“Diversity is the one true thing we all have in common. Celebrate it every day.” – Winston Churchill
Scot E. Page is a professor of complex systems, political science, and economics at the University of Michigan. I took his popular course called Model Thinking on Coursera.
He is a thought provoking teacher and I was excited to read his book “The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy”. I am naturally inclined to approach anything with the Information/Knowledge Economy in the title with a healthy dose of skepticism. So I was curious to see what he had to say about diversity.
For me this was a like getting into a time machine and going back to the days of the Model Thinking course and engaging in a debate with this fast talking wise cracking professor.
The central theme of the book is that diversity, particularly cognitive diversity, is a crucial driver of improved outcomes in the knowledge economy. Page argues that diverse teams, with their varied “cognitive repertoires” – encompassing different information, knowledge, heuristics, representations, and mental models – are better at prediction, creativity, problem-solving, knowledge integration, and strategic decision-making than homogeneous teams, even those composed of highly capable individuals. The book explores the logic behind these “diversity bonuses,” examines the connections between identity and cognitive diversity, and provides frameworks for understanding when and how diversity yields the most significant benefits. Ultimately, Page advocates for a shift in how we think about team composition, emphasizing the value of varied perspectives and approaches in tackling complex challenges.
Here is a lighthearted Deep Dive into the paper|book:
Glossary
This book/paper uses lots of big terms so let’s break them down so we can understand them better
- Cognitive Repertoire
- An individual’s collection of different ways of thinking, including their information, knowledge, heuristics (rules of thumb or strategies), representations (ways of framing or depicting information), and mental models/frameworks (simplified understandings of how things work).
- Diversity Bonus
- The improvement in performance, innovation, or decision-making that can result from bringing together individuals with diverse cognitive repertoires.
- Identity Diversity
- Differences among individuals based on social categories such as race, ethnicity, gender, age, sexual orientation, religion, and other inherent or acquired attributes.
- Cognitive Diversity
- Differences in how individuals think, including variations in their knowledge, perspectives, problem-solving approaches, and ways of processing information.
- Heuristics
- Cognitive shortcuts or rules of thumb that individuals use to make decisions or solve problems quickly, which can be influenced by experience and background.
- Representations
- The ways in which individuals frame or depict information, which can include perspectives (unique identifiers for each possibility) and categorizations (grouping possibilities into disjoint sets).
- Mental Models
- Simplified descriptions or frameworks that individuals use to understand and reason about the world, often based on prior knowledge and beliefs.
- Adjacent Possible
- The set of potential next steps or solutions that become apparent based on a current state or perspective. Diverse perspectives can reveal different adjacent possibles.
- Recombination
- The process of combining existing ideas, knowledge, or tools in new ways to generate novel solutions or innovations, often enhanced by diverse perspectives.
- Negative Externalities
- Costs or consequences of an action that are not fully borne by the individual or entity taking the action, potentially leading to suboptimal outcomes in markets (e.g., pollution, noise).
- Diversity Prediction Theorem
- A mathematical model stating that collective error in a prediction is equal to the average individual error minus the predictive diversity within the group. This implies that greater diversity in predictions can lead to more accurate collective forecasts.
- Knowledge Domains
- Specific areas of expertise or understanding that individuals develop through their training, experiences, and interests, which can vary based on identity.
- Subadditivity (in creativity)
- When the total number of unique ideas generated by a group is less than the sum of the unique ideas each individual could generate alone, often due to overlap in knowledge or perspectives.
- Superadditivity (in creativity)
- When the potential number of combinations or new ideas that can be created by a group sharing their initial ideas is greater than what individuals could create in isolation, highlighting the value of interaction and diverse thinking.
