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.
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The COVID-19 pandemic is making health disparities in the United States crystal clear. It is a clarion call for health care systems to double their efforts in vulnerable communities.
- The COVID-19 pandemic has exacerbated America's health disparities, widening the divide between the haves and have nots.
- Studies show disparities in wealth, race, and online access have disproportionately harmed underserved U.S. communities during the pandemic.
- To begin curing this social aliment, health systems like Northwell Health are establishing relationships of trust in these communities so that the post-COVID world looks different than the pre-COVID one.
COVID-19 deepens U.S. health disparities<p>Communities on the pernicious side of America's health disparities have their unique histories, environments, and social structures. They are spread across the United States, but they all have one thing in common.</p><p>"There is one common divide in American communities, and that is poverty," said <a href="https://www.northwell.edu/about/leadership/debbie-salas-lopez" target="_blank">Debbie Salas-Lopez, MD, MPH</a>, senior vice president of community and population health at Northwell Health. "That is the undercurrent that manifests poor health, poor health outcomes, or poor health prognoses for future wellbeing."</p><p>Social determinants have far-reaching effects on health, and poor communities have unfavorable social determinants. To pick one of many examples, <a href="https://www.npr.org/2020/09/27/913612554/a-crisis-within-a-crisis-food-insecurity-and-covid-19" target="_blank" rel="noopener noreferrer">food insecurity</a> reduces access to quality food, leading to poor health and communal endemics of chronic medical conditions. The U.S. Centers for Disease Control and Prevention has identified some of these conditions, such as obesity and Type 2 diabetes, as increasing the risk of developing a severe case of coronavirus.</p><p>The pandemic didn't create poverty or food insecurity, but it exacerbated both, and the results have been catastrophic. A study published this summer in the <em><a href="https://link.springer.com/article/10.1007/s11606-020-05971-3" target="_blank">Journal of General Internal Medicine</a></em> suggested that "social factors such as income inequality may explain why some parts of the USA are hit harder by the COVID-19 pandemic than others."</p><p>That's not to say better-off families in the U.S. weren't harmed. A <a href="https://voxeu.org/article/poverty-inequality-and-covid-19-us" target="_blank" rel="noopener noreferrer">paper from the Centre for Economic Policy Research</a> noted that families in counties with a higher median income experienced adjustment costs associated with the pandemic—for example, lowering income-earning interactions to align with social distancing policies. However, the paper found that the costs of social distancing were much greater for poorer families, who cannot easily alter their living circumstances, which often include more individuals living in one home and a reliance on mass transit to reach work and grocery stores. They are also disproportionately represented in essential jobs, such as retail, transportation, and health care, where maintaining physical distance can be all but impossible.</p><p>The paper also cited a positive correlation between higher income inequality and higher rates of coronavirus infection. "Our interpretation is that poorer people are less able to protect themselves, which leads them to different choices—they face a steeper trade-off between their health and their economic welfare in the context of the threats posed by COVID-19," the authors wrote.</p><p>"There are so many pandemics that this pandemic has exacerbated," Dr. Salas-Lopez noted.</p><p>One example is the health-wealth gap. The mental stressors of maintaining a low socioeconomic status, especially in the face of extreme affluence, can have a physically degrading impact on health. <a href="https://www.scientificamerican.com/index.cfm/_api/render/file/?method=inline&fileID=123ECD96-EF81-46F6-983D2AE9A45FA354" target="_blank" rel="noopener noreferrer">Writing on this gap</a>, Robert Sapolsky, professor of biology and neurology at Stanford University, notes that socioeconomic stressors can increase blood pressure, reduce insulin response, increase chronic inflammation, and impair the prefrontal cortex and other brain functions through anxiety, depression, and cognitive load. </p><p>"Thus, from the macro level of entire body systems to the micro level of individual chromosomes, poverty finds a way to produce wear and tear," Sapolsky writes. "It is outrageous that if children are born into the wrong family, they will be predisposed toward poor health by the time they start to learn the alphabet."</p>Research on the economic and mental health fallout of COVID-19 is showing two things: That unemployment is hitting <a href="https://www.pewsocialtrends.org/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/" target="_blank" rel="noopener noreferrer">low-income and young Americans</a> most during the pandemic, potentially widening the health-wealth gap further; and that the pandemic not only exacerbates mental health stressors, but is doing so at clinically relevant levels. As <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7413844/" target="_blank" rel="noopener noreferrer">the authors of one review</a> wrote, the pandemic's effects on mental health is itself an international public health priority.
Working to close the health gap<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDc5MDk1MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNTYyMzQzMn0.KSFpXH7yHYrfVPtfgcxZqAHHYzCnC2bFxwSrJqBbH4I/img.jpg?width=980" id="b40e2" class="rm-shortcode" data-rm-shortcode-id="1b9035370ab7b02a0dc00758e494412b" data-rm-shortcode-name="rebelmouse-image" />
Northwell Health coronavirus testing center at Greater Springfield Community Church.
