John R. Smith: Diversity Has Two Faces, and a Downside

Everything has a downside and nuances. A job comes with obligations. Marriage means commitment and rules. Hard partying causes hangovers. Medical insurance requires you to pay premiums and deductibles.

The same is true for ethnic, racial, workplace, and cultural diversity, because diversity exacts a price. And in some cases, the downside can expand into a dark side. Many organizations that require demographic diversity have lost their ability to focus and to achieve positive results or reach workable answers. A highly diverse group often produces viewpoints that taint the output, fail to engender respect, or don’t align with reality. Too many opinions and attitudes prowl about. Focus is lost. Standards and principles are jettisoned along the way to reaching “common ground”. Too many bakers spoil the pie.

For decades, the business world has incorporated diversity into its operations, hoping it would help drive performance. But recent, peer-reviewed independent research has found no correlation or causation between demographic diversity and performance.

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Researchers and scholars have recently identified two schools of thought on this issue: Cognitive Diversity and Demographic Diversity. The first refers to differences in how people process information, think, solve problems, and make decisions. The latter focuses on demographic differences such as age, gender, or ethnicity, concentrating on a variety of social and biological characteristics.

The research by people like Scott Page and Katherine Phillips shows that true workplace diversity is not about optics — i.e., how someone looks or their gender or race — but about diversity of thought, problem-solving skills, creativity, and analytical vs. “gut” thinking. Gender, age, and race alone are inadequate proxies for how people think in the workplace.

Cognitive diversity is about “differences in education, career paths, political views, problem-solving styles, and personality”, says Professor Alex Edmans in London. Instead of focusing on demographic differences, it focuses on differences in perspective, reasoning styles, and the brain’s organization of knowledge, enabling you to interpret situations, make fact-based decisions, and solve problems. The concept here is to form groups with diverse analytical thinking styles, as they can outperform other types of groups when solving complex problems.

There are several types of cognitive diversity in hiring that lead to good performance. We start with a professional background in which workplace decisions focus on information-gathering skills or on successful salesmanship and research. Second is educational background, including vocational training or exposure to the sciences, humanities, and possibly the arts. Third, consider the recruit’s country of origin, upbringing, or background that has provided knowledgeable views on culture, global trends, and politics. Fourth, “cognitive style” is an essential quality to assess during hiring; what kind of thinking process does the candidate demonstrate?

The research makes it clear that the case for demographic diversity in a business setting was oversold. The case for cognitive diversity is far more compelling and needed.


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