Outline
Main Themes and Important Ideas:
The Core Logic of Diversity Bonuses:
- Cognitive Repertoires: Page introduces the concept of a “cognitive repertoire,” which he defines as the different ways in which a person thinks. This repertoire is comprised of:
- Information: Interpretable, meaningful data. “No two people possess the same information. Our educations, experiences, and identities all influence the information we possess…”
- Knowledge: Theoretical, empirical, or practical understanding of patterns, literatures, or domains of inquiry. “Knowledge of a subject or domain of inquiry consists of a working or practical understanding.” -Heuristics (or Tools): Rules of thumb, techniques, or methods used to solve problems or make decisions. “We learn heuristics from textbooks… from novels… and through interactions with friends, family, and coworkers…”
- Representations: Ways of framing or depicting possibilities, including perspectives (unique identifiers) and categorizations (grouping into disjoint sets). “Here, I distinguish between two types of representations: perspectives and categorizations.”
- Mental Models and Frameworks: Systematic, simplified descriptions that capture relevant features of a domain. “Model: A systematic, simplified description that shares or captures relevant features of a domain.”
- Diversity as Non-Overlap: Team diversity, in the context of cognitive repertoires, is measured by the lack of overlap in the members’ ways of thinking.
- Ability as Task-Specific: An individual’s ability is defined by how well their repertoire performs on a specific task, not by general intelligence measures like IQ. “A person’s ability on a task can be measured by how well a person’s repertoire performs on that task, not on a general intelligence test.”
- Diversity Prediction Theorem: This theorem posits that collective error in prediction equals average individual error minus predictive diversity. In simpler terms, a diverse group can be more accurate than the average individual in the group. “Collective Error = Average Error − Predictive Diversity” This is also expressed as: “Group Ability = Average Ability + Diversity”
- Too Much Information (TMI) and Too Much Knowledge (TMK): The increasing complexity and volume of information and knowledge in the modern world make it impossible for any single individual to master everything, necessitating diverse teams. “TMI and TMK imply the necessity of diversity. When Euclid was writing his axioms, a person could learn all of mathematics. That is not true today.” The example of John Milton illustrates the historical shift from all-knowing experts to a world of diverse knowledge.
The Link Between Cognitive and Identity Diversity:
- Frameworks for Understanding the Connection: Page presents three frameworks to illustrate the relationship between identity and cognitive diversity:
- The Iceberg: Highlights the visible (expressed and perceived identity) and less visible (internal identification) aspects of identity.
- The Timber-Framed House: Emphasizes the structural nature of identity, with core, less mutable aspects and more flexible, experience-based components.
- The Cloud: Depicts identity categories as overlapping and internally diverse clouds, rather than rigid boxes. “Categories do not divide people into clean sets of identical people; they create neighboring clouds.” This challenges the notion of a singular “woman’s perspective” or other monolithic identity viewpoints.
- Identity as a Correlate of Repertoire Diversity: Due to segregated communities and differing life experiences, identity categories often correlate with differences in information, knowledge, heuristics, representations, and mental models. “We live in segregated communities defined by identity categories, so those categories correlate with the knowledge, models, information, representations, and heuristics that constitute our repertoires.”
- Statistical Differences vs. Essentialism: While identity groups may exhibit statistically significant differences in their cognitive repertoires, this does not imply essential or deterministic links. Algorithms can predict demographic attributes based on online behavior because of these statistical distinctions. “These algorithms exploit the fact that members of different identity groups differ statistically in the books they buy, the websites they visit, the movies and television shows they download…”
- The “Tom Hanks Is Busy” Experiment: Illustrates how identity influences “adjacent possibles” – the immediate associations and potential solutions that come to mind. When asked for a replacement for Tom Hanks, race and gender often play a significant role in the initial suggestions. “If Denzel did not jump to mind, that does not mean you are racist, but it does reveal that race plays a large role in the adjacent possibles. If you did not think of Sandra Bullock or Meryl Streep, then gender does as well.”
- Identity-Based Knowledge and Opportunities: Individuals from particular identity groups may possess unique insights and see opportunities that others miss, as exemplified by Robert Johnson founding BET and Christy Haubegger founding Latina magazine. “Johnson’s story embodies how a person’s identity and experiences can reveal an opportunity that others miss.”
