The Meritocracy Myth

One of the biggest — and most undermining — myths in the corporate world is that organizations are meritocracies.

The truth is that despite well-intentioned efforts to actively promote diversity and inclusion, organizations aren’t operating as true meritocracies — that is, an equitable system where everyone has equal opportunity to grow and advance in their careers.

Meritocracy is a wonderful idea that CEOs and organizational leaders proudly state and, for the most part, genuinely believe in. Unfortunately, the facts reveal that there is a vast gap between the idea and the reality.

In our collective work with hundreds of clients over a couple decades, and in looking at the career progression of thousands of employees, the evidence reveals that there simply is not a level playing field. The path to career progress is not uniform. For some, this path is aerodynamic as they fly up the ranks, while for other equally talented individuals, the runway is littered with obstacles that limit liftoff.

The theory behind meritocracy is that hard work will pay off, and each person will be judged fairly on results and rise to the fullness of their potential. What we have witnessed is that the differences of those who don’t come from the same backgrounds as the majority culture can have a negative effect on their ability to progress.

These assertions bear out with troubling outcomes in organizations. But before looking at the data, let’s put a key assumption on the table: A true meritocracy should espouse proportional representation of all kinds of talent. The law of averages should be at work and talent will rise and fall according to its own merits — not based on diverse backgrounds.

With this in mind, let’s look at what’s happening with women and professionals of color in these supposed meritocracies.

Though women make up about 50 percent of the workforce and are graduating from colleges at higher rates than men, why is it that in 2013, according to nonprofit advocacy group Catalyst, women only held 14.6 percent of executive officer positions at Fortune 500 companies? Something is getting in the way.

With professionals of color, the statistics are even worse. When combining Latinos, African-Americans, Asian-Americans andNative Americans, the number barely climbs up to just more than 10 percent, as reported in the “2013 Corporate Diversity Report,” by Sen. Robert Menendez (D-New Jersey).

Something is getting in the way. Not only do these statistics contradict the reality of a meritocracy system, but also they are a leading indicator that organizations with poor or mediocre representation will lack economic vitality.

The statistics speak loudly. The January 2015 McKinsey & Co. “Diversity Matters” report looked at 366 public companies across a variety of industries in Canada, Latin America, the United Kingdom and the United States. It found that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. And even more dramatically, this number rises to 35 percent for those with an increase in representation of professionals of color.

Here we have a troubling problem, one we know CEOs and other executive leaders want to solve. It turns out that meritocracies are both fair and profitable. So what is getting in the way of companies being able to live up to this economically sound idea?

To further think about this topic, let’s take a journey by listening in to the composite thoughts of a CEO, a manager of color and an HR executive within the same organization. Based on conversations we’ve had through our work, it likely plays out like this:

The CEO: “I am so proud of my organization and how we’re doing. Our employees and leaders are focused on our growth strategies, global expansion plans are moving fast, and people like working here. And I’m also proud that we have all the hallmarks of a meritocracy. The most talented and skilled individuals are bound to have risen up the ranks into senior leadership positions. Favoritism and elitism just don’t exist within our culture. 

“I have been with the company for 25 years, having started at the bottom and worked my way up from an entry-level accounting position. If I can make it to this level, clearly it’s doable for anyone else who aspires to be CEO for this company.” 

The manager: “I’m fairly pleased with how I’m doing at this company considering the years I’ve been around, but things could be better. My pay grade is respectable, and my level of responsibility is pretty good. I feel well liked by my manager and peers, and am delivering strong results. Yet, the path to moving up the ladder here appears to be limited. It seems that I’m often bypassed by colleagues who appear less capable, even many who have been around less time than I have and I can’t figure out why.

“The more I think about it, the less motivated I am and feel my spirit beginning to wane. I guess those who are excellent at playing the game regardless of their skill set are the ones destined for the plum assignments.

“It feels like the organization only favors individuals who look and talk like the other leaders around here. And I understand it may be just my perception, but given the lack of representation at the top from people who look like me, there has to be something there. I just don’t believe the environment is truly fair where being assessed on your merit alone is the basis for progressing. And it’s disheartening.”  

The vice president of talent management: “I do believe that we are a meritocracy. Our leaders, our HR generalists, we all want to see the best talent rise to the top and for all to attain the fullness of their potential. Yet, here I am looking at the talent movement data and the metrics sure don’t add up to a meritocracy story. Gender, color and disability are not represented equitably — the vast majority of senior leaders come from a homogenous group. And yet as an HR professional, I can honestly say that I don’t see any evidence of real ‘bias’ in the system or that’s represented by deeds among the leadership team.

“But here we are. The turnover rate among professionals of color and women is significantly higher than white men; the pipeline continues to show a significant weakness as it relates to women and professionals of color, in spite of the company having a well-designed talent and performance management process. And to confound things even further, in the past few years the company has needed to hiresenior-level talent from the outside because we were not promoting enough of the right talent internally.” 

