Jason Harvie CA: ‘Cognitive diversity is the business world’s unmined territory’
As our Finance+ Insights series turns its focus to the topic of EDI, we sat down with Jason Harvie CA, Investment Director - Private Equity at Penta Capital, ICAS Council member and Chair of the ICAS London Area Network, to discuss the business benefits of cognitive diversity and how teams can set about fostering it.
What does the term ‘cognitive diversity’ mean to you?
Essentially, it's diversity of thought; people with different prior experience and different ways of looking at problems coming together to solve optimally.
It’s a less directly obvious form of diversity that sits in the background but is applicable to everyone that works in a team. I've worked in a number of different teams on the investment side in private markets. The ones that functioned best and made the better decisions were the ones with a cognitively diverse bunch of people.
Having people in your team that approach problems differently builds a much stronger problem-solving machine.
So it is different to diversity in the traditional sense?
Yes, I think people's implicit assumption when you use traditional diversity terms is because you have a different skin colour, gender or religion, you’ll automatically think differently, but someone can look very different to you and structurally solve problems in exactly the same way.
Having people in your team that approach problems differently builds a much stronger problem-solving machine, covers individual blind spots and is more holistic in risk assessment. Even when you think of it from a more traditional CA perspective, having people that view life and business through a different prism does mean you have a more robust process, be that an audit and how that functions, right the way through to making a decision at an investment committee.
Aren’t there some professions that might benefit from a lack of cognitive diversity? For example, there's the stereotypical accountant as somebody who’s very logical and analytical and focused on numbers and detail, but perhaps less creative?
It's almost implicit that people assume that accountants are required to be logical, which they absolutely are, but if you're not, in the best sense of the word, creative, you're not going to be able to solve problems for your clients. As the accountancy profession evolves and the roles that accountants take become much more variable, that diversity of thought and diversity of approach to problems will become more and more important for CAs to be able to deliver for their clients.
That comes from your own background and experience, both personally and professionally, but also from your education. It's having people from STEM subjects, classics, the arts all in a melting pot contributing together. I was quite traditional in that I did a maths degree and then did the CA qualification, so you'd automatically assume that I’m logical, like data, that type of thing, but I know it helps being paired off with people who more likely to cover my blind spots. If it's making structured, narrative-based arguments, particularly in investing, those with a classics and arts background have more experience with that skill set.
...as our understanding of cognitive diversity gets better, all business decisions will continue to improve.
All the major asset managers have diversity programs, but they're focused on traditional forms of diversity. Do you think they pay sufficient attention to the cognitive diversity that’s entering the industry?
I think it's probably a part of the business community that's been more focused on cognitive diversity for a longer period because the types of decisions they’re making are ones where multiple and opposing opinions form part of a robust decision-making process to reach an optimal investment outcome.
Can it get better? Absolutely. There's loads of scope and I think as our understanding of cognitive diversity gets better, all business decisions will continue to improve.
For example, consider philosophy as a subject of study. How do people think about making structured decisions? What mental models do we use in decision making? Even being self-aware enough to consider your own thought process will be very fruitful when trying to decide how to put teams together. We're on a journey across business and industry. It feels like one of those unmined territories where there are quite a lot of gains to be made.
Have you worked on teams that you think lacked or demonstrated cognitive diversity, and what did they look like?
I've been part of teams that have had cognitive bias and blind spots that they've maybe not necessarily been aware of because the group was more open to people with a similar view of the world. Sometimes that led to suboptimal decisions that the group maybe didn't realise they'd made until later. Equally, I've been in teams where there's been what would look like conflict in their decision-making but actually it was much more robust because people were challenged to think differently, challenged to see things from other perspectives.
Seeing the problem, or the investment opportunity, through other people's eyes meant you highlighted the most pertinent risks, higher-quality opportunities and ultimately arrived at a better decision as a team. That doesn't mean those teams necessarily all looked different ethnically, it was just you got better and more robust discussion with people who approached problems differently. That requires the whole group to buy in, giving people the runway to show their thought process, to allow others to get on board and not just immediately reject something that doesn't feel comfortable or track similarly to your own problem-solving process. Strong leaders are required to create this culture and environment.
How can a leader tell if their team is affected by a lack of cognitive diversity?
