Why cognitive diversity is the new competitive advantage

There are many companies that regard Diversity & Inclusion as a source of competitive advantage, a way to expand beyond the narrow realms and perspectives the company has operated, create untapped market potential by embracing new ideas and change.

There are many companies that regard Diversity & Inclusion as a source of competitive advantage, a way to expand beyond the narrow realms and perspectives the company has operated, create untapped market potential by embracing new ideas and change.

For some, it’s a matter of social justice, corporate social responsibility, or even regulatory compliance. For others, it’s essential to their growth strategy. Irrespective of why, most agree it’s now a priority that can’t be ignored - large or small companies should be embracing it. And when you get it right, it can lead to transformational business outcomes most organisations only dream about.

Yet progress is slow. Many companies struggle to materially increase representation levels of diverse talent, gain an understanding of where in their organisation’s diversity matters most, and create truly inclusive organisational cultures to reap the benefits of diversity. The tangible impact these efforts have on organisational effectiveness, but also on business performance, remains elusive. For many CEOs, the extent to which taking action on D&I can contribute to their path to growth remains unclear. Corporate leaders increasingly accept the business imperative for D&I, and most wonder how to make it work for their organisations’ and support their growth and value creation goals. It makes sense that a diverse and inclusive employee base – with a range of approaches and perspectives – would be more competitive in a globalised economy.

In a study by McKinsey & Co released in 2018 cites that

Companies in the top-quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability than companies in the fourth quartile. For ethnic/cultural diversity, top-quartile companies were 33% more likely to outperform on profitability.

Many organisations that moved beyond the gender narrative have started focussing on cognitive diversity, the notion of recognising that all of us have different ways of gathering and processing information; of making decisions and communicating. It’s more than just gender or ethnicity – it really comes down to personality. It’s about tapping into the different ways we think and harnessing that to unlock solutions and solve problems, both at work and in society. Research shows when you have diverse teams that know how to lean into those different thinking styles and preferences, you can get the best outcomes.

At Emu, we are all from different walks of life and at different life stages with very different ideas on how work should be done or how we think through problems; the solutions can often be varied too. Therefore, we have a strength in cognitive diversity that we harness; we are however mindful this needs to be constantly challenged and we achieve this when hiring consultants and business support team members to ensure they are different to us and challenge us.

As an example, we’ve recently engaged Neu21, an agile consultancy and our coach is not only female but is from Brazil and a former dentist. We don’t see it as a question of gender, it’s a question of “does this person add something to make the cordial stronger or weaker?” “Are they going to take us to a place of higher performance where we obtain productive discomfort to support the growth of Emu now and into the future?” If the answer is yes, then it’s a no brainer.

This is how Emu consults with its clients, often being mandated to find gender diverse talent and almost all corporates we work with expect a 50/50 diverse shortlist and at least one viable candidate from each gender type.

We believe however it stretches far beyond if your male or female; it’s about understanding the unique mix of talent that sits within the executive leadership team to first asses how diverse the team are and then seek to understand why. If an ELT has a strong bent towards white, middle aged males for example, is that a legacy of hiring people who are like the existing team? This may indicate the hiring process is still majority subjective eg no use of objective data being obtained throughout. The problem often sits with the CEO as diversity is something we know must be driven from the very top.

Have they been guilty of hiring bias? If so, the whole recruitment process may need to be addressed entirely and tough conversations may need to be had with the CEO to recorrect the balance.

It’s also not enough to simply change the process or to say, “well we seem to have more men than women, so the next hire needs to be female or it’s probably not a good look that we have more men on the team than women”. By simply doing this you create the issue and challenges around authenticity and longer-term performance; it also creates challenges when going to market as you won’t attract the best possible talent in the market. Not only that you will have onboarding challenges and inclusion issues as others in the team and the new hire coming in feel it’s disingenuous and may create resentment: sure, it could work, we are not disputing that but it’s a huge risk. Hiring for diversity has to be done in a much more deliberate way, perhaps even taking the bold move of a complete restructure to open up a gap for 2 or 3 hires or promotions at once whereby you taken the balance from 90/10 to 70/30 in one hit, sending a clear message to the company and the market that you’re taking this seriously.

Whichever end of the spectrum your company leans in this area, whether it be extremely progressive or a laggard, one thing diversity and inclusion has taught us over the past 5 years is that it never stands still, it’s both ethically and commercially the right thing to do and most importantly it’s never too late to make a start.

As Maya Angelou puts it;

We all should know that diversity makes for a rich tapestry, and we must understand that all the threads of the tapestry are equal in value no matter what their colour, gender or background.