#12: True diversity

A do-or-die organizational problem—and how to solve it.

Yet another of Vaughn Tan’s weekly attempts to develop practical insights about not-knowing. The ideas below are likely to be only partially baked.

Greetings from Los Angeles where pretty much every day has been dry, clear, and nearly warm enough to be outside in a t-shirt.

Last year, thanks to Friends in High Places, I started advising the Wellcome Collection on improving diversity and inclusion. We met as an advisory board twice in December and January—this may be why organizational diversity is on my mind. More precisely, I’ve been thinking about diversity in the context of innovation and adaptation to change.

Though innovation and adaptation are both difficult for organizations, they’re no longer optional. Both are already enormously important for both for- and non-profit organizations—and they’ll become even more important in the future. In industry after industry, the ability to continually develop new products and services is becoming increasingly important to success and even to basic survival. This has already happened in consumer electronics, entertainment, food, music, fashion, and news. It will happen elsewhere too. (A few days ago, I talked to someone in the pharmaceuticals industry—I’m willing to bet that industry will phase-change into a high-frequency innovation pattern as soon as the logic of individualized therapeutics takes hold and regulation adjusts).

And the world is changing. In a simpler, less interconnected, less interdependent world, any change or disturbance was less likely to spread outside of the local context or have unexpected side-effects. A bank failure in the US even three decades ago would have been unlikely to trigger a financial meltdown even in the West. But in 2008, a bank failure in the US led to an enormous financial crisis in every major economy and many of the developing economies too. In our more complex, highly interconnected and interdependent present, disturbances have more unanticipated side effects which ripple further out than before.

Unanticipated and unanticipatable change is going to become the rule, not the exception—and it will come from directions and in forms that will themselves be difficult or impossible to predict.

Diversity mitigates the innovation and adaptation problem for organizations—but not the kind of diversity nearly every conventional diversity programs aim to create.

A typical conventional diversity program tries to make sure there are enough yellow (or brown or black), straight (or gay or trans), old (or young or middle-aged), female (or male) employees so that the relative size of these populations in the organization meets some predetermined criteria.

Bluntly, this way of thinking about diversity is incorrect. It is overly simplistic and static—it begins and ends with the wrong measure of diversity.

Human societies continually evolve, so new categories of people continually emerge. (Imagine categorizing yourself as a natural wine drinker 40 years ago, or as a transhumanist 20 years ago). When diversity is defined solely in terms of predefined categories (brown, straight, male, etc), efforts to promote diversity naturally exclude people who fall into categories that haven’t yet emerged.

Worse, by being simplistic and static and not recognizing the continual evolution of human society and its categorizations, the conventional, predefined-category view of diversity defeats its own goals: it continually creates new forms of hidden discrimination, especially against categories of people which have just emerged or are emerging.

A better—true-er—way to think about diversity in an organization is in terms of multidimensional and multilevel difference.

True diversity reflects at least three types of difference: 1) relative magnitudes of difference between individuals within the organization as a whole, 2) relative magnitudes of differences between teams in the organization, and 3) multiple dimensions of difference (ie, ways of being different) within the organization and its teams.

A simpler way to say it is: true diversity is how rich an organization is in different types of information—no matter what form those differences take. True diversity is therefore analogous to a diversified portfolio of investment in the capacity to innovate and adapt. (I have a more detailed and systematic explanation of true (i.e., multilevel and multidimensional) diversity here.)

When seen as information diversity, it becomes clear how true diversity supports innovation and adaptation.

Innovation occurs through a host of mechanisms. One of the most important mechanisms is recombination—mixing old information in new ways that are newly useful. The more information an organization contains (carried primarily in its employees), the larger the pool of information from which recombinant innovations can emerge. This is why truly diverse organizations are more innovative.

Any piece of information in an organization is more or less adapted to specific environmental states. For instance, in a country where climate and geography make growing wheat cheap and easy, a farm whose management has special expertise growing wheat naturally performs better than a farm whose management is specialized in growing rice—wheat-specialist farms would be highly adapted to this environment.

If the environment suddenly becomes wetter and hotter, growing wheat becomes both hard and expensive, while growing rice becomes both easy and cheap. In the changed environment, rice-specialist farms will perform relatively better than wheat-specialist farms. When such an environmental change occurs, all else equal, a farm with both wheat-specialist and rice-specialist employees will perform better than one with only wheat-specialist employees.

An organization’s employees thus represents a store of potentially useful information for responding to change in the environment. The more unpredictably changeable the environment is, the more essential it is to have an organization which contains more (and more different types of) information.

Thinking about diversity like this allows us to promote it more effectively. An unconventional program to promote true diversity would not focus on beefing up the numbers of underrepresented and predefined categories. Instead, it would have three principal goals:

  1. Inject unexpected new and different information into the organization,

  2. Discover new and different information already present within the organization,

  3. Actively evolve definitions of difference within the organization.

There are many practical ways to build this form of not-knowing into the organization. Many of them are doable at the managerial level (in case senior leadership is seriously asleep at the wheel). Just three interrelated small ideas here:

  1. Create or modify hiring processes so that new employee roles are only partially defined and thus must be actively negotiated—thus injecting unexpected new skills or information into the organization with every new employee;

  2. Change review and promotion processes so that part of each employee’s evaluation criteria is self-defined with input from management—thus allowing employees to reveal unexpectedly useful individual skills or capacities;

  3. Provide training for employees in articulating the special value of new forms of difference for the organization’s survival and success—thus implicitly valorizing employees who are different in ways which haven’t yet been recognized.

It’s eminently feasible for organizations to think in this more realistic, dynamic, and nuanced way about diversity. More importantly, it’s highly pragmatic. Because true diversity is essential for innovation and adaptation, the organization which fails to think and act correctly on diversity will first endanger its chances at success, then its likelihood of survival.

The night life—pro and con.

Previous issues can be found here. You can find me on the internet at www.vaughntan.org, on Twitter @vaughn_tan, Instagram @vaughn.tan, or by email at <uncertaintymindset@vaughntan.org>.