If bosses think employing black people is "risky" I might have the answer

“Employing black people is risky”.

“Employing disabled people is risky”.

“Employing women is risky”.

They might not say it so many words but time and again you hear TV executive producers voicing similar sentiments. It is normally couched in more reasonable language such as:

“I want to improve diversity but when it comes to employing someone I don’t know it’s just not worth the risk”.

Or

“I know it sounds bad but it’s a Catch 22, if people from diverse backgrounds don’t have the track record it’s just too risky to employ them”.

The standard response to these kind of statements to people who champion diversity is to explain why employing people from diverse backgrounds isn’t risky. They argue that the risk is imagined. They say there are lots of experienced people from diverse backgrounds that could be employed. They basically deny the executive producers’ “reality”.

Whether you agree that employing people from diverse backgrounds is risky or not, (and personally I do not believe it is risky), the way diversity champions try to persuade people that is not risky has not been working.

I talked this problem through with my wife who is a development economist and she said the problem of the executive producers’ perceived risk reminded her of the case of farmers in in northern Ghana. I know it seems like a leap but bear with me.

In economics whenever economists talk about “risk” it is usually followed by another word “insurance”.

According to aid workers and economists Ghanaian farmers could be earning a lot more money if they planted more crops and invested more in their farms. But the Ghanaian farmers  kept on refusing to do so saying it was too risky just in case there was a bad rainy season.

Like the advocates of diversity -  government officials, aid workers and economists would try and persuade farmers every year why their fears were unfounded and even if their were bad rains one year in the long run they would make a lot more money. And every year the farmers flatly refused to do so.

That was until one year one set of economists had a eureka moment.

Instead of trying to persuade the farmers they are wrong why not offer them “rain insurance”.

For a small sum of money the farmers could buy insurance against bad rains - the payout wouldn’t be large enough to cause people to ruin their crops on purpose but it would be enough to cover the loss of any extra investment they might have made. It was classic economic theory: the way to combat risk is not through rational argument but through insurance.

In the economic study the farmers who bought risk invested more in their farms, reaped larger yields and made more money. (Coincidentally the risk of bad rains never materialised and the insurance company actually made a profit).

So could insurance work in increasing TV diversity?

Instead of trying to persuade executives that their fears are not real why not offer them insurance.

The way it would work would be quite simple:

If the programme employs a diverse number of production staff they would be able to take out “diversity insurance”. If their programme underperforms by more than 5% in its audience ratings compared to the average rating for similar programmes in the genre then the production company could get an extra 50% of its production fee.

This would encourage production companies, who commissioners trust, to employ more diverse talent.

The exact sum of money would have to be tweaked - too little and it won’t be worth taking the “risk”, too large and productions could produce bad programmes on purpose.

The exact metric as to when the insurance company pays out would also have to tweaked - should insurance companies pay out when a programme’s ratings are 5% lower than the average audience in the same genre or 10%? Should we measure programmes through audience ratings or through audience appreciation scores?

But these are just details that could be easily ironed out.

Insurance was able to persuade farmers in northern Ghana to take “risks” when in reality none existed. 

The question is how could we persuade overly cautious execs to take similar “risks” even when we all know there is no "risk". Insurance might not be the answer but just shouting at them telling them that there is no risk doesn't seem to be working either.