Cognitive Diversity - A 'Difference' Future


In this our third article on future-board dynamics, we explain why cognitive diversity represents an opportunity to profoundly enhance boardroom performance and to become a game-changing vehicle for wider diversity, equality and balance.


In our November article, The Hidden World of Shortcuts, we explored the science behind social heuristics and illustrated how this covert mechanism leads to homogenous boardrooms. Our second article Beyond Agility published in December explained how these heuristics reinforce narrow, rigid ways of thinking that inhibit true cognitive diversity, inclusive thinking and innovation.


Through training and experience, aspiring board members learn how to think and behave along accepted lines. This assimilation into the rather narrow characteristics of the dominant culture drives both selection and success at the top table. In this article, we describe this process simply as conditioning.


This article is about cognitive diversity, its vital importance to the future success of business and as a vehicle for greater boardroom diversity, equality and balance. It seeks to get to the essence of attitudes and beliefs about how business should be done and how boardrooms should operate. We argue that, due to conditioning, these attitudes and beliefs remain stubbornly entrenched and operate against the beneficial impact of richly diverse thought.



The impact of gender balancing


We will all recall the scandalous quotes from the 2018 BEIS research into board gender diversity: “I don’t think women fit comfortably into the board environment” and “We have one woman already on the board, so we are done - it is someone else’s turn” are just two of them.


Much has been written since on the beliefs and organisational structures that underpin these attitudes. What stands out from analysis are core beliefs that the way things work now is broadly right, and that different perspectives add little value. They are often based on patterns of thought that have been conditioned over decades and represent narrow but genuinely held beliefs about the world, business and the boardroom.


But the evidence still indicates that beliefs about how business should be done – those outlooks that drive boardroom intentions, methods and outcomes – remain very much entrenched and favour particular ways of thinking.

Few male directors would identify with the quotes from the BEIS study. But the evidence still indicates that beliefs about how business should be done – those outlooks that drive boardroom intentions, methods and outcomes – remain very much entrenched and favour particular ways of thinking. This statement is not to demonise this viewpoint; what has worked well in the past is also going to help solve tomorrow’s problems too. There remains immeasurable value in these learned experiences. However, the world is changing fast, and the boardroom is not keeping up.


The excellent work of organisations such as the Alexander Hampton Review and the 30% Club to promote the benefits of gender balance in the UK’s largest quoted companies has been significant. As a result, there is a degree of change in male attitudes, as indicated by recent research from the University of Edinburgh. This study found that attitudes and beliefs of male directors are being influenced by their female colleagues, but that this happens more effectively when social interaction takes place outside the boardroom.


However, the University of Edinburgh research raises two fundamental questions about boardroom change. The first is about the pace of change in male attitudes, and the second is why should women directors need to use social opportunities to boost their direct contribution within board meetings.


There is growing frustration amongst female directors with how slowly change is happening. This is not just an issue of equality and fairness (inclusion), but also of contribution and performance (diversity). Many complaints centre on limited opportunities to express viewpoints, the need to plant ideas with male colleagues in order to get them heard and actioned, and the persistence of myths about the number and quality of female directors available in the pool that are directly contradicted by extant factual evidence.


There are other pointers that Society itself is losing patience with business and the boardroom. One is yet another round of major UK governance reforms (there will be more). Another, more significant indicator, is the emerging narrative on the new economics of people-planet centric business, which recent surveys show the modern boardroom is failing to get to grips with.


It would be fair to conclude that, if female directors must rely on social opportunities to make more impact, the same will be true for any diversely thinking director. This phenomenon is a clear marker that the boardroom remains a relatively closed space, where difference is not sought and consequently, where diverse thought cannot expressed and applied anywhere near enough. In a post-covid world, where social opportunities may lessen through continued use of video conferencing, doubts must arise whether diverse contributions will actually reduce in the nearer term.


Many diversity commentators look to the day when boardrooms become fully gender balanced for the time when the female voice is properly heard. Like most sensible thinkers, we take the view that this change should happen now. However, we doubt even then that gender balance will produce all the outcomes hoped for. Without a significant systemic shift, we think that the boardroom will to a large extent remain bound to the current construct of how things should be done. Furthermore, this construct lacks the operating framework to achieve and make the best use of diverse thought, as evidenced by the Edinburgh University research and the host of other indicators.


Shifting the focus


Much of this article has focussed on gender diversity because that is currently the mainstream narrative. However, cognitive diversity is about difference in thought, not gender, social background, age or ethnicity. Such groups are just as susceptible to similar kinds of conditioning as white males if the route the top is the same.


Since 2017, demyst has been arguing that the answer to conditioning lies in cognitive diversity.


We define cognitive diversity as


“The range of dissimilar ways of interpreting and understanding information, reasoning and reaching decisions which are capable of expression and application.”

The essence to cognitive diversity therefore lies in difference, expression and application. By actively seeking difference, we open the gates to deeper, more impactful debate, and we naturally broaden boardroom diversity to facilitate it. By shifting focus onto difference, boards will more readily seek its expression and apply it to decisions.


Cognitive diversity mitigates against group-think risk and facilitates asking the right questions at the right time, which is the key ingredient to effective supervision.


The concept of difference is critical to the future of successful business. Difference drives group knowledge creation. Group knowledge creation drives innovation. Properly intentioned innovation will drive the new economics of people-planet centric business. Therefore, the right kind of business change will not happen without first embracing difference, its expression and application.


