‘Cognitive diversity ultimately contributes to better decision making and effectiveness.’

September 6, 2023
This month, Krishna Grenville-Goble, the Inclusion, Diversity and Equity Director of KPMG UK’s Board Leadership Centre spoke to The Loop about the importance of cognitive diversity in the boardroom…

Why do you think cognitive diversity is so important among board members and organizations as a whole?

Cognitive diversity plays a crucial role in enabling critical thinking. This is especially important given the post-pandemic, geopolitical, and economic turmoil, which requires greater agility and innovative thinking across various aspects of companies, from business models and digital transformation to focusing on inclusion, diversity, equity, as well as mental health and well-being.

At the board level, cognitive diversity contributes to improved decision-making and overall effectiveness. Having a more cognitively diverse board or workforce provides access to a range of different thinking styles, which helps address business challenges such as problem-solving, risk assessment, innovation, product/service design, team management, and creativity.

It’s essential for leaders to foster a culture of inclusivity and psychological safety, so that everyone feels empowered to contribute their unique perspectives, thereby promoting greater cognitive diversity.

Can you cite any examples of where cognitive diversity – or lack of – among board members has contributed to an organization’s success or failure?

Dysfunctional boardrooms often indicate a lack of thorough scrutiny and critical evaluation in decision-making processes. This can result in an overemphasis on certain areas while neglecting others critical for executing strategies. Groupthink might discourage dissenting opinions, and a rigid corporate culture might stifle creativity.

In the book ‘Disaster in the Boardroom’ by Gerry Brown and Randall Peterson, they explore six causes of board dysfunction, all highlighting the significance of cultivating a healthy culture to prevent dysfunction and business failure.

Andy Fastow, the former CEO of Enron, emphasized the need for genuine diversity of thought and perspective rather than just gender or age diversity. He observed that a competitive and testosterone-driven environment hindered this diversity.

How should an organization that is striving to make its board more cognitively diverse go about it?

Enhancing cognitive diversity in the boardroom involves taking an inclusive approach to diversity and considering intersecting identities. Organizations should align their strategy with the cognitive diversity required to support and implement it. The board should reflect on the types of thinking styles needed, such as risk-averse or risk-taking, idea initiation or generation, diplomatic or forthright, task-oriented or people-oriented, detailed thinking or strategic thinking, collaborative or autonomous, logical or emotional.

Boards should also reevaluate essential skills for board roles. If recruitment criteria are overly rigid, it might discourage diverse candidates and limit cognitive diversity.

Can an organization that encourages cognitive diversity, but has low levels of psychological safety, benefit from diversity and deliver high performance? How can psychological safety be measurably enhanced among board members?

For organizations to truly benefit from cognitive diversity, they must foster an environment where people feel empowered to contribute freely without fear of negative consequences or judgment. Failing to do so could lead to groupthink and hinder collaborative culture.

Leaders play a pivotal role in setting clear behavior expectations and actively listening to foster psychological safety. Encouraging open dialogue, discouraging personal attacks, and providing constructive feedback help create psychological safety. Psychological safety at the board level can be improved through a culture of feedback and learning, both collectively and individually.

Based on the adage ‘if you can’t measure something, you can’t improve it,’ how would you measure cognitive diversity among a company’s board leadership team and more broadly? What role can software and 360-degree feedback play?

Measuring cognitive diversity involves understanding the cognitive strengths of current board members in relation to the company’s strategy and decision-making needs, identifying potential gaps in thinking styles.

360-degree feedback can help measure individual cognitive strengths and areas for development, offering insights into an individual’s suitability for specific challenges.

AI tools, with proper governance, could aid decision-making by scenario mapping, offering alternative perspectives, analyzing trends, and suggesting potential trajectories using real-time company data. They might also assist in identifying board candidates with different thinking styles.

However, while AI tools can be supportive, they should be designed inclusively, and human decision-makers should remain ultimate decision-makers.