Conscious Inclusion

We’ve heard three different perspectives from three different people in the same organization. They believe in the organization. They respect and want the best for all. Yet, the manager and vice president of talent are left to their worries while the CEO is feeling things are humming along as they should.

So how do we address the imbalance? The key phrase here is inclusion, or more accurately, conscious inclusion. Conscious inclusion is an approach and mindset. The outcome of a truly inclusive organization is that it is indeed an authentic meritocracy.

Conscious inclusion requires believing in and acting on four foundational premises:

1. All are capable of performing at their highest level of contribution.

If every leader were to believe this premise, ultimately each individual — regardless of ethnicity, gender, tenure or previous experience — would feel more empowered and engaged. Part of the problem here is that many leaders are ill-equipped to implement a culture of development for their team members.

If they were able to do this, watch out. A chain reaction of positive reinforcing individual and organizational behaviors gets triggered. When employees are intentionally positioned for development, they feel challenged and with that comes the determination and commitment to succeed. As a result, their confidence increases, and they become more open to taking on more responsibility. Engagement goes up, confusion about the way forward goes down and productivity rises.

This talent has now been given a new lease on corporate life and a platform to blossom. Individuals can grasp those opportunities with both hands, improve their perception, increase visibility and exert greater influence— three key areas that will help nail that promotion and certainly increase their overall contribution to the organization.

2. Talent is assessed according to a core set of competencies.

One of the most important elements for success in any endeavor is clarity of standards. This provides a clear picture of what leadership competencies that are behaviorally oriented look like and are appropriate for each level (individual contributor, manager, director or vice president). When these are in place, the hiring, development and promotion of people against those standards will be more consistent.

Assessing talent with clear competencies in a systemic way is the equalizer. In its absence, the tendency is to experience significant variability in how managers assess talent. This increases the chance of leaning toward familiarity and comfort — which biologically is proven to happen most easily with people who are most like us — as the basis for a decision as opposed to how the person actually measures up to the standards.

3. Standards of success, the developmental gaps and the way forward are clearly communicated.

It’s one thing to have consistent standards via competency criteria. It’s another to ensure that all employees know what they are, how they are doing against them and what is available to them to help them grow to meet those standards.

This requires clearly stated performance expectations through best practices, such as having an organizational core competency model with clearly stated performance outcomes tied to employees’ day-to-day responsibilities. It also requires the effective application of honest and constructive feedback to provide a clear picture of what to improve.

These efforts do indeed help level the playing field. They deflate managerial tendencies to subjectively — and without explanation — make promotion decisions that may systematically reinforce the lack of diversity.

4. Leaders, managers and HR need to be more cross-culturally agile.

The first generation of diversity thinking was grounded in the concepts of tolerance and sensitivity. While still relevant, this ignores key differences. Individuals are not all products of the same socio-economic and socio-psychological demographics. What motivates them, how they best respond to feedback and how they prefer to get things done can vary in ways that can feel uncomfortable for the manager just because of how different they are. But these factors will very likely still achieve, or even exceed, the stated objectives of performance.

But how can you ensure that this happens effectively when different approaches are so difficult to comprehend, appreciate or even like? Fundamentally it requires the bundle of skills called cross-cultural agility: the business skill that enables effective collaboration and communication among people across multiple dimensions of culture.

To be cross-culturally agile requires three intelligences: emotional, cultural and business.  Emotional intelligence requires self-awareness of one’s own cultural preferences — what one believes, why one believes it, and where the belief comes from. Only with this self-awareness are you then ready for cultural intelligence, which is learning about the similarities and differences of others.

One can then determine the gaps in interpretations of the same thing, or be more appreciative of different approaches in solving a challenging problem.

Once these parameters are in place, then the rewarding application of business intelligence — solving the dilemmas, leveraging the differences and achieving outcomes together that make the best of what all team members have to offer — can take place.

Meritocracy at Work

When organizations have implemented these conscious inclusion principles that in turn sustain an authentic meritocracy, not only does talent — regardless of background — rise to the fullness of its potential, but it also tends to generate a much more engaged environment for all.

A 2014 Bersin by Deloitte study found that when employees think their organization is committed to diversity and development and they feel included, employees report increased business performance in terms of ability to innovate (83 percent), improved responsiveness to changing customer needs (31 percent) and greater team collaboration (42 percent).

Self-awareness is the beginning of wisdom. The first step in undoing the undermining effects of thinking you are leading a meritocracy company when you’re not is to recognize this reality. Then the work of conscious inclusion can begin in earnest. In this, gender, race, disability and other differences will become less of a hindrance to people’s advancement. They will rise to the fullness of their potential.

And then, and only then, can we say that meritocracy rules.