559: Professor of Finance at London Business School, Alex Edmans, on Why ESG and DEI Data May Contain Lies

559: Professor of Finance at London Business School, Alex Edmans, on Why ESG and DEI Data May Contain Lies

In this episode, finance professor and author, Alex Edmans, offers a rigorous examination of the narratives surrounding diversity, equity, and inclusion (DEI) in corporate strategy. Drawing on his critique of widely cited studies, including those from McKinsey and BlackRock, Edmans illustrates how flawed data interpretations and confirmation bias contribute to the persistence of questionable claims. He warns against relying on correlation-based research that lacks causal rigor, especially when such findings are used to justify high-stakes decisions in boardrooms and policy circles.

Edmans identifies three recurring issues in the current DEI discourse: cherry-picked performance metrics that ignore long-term shareholder value; reverse causality, where strong performance leads to more diversity, not the other way around; and omitted variable bias, such as industry effects that confound diversity claims. He also critiques the narrow definition of diversity, which often reduces individuals to surface-level demographic traits while ignoring cognitive and experiential variation that may be more relevant to performance.

The conversation extends beyond DEI to explore the structural incentives within academia, consulting, and media that reward oversimplified narratives. Edmans notes that when ideas become dominant, dissenters face not only reputational risk but also institutional hurdles that discourage honest debate. The result is a professional ecosystem in which flawed research is amplified and poorly contextualized advice is recycled across geographies and sectors without regard for applicability.

Other key themes include:

  • The difference between demographic and cognitive diversity in strategic decision-making

  • The dangers of universalizing business practices without accounting for local context

  • Why flawed performance metrics (e.g., EBITDA) misrepresent firm success

  • How misaligned incentives distort executive behavior and perpetuate ineffective initiatives

  • The role of institutional culture in suppressing dissent and reinforcing groupthink

For senior leaders navigating complex decisions, Edmans' commentary offers a timely reminder: even widely accepted practices warrant scrutiny. In environments where performance is difficult to measure and cause-effect relationships are opaque, intellectual discipline, not ideological alignment, is essential.

Learn more about Alex Edmans here: https://alexedmans.com/

Get Alex's book here:

May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases—And What We Can Do about It. https://maycontainlies.com/

Here are some free gifts for you:

Overall Approach Used in Well-Managed Strategy Studies free download: www.firmsconsulting.com/OverallApproach

McKinsey & BCG winning resume free download: www.firmsconsulting.com/resumepdf

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174: Is it expensive? Author Program Q&A 4

174: Is it expensive? Author Program Q&A 4

Learn more and see the application guidelines: https://www.firmsconsulting.com/experts-published-author-program/ Apply: email team@firmsconsulting.com This is a part of a 10-episode program to help our clients and customers measurably and radically transform their careers through The Author Program. How would your career, reputation, and earnings change as a published author? Imagine your client interactions when potential and current clients saw your thinking in a published book before they met you? Imagine the time you would save not having to explain your ideas and the value you could add to them? Imagine the fee premium you could earn? Imagine avoiding awkward meetings trying to establish your credibility? Imagine how many potential clients would find you and reach out to you? Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo

22 Syys 202112min

173: What is the ROI? Author Program Q&A 3

173: What is the ROI? Author Program Q&A 3

Learn more and see the application guidelines: https://www.firmsconsulting.com/experts-published-author-program/ Apply: email team@firmsconsulting.com This is a part of a 10-episode program to help our clients and customers measurably and radically transform their careers through The Author Program. How would your career, reputation, and earnings change as a published author? Imagine your client interactions when potential and current clients saw your thinking in a published book before they met you? Imagine the time you would save not having to explain your ideas and the value you could add to them? Imagine the fee premium you could earn? Imagine avoiding awkward meetings trying to establish your credibility? Imagine how many potential clients would find you and reach out to you? Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo

20 Syys 202110min

172: Charlene Li, Grow your business via disruption

172: Charlene Li, Grow your business via disruption

Welcome to Strategy Skills episode 172, an episode with a sought-after public speaker and an influential thought-leader, Charlene Li. Get Charlene's new book here: https://amzn.to/2XhSdFv Charlene Li is a guide on digital transformation, leadership, customer experience, and the future of work. Her career is focused on helping people see the future and thrive with disruption. She is currently a Senior Fellow at Altimeter, a Prophet company. In this episode, Charlene talked about how disruption serves as a key element in order for a company to determine their future and set their path to growth. For those who wants to learn more on how to advance through the future, this is for you. THE DISRUPTION MINDSET: Why Some Organizations Transform While Others Fail. Charlene Li: https://amzn.to/2XhSdFv Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

