Andrew Crapuchettes - Is DEI actually hurting the people it was supposed to help?

A new White House-backed analysis is raising eyebrows, suggesting companies that heavily implemented DEI policies may be seeing lower productivity. Supporters say DEI expands opportunity, while critics argue it may be hurting performance and missing its intended goals.

Andrew Crapuchettes, CEO of RedBalloon, joins the program to break down the findings and what they could mean for businesses moving forward.

Transcript

SPEAKER_00 0:02

Welcome back to the program. It's a pleasure to be with you, and I'm glad to get to your phone calls and emails. You know, we've talked a lot about DEI on this program. Diversity, equity, and inclusion. It is, as far as I'm concerned, institutionalized racism. It says you're not going to pick people for jobs or schools or opportunities based on their skills and abilities. Pick based on what's between their legs. Pick based on what kind of uh what kind of gender they identify with or what kind of sexual preference they have. Pick based on the color of their skin. Don't pick on those qualification measures, pick on those individual characteristics. I think that's crazy. Well, now the White House has released a study on DEI, and I think a lot of corporate boardrooms are going to be very uncomfortable with it. So I've invited Andrew Krapuchetz on, who is CEO of Red Balloon. Andrew, welcome back to the program. Hi, thanks for having me, Lars. By the way, for people who don't know it, Red Balloon is a is an enterprise that helps hook up uh companies with the most qualified employees, and the most qualified employees with the companies that actually want to choose people based on skills and abilities and not based on personal characteristics like color, right? That's right.

SPEAKER_01 1:16

That's right. And uh can you imagine you know actually hiring someone based on are they good at the job, are they able to work hard, be a culture fit, actually grow my business, believe in capitalism. Um it's kind of fun because we we get to um help those people find great jobs with great businesses, and we hear from businesses all the time. When you hire the right people who are a culture fit, who are you know believe in the American dream of working hard and earning uh what you have, um you as a business, you're gonna make more money and you're gonna have more fun in the meantime. So that's what we do, and we get to help a lot of businesses um all over the country. And in fact, Lars, one of the things um we're not talking about today, but we actually just took on a huge engagement with the Department of State. So we're gonna help place uh hardworking patriots in the uh Department of State and Marco Rubio's organization, which we're very excited about getting to uh help there.

SPEAKER_00 2:09

Well, let me ask you this. What have we had a government, say, under Joe Biden, President Otto Penn, or under Barack Obama, where they were hiring people at state, which is a very that's a very critical function of the federal government to represent the president in dealing with other countries. Have we been hiring truly the best qualified people or hiring people who met other characteristics?

SPEAKER_01 2:31

Well, it's interesting because this ties into this DEI topic because uh the Department of State actually had a 50-person recruiting team and they were focused on um, you guessed it, DEI as one of their primary objectives when they were doing hiring. So they had somebody who was focused on the Hispanic community, someone who was focused on the LGTBQ community, someone who was focused on the historically black colleges. And what that did is it meant they weren't looking for the best people for the job. They were looking for people who uh you know fit a certain characteristic, um, not based on skills, not based on abilities. And right now the Trump administration is reaping the rewards of that when they you know go to the embassy in Botswana and say, hey, we need you to go to the government and negotiate a deal. Uh they're finding that these people don't have the skills necessary and simply aren't willing to work hard, right? They'll say, hey, go do this, and they'll be like, you know, I don't feel like it. What do you mean you don't feel like it? You're getting a paycheck. And in the real world, there's this one-to-one correlation between I sign your paycheck and you do what I say. Um and unfortunately, a lot of these people um didn't see that. So we are um helping fix that problem here at Red Balloon for the State Department.

SPEAKER_00 3:44

Well, and by the way, this new study that came out of the White House, the one that the part that jumped out at me was it found industries that pursue DEI and by promoting minority managers were 2.7 percent less productive than those who did not. And I know some people might hear that number and say 2.7. How much is that? I said, well, it's the entire profit margin of Walmart. I mean, if you took a giant industry that makes say billions or tens of billions of dollars and make 2.7% more or 2.7% less, that's a gigantic amount of of uh of uh of money, isn't it?

SPEAKER_01 4:22

That's right. And actually what they're looking at, and and basically they quantified it as a$94 billion annually that the US economy is not producing that would have been otherwise because of these hiring practices, right? And there it's a two-edged sword, right? Not only are you hiring someone based on their skin color, basically based on who their parents are or what they believe around their about their sexuality, right? When you're hiring people based on not, not can they do the job? Do they actually have the skills, the drive, the desire, the work ethic to be successful in this job? Um, not only does that hurt the productivity of the people under them and the people around them, but then if you have a minority that actually has those skills, has the drive, has the desire, and gets in that position, the study actually shows that it um it discriminates against those people because now everyone's looking sideways at them, like, oh, you just got this job because of your skin color. You just got this job because you're a woman, uh, when that's not actually true. And then they're actually less able to get their job done because everyone assumes that they're just a DEI hire, not actually a competent person, right? So it actually hurts everyone when you uh don't use merit as the way to determine if someone's gonna get a job or not.

SPEAKER_00 5:38

And Andrew, you know, I've got my own theory. I couldn't write an academic paper on it, but I'll give you two of those kind of hires that were made in the last few years, and everybody will know their names. One is Kotenji Brown Jackson, she's sitting on the Supreme Court, and she's, by all accounts, not the sharpest tool in the shed. And then you've got Kamala Harris, who was vice president of Joe Biden, then for a time not chosen by voters, the candidate for the Democrat Party, and she was a gigantic disappointment. And when you say, what happens when you hire people based on gender and skin color? You say, Kamala and Kutenji, and they say, Oh, enough said. I don't, you know, we know what the result is gonna be. It's it's painful, isn't it?

SPEAKER_01 6:22

It is. It is really painful, and it's funny because if you use it in any other context, let's imagine you're an NBA team and you decide, you know, we're gonna hire not based on the ability to put the ball in the hoop or based on how tall you are, or your ability to block shops or get assists, but we're gonna base on skin color. Like we need to have more Asian women on our NBA team. Well, no one would do that because you're just gonna lose every game, right? And it's okay, nothing against Asian women. They're amazing, they're just not NBA players, right? And so that like when you when you take it to that context, it's like that's the most ridiculous thing I've ever heard. Why would I base something anything uh on anything other than their ability to do the job? And when businesses have done this and they've been doing it at scale, um, and they and this study goes in to say that basically there's a McKinsey report in 2015 pushing this. It is good for the economy to have DEI in the economy, it's good for business, it's gonna help you. And so this 2015 is kind of this inflection point where businesses really lean into it, and they started making really, really poor business decisions that's now costing the U.S. economy$94 billion a year. And hopefully, we're gonna start seeing all of this turnaround. We're already seeing it at the federal level, we're starting to see it at the business level, but we still have a long way to go.

SPEAKER_00 7:39

Well, imagine if the NBA had the reverse Rooney rule. You say, you got this ball team, it's almost all black players. So every time you talk to a player, you gotta talk to at least one white player. And they don't look at you like, what are you completely crazy? That's Andrew Crapuchetz. He's CEO of Red Balloon, and they specialize in hiring people based on skills and not based on skin color. And you've got the Lars Larson show and the Radio Northwest Network.