Cognitive Diversity – a fancy phrase for thinking differently

Diversity is a problem for many industries across the world; this much is obvious. But what about diversity of thought? NextGenNow has identified a distinct lack of this within the pension industry, and has made it a key aim to change this for the better.

So how do we solve this issue? Whilst it might be tempting to thrust hundreds of 20-somethings into the sector, this would probably be counterproductive. Rather, we want to focus on diversity of thought, or cognitive diversity. In this blog, we will explore what that means…

Why cognitive diversity?

Across industries, diversity has been on the agenda for some time, and there are countless studies highlighting how people of different age, gender and ethnicity can contribute to better outcomes in business. A report by Mckinsey strengthens this point, stating that, “new research makes it increasingly clear that companies with more diverse workforces perform better financially”. But unfortunately, despite overwhelming evidence supporting this argument, we don’t always see this playing out in practice.

When we refer to the ‘diversity of thought’ or cognitive diversity, we go a step beyond traditional aspects of diversity. Rather than considering the age, race and gender of an individual, cognitive diversity refers to thinking outside the box, and approaching problems from different perspectives.

To prove the importance of cognitive thought, a study published in the Harvard Business Review looked at how well executive teams could complete a strategic execution task under time pressure. They discovered that the kinds of diversity we most commonly think of — gender, race, age — had no correlation to a team’s results. What did make a difference was whether the team members had different perspectives and different styles of processing knowledge. Of course, this doesn’t mean that the ‘traditional’ interpretation of diversity should      be pushed to the side lines. What is does mean is that in order to get the best outcomes, maybe we need to think a bit more holistically and recruit for the challenges we face.

How does it play out in practice?

Though potentially difficult to assess in advance, the fact that different approaches are valuable is intuitive. You might think you have a diverse team if measured by the more visible factors. However, if the team in question is comprised of introverts, from similar schools, who all live in London and have a passion for big data, your cognitive diversity is probably going to be low. This is perfect for some teams, but when it comes to pension trustees this will be far from ideal.

Teams in workplaces are often small, especially in the pension’s industry. This makes the idea of increasing diversity seem a bit overwhelming, but an article by Forbes shows there are lot of ways to increase cognitive diversity. Creating a culture of collaboration and openness was highlighted as a vital step in achieving this. Building relationships with other teams and companies, for example, opens teams up to multiple viewpoints and different working styles. Cross-party communication would prove to be an important learning curve for many teams, and indeed, organisations.

Getting closer to a definition

The United States Air Force has a useful definition for cognitive diversity described through different ways of thinking such as; extroversion vs. introversion, Type A vs. Type B personalities, and quick, decisive thinking vs. slow, methodical thinking. And indeed, there are a range of ways to improve cognitive diversity through considering some of these factors.

The aforementioned Harvard Business Review article also explains that in order to improve cognitive diversity in teams, recruitment teams must “identify difference’ and “recruit for cognitive diversity”. In practice, this means placing greater value on people who have a different opinion. Usually, having a good rapport with an interviewee is normally a sign of a successful candidate. However, perhaps now organisations should consider whether selecting for similarities might be less optimal for overall outcomes, if the person we require needs to bring something different to the team.

Having teams in the pensions industry who can solve complex problems effectively matters because of the diverse challenges it faces. Incorporating responsible investment, championing member engagement, the complexities of cost transparency and developing retirement income solutions all require new ways of thinking and a range of skills.

A continued lack of cognitive diversity will have a huge impact on the industry. It would mean that initiatives are weaker due to the lack of varied input and as a result, would fail to resonate with the population which they are trying to serve, in our case pension members. Consequently, this could reduce member engagement.

So it turns out that there is no single definition for cognitive diversity, but in essence, it is a group of people who think differently.

Pensions are no longer the privilege of the few. If pension provision is going serve the general population, we need the best ideas, which are born out of the cognitive diversity of the UK.

Common sense really.

Lauren Peacock is part of the NextGen Research and Insights subcommittee.

References and further reading

Reynolds, A. Lewis, F. (2017). Teams Solve Problems Faster When They’re More Cognitively Diverse. Harvard Business Review. [Accessed 30th July 2019]. Available online here: https://hbr.org/2017/03/teams-solve-problems-faster-when-theyre-more-cognitively-diverse

Hunt,V. Layton, D. and Prince, S. (2015). Why diversity matters. Mckinsey. [Accessed 30th July 2019]. Available online here: https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Why%20diversity%20matters/Why%20diversity%20matters.ashx

Kraus, A et al. (2007). The Impact of Diversity on Air Force Mission Performance: Analysis of Deployed Service members’ Perceptions of the Diversity/Capability Relationship.  [Accessed 30th July 2019]. Available online here: https://www.cna.org/CNA_files/PDF/D0015452.A2.pdf

Schindler, J. (2018). The Benefits Of Cognitive Diversity. Forbes. [Accessed 30th July 2019]. Available online here: https://www.forbes.com/sites/forbescoachescouncil/2018/11/26/the-benefits-of-cognitive-diversity/#3bde52725f8b

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