Why Diversity Is More Important Than Having a Meritocracy
Look at Wall Street in 2008, and the White House right now. Diversity—of people and cognitive perspectives—is crucial for avoiding failure.
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.
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 best team?” Build the best team with diverse skill sets, et cetera. So as a CEO my advice is changing. My advice is to often override the meritocracy. That this desire to let your managers manage — honey, we tried it. There's nothing more meritocratic than Wall Street and look what happened there. The most homogeneous of environments and oh— financial crisis.
And so to put metrics out there, to pay managers on diversity is, I think, the only way to drive it. And as for the old diversity committee which you sort of did that ten years ago and, “Look, we’re working on diversity because we have it.” If you’ve had something in place for five and ten years and you’re diversity is not moving forward it’s time to stop it. It’s time to do something different, to change the tired mentoring program into a sponsorship program. To set those quotas—I know we hate the word quota—to set those goals. To pay people on those goals. To try to do something that’s different.
P.S. it’s not a pipeline issue. It’s not a lack of talent issue. There are plenty of women, there are plenty of professional women, there are plenty of people of all kinds of diverse cognitive perspectives out there. It’s not just bringing them in and letting the organization work; the organization is working against you.
There is no doubt in my mind that the financial crisis that the United States and the world suffered would have been less severe if we’d had more diversity on Wall Street. There’s no doubt. We know this intuitively. If all of us think about those cavernous trading floors where the individuals populating the trading desks looked the same, that if those had been incredibly diverse, sort of the United Nations of every different kind of person you could have, we intuitively know that the crisis would have been less severe. We intuitively know that if there were more women at the senior leadership tables that the crisis would have been less severe.
And not only do we know it intuitively, the research tells us this. The research tells us that homogenous teams tend to over-trust each other. We cognitively finish each other’s sentences. “Oh, she’s just like me. Or he’s just like me.” So therefore since we look and talk and act alike and have a set of shared experiences, I understand what you’re thinking and what you’ll do next. And so homogenous markets tend to be mispriced by tens of percentage points.
The other thing that the research tells us is that trading risk can be driven by testosterone. And that as gentlemen’s testosterone increases they take on more trading risk. As it reduces, less trading risk. You know who doesn’t have a lot of testosterone? Women. Women! And it’s funny because we women get that rap for being so “emotional” and so “hormone driven”. But, in fact, what the research tells us is you can track the risk with testosterone, not estrogen.
You know we are sitting here today in the early months of the Trump administration. And the pictures of the leadership are startling and striking, in that it is not unusual to see a picture of all white males. Whether that’s all white males huddled around, you know, in the oval office, huddled around the president on the telephone, or whether it’s all white males making decisions about our healthcare. Sitting here in these early months of the Trump administration I think you would be hard pressed to say that the administration is running efficiently, effectively, like a well-oiled machine, taking into account the complexity of what it’s trying to do. There have been several important missteps. And there’s no way, to my mind, those things are unrelated and the research would tell us that they are indeed related.
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.
Dominique Crenn, the only female chef in America with three Michelin stars, joins Big Think Live this Thursday at 1pm ET.
Finances can be a stressor, regardless of tax bracket. Here are tips for making better money decisions.
- Whether you have a lot of money or a lot of debt, it matters how you handle your personal finances. A crucial step when it comes to saving is to reassess your relationship with money and to learn to adopt a broader, more logical point of view.
- In this video, social innovator and activist Vicki Robin, psychologist Daniel Kahneman, Harvard Business School professor Michael Norton, and author Bruce Feiler offer advice on achieving financial independence, learning to control your emotions, spending smarter, and teaching children about money.
- It all starts with education and understanding. The more you know about how money works, the better you will be at avoiding mistakes and the easier it will be to take control of your financial circumstances.
Astronomers spot an object heading into Earth orbit.