Diversity Bonuses in Action (Prediction, Creativity, Problem Solving, etc.):
- Prediction: Diverse predictions, stemming from varied information, categorizations, and models, lead to more accurate collective predictions. The Diversity Prediction Theorem underpins this.
- Creativity: Identity-diverse groups can generate more novel and diverse ideas because they draw from different knowledge domains and experiences. Creativity is often “subadditive” when counting ideas alone, but “superadditive” when considering the potential for recombination of those ideas. “If we count by ideas alone as we have done so far, creativity is subadditive… Counting by the number of combinations reveals the potential for superadditivity from sharing.” The “Alphabet of the Famous” test illustrates how diverse knowledge domains contribute to creative output.
- Problem Solving: Effective problem solving relies on a diverse set of tools and approaches. When problems require a large number of potential tools, diverse teams of specialists are often more effective than homogeneous teams of generalists. “For domains with large numbers of tools, a high-ability person can have high facility with only a subset of the tools… the ratio of the number of potential tools to the group size plays a role in whether diversity bonuses matter.” Analogies like the zoo and train ride illustrate how different individuals possess different sets of problem-solving tools.
- Knowledge Integration: Diverse teams are better at integrating knowledge from different domains, as illustrated by the example of the ghost atom idea, which connected anthropological and economic heuristics. “Make up a ghost atom, create a phantom island, assume a can opener— these build on the same idea: make up what you need so that the math works.” Patent data shows an increasing trend towards innovation through the recombination of diverse technological codes.
- Strategic Decision Making: In contexts like venture capital, cognitive diversity at each stage (prediction, evaluation, intervention) leads to better outcomes. “Cognitive diversity helps at each stage.”
The Importance of Identity Diversity:
- Beyond Representation: While representation is important for its own reasons, identity diversity also contributes to cognitive diversity by bringing different life experiences and perspectives to the table. “The first benefit of identity diversity is that it is a source of cognitive diversity.”
- Challenging Assumptions and Mental Models: Diverse teams can challenge ingrained assumptions and broaden the range of mental models applied to a problem, as seen in the revised understanding of human egg fertilization involving both male and female researchers.
- Considering Identity in Team Formation: When forming teams for complex tasks, considering identity diversity alongside functional diversity can lead to a more robust set of cognitive repertoires. “Thus, a wise NASA director would consider identity diversity as contributing to cognitive diversity.”
- Indirect Effects of Identity Diversity: The mere presence of someone from a different identity group can cause others to generate more ideas and construct more complex arguments. “Evidence from controlled experiments shows that the presence of a person from a different identity group causes people not from that identity group to generate more ideas and construct more complex arguments.”
- Identity-Based Knowledge in Product Design: Understanding the needs and experiences of diverse consumer groups, often facilitated by identity-diverse teams and research, leads to better product design. “To make rich observations, IDEO seeks out identity-diverse consumers. They hire identity-diverse employees to better classify observed behaviors as idiosyncratic or representative…”
Implementing Diversity and Inclusion:
Organizations are increasingly recognizing the business case for diversity and inclusion, viewing it as a driver of long-term success. “BlackRock’s assessments of a company’s value include evaluations of a company’s efforts on social dimensions such as diversity and inclusion efforts… because they provide a signal of that company’s prospects for long-term success.” Diversity and inclusion programs often involve bias reduction, fostering inclusive cultures, and using people/team analytics. Quotes Highlighting Key Ideas:
“Diversity is not just about who is in the room; it is about the different ways in which people in the room think.” (Implied throughout the book) “The mastery of successful men consists in adroitly keeping themselves where and when that turn shall be oftenest to be practiced.” (Quoting Emerson, used to illustrate the value of unique talents and perspectives) “People only see what they are prepared to see.” (Quoting Emerson, highlighting how identity shapes perception)
Further Considerations:
The book primarily focuses on the potential for diversity bonuses. Realizing these bonuses requires inclusive environments where diverse perspectives are valued and effectively integrated. Measuring and managing cognitive diversity can be challenging in practice. The specific types of diversity that yield the greatest benefits may vary depending on the industry, task, and context.
