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16 November 2019

The Power of Diverse Thinking (2)

Tag(s): Leadership & Management, Languages & Culture
In this week’s blog I want to continue to explore best-selling author and Times columnist Matthew Syed’s ideas in his new book Rebel Ideas: The Power of Diverse Thinking[i] . He cites the example of the Poll Tax, one of the most unpopular taxes ever introduced in Britain, which contributed to the fall of Margaret Thatcher as Prime Minister. How could seemingly intelligent and rational people come up with and then follow through on such a policy despite all the warning signs? There was logic behind the idea of the Poll Tax. Why should a little old lady living in a large house but with only a state pension as income pay much more in local taxes i.e. rates, than a family of seven living in a small house but consuming far more in local services like schooling? But my father, who understood local politics very well as a hard-working, long-serving member of the local Ratepayers’ Party, which had returned all three local councillors in its ward since the 1920s, knew from the outset it was doomed.

To change local taxation from a levy on property to one paid by individuals proved almost impossible to collect and was also regressive, falling disproportionately upon households in modest, low-rated dwellings.

The policy was even tested first in Scotland where it proved utterly unpopular and unsuccessful but still they persisted. Who were they? The secretary for the environment, Nicholas Ridley was the son of Viscount Ridley and grew up in the magnificent Blagdon Hall in Northumberland. The other environment secretaries during the life of the Poll Tax were Patrick Jenkin (Clifton and Cambridge), Kenneth Baker (St Paul’s and Oxford), Chris Patten (St Benedict’s and Oxford), all of whom went to fee-paying schools and then Oxbridge, as did Ridley (Eton and Oxford).

The review group was led by William Waldegrave, son of the 12th Earl Waldegrave. He grew up in Chewton House, one of the largest mansions in Somerset, and also went to Eton and Oxford.  The review group was homogeneous and loved working together. But their lack of experience of the lives of ordinary people made it impossible for them to see the pitfalls, obvious to most commentators. According to an extensive study by Anthony King and Ivor Crewe[ii] this lack of diversity is at the core of most political blunders in recent history by all kinds of government, left and right.

The Industrial Revolution was arguably the greatest innovation in the history of humanity. It was the first time progress was driven primarily by technological innovation. But there was an anomaly in its development. The first phase was driven by the adoption of energy derived from the power of steam. When electrification came in the later part of the nineteenth century electrical motors could replace the older, less efficient steam engines. But this development took quite a long time, and many firms, particularly those based in the US who were well placed to adopt the new technology, failed to do so and went bust.

In factories the production process was clustered around the giant steam engines. It is difficult to reduce their size as they become less efficient. But this is much easier with electricity which means you can lay out the factory much more efficiently. But instead manufacturers just dumped a large electric motor in the middle, completely missing the point. 

There are two kinds of innovation. The first is called incremental innovation where an inventor works on successive prototypes until he gets to his ideal solution – think of Edison with his thousand ways not to make a light bulb. The second is called recombinant innovation where you take two ideas from different fields, previously unrelated, and fuse them together. Syed gives the example of wheels on a suitcase which is ubiquitous now but was turned down for decades by suitcase manufacturers. Sony, where I spent ten years as MD of the UK Consumer Electronics business, was founded on the principle of bringing together electronics and mechanics, hence products like the Walkman.

Syed demonstrates the biological links to the process of innovation in the theory of evolution and then takes this further to show how often the more innovative and creative members of a society are immigrants or sons of immigrants. Here I am not as convinced as I think this may be cultural. It is easy to quote numerous examples in the USA where immigration has been a constant for centuries but in Japan where it has not there is still a very strong record of innovation with firms like Sony and Toyota.

In large institutions you might expect more diversity but the reverse is true. Syed cites studies of, for example, universities. The University of Kansas has 30,000 students and, of course, they are a diverse group. But with such numbers it is much easier to find people like yourself, similar in background, in views, in tastes, and so groups form for sport, social life, interests etc where there is almost no diversity. In smaller universities in the state of Kansas where the average number of students is more like 1,000 there is less overall diversity but also there are far fewer available choices and people have to make connections with people who are comparatively more different.

The same is true of the Internet. According to Syed “For all its promise of diversity and interconnection, the Internet has become characterised by a new species of homogeneous in-groups, linked not by the logic of kin or nomadic tribe, but by ideological fine-tuning.” This is how echo chambers are formed. In many cases, echo chambers are nothing to worry about. If you are interested in fashion, or the music of a pop group, you want to join a forum where you can converse with like-minded others. Here diversity is not just redundant, but irritating. But when one is seeking to become informed on complex subjects such as politics, echo chambers are inherently distorting. By getting their news from Facebook, and other platforms, where “friends” share cultural and political leanings, people are more exposed to people who already agree with them, and evidence that supports their views. They are less exposed to opposing perspectives.

