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I want to make an argument about
diversity from the perspective of
performance and I want to draw a
distinction right at the start between
two kinds of diversity on the one hand
demographic diversity which is a thing
that we often think about when we think
about this term on the other hand there
is cognitive diversity which is about
differences in perspectives and insight
and the models in heuristics we deploy
to make sense of the world around us and
also perhaps differences in thinking
styles some people are quite analytical
thinkers and others more holistic and
contextual thinkers imagine you're
putting together a group of sprint relay
runners and let's say the fastest four
runners are all the same gender the same
race the same age they'll have two
children watch the same TV programs so
they're not terribly diverse
demographically and probably not
cognitively either and suppose somebody
sent you you know what if you could
diversify that team diversity really
matters and you then started selecting
slower runners who were indeed diverse
would this help you in the Olympic
gold-medal no it would undermine your
chances of winning Olympic gold medal in
a sprint relay team you want to have the
fastest runners and that's basically the
only criterion of selection if you want
to win the race and if you could take
the fastest runner and hypothetically
clone that runner let's call that person
Usain Bolt so you now have a team of
Usain Bolt's that's a fantastic team a
team of clones who are identical to each
other because every member of your team
is faster than any member of any other
team that's gonna win the Olympic Games
but now let's shift from a simple linear
task like running to a complex task like
economic forecasting and let me share
briefly a brilliant piece of research by
a psychologist from Duke University
called jack salt he took two hundred and
fifty eight economic forecasters and he
measured their track record he was
trying to figure out who were the most
accurate forecast errs and he found that
there was a distribution
that was a bell-shaped curve he also
found that the most accurate forecast
there was five percent more accurate
than an average forecaster but then sold
took the top six forecasters and put
them in what you might call a nominal
team and he took the average of their
forecasts but when sold took the average
of the top six forecasters in the
paddock with the moat with the most
accurate forecast er what you think was
more accurate
I mean after giving the game away here
but the average of the top six but it
wasn't just one percent more accurate or
five percent more accurate or ten
percent more accurate it was 15 percent
more accurate and the reason hinges on
cognitive diversity economic forecasters
like the rest of us they use a model in
order to make a prediction a way of
thinking about the world each of these
models if the economist is worth their
salt contains some useful information
but because if columnist sees different
models the information contained in six
moderately valid models must be more
information than any one model alone if
you're thinking each of these models
probably also contains mistakes and
myths and blind spots and errors that is
true but the technique of averaging
eliminates the errors but pulls the
information if that makes sense this is
a powerful thing and it's a robust
finding in social science sometimes
called the wisdom of the crowds but
here's the interesting thing when it
comes to tasks that we're more familiar
with like problem solving and coming up
with creative ideas and strategies or
new products and businesses the power of
cognitive diversity is even more
profound and perhaps a good way to make
the point conceptually is to imagine
you're putting together a group of ten
people in a team to come up with
creative ideas to do the next big thing
in your business or organization and
let's also assume that this is a
talented group of people each of whom
comes up with ten genuinely useful ideas
but if they're cognitively homogeneous
if they
in the same way and they come up with
the same 10 ideas you only have 10%
overall if on the other hand they are
cognitively diverse and come up with
different ideas from one another you
could have a hundred useful ideas think
about that for a second these are two
teams composed of individuals who are
equally talented but the cognitively
diverse team comes up with almost 1,000
percent additional creative ideas in the
space of innovation which is going to
dominate the future of our economy our
political institutions and more common
engineering cognitive diversity relative
to the context you get this massive
uplift in what I call collective
intelligence and the tragedy is two
things one a psychological point we are
attracted unconsciously to people who
think like us when people are mirroring
our perspective back to us it makes us
feel smarter it validates our worldview
when it's a simple task that's fine any
one person has a solution you surround
yourself with like-minded others you are
able to deliver the solution but as the
complexity increases and no one brain is
sufficient to solve the problem when
you're attracted to people who think in
the same way you're getting no uplift at
all in collective intelligence and by
mirroring each other's perspectives you
become more confident about a solution
that might be gravely mistaken this is
why cognitive diversity is so important
and I believe will become the key
feature of competitive advantage for the
next 50 years but here's another thing
it's not just a psychological problem
it's a conceptual one I talked to one of
the most eminent economic forecasters in
the world I said do you prefer working
with people who think like you or who
think differently and he said if I truly
believe that my model is the best one
out there
then by definition I should be working
with people who think like me that logic
is extremely compelling it is also
spectacularly wrong
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