As South Africans, our complex history has ensured that we inherently understand the deep need to nurture diversity, inclusion and constructive debate at every level of government, society and business. In his State of the Nation speech (SONA) on 13 February 2020, President Cyril Ramaphosa spoke about the importance of inclusive economic growth to take the country forward.

There are essentially two kinds of diversity and considering both is useful to understand how they can positively impact organisations, communities, and society as a whole.

Identity diversity is the diversity of externally apparent demographic differentiators such as race, gender, ethnicity and age, whereas cognitive diversity is the diversity in people’s perspectives, based on their culture, values, background, socioeconomic circumstances, gender-identity, education and other formative influences on the way they think about the world.

Achieving identity diversity is an obvious goal for any South African business in order to correct the inequality of the past and appropriately reflect the country’s demographics. But beyond this, more global companies are realising the value created by tapping into cognitive diversity.

Finance Minister Tito Mboweni is a proponent of cognitive diversity and recently tweeted that even among government ministers, a diversity of ideas and debate were needed to arrive at good conclusions.

Look beyond visible diversity

South African businesses are very familiar with identity diversity. This is to a large degree driven by broad-based black economic empowerment (BBBEE) legislation, which incites very different feelings and responses. But the concept of cognitive diversity and inclusion is the big casualty of the heavy focus on headline stats, i.e creating an environment where people can be themselves, be valued for their unique talents and perspectives, and feel like they belong. I believe the “inclusion” component captures the zeitgeist of this complex topic and is key to unlocking the diversity dividend.

Cognitive diversity means recognising what isn’t always visible in people, embracing this difference and actively including people who think differently and have differing viewpoints and skill sets. One of the biggest challenges of our South African experience has been looking beyond the many superficial assumptions based on identity. It creates a barrier to digging deeper and identifying the cognitive, something that we have had to work hard at changing.

Improved cognitive diversity boosts collective team intelligence

Harvard Business Review surmised that cognitively diverse teams solve problems more effectively by looking at how individuals with different perspectives, or information-processing styles add value in a team that is tackling new challenges. The significant correlation between high cognitive diversity and high performance makes intuitive sense. When we take on a new challenge, we need to balance what we know with what we don’t know that might also be important. So, it’s valuable for everyone involved in a task to be able to apply their unique expertise.

The barriers:

Visibility

Cognitive diversity is hard to detect at face value. A person’s race, gender, culture, or generation may not necessarily tell us how that person thinks and processes information. It takes effort to draw out those internal differences and harness the benefits. 

Organisational culture

Cultural barriers can unintentionally restrain cognitive diversity. It’s natural for people to gravitate toward others who think and express themselves similarly (also known as “group think”), and so organisations often end up with like-minded teams. It’s called functional bias and the result is low cognitive diversity – a material decision-making handicap in fast-changing and complex environments.

Organisational beliefs and setup

An organisation’s beliefs about diversity also create a self-fulfilling cycle. Industries and companies that view diversity as important and actively implement it in their recruitment, capture its benefits. Those that don’t, don’t. Research shows that truly diverse teams can and do develop more innovative and creative ideas.

But diversity does not work without psychological safety. People only contribute unique ideas when they feel comfortable enough to speak up and present a contrarian view. It is difficult and stressful for those who do not fit into an entrenched culture, or identity group.

How to achieve cognitive diversity and inclusivity

Cognitive diversity is all around us, but you have to look out for it. When faced with a complex business challenge and everyone agrees on what to do, find someone who disagrees and make an effort to understand their viewpoint. Our thinking improves significantly when we move beyond the comfort of our own echo chamber and consider different views.

Embracing true diversity and inclusion in the asset management industry seems obvious. Our environment is competitive and uncertain, and thriving requires creative thinking. At Coronation, we encourage robust debate and minority views are celebrated. It makes for richer and deeper analysis, and, ultimately, better outcomes for clients.

To achieve this, one must take deliberate action. Start with the right tone at the top and ensure that progress is being made at every level of the organisation. Make it clear that diversity and inclusion are business necessities, not just human resource targets. It needs a long-term plan and commitment in order to become entrenched culturally.

Mentoring talent

Establishing mentoring programmes encourages cognitive diversity and an inclusive environment, as giving advice as an experienced expert can help others. In an industry where you are only as good as the people you employ, it gives you a competitive edge when you enable your people to collaborate seamlessly and to bring out everyone’s best.

Building a strategy for the future

A McKinsey study titled Delivering through diversity reiterates the positive relationship between a company’s level of diversity and financial outperformance. It recommends how to develop more effective Diversity and Inclusion (D&I) strategies as a source of competitive advantage. The success factors of top-performing companies include having a strong, sustained and inclusive leadership who are committed for the long term and who ensure that the strategy reflects their own unique company ethos and business-growth drivers.

Long-term D&I strategies

Companies – and the economy – can be empowered beyond creating a demographically diverse workforce by creating a cognitively diverse and inclusive environment. But we all need the willingness to openly recognise and tackle bias. We need well-planned and long-term D&I strategies and the realisation that differences in identity and thinking bring valuable benefits.

From personal experience, I know that you do not need to conform to a stereotype to fit in. Own and celebrate your differences and the value they bring to your area of work. Both you and your organisation will reap the rewards. DM