Minimoons<p>Scientists have confirmed just two prior minimoons. One was <a href="https://en.wikipedia.org/wiki/2006_RH120" target="_blank">2006 RH120</a>, which orbited us from September 2006 to June 2007. The other was <a href="https://en.wikipedia.org/wiki/2020_CD3" target="_blank">2020 CD3</a>, which got stuck in the 2015–2016 timeframe, and is believed to gotten away in May 2020.</p><p>2020 SO, the new kid on the block, is expected to arrive in October 2020 and pop out of orbit in May 2021.</p><div id="37962" class="rm-shortcode" data-rm-shortcode-id="f4c0fc8a2cba6536ea4cd960ebed3e6e"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1307729521869611008" data-partner="rebelmouse"><div style="margin:1em 0">Asteroid 2020 SO may get captured by Earth from Oct 2020 - May 2021. Current nominal trajectory shows shows capture… https://t.co/F5utxRvN6Z</div> — Tony Dunn (@Tony Dunn)<a href="https://twitter.com/tony873004/statuses/1307729521869611008">1600621989.0</a></blockquote></div>
Identifying 2020 SO<p>The first clue 2020 SO isn't your ordinary asteroid is its exceptionally low velocity. It's traveling much more slowly that a typical asteroid — their <a href="https://www.lpi.usra.edu/exploration/training/illustrations/craterMechanics/" target="_blank">average rate of travel</a> <a href="https://www.lpi.usra.edu/exploration/training/illustrations/craterMechanics/" target="_blank" rel="noopener noreferrer"></a>is 18 kilometers (58,000 feet) per second. Even <a href="https://en.wikipedia.org/wiki/Moon_rock" target="_blank">moon rocks</a> sent careening into Earth orbit by impacts on the lunar surface outpace pokey 2020 SO.</p><p>For another thing, 2020 SO has an orbital path very similar to Earth's, lasting about one Earth year. It's also just slightly less circular than our own orbit, from which it's barely tilted off-axis.</p><p>So, what is it? <a href="https://cneos.jpl.nasa.gov/ca/" target="_blank">NASA estimates</a> that the object has dimensions very reminiscent of a discarded Centaur rocket stage from the <a href="https://en.wikipedia.org/wiki/Surveyor_2" target="_blank" rel="noopener noreferrer">Surveyor 2 mission</a> that landed an unmanned craft on the moon. Back in the day, rocket stages were jettisoned as craft were aimed toward their desired position. This stuff, if released high enough, remains in space. It appears that this Centaur rocket, launched in September 1966, is now making its way back homeward, at least for a little bit.</p><p>When 2020 SO arrives at its closest point in December, the rocket is expected to be about 50,000 kilometers from Earth. Its next closest approach is much further: 220,000 kilometers, in February 2010.</p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQzMDk3NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyODg1MTQ1MX0.HGknDwqp0GmeuczKY_AS7vrPG7KMFUc_XO95tNoI2xo/img.jpg?width=980" id="e5cda" class="rm-shortcode" data-rm-shortcode-id="85eb1f790d8c3ee5b261f7ba13eaa5e1" data-rm-shortcode-name="rebelmouse-image" alt="Centaur rocket stage" />
Centaur rocket stage
What we may be able to learn<p>Earthly space programs being as young as they are, scientists would love to know what's happened to our rocket during a half century in space.</p><p>While 2020 SO won't get close enough to drop into our atmosphere, its slow progress has scientists hopeful that they'll still get some kind of a decent look at it.</p><p>Spectroscopy may be able to reveal what the rocket's surface is like now — has any of its paint survived, for example? Of course, being out in space, it's likely to have been hit by lots of dust and micrometeorites, so the current state of its surfaces is also of interest. Experts are curious to know how reflective the rocket is at this point, valuable information that can help planners of future long-term missions anticipate how well a craft out in space for extended periods will remain able to reflect sunlight.</p>
Welcome to the world's newest motorsport: manned multicopter races that exceed speeds of 100 mph.
- Airspeeder is a company that aims to put on high-speed races featuring electric flying vehicles.
- The so-called Speeders are able to fly at speeds of up to 120 mph.
- The motorsport aims to help advance the electric vertical take-off and landing (eVTOL) sector, which could usher in the age of air taxis.
Credit: Airspeeder<p>To prevent crashes, Airspeeder is working with the companies Acronis and Teknov8 to develop "high-speed collision avoidance" systems for its Speeders.</p><p style="margin-left: 20px;">"As they compete, Speeders will utilise cutting-edge LiDAR and Machine Vision technology to ensure close but safe racing, with defined and digitally governed no-fly areas surrounding spectators and officials," Airspeeder wrote in a <a href="https://airspeeder.com/news/2020/9/7/airspeeder-worlds-first-flying-electric-car-racing-series-partners-with-cyber-protection-leader-acronis-34g4k" target="_blank">blog post</a>.</p>
Credit: Airspeeder<p>Beyond motorsports, Airspeeder hopes to help advance the electric vertical take-off and landing (eVTOL) sector. This sector is where companies like <a href="https://www.ainonline.com/aviation-news/business-aviation/2020-01-07/hyundai-and-uber-announce-evtol-air-taxi-partnership" target="_blank">Uber, Hyundai</a>, and Airbus are working to develop air taxis, which could someday take the ridesharing industry into the skies. By 2040, the autonomous urban aircraft industry could be worth $1.5 trillion, according to a <a href="https://www.morganstanley.com/ideas/autonomous-aircraft" target="_blank">2019 report</a> from Morgan Stanley.</p><p>Still, many technical and regulatory hurdles remain. Matt Pearson, Airspeeder's founder and CEO, thinks the futuristic motorsport will help to not only speed up that process, but also pave the way for self-driving cars.</p>
From cryonics to time travel, here are some of the (highly speculative) methods that might someday be used to bring people back to life.
- Alexey Turchin and Maxim Chernyakov, researchers belonging to the transhumanism movement, wrote a paper outlining the main ways technology might someday make resurrection possible.
- The methods are highly speculative, ranging from cryonics to digital reconstruction of individual personalities.
- Surveys suggest most people would not choose to live forever if given the option.