I think I would ask, how many times does your team move you out of your comfort zone when making a decision? How many times have they challenged your own thought process? How many times have you used someone else's thought process to enhance your own? How many new ideas does your team bring to you that you that you wouldn’t have thought of? And if the answers to those questions are, not very many or none, then you probably don't have a very cognitively diverse team.
What role does psychological safety play in the process of creating a psychologically diverse team?
Psychological safety pretty much gets to the point of it. It’s about a culture where the manager or the leader feels comfortable with the idea that it's unlikely they know it all and that they are the leader for a reason – that reason being they are best-equipped to get the best out of the team. That shouldn't feel comfortable all the time, it should feel like there's friction sometimes or a different perspective that you have to manage. It shouldn't be, ‘yes, we believe everything you're saying’. Once a decision has been made everyone has to have buy in, but the road to it shouldn't look like a straight one.
That was a blind spot of mine for a long time. I didn't think about how I thought.
You mentioned earlier about having people to cover colleagues’ cognitive blind spots. What would you say are your cognitive blind spots?
I think cultural blind spots exist for us all. For example, if you're investing in different countries and you've not been immersed in the culture, you might not understand the diversity that exists in those markets. You can't necessarily just draw parallels between the UK and other regional markets around the world. Having people who think similarly or have been in those environments can be vital to support your understanding.
Then there are the less obvious ones that are blind spots by definition, so you don't know they exist, and it's only when somebody says, ‘have you thought about it this way?’, that you think, ‘wait a minute’. One thing I find interesting is the idea of building mental models in problem solving that bring structure to your thinking. That was a blind spot of mine for a long time. I didn't think about how I thought.
Since the pandemic, there's been a lot more focus on wellbeing. How do you think cognitive diversity fits into that equation, with companies starting to think more about the minds of their employees?
The two tie in nicely. If you think about wellness and mental health, particularly for a people-business like an accountancy firm, looking after the engine of your company means the minds of your people. If you want those CAs functioning as efficiently as possible and making good decisions, that means those minds need to be attended to.
Focusing on mental fitness is as important as physical health. Providing the environment for healthy minds to function well is the job of employers today. If you've promoted your thinkers all the way through the system with capacity problems dominating, you’ve probably not made the best decisions as a business along the way. Providing your talent the tools to develop their mental fitness is optimal for everyone.
It's about saying to the team, it's OK if that new person is a bit challenging.
How does an organisation go about fostering cognitive diversity?
I think that starts with the recruitment process. Ask the internal HR teams or managers how they think about cognitive diversity. By having an awareness of it, you're empowering that person to think about the cognitive diversity of the candidates in front of them. I think with so many of the recruitment processes today it doesn't come into consideration and that comes back to blind spots.
I think that some of those processes are not even factoring it in. How does this person think versus someone else? How will they play off against other team members? It's not just about, will they work well together? It's, will they work efficiently together to get the right outcome?
It's about saying to the team, it's OK if that new person is a bit challenging, and then it's up to the manager to use their EQ to keep the players operating well on the field. Functioning well should mean robust interaction to reach the right decision, and provided everyone wants to make the right decision then people shouldn't shy away from sharing different views and perspectives.
A team member’s idea might get turned down one week and a different idea accepted the next and that should happen in a highly functioning team. If you're making lots of decisions you should make more optimal ones doing that than all saying yes to the same thing every time.
Have you got any examples of good leaders that you've seen through your career, in the profession or wider world who you think have fostered cognitive diversity?
Over the past 3 years that I’ve been on ICAS Council, I would credit the successive Office Bearers with fostering cognitive diversity in the group. We have a group today that generates strong debate and provides a platform for each member to voice their own views and the views of the membership.
There are several leaders I have come across in my career to date, some of them CAs, that have had high EQ and really understood how to get the best out of their people, all investment professionals funnily enough.
What is cognitive diversity?
- It’s the inclusion of a variety of people with different ways of thinking, different ideas, world views, problem-solving methods and mental perspectives.
How could it help my team?
- Teams and organisations that display cognitive diversity tend to perform better by avoiding group think, being more creative and demonstrating more effective problem-solving and decision-making processes.
- It can also help to boost team morale by ensuring that all employees’ views are heard and valued.
What are some simple steps to help foster cognitive diversity?
- Hire for culture ‘add’ rather than culture ‘fit’.
- Give employees continuous learning opportunities.
- Create a psychologically safe culture that encourages diverse voices.
- Seek external input (from outside the team or organisation) to share expertise or provide training.