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Cognitive diversity reduces blind spots in organisations

Biodiversity is important – not just for ecosystems, but for organisations, too. A heterogeneous workforce with cognitive diversity boosts creativity and innovation. An inclusive corporate culture is crucially important in translating these benefits into better results.

These are the words of Sasha Scott, the founder and CEO of the Inclusive Group in London. Before joining the Inclusive Group, she worked for international investment banks in the City. She explains why she decided to make a career switch: “It struck me that lots of managers in the financial industry were unwilling to adopt an inclusive approach, and as a result failed to get the most out of their staff. It was not intentional, but a consequence of certain unconscious biases. I realised that there was an opportunity to raise management awareness and to help managers relate to the concept of inclusivity.” In the twenty years of its existence, her Inclusive Group has coached more than 50,000 professional staff on the subjects of inclusivity and behavioural change.

The terms ‘inclusivity’ and ‘diversity’ are often mentioned in one and the same breath. “In reality, though, they are two distinct concepts. Diversity is about who you are and involves attributes such as gender, ethnicity, sexual orientation and cognitive abilities. Inclusivity is about how people behave and operate as a group. Inclusivity is a conscious choice in favour of a given mindset and a group behaviour that creates a safe environment in which individuals feel comfortable being different and taking part in a debate.”

The same three management biases

Time and again, Scott encounters the same three management biases in organisations. “These biases create consistently similar work environments, which is why it’s important to be aware of them and know how to deal with them. The first of these is affinity bias, which is our tendency to hire people who resemble us in terms of their background and capabilities. Just because it is the easy thing to do. The second mental pitfall is what is known as efficiency bias, or cultural fit bias. In other words, we tend to hire people who fit within the existing corporate culture, so that they can get down to work straightaway. The third trap is sunflower bias, which is the tendency to agree with the boss, which kills virtually all divergent thinking in the workplace.”

Enhancing diversity starts at the gate. One way of achieving cognitive diversity is by devising criteria for recruitment interviews, so as to curb unconscious biases.

Recruit from a wider circle

People who have been educated in the same way and share similar backgrounds will be likely to solve problems in the same way. “In other words, you won’t have enough cognitive diversity in your organisation. In his latest book, entitled Rebel Ideas: The Power of Diverse Thinking, Matthew Syed cites the CIA’s ‘white’ recruitment policies as an example. Even though it has the pick of thousands of talented applicants, it nevertheless opts for cultural conformation rather than expansion. In order to prevent this, organisations need to recruit from a wider circle, and give people from different backgrounds a chance to grow and develop. Enhancing diversity starts at the gate. One way of achieving cognitive diversity is by devising criteria for recruitment interviews, so as to curb unconscious biases.”

Hold boards to account for inclusivity

If she were employed as a CEO, Scott would seek to raise the level of cognitive diversity on the board. “This means selecting directors on the basis of cultural expansion rather than cultural conformation. The next step is that the board should gain a better understanding of how inclusivity yields better results, thanks to a safe work environment for all. When people feel safe and at ease, they are 30% more productive. Finally, the board should be held to account – by measuring the degree of inclusivity in the company in question. When all is said and done, a more creative and cognitively enriched work environment generates better commercial results.”

Shake up the organisation

Inclusivity is probably a lot easier for the extremely talented than for positions requiring middle-of-the road capabilities, Scott says. “Take top-level sport, for instance, where the results are easy to see and competition is cut-throat. Where hiring people for regular jobs is concerned, however, it’s very tempting to take the line of least resistance by choosing someone who is rather like yourself. The management must accept that it’s more profitable to try and achieve diversity. While it’s true that a diverse workforce is less easy to manage, it does reduce the number of blind spots in an organisation. Diversity also needs to apply at senior management level. If not, people will see that it’s all just a show and they’ll leave. Harsh as it sounds, you may have to shake up the organisation by trading in people from the current, homogeneous working culture for newcomers from a different culture.”

Inclusivity is not a threat

In the past twenty years, the amount of progress made in terms of diversity and inclusivity has not been much to write home about, is Scott’s assessment. “Twenty years ago, many City firms found themselves facing legal claims for discrimination, some of which cost them a great deal of money. This prompted a wave of corporate behavioural training programmes, but many of the problems from those days are still around. There still is a vast salary gap between men and women, ethnic diversity is still very limited, and there is hardly any social mobility. Most progress has been achieved on the LGBTQ+ front, as social perceptions of this have now changed. Many companies still have a great deal of work to do in enhancing inclusivity, so that they can benefit from cognitive diversity. That said, it is unquestionably the case that people are now taking more interest in inclusivity, and there are companies where inclusivity has become a recurring agenda item in board meetings. We ourselves received 450% more inquiries following the Black Lives Matter demonstrations, which suggests that many companies are indeed prepared to become more representative. They are starting to see that inclusivity is not a threat.”

Bridging the wage gap

Scott expects that the wage and pension gap between men and women will soon narrow, partly thanks to Covid-19. “Companies in the financial industry are making a big effort to bridge the gap, for instance by arranging childcare for their staff. The pandemic has shown that working from home is perfectly feasible, and this will also help to narrow the wage gap between men and women. And the practice of working from home will give a fresh boost to inclusivity on the work floor.”

A homogeneous group of privileged people

Scott is not impressed by the way in which British politicians have responded to the pandemic and the Black Lives Matter movement. “When Matt Hancock, the Health Secretary, recently claimed that the current British cabinet was the most diverse in history, he became the butt of some highly critical comments in the media. In actual fact, all cabinet ministers come from the same background: it is an exceptionally homogeneous group of privileged people, with very limited cognitive diversity. The two groups who were hit hardest by the government measures to combat the pandemic were ethnic minorities and working mothers. Neither of these groups is represented in the British cabinet.”

Towards a balanced ESG policy

The financial industry is making more and more of an effort, be it often reluctant, to develop balanced ESG policies. The first step in the right direction involves creating an inclusive corporate culture that pays serious heed to diversity thinking. By challenging conventional ways of thinking, decision-making will improve, both in general terms and with respect to ESG-driven factors and climate change in particular.