Diversity in the workplace is no longer a social imperative but a must for businesses who want to avoid blindspots in their understanding of the problem at hand and possible solutions for the same. Especially so in our world of investment management, it is easy for teams that have worked together for long periods of time to get caught in their echo chambers resulting in groupthink and make sub-par investment decisions. This piece in the BBC by Matthew Syed takes the example of the CIA – how the homogeneity at the CIA created blindspots which perhaps a diverse team of analysts could have avoided and potentially prevented 9/11.
“….there is no doubt they hired exceptional people. “The two major exams were a SAT-style test to probe a candidate’s intelligence and a psychological profile to examine their mental state,” says a CIA veteran. “The tests filtered out anyone who was not stellar on both tests. In the year I applied, they accepted one candidate for every 20,000 applicants. When the CIA talked about hiring the best, they were bang on the money .”
And yet most of these recruits also happened to look very similar – white, male, Anglo-Saxon, Protestant Americans.
This is a common phenomenon in recruiting, sometimes called “homophily”: people tend to hire people who think (and often look) like themselves. It is validating to be surrounded by people who share one’s perspectives and beliefs. Indeed, brain scans suggest that when others reflect our own thoughts back to us, it stimulates the pleasure centres of our brains.
…..Why did this homogeneity matter? If you are hiring a relay team, don’t you just want the fastest runners? Why would it matter if they are the same colour, gender, social class, etc?
Yet this logic, while sound for simple tasks like running, flips for complex tasks like intelligence. Why? Because when a problem is complex, no one person has all the answers. We all have blind spots, gaps in our understanding.
This means, in turn, that if you bring a group of people who share similar perspectives and backgrounds, they are liable to share the same blind spots. And this means that far from challenging and addressing these blind spots, they are likely to be reinforced.
….Getting the right mix of diversity in human groups isn’t easy. There is a science to putting together the right minds, with perspectives that challenge, augment, diverge and cross-pollinate rather than parrot, corroborate and restrict. This is set to become a key source of competitive advantage for organisations, not to mention security agencies. This is how wholes become more than the sum of their parts. “
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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
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