In today’s world, most challenges and problems need the work of a team, rather than just an individual working alone. The key ingredient is the ‘collective intelligence’ of the group as a whole, which can deal better with complex and ‘non-linear’ problems. And a major factor driving such intelligence is the inherent diversity of the group.
Diversity is still most commonly thought of in terms of demographic or socio-demographic characteristics like gender, race, age, social class or religion. ‘Identity diversity’ is another term for such factors. But another, crucial category of diversity is ‘cognitive diversity‘ – which refers to differences people have in terms of their thinking styles, perspectives, backgrounds and experiences in life.
A growing body of research is clearly pointing to how diverse groups or teams perform much better compared to homogenous teams. Most studies to-date have considered race or gender: for example, a 2009 analysis of 50 companies found that firms with more racial or gender diversity had more sale revenue, more customers and greater profits; and a 2016 analysis of more than 20,000 firms in 91 countries found that companies with more female executives were more profitable. Research focusing on cognitive factors included a 2011 study that found that management teams with a wider range of educational and work backgrounds produced more highly innovative products.
A particular, more recent study that caught my eye was that by the UK’s Financial Reporting Council into the profile of the boards of the UK’s top listed companies (‘Board Diversity & Effectiveness in FTSE 350 Companies’, July 2021). In looking at financial performance, one of the study’s findings was that companies which have at least one woman on their board have on average a three to four percentage points higher profitability margin over the next four years, whilst those companies where at least one third of board members were women accounted for less than 5% of instances of negative earnings. The study also established a positive – but weaker – correlation between racial diversity and increased profitability.
Helpful findings, but proving a direct causal link between board diversity and a company performance is not easy, of course – given the myriad of other factors that can impinge on performance. So, more interesting to me were the qualitative benefits which the study found that wider gender diversity could bring to boards, particularly around board dynamics: the boardroom culture became more relationship-focused and collaborative; there was an increased likelihood of reaching consensus before important decisions were made; there was reduced over-confidence about the board’s problem-solving skills; and the board was less likely to experience dissent amongst shareholders.
The other, hugely valuable finding I noted fromt the study was that directors, when asked freely to define what they actually regarded as the leading type of diversity of concern to a board, referred not to demographic variables like gender or race but rather to individual personality and individual thinking styles (the precise figures for how directors ranked types of diversity as top-of-mind were: personality/individual way of thinking 55% (of all respondents); gender 11%; age/experience 10%; functional background 8%; socio/economic status 7%; mirror the customer 3%; race/ethnicity 1%; and nationality 1%).
In other words, the most salient type of diversity actually valued by directors concerns cognitive diversity, not identify diversity! Focusing on gender or ethnicity is worthy but – in the eyes of boards – not as useful as considering individuals’ thinking approach or personal background – especially, as the study noted, just focusing on gender or race for board recruitment has, anyway, often just ended up appointing female or ethnic minority individuals who are actually very similar indeed in socio-economic profile to existing board members (i.e. very educated, professional, successful high-earners)!
How cognitively-diverse teams peform better
In a cognitively-diverse group, a major characteristic is that there is a variety of preferred thinking styles across the group’s members. A popular misconception is that there are just two, extreme modes of thinking: ‘left-brain’ thinking, dealing with logic, reason and analysis; and ‘right-brain’ thinking, which deals more with abstract, integrating and creative thinking. This is an over-simple, false dichotomy: the human brain actually relies on holistic (neuronal) interconnections between several, specialised areas to function, rather than separate working by just one of two parts.
A more realistic model is the ‘Whole Brain‘ model developed by Ned Hermann, which identifies four core types of thinking, summarised under four catchy titles (The Analyser: logical, quantitative-based thinking; The Organiser: thinking based around detailed, sequential planning; The Personaliser: thinking around emotions and relations between people; and The Strategizer: big-picture and conceptual thinking. Every person has access to each of these four modes of thinking, but usuaally has a stronger preference and natural (default) inclination to one or two specific modes. Problem-solving and decision-making are usually substantially improved – especially where there is more complexity or uncertainty – when a combination of these thinking styles is applied – typically via a group of individuals working together – provided, though, that the members of the group have some degree of relevant knowledge or (broad) familiarity with the subject already.
Bringing together a range of thinking approaches enables a richer, more productive basis for reaching better outcomes. These beneficial outcomes can be impressive, including: a wider range of ideas and perpectives contributed; acess to wider insights; more creative or original ideas; development of more options; more thorough and critical assessment of ideas and proposals; and more balanced and appropriate selection of choices. Cognitively diverse groups typically also make more accurate estimates and predictions compared to less diverse groups.
