Recent research reveals that McKinsey’s efforts to promote diversity, equity, and inclusion (DEI) for profitability were found to be ineffective
A recent report exposed flawed research by McKinsey & Company, disputing the correlation between DEI programs and profits. Despite lacking empirical support, the U.S. military referenced McKinsey’s 2015 diversity report. Caution is advised regarding McKinsey’s DEI recommendations due to their inability to replicate results. The firm’s tests suggest a reverse causality, undermining the reliability of their studies.
A report out last month shows that studies from the global consulting firm McKinsey & Company showing a correlation between Diversity, Equity, and Inclusion (DEI) programs and significant profits were based on junk research.
A 30-page paper published in Econ Journal Watch found that studies conducted by the consulting giant in 2015, 2018, 2020, and 2023 could not be verified to find significant results supporting conclusions that favor corporate DEI regimes.
“Our results indicated that despite the imprimatur often given to McKinsey’s 2015, 2018, 2020, and 2023 studies,” researchers concluded, “McKinsey’s studies neither conceptually (in terms of the correct definition of causality) nor empirically (in terms of their set of large US public firms) support the argument that large US public firms can expect on average to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”
In other words, McKinsey’s studies touting diversity are not reliable.
Over the past few years, @McKinsey has released at least 4 studies claiming a positive relationship between DEI and firm performance.
A new paper published today in @EconJWatch finds these results can’t be replicated.
”Our inability to [replicate] their results suggests that… pic.twitter.com/W2qKHasLRy
— Chris Brunet (@realChrisBrunet) April 1, 2024
According to the pair of researchers who reviewed McKinsey’s work, “caution is warranted” when considering the recommendations from the firm to support DEI initiatives because results could not be replicated.
“The structure of McKinsey’s tests,” they added, point in “the default direction of causality,” showing “better firm financial performance causes firms to diversify the racial/ethnic composition of their executives, not the reverse.”
Despite the flaws in McKinsey’s work, the U.S. military cited the 2015 diversity report from the consulting company in 2021. In the Navy’s “Task Force One” final report espousing the need to diversify the force, the authors wrote that “gender-diverse organizations are 15 percent more likely to outperform other organizations and diverse organizations are 35 percent more likely to outperform their non-diverse counterparts.”
“When compared to 2018 U.S. Census population data, our enlisted force has greater racial and ethnic diversity than our society, however, is under represented from a gender perspective,” the Navy reported. “Our officer corps remains overwhelmingly white and male and, except for Asian representation, is not representative of the U.S. today.”
Elaine Donnelly, the president of the Center for Military Readiness, outlined the military’s recruiting woes for The Federalist last week as the Pentagon prioritizes far-left DEI initiatives.
“Chronic recruiting shortages are forcing the Army to cut 16,500 occupational positions, most of them vacant,” she wrote. “The Air Force has proposed a reduction of 8,000 troops after missing recruiting goals for the first time in over 20 years. The Navy is short 9,000 sailors, forcing longer deployments for others.
She explained, “Race-conscious ‘diversity, equity, and inclusion’ (DEI) policies are making personnel shortages worse.”
“Minority recruitment has remained steady or increased, which is fine,” Donnelly wrote, “but a steep decline in white recruits almost entirely accounts for the ongoing recruiting crisis.”
Tristan Justice is the western correspondent for The Federalist and the author of Social Justice Redux, a conservative newsletter on culture, health, and wellness. He has also written for The Washington Examiner and The Daily Signal. His work has also been featured in Real Clear Politics and Fox News. Tristan graduated from George Washington University where he majored in political science and minored in journalism. Follow him on Twitter at @JusticeTristan or contact him at [email protected]. Sign up for Tristan’s email newsletter here.
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