InvestMacro

By Adia Harvey Wingfield, Arts & Sciences at Washington University in St. Louis 

Few ideas in business are as misunderstood as DEI.

While opposition to DEI – diversity, equity and inclusion – has a long history, it has picked up steam recently.

In 2023, when Silicon Valley Bank collapsed, detractors claimed that the bank’s focus on DEI was responsible – rather than the bank overinvesting in bonds that suddenly lost much of their value.

Not long afterward, when a wall panel detached from an Alaska Airlines flight at 16,000 feet, opponents claimed without evidence that DEI’s corrosive effects were to blame.

More recently, when a cargo ship lost power and slammed into Baltimore’s Key Bridge, critics suggested that DEI was somehow at fault.

In the face of these attacks, many company leaders are troublingly silent about their commitment to DEI. I believe this is a mistake. It allows misrepresentations to take root, and it reinforces the exclusion and marginalization many workers of color already experience.

As a sociologist who focuses on race, gender and work, I believe this is a pivotal moment for companies to reinforce their commitment to DEI.

A history of DEI

For starters, it’s useful to take stock of how American companies moved to DEI in the first place, and how diversity practices are typically structured.

For the overwhelming majority of U.S. history, workers who weren’t white men weren’t just legally banned from leadership roles; they could be barred from holding any role in an organization.

The formal exclusion of women of all races and men of color didn’t become illegal until the passage of the Civil Rights Act of 1964. That means that for nearly 200 years after the country’s founding, white men had virtually unrestricted and exclusive access to the levels of power in all organizations.

The objective, meritocratic past that DEI critics imagine is thus a myth. The centuries-long, systematic exclusion of white women and people of color gives lie to the idea that jobs have historically gone only to the most qualified.

After the Civil Rights Act, companies moved to address the new reality that the racial and gender discrimination that had been practiced with impunity for generations was now illegal. Affirmative action policies were one way organizations sought to address past and ongoing discrimination, and many companies, at least for a time, sought to close racial and gender disparities.

But by the 1980s, backlash to these goals was ascendant. Legal decisions such as the Supreme Court’s 1978 Bakke ruling allowed organizations to consider race as one of many factors when they evaluated applicants but specifically outlawed the use of quotas. Companies could thus consider race as part of a package but, contrary to popular opinion, could not hire candidates simply because they were Black (or from another marginalized group).

They could, however, consider diversity as a compelling interest that justified using race as one of a variety of factors in making decisions about hiring. A company that had no Black workers on its entire staff could thus seek to diversify, taking race into account alongside experience, qualifications, education and other criteria when considering a candidate.

What this hypothetical company could not do is simply hire a Black worker based exclusively on their race.

Diversity initiatives today

In the wake of ongoing backlash, most companies today have moved even further from trying to alleviate ongoing racial and gender disparities. Instead, they embrace the form of DEI that’s under harsh criticism today.

But today’s DEI doesn’t necessarily entail a focus on hiring or promoting more Black workers. It doesn’t even always focus on race. Instead, many DEI managers have sought to focus their efforts more broadly on diversity of thought, region or opinion as a way to avoid the kind of pushback they’re encountering today.

Additionally, companies often rely heavily on DEI practices such as mandatory diversity training or brief workshops with external consultants that actually depress the numbers of Black workers – and other workers of color – in leadership roles.

Today’s critics cast DEI as unfairly advantaging unqualified Black workers, but the reality is that companies stopped focusing on closing racial disparities long ago.

The numbers bear this out. While white men constitute only 30% of the U.S. population, as of 2017 they made up 80% of members of Congress, 85% of corporate executive officers, 95% of Fortune 500 CEOs and 97% of heads of venture capital firms.

The business case for diversity

Clearly, DEI is not reshaping America’s most powerful institutions in a way that places significant numbers of Black workers in leadership roles.

Instead, researchers know that obstacles such as hiring discrimination, wage inequality, hostile organizational cultures and blocked routes to advancement still persist for highly qualified, skilled and motivated Black workers.

The irony is that the data shows very clearly that diversity is correlated with clear benefits to organizations. Companies with more racial and gender diversity among managers boast more profitability and more innovation than those without. They have advantages in recruitment, employee satisfaction and responding to market changes and consumer needs.

