McKinsey’s diversity research is probably the most cited business case for diverse teams anywhere, and it’s also genuinely disputed by economists who’ve looked closely at the methodology, and both of those facts are worth knowing before repeating the headline number.
The research itself, published across three reports since 2015, found that companies in the top quartile for gender or ethnic diversity on their executive teams were meaningfully more likely to report above-average financial performance than companies in the bottom quartile, with the gap widening in later reports. It’s a real, large dataset, hundreds of public companies across multiple countries, and it’s been cited constantly as evidence that diverse teams simply perform better.
The methodological critique, published by researchers including economists Jeremiah Green and John Hand, is specific and worth taking seriously rather than dismissing as noise. Their core objection is about the order of the data: McKinsey’s analysis compared each company’s diversity in a given year against that company’s financial performance in the years leading up to it, meaning a more profitable company could have diversified its leadership as a result of already doing well, rather than diversity causing the good performance. Correlation in the right direction doesn’t establish which way the causation runs, and McKinsey’s own 2018 report concedes this possibility exists, buried a long way from the headline.
Neither side of this fully settles the question, which is itself the more honest answer than either headline offers on its own. The critique doesn’t prove diverse teams perform the same as non-diverse ones, it proves the specific McKinsey studies can’t prove they perform better, which is a narrower and much less exciting claim than either “diversity works” or “diversity research is bunk.”
What we’d actually say, without pretending a disputed correlation settles it, is that the value of a genuinely mixed group of people working on the same creative problem doesn’t need to rest entirely on an EBIT margin to be worth having. Different backgrounds surface different assumptions about what an audience will find obvious, confusing, or off, and that’s a useful thing to have in a room regardless of whether it shows up as a measurable financial uplift in a McKinsey dataset. The honest version of this argument is smaller than the marketing version, and probably more durable for it. A correlation that’s real but contested is still more honest ground to stand on than a headline stripped of its caveats.
A correlation that's real but contested is still more honest ground to stand on than a headline stripped of its caveats.