Immortality and identity<p>The paper defines life as a "continued stream of subjective experiences" and death as the permanent end of that stream. Immortality, to them, is a "life stream without end," and resurrection is the "continuation of that same stream of experiences after an arbitrarily long gap."</p><p>Another key clarification is the identity problem: How would you know that a downloaded copy of yourself really was going to be <em>you? </em>Couldn't it just be a convincing yet incomplete and fundamentally distinct representation of your brain?</p><p>If you believe that your copy is not <em>you</em>, that implies you believe there's something more to your identity than the (currently) quantifiable information contained within your brain and body, according to the researchers. In other words, your "informational identity" does not constitute your true identity.</p><p>In this scenario, there must exist what the researchers call a "non-informational identity carrier" (NIIC). This could be something like a "soul." It could be "qualia," which are the unmeasurable "subjective experiences which could be unique to every person." Or maybe it doesn't exist at all.</p><p>It's no matter: The researchers say resurrection, in some form, should be possible in either scenario.</p><p style="margin-left: 20px;">"If no 'soul' exist[s], resurrection is possible via information preservation; if soul[s] exist, resurrection is possible via returning of the "soul" into the new body. But some forms of NIIC are also very fragile and mortal, like continuity," the researchers noted.</p><p style="margin-left: 20px;">"The problem of the nature of human identity could be solved by future superintelligent AI, but for now it cannot be definitively solved. This means that we should try to preserve as much identity as possible and not refuse any approaches to life extension and resurrection even if they contradict our intuitions about identity, as our notions of identity could change later."</p>
Potential resurrection methods<p>Turchin and Chernyakov outline seven broad categories of potential resurrection methods, ranked from the most plausible to most speculative.<br></p><p>The first category includes methods practiced while the person is alive, like cryonics, plastination, and preserving brain tissue through processes like chemical fixation. The researchers noted that there have been "suggestions that the claustrum, hypothalamus, or even a single neuron is the neural correlate of consciousness," so it may be possible to preserve just that part of a person, and later implant it into another organism.</p><p>Other methods get far stranger. For example, one method includes super-intelligent AI that uses a <a href="https://en.wikipedia.org/wiki/Dyson_sphere#:~:text=A%20Dyson%20sphere%20is%20a,percentage%20of%20its%20power%20output." target="_blank">Dyson sphere</a> to harness the power of the sun to "power enormous calculation engines" that would "reconstruct" people who collected a sufficient amount of data on their identities.</p>
Turchin<p style="margin-left: 20px;">"The main idea of a resurrection-simulation is that if one takes the DNA of a past person and subjects it to the same developmental condition, as well as correcting the development based on some known outcomes, it is possible to create a model of a past person which is very close to the original," the researchers wrote.</p><p style="margin-left: 20px;">"DNA samples of most people who lived in past 1 to 2 centuries could be extracted via global archeology. After the moment of death, the simulated person is moved into some form of the afterlife, perhaps similar to his religious expectations, where he meets his relatives."</p><p>Delving further into sci-fi territory, another resurrection method would use time-travel technology.</p><p style="margin-left: 20px;">"If there will at some point be technology that allows travel to the past, then our future descendants will be able to directly save people dying in the past by collecting their brains at the moment of death and replacing them with replicas," the paper states.</p><p>How? Sending tiny robots back in time.</p><p style="margin-left: 20px;">"A nanorobot could be sent several billion years before now, where it could secretly replicate and sow nanotech within all living being[s] without affecting the course of history. At the moment of death, such nanorobots could be activated to collect data about the brain and preserve it somewhere until its future resurrection; thus, there would be no need for forward time travel."</p>
Pixabay<p>The paper <a href="https://www.academia.edu/36998733/Classification_of_the_approaches_to_the_technological_resurrection" target="_blank">goes on to outline some more resurrection methods</a>, including ones that involve parallel worlds, aliens, and clones, along with a good, old-fashioned possibility: God exists and one day he resurrects us. </p><p>In short, it's all extremely speculative.</p><p>But the aim of the paper was to catalogue known potential ways humans might be able to cheat death. For Turchin, that's not some far-off project: In addition to studying global risks and transhumanism, the Russian researcher heads the <a href="http://immortality-roadmap.com/" target="_blank">Immortality Roadmap</a>, which, similar to the 2018 paper, outlines various ways in which we might someday achieve immortality.</p><p>Although it may take centuries before humans come close to "digital immortality," Turchin believes that life-extension technology could allow some modern people to survive long enough to see it happen. </p><p>Want a shot at being among them? Beyond the obvious, like staying healthy, the Immortality Roadmap suggests you start collecting extensive data on yourself: diaries, video recordings, DNA information, EEGs, complex creative objects — all of which could someday be used to digitally "reconstruct" your identity.</p>But odds are you're not interested. Although Turchin and other scientists are bent on finding ways to avoid death and extend life indefinitely, <a href="https://www.theguardian.com/uk/2011/may/16/dying-still-taboo-subject-poll" target="_blank" rel="noopener noreferrer">surveys</a> <a href="https://quillette.com/2018/03/02/would-you-opt-for-immortality/" target="_blank" rel="noopener noreferrer">repeatedly</a> <a href="https://www.cbsnews.com/news/60-minutesvanity-fair-poll-the-afterlife/" target="_blank" rel="noopener noreferrer">show</a> that most people would not opt to live forever if given the choice.