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DEI Was Never About Profitability

The claims from business giants like McKinsey and Mark Cuban have been proven wrong—and in the process reveal their real concerns.

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McKinsey & Company—the largest management consultancy in the world, the alumni of which include Pete Buttigieg and the geniuses who advised Purdue Pharma on how to “turbocharge” opioid sales—have published four studies since 2015 (“Diversity Matters,” “Delivering Through Diversity,” “Diversity Wins,” “Diversity Matters Even More”) claiming that diversity, equity, and inclusion (DEI) initiatives enhance company profitability.

This “proof” has been used for the past decade to advance a leftist social engineering agenda under the guise of business acumen, corporate social responsibility, and fiduciary duty. Now, independent researchers are calling it what it is: blatant fraud, or, in the most charitable interpretation, gross incompetence. (But let’s not kid ourselves.)


“Our inability to [replicate] their results suggests that...[McKinsey] should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives,” conclude Jeremiah Green, an accounting professor at Texas A&M, and John Hand, an accounting professor at the University of North Carolina Chapel Hill, in a new peer-reviewed paper published last month.

“[McKinsey] cherry picked the years that were particularly to lead to a significant result,” adds Alex Edmans, a finance professor at London Business School. “As is well known, ‘garbage in, garbage out’. It doesn’t matter how many numbers you crunch—if the methodology is flawed, the results are meaningless.”

Ironically, if McKinsey’s team that conducted the research had been more diverse, perhaps the study wouldn’t have been so fatally flawed. Professor Edmans writes:

[McKinsey’s] six-person research team was comprised [sic] solely of women, the majority of whom are also ethnic minorities. Due to confirmation bias, they might want to find that diversity matters (just as I would, being an ethnic minority myself) and thus turn a blind eye to the glaring errors. In addition, none has a PhD in economics, finance, or any business discipline which is a basic qualification to do research.

The loudest cheerleader for this now-debunked McKinsey talking point is the billionaire Mark Cuban, of Shark Tank and Dallas Mavericks fame. He currently has 8.8 million followers on X, formerly Twitter, and has spent the past few months aggressively preaching to them about how diversity initiatives are not just socially commendable but are also crucial for enhancing profitability.


In January, after Cuban went on yet another of his long rants about DEI being good for business, Elon Musk replied simply: “Cool, so when should we expect to see a short white/Asian women [sic] on the Mavs?” Musk’s retort pierced the veil of hypocrisy—the current Mavericks lineup boasts 18 players, 16 of whom are tall black men. This stark lack of diversity on Cuban’s team raises questions about the sincerity of his advocacy.

This is a trend. Mark Cuban is a master of the art of public posturing and virtue signaling. When Cuban made his initial fortune with Broadcast.com, for example, his board of directors was exclusively white men. Draped in the wealth created by that very homogenous entity, he now says that the next generation of boards must select their members based on skin color and genitalia, rather than on merit. Do as I say, not as I do.

Following his January spat with Musk, Cuban got into a public debate this month with the Manhattan Institute’s Chris Rufo over the same subject. Cuban’s arguments in this debate were primarily about his own lived experience: “I own or invest in hundreds of companies. I know DEI is a positive because I see its impact on bottom lines…. I think DEI is smart business.”

Even if Cuban’s “lived experience” were valid, and even if McKinsey hadn’t fudged the data he uses to substantiate that experience, the premise that racial composition inherently boosts economic performance is morally repugnant race science. What if they had found that a homogeneous racial composition—say all Caucasian, all Asian, or all male—were more profitable? Would Cuban and McKinsey then be entitled to preach racial purity for profit's sake? Of course not. This was never about profitability; DEI was always a smokescreen for something far more sinister: a subversive embrace of Marxist equalitarianism under a thin veneer of fiduciary duty. 

Edmans, who has written a forthcoming book about how McKinsey consultants fudge DEI data, told The American Conservative

McKinsey is a premier consulting firm, not a research institute. The goal of its studies is marketing, not scientific inquiry, and so it sometimes writes whatever the public wants to hear and skews the data to do so. This is a particular problem for DEI because the strong entrenched ideologies mean there’s only one acceptable answer. If you deliver it, your image will soar—and even if your study is flimsy, people will lap it up uncritically due to confirmation bias. So you have both the incentives and ability to promote a false message.

The same is true for Mark Cuban. He is a great business leader, but has not conducted scientific research on the link between DEI and firm performance, nor an expert in scrutinizing scientific research. His incentives are to boost his own image, not to improve the performance of other companies, some of whom may be competitors. Does he give free advice on how to improve operational efficiency or capital allocation? No; he says what will help him go viral.

In short, Cuban wants to be liked, to seem trendy, to seem modern, to seem young. Cuban’s overt displays of wokeness serve not as evidence of visionary leadership but as a spectacle of an old man hungry for approval.