Forbes: When It Comes To Business Decisions, Diversity Is Not Propaganda

Posted by Erik Larson on Nov 8, 2018 8:18:00 AM

Unposed group of creative business people in an open concept office brainstorming their next project.It’s my business to understand the role of bias when it comes to making decisions. Some of the most difficult biases cause people to dig their heels in when presented with anything that challenges their beliefs and perceptions. So it’s no surprise that our Cloverpop research, “Hacking Diversity with Inclusive Decision Making,” triggered dismissive tweets like this:

Replying to @erikdlarson
If I ran a business, I’d want the best of the best for my company, whether man or woman, I wouldn't pick someone just cause what is between their legs brings diversity to my business.

Clearly, gender bias touches a nerve and sometimes brings out the worst in people. But it’s not the main point of our research. For people who actually do run businesses, our research answers the key question of how they can improve decision practices to get the best of the best. It turns out that inclusive decision-making is one of the most effective ways to improve decision practices.

Many people were tweaked by our research but nevertheless asked valid questions about our findings. Some raised the unproven anti-team myth that group decisions lead to mediocrity, supported only by the almost-clever quip that “a camel is a horse designed by committee.” Many others questioned how we could ever know that more diverse groups arrive at "better" decisions, like in this email:

Erik,
The Hacking Diversity white paper seems to be very shallow and propagandistic.
How did your research team differentiate between groups subjectively seeing their decisions as better in diverse groups with perhaps an inability to be self-critical over those decisions? This would seem to show that perhaps, with equal validity, that more diverse groups are less adaptive and less self-critical.
What is your response?

Trust me, I get it. Questioning standard practice is like tipping sacred cows. But the proof is clear, and it’s time to tip those cows. So here is my response.

How to Determine Better Decisions

At first blush, it could be that a more diverse decision-making process is just feel-good corporate window dressing, and so people on diverse teams are less self-critical and inflate their rates of success. But in general, the research on diverse groups runs opposite to this assertion. A diverse group of people is much more likely to be self-critical and spend more time dealing with disagreements. Our findings indicate this is a big part of why inclusive teams perform better -- their decision process surfaces better choices and aligns their views more closely with reality.

We arrived at our conclusions through disciplined numerical research, not positive vibes.

From a research standpoint, it’s problematic that once a company executes a decision, you can’t reset the clock to zero and try a different path. You can't see what would happen in a different situation in a sort of “choose your own adventure” mode. We only get to live one life at a time, so it is impossible to prove that any individual decision would have had better results than another.

So we tested our methodology in several ways, originally in conjunction with researchers at Stanford Graduate School of Business using A/B testing and treatment/control methods. For all the decisions in our research, we have extensive written context for the decisions being made and the perspectives of the individual group participants.

The results of the research tell a clear story:

  • In a typical meeting-driven decision process, the decision maker's initial preferred choice ends up as the final choice about 75% of the time. That means the rest of the group only identifies a better choice for 25% of decisions in normal practice. This is likely because the authority and persuasiveness of the decision maker have a large biasing influence, with presentations and processes crafted to give their preferred choice a big advantage.
  • When you switch to meetings where decisions are made based on pre-reads of written summaries, like at companies such as Amazon, the group’s input results in a different final decision 56% of the time. In other words, the decision maker goes with their preferred choice less than half the time. This 2X improvement happens because written communication provides more clarity of thought and gives more people in the group equal footing regardless of power or personality, so better information and alternatives are more likely to surface.
  • Then when you look deeper at who is involved in decisions, it is clear that diverse teams have an even greater chance of identifying better alternatives. This happened at least 87% of the time for the most diverse teams, and we have strong evidence that diverse teams make better choices than lone decision makers about 95% of the time, almost 4 times better than standard practice. (FYI: The optimal group size is 5-6 people and the optimal number of choices to consider is 6-7).

Beyond the numbers, we looked at what decision makers thought about the choices they made. After deciding with a diverse group, decision-makers said the final result was "better" most of the time and "about the same" the rest of the time. None said the decision was worse, and they all could easily articulate clear reasons why they believed this to be true. When we inspected the full context of the written decisions from an outside viewpoint, it was usually obvious that the group surfaced new information that resulted in a different choice, or directly identified a new alternative that became the final choice.

Diversity and Inclusion Can Have Multiple Meanings

Another sticking point for some people is that the word “diversity” carries a lot of baggage.

When we reference diversity, many people assume we mean the narrow and politically distorted meaning of diverse groups, like the racial makeup of a college brochure or the civic theater of people orchestrated to stand behind political candidates at podiums. But that isn't what we're talking about at all.

But when we explore decision making in corporate landscapes, the most important type of diversity is a diversity of mental models. People of different ages, different genders, and who live in different places all see the world slightly differently. So we used those characteristics as an easy and objective way to measure significant mental differences.

That is how we could show that the farther apart people are in a group (different continents instead of different cities, a wider versus narrower range of ages), the more widely varied their perspectives and the more likely they were to highlight new information and better choices. Given that view of decision making, it is hardly surprising that diverse groups make better decisions.

I think it is clear that the combined strength of underlying mental differences is what drives improved decision effectiveness, and there is nothing magical about age, gender, location, ethnicity, etc. We are all biased each in our own way, so getting a wider diversity of views helps to balance things out and bring reality into view. Metaphorically it's like six spotlights shining from one angle highlighting one spot and casting stark shadows elsewhere versus a half-dozen spotlights from very different angles more fully revealing both the subject and the broader context.

It’s important to note that we’re also not talking about the "wisdom of crowds" or bringing in experts or random outsiders. Our research was with intact teams who work together on a regular basis and share context and understanding of the decisions they were making. The diversity we are talking about involves people who are already within a company, who understand the business, its customers and technologies. They are providing informed, focused thoughts from the perspectives of people who each know the details of a business from their own unique vantage points.

We're Just Having A Different Discussion

When it comes to gender equality, workplace discrimination, pay equity, or any issues that are often linked to diversity and inclusion in the workplace, we completely support and want that dialogue to happen, be examined, and continue.

But the concepts of diversity and inclusion are too broad to only have one meaning. And they are the proper words to use when doing empirical research, so we're going to keep using them. In the end, we think the truth will come out:

Thanks, Erik, that seems a much more reasonable explanation of your research. It’s too bad we live in such polarized times, where people manipulate even the spirit of the thing rather than embrace it rationally. I wish you the very best in your endeavors and I wish you much future prosperity in your work.

It is ironic that both people championing diversity and inclusion, and people opposed to it, put so much focus on tightly scripting and restricting the meanings of the terms.

The research on diversity and inclusive decision making all points in one direction. You can decide for yourself whether to believe it. But our research says you’d do better by including a diverse group of colleagues in your decision first. :)

Originally published on Forbes.

Topics: Leadership and Management, High Performance Decision Making