The cognitively non-diverse (A) versus the cognitively diverse (B) board.



Almost without exception, boardrooms today are most comfortable with the familiar, which is, after all, a natural human trait. As a group dynamic, boards have maintained a dominant predilection for the safety of similarity over difference, which creates an antipathy for, or even a suspicion of, the unexpected and unfamiliar. However, a reluctance to embrace new outlooks and practices has caused the modern boardroom to evolve into an overly conditioned operating environment that is ill-equipped to address today’s, let alone tomorrow’s, business challenges.


As a group dynamic, boards have maintained a dominant predilection for the safety of similarity over difference, which creates an antipathy for, or even a suspicion of, the unexpected and unfamiliar.

One writer recalls a conversation late last year with another board evaluator who explained his standing advice to chairs, which was to replace disruptive directors. In that advice, little credence is placed on exploring thoroughly the underlying reasons for the agitation. Sadly, this scenario is frequently played out in many UK boardrooms, where the director identified is quietly exited. The deeper malignancy these dismissive attitudes and behaviours creates often go unrecognised, but the fruits are usually obvious to all of us operating in the governance space – an increase in fear, defensiveness and fettered dynamics.


In her superb research into the how the ‘unsaid’ shapes decision making, Marilieke Engbers offers analysis into incongruent boardroom communication and the “spiral of unsaid [as directors] try to manage silent conflicts during informal decision-making”. This body of work opens new insights into the hidden dynamics that arise in both cognitively non-diverse and diverse boardrooms.


How cognitive diversity can be made to work successfully


Designing boards and their ecosystems to capture the greater capability and performance that comes from richly diverse thought is no easy matter. Without the right framework, diverse thinking quickly polarises personalities and fragments boards. This is why divergent directors are so often quietly exited and many boards continue to distrust difference.


If assimilation is a systemic strategy, then using cognitive diversity as a vehicle for integration must also have a systemic strategy that encompasses both beliefs and organisational structures.

In their work, Sam and Berry describe acculturative strategies – assimilation, integration, separation and marginalisation. These are systemic characteristics that drive culture. Currently, the boardroom system can be described as assimilation, were new members gradually become part of the dominant culture rather than being allowed to integrate difference into that culture. Conversely, using the Sam and Berry model, cognitive diversity is about creating the conditions for integration.


If assimilation is a systemic strategy, then using cognitive diversity as a vehicle for integration must also have a systemic strategy that encompasses both beliefs and organisational structures.


Building for cognitive diversity therefore starts with understanding similarities and differences within the group. In part this relies on education and modelling. There are numerous psychometric tools available to boards, but these often amount to rough and potentially misleading approximations based on personality or IQ. In contrast, because cognitive diversity is about interpreting and understanding information, reasoning and reaching decisions, this requires entirely different techniques, measures and metrics.


Most boards hold strategy days as part of their annual programme. Such days create windows for blue-sky thinking, which provide excellent opportunities to bring-in expertise to begin the process of understanding cognitive diversity within the particular boardroom. This starts a journey where recruitment can be approached with difference in mind as well as team fit and balance.


De-conditioning

The good news about conditioning is that it can be reversed. Once stark example is the Covid-19 pandemic. Before this, no-one would conceive main board meetings being held other than in person. Necessity has led to change, with both negative but also positive results. Boards do not have to be run for all time in the same way they are currently, which is, after all, a re-worked Victorian model. Re-imagining the future board is possible. Embracing change allows new dynamics to emerge and, when planned well, can add significant value.


Tuckman

Dating back to 1965, Tuckman’s original four stage model for team development may be old, but its principles still apply today. In a nutshell, Tuckman maintains that no group can truly expect to perform together without a storming phase. This is where mutual understanding and respect are allowed to grow.


To be conducted safely, this is a conscious, informed process that unwinds old team norms and accelerates the establishment of new norms. The process involves a mix of personal reflections, chair training and group work, led by external expertise providing insights into relational and technical factors.


Shadow boards

Another interesting recent development is the experimentation with shadow boards, where board decisions can be tested in a more diverse forum.


Shadow boards make use of generation as a cognitive diversity factor. Younger brains are wired very differently to those represented in most boardrooms. This is important for two reasons. Firstly, they will engage with problems in very different ways and, secondly, they are in less need of the de-conditioning later generations require.


There are three clear weaknesses of shadow boards. Firstly, they are typically used very narrowly, for example when the subject relates to digital marketing or technology. The available diversity is rarely put to work on wider, more sensitive issues. Secondly, the ultimate power for decisions remains with the principal board, and there has been little study on the extent to which shadow boards change key decisions. Thirdly, they absolve boards from the moral obligation to widen cognitive diversity in their own composition.


Webinar


Do join us for a lunchtime webinar hosted by The Chartered Governance Institute on 8 June, which expands on the areas covered in this article.


The webinar draws from notable experts and boardroom practitioners, including the authors, Denise Wilson OBE and Charlotte Valeur, to explore how the boardroom is failing to grasp the opportunities from truly diverse thought, why actively seeking difference is essential for innovation and the evolution of people-planet centric business, and how cognitive diversity can be made to work successfully.


Click here to register.


Dr Tamara Russell MSc PhD DClinPsy FRSA and Neil Tsappis LLM FCG FRSA are directors of demyst board sciences


www.demyst.co.uk

Originally published in the May 2021 issue of Governance and Compliance magazine. https://www.cgi.org.uk/knowledge/governance-and-compliance

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