Organizations that are genuinely committed to DEI aren’t losing sight of the big picture; rather, they’re investing in their long-term financial success.

For purely self-interested reasons, then, companies should be offering a full-throated defense of DEI. Instead, they’ve been in retreat.

For example, law firms are walking back programs designed to attract lawyers of color, even though the legal profession is overwhelmingly made up of white workers. Similarly, efforts to increase venture capital funding to Black women are under attack, even though in 2018 less than 1% of a total of US$130 billion raised went to firms headed by women of color. And major tech companies are shifting resources away from post-2020 investments in DEI, even though Black workers remain significantly underrepresented in that industry as well.

DEI practices that work

It doesn’t have to be this way. Companies can still rely on evidence-based DEI practices that show results. One approach involves establishing mentoring programs that are open to everyone. Another is cross-training workers so they can build their skills in various parts of a company while at the same time broadening their networks. And a third tack includes investing in flexible, family-friendly workplace policies that send a message to workers that they and their needs matter.

None of these programs are reserved for members of any particular racial group, so they’re within the bounds of the law. The beauty of this approach is that even though these initiatives are race-neutral, research indicates they benefit workers of color more than mandating annual diversity training.

In addition to using measures like these that work, I believe it’s important for corporate leaders to stand up for DEI precisely because it’s under threat.

Some are doing this already. Jamie Dimon of JPMorgan Chase recently described himself as a “full-throated, red-blooded, patriotic, unwoke, capitalist CEO” who still plans to maintain the bank’s commitment to DEI, particularly when it comes to the approaches that are shown to net results. The celebrity businessman Mark Cuban has been similarly outspoken in support of DEI, unequivocally describing it as “good for business.”

Given that research shows workforce diversity helps companies boost profits, it’s surprising to me that more leaders don’t take this approach. The alternative is letting a false narrative that imperils their growth go unchallenged.

About the Author:

Adia Harvey Wingfield, Professor of Sociology, Arts & Sciences at Washington University in St. Louis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By ForexTime 

• Bitcoin still climbing this CPI week; up over 2%/$1,600 since Sunday
• US400 and RUS2000 stock indices showed larger-CPI reactions, as predicted
• FXTM Trading Signals: EURGBP reaches all 4 Targets

The monthly US CPI release has come and gone.

The highly-anticipated set of US economic data exceeded market expectations by 0.1 percentage points each:

• Headline CPI in March 2024 vs. March 2023 (year-on-year): 3.5%
  Higher than the forecasted 3.4%; higher than February’s 3.2% year-on-year figure
• Headline CPI in March 2024 vs. February 2024 (month-on-month): 0.4%
  Higher than the forecasted 0.3%; higher than February’s 0.4% month-on-month figure
• Core CPI (excluding food and energy prices) year-on-year: 3.8%
  Higher than the forecasted 3.7%; matching February’s 3.8% year-on-year figure
• Core CPI month-on-month: 0.4%
  Higher than the forecasted 0.3%; matching February’s 0.4% month-on-month figure

The higher-than-expected CPI numbers pushed back bets that the Fed can cut US interest rates as soon as June 2024.

As we’d written about extensively, this CPI numbers certainly jolted various asset classes on Wednesday, April 10th.

Now, we look back at a couple of instruments that performed as per outlined in our recently published Daily Market Analysis articles:

1) Bitcoin still rising so far this CPI week

What we wrote:

So far in 2024, cryptos have risen every week that the highly-anticipated US inflation data is released!

(Trade of the Week: Cryptos to rise again this CPI week?; published Monday, April 8th)

What’s happened since?

At the time of writing, Bitcoin has risen by over 2% (or about $1600) so far this week since Sunday’s closing price of $69,315.13.

Even though other risk assets (such as stocks) fell after the hotter-than-expected US CPI, Bitcoin managed to rebound after its own initial post-CPI selloff.

If Bitcoin can continue shrugging off the US CPI’s impact and adhere to this trend of posting a weekly advance for each week so far in 2024 that has featured a US CPI announcement, that could translate into further gains for Bitcoin bulls for the rest of this week.