Credit: Northwell Health<p>Novel coronavirus may spread and infect indiscriminately, but pre-existing conditions, environmental stressors, and a lack of access to care and resources increase the risk of infection. These social determinants make the pandemic more dangerous, and erode communities' and families' abilities to heal from health crises that pre-date the pandemic.</p><p>How do we eliminate these divides? Dr. Salas-Lopez says the first step is recognition. "We have to open our eyes to see the suffering around us," she said. "Northwell has not shied away from that."</p><p>"We are steadfast in improving health outcomes for our vulnerable and underrepresented communities that have suffered because of the prevalence of chronic disease, a problem that led to the disproportionately higher death rate among African-Americans and Latinos during the COVID-19 pandemic," said Michael Dowling, Northwell's president and CEO. "We are committed to using every tool at our disposal—as a provider of health care, employer, purchaser and investor—to combat disparities and ensure the <a href="https://www.northwell.edu/education-and-resources/community-engagement/center-for-equity-of-care" target="_blank" rel="noopener noreferrer">equity of care</a> that everyone deserves." </p><p>With the need recognized, Dr. Salas-Lopez calls for health care systems to travel upstream and be proactive in those hard-hit communities. This requires health care systems to play a strong role, but not a unilateral one. They must build <a href="https://www.northwell.edu/news/insights/faith-based-leaders-are-the-key-to-improving-community-health" target="_blank" rel="noopener noreferrer">partnerships with leaders in those communities</a> and utilize those to ensure relationships last beyond the current crisis. </p><p>"We must meet with community leaders and talk to them to get their perspective on what they believe the community needs are and should be for the future. Together, we can co-create a plan to measurably improve [community] health and also to be ready for whatever comes next," she said.</p><p>Northwell has built relationships with local faith-based and community organizations in underserved communities of color. Those partnerships enabled Northwell to test more than 65,000 people across the metro New York region. The health system also offered education on coronavirus and precautions to curb its spread.</p><p>These initiatives began the process of building trust—trust that Northwell has counted on to return to these communities to administer flu vaccines to prepare for what experts fear may be a difficult flu season.</p><p>While Northwell has begun building bridges across the divides of the New York area, much will still need to be done to cure U.S. health care overall. There is hope that the COVID pandemic will awaken us to the deep disparities in the US.</p><p>"COVID has changed our world. We have to seize this opportunity, this pandemic, this crisis to do better," Dr. Salas-Lopez said. "Provide better care. Provide better health. Be better partners. Be better community citizens. And treat each other with respect and dignity.</p><p>"We need to find ways to unify this country because we're all human beings. We're all created equal, and we believe that health is one of those important rights."</p>
Shannon Lee shares lessons from her father in her new book, "Be Water, My Friend: The Teachings of Bruce Lee."
- Bruce Lee would have turned 80 years old on November 27, 2020. The legendary actor and martial artist's daughter, Shannon Lee, shares some of his wisdom and his philosophy on self help in a new book titled "Be Water, My Friend: The Teachings of Bruce Lee."
- In this video, Shannon shares a story of the fight that led to her father beginning a deeper philosophical journey, and how that informed his unique expression of martial arts called Jeet Kune Do.
- One lesson passed down from Bruce Lee was his use and placement of physical symbols as a way to help "cement for yourself this new way of being, or this new lesson you've learned." By working on ourselves (with the right tools), we can develop the skills necessary to rise and conquer new challenges.
How to deal with "epistemic exhaustion."
Philosopher Nick Bostrom's "singleton hypothesis" predicts the future of human societies.
- Nick Bostrom's "singleton hypothesis" says that intelligent life on Earth will eventually form a "singleton".
- The "singleton" could be a single government or an artificial intelligence that runs everything.
- Whether the singleton will be positive or negative depends on numerous factors and is not certain.
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A strange object found in Utah desert has prompted worldwide speculation about its origins.
- A monolithic object found in a remote part of Utah caused worldwide speculation about its origins.
- The object is very similar to the famous monolith from Stanley Kubrick's "2001: Space Odyssey".
- The object could be work of an artist or even have extraterrestrial origins.
1. ART OBJECT<p>Chances are, this is an art object. The shiny "monolith" appears to be bolted to the ground and made of metal. It also seems to be fastened with rivets, rather being a uniform block of more unexplainable production origin. Deserts are great places for unusual art installations as has been evidenced by art projects you can discover wondering through the desert ghost towns and faraway canyons of Nevada, California, Utah and New Mexico. Certainly, an artist with a sense of humor and an appreciation of Kubrick's genius could have installed such "sculpture" in hopes of exactly what is happening right now – viral fame.</p><p>On the other hand, there is evidence, courtesy of eagle-eyed <a href="https://www.reddit.com/r/news/comments/jzkpad/helicopter_pilot_finds_strange_monolith_in_remote/gdg9qfi?utm_source=share&utm_medium=web2x&context=3" target="_blank">Google Earth sleuths</a>, that the object appeared in that location (somewhere near <a href="https://www.nps.gov/cany/index.htm" target="_blank" rel="noopener noreferrer">Canyonlands National Park</a>) in 2015-2016. So it's possibly been there for a few years. Would an artist have placed it there so long ago with the aim of having this type of success eventually?</p><p>A gallery owner <a href="https://www.9news.com.au/world/utah-monolith-desert-mystery-solved-john-mccracken-sculptor-artist-2001-a-space-odyssey/0bae1a27-5bd2-451e-90a6-393928d9ed02" target="_blank">claimed</a> the work may be a tribute to the art of the late artist John McCracken, who created similar-looking objects before he died in 2011. McCracken was part of the Light and Space movement with such artists as James Turrell, and was known to make his sculptures from plywood forms that were coated with fiberglass and polyester resin.</p><p>While the theory that the monolith was the work of a McCracken aficionado (or the artist himself) may hold some water due to the object's similarity, the fact that the artist died so long ago and the lack of clear incentive for anyone to have planted this years ago only to reveal it now work against this theory.</p>
John McCracken sculptures.