15 Syys 202156min

171: April Rinne, Rethinking humanity's beliefs

171: April Rinne, Rethinking humanity's beliefs

Welcome to Strategy Skills episode 171, an episode with one of the world's leading female futurists, April Rinne. Get April's new book here: https://amzn.to/38iGhFp April Rinne is a navigator in a world of flux. She is guiding individuals and organization operate in these fast-paced changing times. Her solo travels to over 100 countries in a span of 25 years has developed her to see how the world changes and how the trends will be set in the future. April is a well-known advisor of startups, companies, financial institutions, non-profits, think tanks and government agencies around the globe. In this episode, April talked about a few key points that would make us rethink our views and help us be prepared for what's coming in the future. For those who wants to better understand uncertainties in order to anticipate and adapt to what's ahead of us, this is for you. FLUX: 8 Superpowers for Thriving in Constant Change. April Rinne: https://amzn.to/38iGhFp Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

14 Syys 202154min

170: Gary Hamel, Everyone should be the manager

170: Gary Hamel, Everyone should be the manager

Welcome to Strategy Skills episode 170, an episode with one of the world's most influential and innovative business thinkers, Gary Hammel. Get Gary's new book here: https://amzn.to/3DkAvRZ Gary Hammel is the founder of the international consulting firm Strategos and the Director of the Woodside Institute. He has worked with top companies around the world and is a sought-after management speaker. Throughout his career, he has helped numerous companies in designing and building innovation-friendly management practices, tools and platforms. His concepts of "strategic intent", "core competence", "industry revolution" and "management innovation" have changed the management of organizations worldwide. He's been teaching at the London Business School for over 30 years now as a Visiting Professor. In this episode, Gary talked about how some of the largest companies in the world has gone ahead of their competition by implementing radical changes inside their respective organizations. For those leaders who also want to have a drastic improvement in their companies, this is for you. HUMANOCRACY: Creating Organizations as Amazing as the People Inside Them. Gary Hammel: https://amzn.to/3DkAvRZ Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

9 Syys 20211h 9min

169: Tom Eisenmann, Startups and their wrong decisions

169: Tom Eisenmann, Startups and their wrong decisions

Welcome to Strategy Skills episode 169, an episode with the Howard Stevenson Professor of Business Administration of Harvard Business School, Tom Eisenmann. Get Tom's new book here: https://amzn.to/3Dmxqkl Tom Eisenmann, as a Harvard Business School professor for the past 24 years, has guided over a thousand Harvard Business students and alumni as they launch new ventures up to their success. But not every startup story is like this. In this episode, Tom talked about a glimpse of his new book  where he carried out numerous case studies about failed startups. And from these, he found 6 patterns why a lot of startups fail. For those founders, at any stage of their entrepreneurial journey, this is for you. WHY STARTUPS FAIL: A New Roadmap for Entrepreneurial Success. Tom Eisenmann: https://amzn.to/3Dmxqkl Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

7 Syys 202148min

168: Jeff Kavanaugh, Unleashing your employees

168: Jeff Kavanaugh, Unleashing your employees

Welcome to Strategy Skills episode 168, an episode with Jeff Kavanaugh. Get Jeff's new book here: https://amzn.to/3Bfd8Hr Jeff Kavanaugh is the global head for Infosys Knowledge Institute - the research and thought leadership arm of global IT powerhouse Infosys, a leader in digital services and consulting. Aside from speaking on conferences, he also teaches at the Business School of University of Texas at Dallas as an adjunct professor. He serves on boards of the Institute of Business Analytics at Indiana University, and the Marketing Analytics Advisory Board at the University of Texas at Dallas. He is the author of the best-selling book Consulting Essentials. THE LIVE ENTERPRISE: Create a Continuously Evolving and Learning Organization. Jeff Kavanaugh: https://amzn.to/3Bfd8Hr Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

2 Syys 202157min

167: Mike Zani, How data science could boost your workforce

167: Mike Zani, How data science could boost your workforce

Welcome to Strategy Skills episode 167, an episode with Mike Zani. Get Mike's new book here: " data-userid="751940007443001344" data-orgid= "751940008097312768">https://amzn.to/3kskiBp Mike Zani is the CEO of The Predictive Index, a platform that is dedicated to talent optimization using over 60 years of proven science and software. They help businesses in creating high-performing teams, making objective hiring decisions, and inspiring greatness in people. They have 8,000+ clients that includes Bain Capital, Blue Cross Blue Shield, DoorDash, LVMH, Nissan, Omni Hotels, and VMware. In this episode, Mike talks about building effective teams, preparing companies for the future of work, developing strategies for long-term success, and more. THE SCIENCE OF DREAM TEAMS: How Talent Optimization Can Drive Engagement, Productivity, and Happinessby Mike Zani. Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

31 Elo 202150min

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