F.A.Q.
What is the core idea behind the “diversity bonus,” and in what domains is it most likely to occur? The core logic for how diversity creates bonuses lies in the idea that individuals possess different “cognitive repertoires,” which encompass their unique ways of thinking, including their information, knowledge, heuristics, representations, and mental models. When teams or groups are composed of individuals with diverse cognitive repertoires, they bring a wider array of tools and perspectives to problem-solving, prediction, creativity, and strategic decision-making. Diversity bonuses are most likely to occur in complex domains, particularly in the knowledge economy, where there is “too much to know” (TMK) and “too much information” (TMI) for any single individual to master. In such environments, the collective intelligence arising from diverse perspectives can lead to superior outcomes compared to homogeneous groups of even highly capable individuals.
How does the concept of “cognitive repertoire” differ from traditional measures of intelligence like IQ, and why is it a more useful framework for understanding diversity bonuses? The concept of a “cognitive repertoire” differs from traditional measures of intelligence like IQ by focusing on the specific tools and approaches a person has for thinking and problem-solving, rather than a general measure of intellectual capacity. IQ scores lack the granularity to reveal how diversity bonuses arise because they don’t capture the different types of knowledge, strategies, and perspectives individuals possess. For example, two people with similar IQs might have vastly different cognitive repertoires suited for different tasks. Measuring diversity through the lack of overlap in members’ repertoires and individual ability by how well a person’s repertoire performs on a specific task allows for a more intuitive and relevant assessment of how diversity contributes to a team’s effectiveness. It also acknowledges that someone can be highly capable in one area but less so in others.
The text discusses different frameworks for understanding the connection between cognitive and identity diversity, such as the iceberg, the timber-framed house, and the cloud. Can you briefly explain one of these frameworks and how it illuminates this connection? The “cloud” framework illustrates the relationship between identity categories and cognitive diversity by emphasizing that identity categories do not create homogenous groups but rather “neighboring clouds” of individuals. Within any identity bundle (e.g., women, African Americans), there is significant variation in individual experiences, information, knowledge, and perspectives. While there might be statistical differences in cognitive repertoires between different identity clouds (due to shared experiences or societal influences), these clouds also overlap substantially, and no single “perspective” can be attributed to an entire identity group. This framework highlights that identity diversity is often correlated with cognitive diversity due to the different life experiences and opportunities associated with various identities, but it avoids essentializing or stereotyping individuals based on their group affiliations.
How does diversity contribute to better predictions, according to the “Diversity Prediction Theorem”? Can you illustrate this with an example from the text? The Diversity Prediction Theorem states that Collective Error = Average Error − Predictive Diversity (or Group Ability = Average Ability + Diversity). This means that a diverse group of individuals making predictions will, on average, be more accurate than a homogenous group of similar ability because the diversity of their individual errors tends to cancel out. The text illustrates this with an example of asking sixty students to guess the number of ridges on a US quarter (correct answer: 120). The average of their predictions was around 137, but the collective prediction, taking into account the diversity of their guesses (some high, some low), would be closer to the correct answer than the average. This demonstrates how diverse information, categorizations, or models used by individuals lead to diverse predictions, and this diversity improves the accuracy of the collective prediction.
