December 4, 2020
By Laura Liswood, World Economic Forum
• The Meritocracy Stress Test does for equality what the bank stress test did for liquidity.
• Despite claiming to be meritocracies, many workplaces do not measure up.
• Asking key questions can highlight your company’s current shortcomings.
After the global financial crisis of 2007-2009, bank regulators in the United States and other countries implemented what is known as the bank stress test to ensure that banks had enough capital to withstand an economic or financial crisis. It provides a snapshot into the hypothetical health of a financial institution and its ability to prevent failure, maintain trust and provide protection to consumers. The annual test outlines categories in a few key areas for evaluation, including level of capital, credit risk, market risk and liquidity risk. It provides a way for banks to go beyond saying they are financially sound to proving that they truly are.
I propose a similar test for any organization that considers itself a meritocracy. I call it the Meritocracy Stress Test. It is an exercise for a company to discover whether it is at risk of not being the diverse, inclusive, fair and equitable workplace it purports to be. To date, every organization I have worked with proclaims it is a meritocracy – the bedrock for values, mission statements and self-perception.