Working in a cognitively-diverse group, howefer, is not easy or as comfortable as being a member of a more homogeneous group. The natural inclination of people to associate with like-minded people (‘homophily’) is avoided. But that’s why diverse groups usually perform better!
Working with others who think differently can certainly be more frustrating, tiring and cause tension, but is this contextt that leads everyone to ‘raise their game’ – in terms of key aspects like the quality of their own thinking, how carefully they express their thoughts, their alertness and attentiveness to what others are saying and spotting weak or flawed arguments, openess to hearing and accepting challenges to their own views, and inclination to build on others’ ideas and develop new ideas or perspectives. The sheer dynamics of human behaviour in such a group naturally stirs everyone to sharpen their thinking and seek to appear as smart, reasonable and constructive as possible to each other. The whole group benefits with an improved, collective performance: the group becomes more than the sum of its parts!
Barriers to group cognitive diversity
However, this improved performance is not guaranteed just because a group is diverse. Several factors can act to thwart or prevent better team performance, including:
i) If the is a low level of trust between group members, or they do not know each other very well.
ii) If there is a low level of perceived ‘psychological safety‘ in the group i.e. members do not feel comfortable raising ideas or criticisms for fear of rebuke or embarrasment from other group members or elsewhere in the organisation.
iii) If the culture of the wider organisation doe snot value openness, inclusion and diversity.
iv) If ‘dominance dynamics‘ in the group are left unaddressed i.e. some members of the group feel inhibited because one of their number has a senior position in the company’s hierarchy or because they have a domineering manner.
v) If the group contains several individuals who are naturally quiet or introverted in their personal style and so hesitate to speak up in group discussion
vi) If individuals in the group who are more knowledgeable or experienced in the subject at-hand choose deliberately to limit their contribution because they don’t want to lose face, status or reputation.
vii) If the group does not have the right conditions to do its work e.g. a quiet or comfortable environment, adequate time, or access to supportive tools or resources
viii) If the group is not well facilitated or suitable analytical or deliberative techniques/methods are not used. For example, the group leader may not define the problem at-hand at the start, or he/she may not give everyone an equal opportunity to speak in discussions
Another major, potential barrier to a diverse group’s performance is if its membership does not change for a long time or if members spend too much time together (without other people from outside the group). The issue here is the natural inclination and social process with any group’s membership to converge and align its spread of beliefs, attitudes, norms and behaviours closer together – a process called ‘assimilation’. Unfortunately, in extremis, this can lead to the group suffering excessively ‘entrenched‘ views and opinions and so the outputs/contributions of the whole group become stale or out-of-touch with other, wider views and developments in the external environment. A related problem can be that of ‘group polarisation’: when group members meet other people outside the group who hold different or contrasting opinions or beliefs to theirs, those group members may not only defensively dismiss those contrary views but actually then deepen and strengthen their own views even more!
Where to apply cognitive diversity in your organisation
Given the above, potential barriers, achieving the benefits in an organisation from cognitive diversity is not an easy matter. By being aware of the difficulties, however, leaders can take appropriate action to try and avoid or overcome many of the barriers. But what are the key areas in an organisation where leaders should focus their efforts? Here’s an outline list of my recommended half-dozen, priority areas where composition of the team or group should be very carefully thought about:
i) Membership of an organisation’s Board of Directors
ii) Composition of an organisation’s senior executive team
iii) Make-up of recruitment panels/committees charged with interviewing and selecting new senior appointments: this is especially important, of course, for new Board or executive leadership appointments.
iv) Composiiton of any major strategic reivew, problem-solving or planning committee or task-force.
v) Make-up of any innovation task-group or new product project team: for such groups a balanced mix of creative minds and analytical thinkers is, of course, so valuable.
vi) Composition of Board governance committees or sub-committees e.g. Audit & Risk committee, or a committee to assees or plan the integration/merger with another company.
Overall, the crux of the issue in thinking about the composition of these and similar organisational teams or groups is, of course, to seek a range of individuals who collectively exhibit a balanced and complementary mix of thinking styles, backgrounds and perspectives and then to ensure they get on and work together well (to enable the fruits from a diverse team to flourish).
If helpful to strengthen the mix – certainly for a dedicated, focussed meeting like a Board or strategic away-day – do consider bringing in selected, other individuals to ‘boost’ the core team. Also, to help ensure the group actually works effectively together, do consider bringing in possibly an external, professional facilitator: certainly, at strategic-type sessions of a team or group, the group’s regular leader will typically find it very difficult to be both a good contributor to discussion and a good session facilitator.
I wish you well in securing the benefits of cognitively-diverse teams in your organsiation. As always, if I can help at all, do contact me.
Written by Mike P. Owen,
Senior Partner at The Owen Morris Partnership