In what ways does diversity enhance creativity and innovation, going beyond just generating a larger number of ideas? Diversity enhances creativity and innovation in several ways beyond simply increasing the quantity of ideas. First, individuals from diverse backgrounds bring different knowledge domains and experiences, leading to more novel and “outside-the-box” ideas. The “Alphabet of the Famous Test” example shows how individuals with different interests (sports, music, politics) can generate unique lists of famous people, and a diverse group will likely cover a broader range of names than a group of experts in a single domain. Second, diversity facilitates “recombination,” where different and seemingly disparate ideas can be combined in new and valuable ways. While counting ideas alone might show diminishing returns with overlap, considering the number of potential combinations reveals a “superadditivity” from sharing diverse ideas. The example of Prada allowing customers to design their own shoes illustrates how combining diverse styles, leathers, and soles can create a vast number of functional and potentially innovative products.
How does diversity play a role in effective problem-solving, particularly in domains with a large number of potential tools or approaches? In problem-solving, especially in complex domains with numerous potential tools or approaches, diversity is crucial because different individuals will have facility with different subsets of these tools. Even highly capable individuals are unlikely to master all relevant tools. A diverse team ensures that a wider range of tools and heuristics can be applied to a problem, increasing the likelihood of finding a solution. The analogy of integration problems solved using different calculus techniques (expansion, adding zero, multiplying by one, substitution) demonstrates how a team with specialists in different techniques can outperform a team where everyone has similar, even if high, overall ability. In domains with a large “tool space,” hiring for diversity, to ensure coverage across different sets of tools, can be more effective than solely hiring for general ability.
The text provides examples of how identity diversity can lead to the identification of overlooked opportunities and the development of more effective products or services. Can you describe one such example? The story of Robert L. Johnson and the founding of Black Entertainment Television (BET) exemplifies how identity diversity can reveal overlooked opportunities. Johnson, as an African American, understood the large, underserved market of Black viewers who were not adequately catered to by mainstream television. His identity, coupled with his experience in broadcasting and his understanding of Black music and culture, provided him with a unique perspective that others, lacking that identity and those experiences, did not possess. This allowed him to identify a significant market opportunity and build a successful business by creating content specifically for this demographic. Similarly, Christy Haubegger’s founding of Latina magazine highlights how her Latina identity provided insight into an untapped market of Latina readers. These examples demonstrate how a person’s background and identity can shape their understanding of needs and opportunities in ways that can lead to innovation and success.
Beyond the direct contributions of diverse cognitive repertoires, how does the presence of identity diversity within a group or organization have other positive effects, as suggested in the text? Beyond the direct contributions of diverse cognitive repertoires, the presence of identity diversity can have several other positive effects. Controlled experiments show that the presence of someone from a different identity group can cause individuals not from that group to generate more ideas and construct more complex arguments. This suggests that diversity can stimulate more rigorous and creative thinking within the group. Additionally, identity diversity can lead to a better understanding of diverse customer bases, as seen in IDEO’s storycentric design approach where observing diverse consumers provides richer insights into product needs. Furthermore, organizations with a commitment to diversity and inclusion are increasingly being recognized as having better long-term prospects, as evidenced by BlackRock’s assessments of company value, suggesting that diversity is not just a social good but also a factor in financial success. The text also notes that even the perception of being excluded based on identity can negatively impact cognitive performance, highlighting the importance of inclusive environments to fully leverage the cognitive diversity present.
Some thoughts
“The Diversity Bonus” provides a compelling and well-reasoned argument for the value of diversity, particularly cognitive diversity, in driving success in the modern knowledge economy. By dissecting the components of cognitive repertoires and illustrating how identity diversity can lead to a broader range of thinking styles, Page demonstrates the tangible benefits of building diverse teams for a wide array of tasks. The book encourages a move beyond viewing diversity as a matter of fairness or compliance towards recognizing it as a strategic imperative for enhanced prediction, innovation, problem-solving, and overall organizational performance.
Citation
@online{bochman2023,
author = {Bochman, Oren},
title = {🤝 {Diversity} {Bonuses:} {How} {Diverse} {Teams} {Achieve}
{Superior} {Results}},
date = {2023-10-01},
url = {https://orenbochman.github.io/reviews/2017/diversity-bonus/},
langid = {en}
}