant, because I haven’t yet figured out a way to convert the color of your skin to green in my pocket.  I don’t care about your background or how you got to me, I just want to know that you can do the job today.  Your religion is also irrelevant, unless you can convince whatever God you pray to to bless me with prosperity.  In short, are you smart, do you work hard, do you get along with people? Yes, yes, and yes?  Fantastic! This could be the start of something wonderful...”.

Have a good night everyone.

JR