Still, the astute trader would note the stubborn resistance region around $71,400 which has capped Bitcoin’s upside since week of March 25th.

The world’s oldest crypto has to vanquish the $71,400 resistance in order to have another shot at posting a new record high.

2) US400 and RUS2000 indices saw massive post-CPI moves

What we wrote:

“On CPI days, the US400 typically sees a 39% larger-than-average move, which translates into 13 index points higher than average (average: 34 index points).”
“On CPI days, the RUS2000 typically sees a 27.8% larger-than-average move, which translates into 7 index points higher than average (average: 25 index points).”
” … stock markets may be pulled back lower if US inflation is proving stubborn, …”

(“Smaller” US stock indexes, bigger CPI reactions?; published Tuesday, April 9th)

What’s happened since?

• US400

This mid-sized US stock index posted a 93.8 index point difference between its highest and lowest traded prices in the 1 hour immediately following the US CPI release.

Those 93.8 index points are almost 3x the average daily intraday difference (highest price – lowest price) of 34 index points over the past 12 months.

• RUS2000

This “small” US stock index posted a 86 index point difference between its highest and lowest traded prices in the 1 hour immediately following the US CPI release.

Those 86 index points are MORE THAN TRIPLE the average daily intraday difference (highest price – lowest price) of 25 index points over the past 12 months.

Given that massive post-CPI move downwards for US stock indices, as was expected in light of the hotter-than-expected US inflation data …

This would’ve been a major payoff for those who had “short” positions (bet that prices would go down) on either the US400 or RUS2000 stock indices!

3) FXTM Trading Signals: EURGBP bags over 100 points

Every week day, we publish the FXTM Trading Signals twice daily:

• EU session: 6:00AM GMT
• US session: 12:30PM GMT

This EURGBP signal, published just today (Thursday EU session), has already reached all 4 Targets!

NOTE: FXTM Trading Signals are available for clients under the MyFXTM portal (published within the Trading Services section)

FXTM Signal: EURGBP M15 – how it started …

FXTM Signal: EURGBP M15 – how it ended …

But wait, there could be more volatility ahead for EURGBP!

The European Central Bank (ECB) is due to announce its policy decision at 12:15PM GMT later today (Thursday, April 11th)

To be clear, markets roundly expect the ECB to leave its benchmark rates unchanged at its record high of 4%.

However, markets will be keen to find out if the ECB is now more certain about CUTTING its benchmark rates by 25-basis points in June 2024.

Such clues may be derived out of ECB President Christine Lagarde’s press conference due at 12:45PM GMT, which is 30 minutes after the ECB’s policy announcement.

EURGBP: Potential Post-ECB Scenarios

• If President Lagarde lends further credence to the thought of a June rate cut by the ECB, that could prompt EURGBP to revisit the 0.8550 level.
• However, if President Lagarde unexpectedly pushes back against bets for a June rate cut, that should trigger a greater rebound for EURGBP back above the 0.8570 line.

Feel like you missed out on these profits?

You can keep following our “Daily Market Analysis” for fresh trading ideas and opportunities across global financial markets.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By John Kounios, Drexel University and Yvette Kounios, Widener University 

Flow, or being “in the zone,” is a state of amped-up creativity, enhanced productivity and blissful consciousness that, some psychologists believe, is also the secret to happiness. It’s considered the brain’s fast track to success in business, the arts or any other field.

But in order to achieve flow, a person must first develop a strong foundation of expertise in their craft. That’s according to a new neuroimaging study from Drexel University’s Creativity Research Lab, which recruited Philly-area jazz guitarists to better understand the key brain processes that underlie flow. Once expertise is attained, the study found, this knowledge must be unleashed and not overthought in order for flow to be reached.

As a cognitive neuroscientist who is senior author of this study, and a university writing instructor, we are a husband-and-wife team who collaborated on a book about the science of creative insight. We believe that this new neuroscience research reveals practical strategies for enhancing, as well as elucidating, innovative thinking.