We now come to the problem of averages. In the early era of jet-powered flight in the late 1940s the US Air Force ran into frequent safety incidents. In February 1950 alone there were 172. What was going on? The problem didn’t seem to be the mechanical or electronic systems of the planes. These had been thoroughly tested by engineers and found to be in good working order. Nor did it seem to be a sudden deterioration of skill in the pilots; these were well-trained professionals, highly regarded within the industry. A Harvard graduate Lieutenant Gilbert S. Daniels, who specialised in physical anthropology had a hunch that it might be the design of the cockpit.

The cockpit design had been standardised in 1926 by the US Air Force after tabulating the dimensions of hundreds of airmen. Some wondered whether the average airman had grown since 1926. Daniels had a different idea. Perhaps there was no such thing as an average airman. He led a project which set out to measure the physical dimensions of pilots. He carefully tabulated 4,063 pilots on 140 dimensions of height including thumb length and the distance from a pilot’s eye to his ear. He then calculated the average for the ten dimensions that he deemed most important when it came to cockpit design.

He was quite generous in the way he calculated the latitude, including the middle 30% of the range of values for a given dimension. Not a single pilot out of over 4,000 was within the average range across the ten dimensions. The problem was that there was no such thing as an average pilot. Even if he selected only three dimensions out of the ten less than 3.5% were average on all three. And so the cockpit was redesigned to adapt to the diversity of individuals.

Now this blog and Syed’s book is about diversity of thinking not physical characteristics. But the same kind of diversity applies to thinking. Two people with similar IQ scores will vary hugely in their thinking. You could be high on matrix reasoning, low on knowledge, medium on block design, high on symbol searching and low on encoding – or vice versa. The single IQ metric is not expressing this variation, it is concealing it. And in most areas of performance it is concealing it.

So the US Airforce problem is a metaphor. It is just one example of the standardisation of our world. We have standardised education, standardised working arrangements, standardised policies, standardised medicine, and even standardised psychological theories. All, in their different ways, fail to take into account human diversity.

The organising concepts in Syed’s book are holistic. The collective brain. The wisdom of crowds. Psychological safety. Recombinant innovation. Homophily. Network theory. The dangers of fine-grained assorting. The content of these concepts emerges not from the parts, but the whole. This is crucial in an era where our most pressing problems are too complex for individuals to solve; an era where collective intelligence is moving front to centre.

But in a sense this has always been true. The dominance of humans over all other creatures comes from our bigger brains. They are four times the size they were in early man. They have been driven by collective brain power. Great ideas drive bigger brains and it has been the diversity and collective nature of that that has been the driving force.

I said that I had shared two stories with Matthew Syed that illustrate his thesis. I learned both at Sony. The first is probably apocryphal but makes its point. The second I observed personally.

My first Japanese boss Nobuyuki Watanabe told me this story in response to my question about the Japanese concept of consensus.
“You are the Chairman of a board. Today’s decision is whether the company should launch a new product.  You go round the table asking for the opinion of each Director.
The Marketing Director says “We should launch this product because our market share has been slipping and our brand image is also suffering. We need this product to get back on top.
The Sales Director says “I agree. Our sales force is losing influence with our customers and we need this new product to get that back.”
The Manufacturing Director says “I also agree. With declining volumes I am struggling to recover my labour cost.”
The Human Resources Director says “I too agree. We are finding it more difficult to recruit.”
The Finance Director says “I also agree. We have invested a lot in Research & Development for this product. We need a return on that.”
Lastly, the Research & Development Director says “I’d like a bit more time in testing.”
Well, based on this clear majority of 5 to 1 you decide to launch the new product. You’ve just launched Thalidomide. The point is to give the right weight to the different points of view, not to treat them all equally. For a drug company there is nothing more important than safety.”

The second story is about my audio team at Sony, and this is not my achievement because the audio group was already like this when I arrived. A product manager needs a range of skills and it is unlikely that everyone has them to the same high level. So Steve organised his team in two ways. Geoff was in charge of HiFi Systems, Tim - Hifi Separates, Yoshi - Personal Audio like Walkman and Carl - accessories like speakers.

But Geoff was also the most creative so he led the relationship with the agencies. Tim was the most computer literate (this was 30 years ago) so he was king of the spreadsheets. Yoshi obviously was the Japanese implant so he led the relationships with the factories in Tokyo and Carl was a big rugby playing extrovert so he led the relationship with the sales force. Steve christened them the A team (A for Audio) and they dominated the British consumer electronics market for years with phenomenally high market shares, meeting corporate profit targets.

[i] Rebel Ideas: The Power of Diverse Thinking Matthew Syed. (John Murray. London 2019)
[ii] The Blunders of Our Governments Anthony King and Ivor Crewe (Oneworld 2013)

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