Improving diversity is a common published strategy. It is puzzling that some diversity practices fail to diffuse more broadly.
For example, CV-blind policies are shown to be effective in breaking hiring biases in favour of certain stereotypes. Take an Oxbridge recruitment bias among law firms: elite law firms in the UK are over-represented by graduates from Oxbridge. One possible reason is that Oxbridge degrees are so salient that CVs with this cue are more likely to receive further consideration. Others could prove to be better than (at least some) Oxbridge graduates, but firms cannot uncover these ‘hidden gems’ unless recruiters are made to ignore this salient cue. In 2014, Clifford Chance adopted a ‘CV-blind’ policy. But it is puzzling that few firms in the UK have apparently followed this best practice.
There are many possible explanations of non-adoption of best practices. One is an identification barrier. Take the case of the book Moneyball, which illustrates how Billy Beane, manager of Major League Baseball (MLB) team Oakland Athlete (the A’s), utilised data analytics to identify undervalued players – team members who were underpaid relative to their contribution toward the team winning because they did not have ‘the look’. Many people interpreted Moneyball as a triumph of data analytics. But data about MLB players had been publicly available for decades, as were the sabermetrics methods used to analyse them. It turns out the data and findings were publicly known, but ignored by most MLB managers, because, unlike Beane, many managers were successful MLB players and benefited partly from the right look. Managers hesitated to adopt an approach that could hurt their own identification, even when the approach was obviously beneficial to the business.
Managers may ignore best practices they don’t ‘like’, or which endanger their world view. As a result, firms can be blind to obvious opportunities and end up suboptimal.
This suggests best practices may not diffuse because of non-economic but behavioural barriers. Managers may ignore best practices they don’t ‘like’, or which endanger their world view. As a result, firms can be blind to obvious opportunities and end up suboptimal.
Breaking an identification barrier is challenging. To paraphrase German physicist Max Planck: “Meritocracy never triumphs – its opponents just die out”. That said, something that has (unfortunately) happened in South Korea should arguably give some hope. Many foreign firms benefit from hiring female executives in the country as they have been seriously undervalued because of strong gender bias. Importantly, even when local firms recognised this as suboptimal practice and undervalued human resources, only foreign firms were insensitive enough to act on it by actively hiring female executives. Similarly, UK law firms might exploit non-adoption of CV-blind policies outside the UK. Firms expanding to other countries can search for their hidden gems in ‘non-elite’, local universities there.
This article originates from Briefing September 2018: Let’s talk shop