Difference Makers summary

Diversity pays. That’s the view of the business world’s leading analysts. Take management consultancy McKinsey’s 2014 report Diversity Matters. It shows that highly diverse companies are 35 percent more likely to enjoy above-industry-average returns than their less diverse counterparts.

That’s hardly surprising. According to the same report, women and minority groups make the majority of consumer decisions, so it stands to reason that companies which better represent these groups are good at attracting their business. But if it’s such a no-brainer, why aren’t more companies cashing in?

So we’re prone to favoring people like us and forming small, like-minded groups. In this blink, we’ll take a look at one of the most dangerous effects of this phenomenon – groupthink – and how to overcome it.

Groupthink is the tendency of highly cohesive groups to favor consensus and make bad calls when they’re under pressure. The term was coined by psychologist Irving Janis, the author of a 1972 study analyzing US foreign policy fiascos, such as the failed Bay of Pigs invasion of Cuba in 1961 and the escalation of the Vietnam war.

Emotions play a huge role in the day-to-day life of boardrooms and the decisions made there. Just think of how often you intuitively sense that something’s up. That’s a physical reaction triggered by the limbic system, the part of the brain that controls emotional reactions. That means simply trying to suppress your feelings won’t work – in fact, your best bet for improving your decision-making is to learn to observe and manage your moods.

So how do you do that? Well, let’s start with a definition. A mood is basically a filter that determines the way you see and respond to the world around you. According to life coach Alan Sieler, there are six Basic Moods of Life. These come about as the result of negative or positive responses to what he calls Facticity, Possibility and Uncertainty. Let’s break those down.

So far, we’ve looked at some personal strategies to become more open to diverse ways of thinking. In this blink, we’ll be shifting our focus to collective boardroom game plans that you can use to help your company commit itself to becoming a champion of diversity. So where do you start? Well, the key is to make sure the entire board is on the same page. That means you’ll need to start a conversation.

Diversity, as we’ve learned, has plenty of advantages, but there’s more than one way to get there. If you want to find the policy that’s right for your organization, you’ll need to generate ideas that suit your needs. This is known as a speculative conversation – an attempt to figure out where you are right now and where you want to go. In other words, does the governance of your organization reflect the diversity of the communities and customers which it serves?