Jazz musicians in flow

The concept of flow has fascinated creative people ever since pioneering psychological scientist Mihály Csíkszentmihályi began investigating the phenomenon in the 1970s.

Yet, a half-century of behavioral research has not answered many basic questions about the brain mechanisms associated with the feeling of effortless attention that exemplifies flow.

The Drexel experiment pitted two conflicting theories of flow against each other to see which better reflects what happens in people’s brains when they generate ideas. One theory proposes that flow is a state of intensive hyperfocus on a task. The other theory hypothesizes that flow involves relaxing one’s focus or conscious control.

The team recruited 32 jazz guitarists from the Philadelphia area. Their level of experience ranged from novice to veteran, as quantified by the number of public performances they had given. The researchers placed electrode caps on their heads to record their EEG brain waves while they improvised to chord sequences and rhythms that were provided to them.

Jazz improvisation is a favorite vehicle for cognitive psychologists and neuroscientists who study creativity because it is a measurable real-world task that allows for divergent thinking – the generation of multiple ideas over time.

The musicians themselves rated the degree of flow that they experienced during each performance, and those recordings were later played for expert judges who rated them for creativity.

Train intensively, then surrender

As jazz great Charlie Parker is said to have advised, “You’ve got to learn your instrument, then, you practice, practice, practice. And then, when you finally get up there on the bandstand, forget all that and just wail.”

This sentiment aligns with the Drexel study findings. The performances that the musicians self-rated as high in flow were also judged by the outside experts as more creative. Furthermore, the most experienced musicians rated themselves as being in flow more than the novices, suggesting that experience is a precondition for flow. Their brain activity revealed why.

The musicians who were experiencing flow while performing showed reduced activity in parts of their frontal lobes known to be involved in executive function or cognitive control. In other words, flow was associated with relaxing conscious control or supervision over other parts of the brain.

And when the most experienced musicians performed while in a state of flow, their brains showed greater activity in areas known to be involved in hearing and vision, which makes sense given that they were improvising while reading the chord progressions and listening to rhythms provided to them.

In contrast, the least experienced musicians showed very little flow-related brain activity.

Flow vs. nonflow creativity

We were surprised to learn that flow-state creativity is very different from nonflow creativity.

Previous neuroimaging studies suggested that ideas are usually produced by the default-mode network, a group of brain areas involved in introspection, daydreaming and imagining the future. The default-mode network spews ideas like an unattended garden hose spouts water, without direction. The aim is provided by the executive-control network, residing primarily in the brain’s frontal lobe, which acts like a gardener who points the hose to direct the water where it is needed.

Creative flow is different: no hose, no gardener. The default-mode and executive-control networks are tamped down so that they cannot interfere with the separate brain network that highly experienced people have built up for producing ideas in their field of expertise.

For example, knowledgeable but relatively inexperienced computer programmers may have to reason their way through every line of code. Veteran coders, however, tapping their specialized brain network for computer programming, may just start writing code fluently without overthinking it until they complete – perhaps in one sitting – a first-draft program.

Coaching can be a help or hindrance

The findings that expertise and the ability to surrender cognitive control are key to reaching flow are supported by a 2019 study from the Creativity Research Lab. For that study, jazz musicians were asked to play “more creatively.” Given that direction, the nonexpert musicians were indeed able to improvise more creatively. That is apparently because their improvisation was largely under conscious control and could therefore be adjusted to meet the demand. For example, during debriefing, one of the novice performers said, “I wouldn’t use these techniques instinctively, so I had to actively choose to play more creatively.”

On the other hand, the expert musicians, whose creative process was baked in through decades of experience, were not able to perform more creatively after being asked to do so. As one of the experts put it, “I felt boxed-in, and trying to think more creatively was a hindrance.”

The takeaway for musicians, writers, designers, inventors and other creatives who want to tap into flow is that training should involve intensive practice followed by learning to step back and let one’s skill take over. Future research may develop possible methods for releasing control once sufficient expertise has been achieved.

About the Author:

John Kounios, Professor of Psychological and Brain Sciences, Drexel University and Yvette Kounios, Adjunct Instructor of English and Professional Writing, Widener University

This article is republished from The Conversation under a Creative Commons license. Read the original article.