19 min read

Suspicious Minds

Suspicious Minds

For more than 10 years, companies have asked me to make the business case for diversity. It turns out to be an easy case to make. Research ranging from theory-driven lab experiments to economic analyses of the global economy have shown again and again that organizations that are both diverse and inclusive outperform their competitors, particularly in innovation. And yet it’s 10 years later and I’m still being asked to make the argument, convince the same crowds. If diversity pays such easily measurable dividends, why does it seem so hard for so many organizations to share in those benefits. While there are some genuine bad actors in the world, can explicit bias alone account for these continuing challenges?

When confronted by this frustrating question during the pandemic, I decided to dig deeper into the problem—deeper than organizations or programs. Deeper than surveys of employee feelings or even ideas such as implicit bias. As a neuroscientist I decided to look inside our brains to explore the neuroscience of trust.

Before diving into the amygdala and anterior cingulate, let’s begin by clearly stating the problem…

The Diversity-Innovation Paradox

There is large research literature on the role of diversity in creative problem solving and collective intelligence. Within science, for example, elite teams slowly lose their impact and originality over time, even as their rate of research production goes up. Collaborations become more efficient as trust increases, but it robs them of the sparks necessary for innovation. Yet simply adding new collaborators increases originality, innovation, and multidisciplinary impact, in part by restoring the allostatic[1] tension between trust and novelty.

This phenomenon extends well beyond scientific innovation. Many years ago, I was on an advisory board for the Swiss banking giant Credit Suisse[2] when we conducted an analysis on the impact of women on corporate boards. The report revealed that boards with at least 1 woman had a 3% greater return to shareholders, and that boards with 3 or more women returned an average of 5% more[3]. And the results held true throughout the regions of the world.

In entrepreneurship, research tracing the cultural diversity of thousands of London companies found that diverse management teams, in terms of both ethnicity and immigration status, produced more product innovations than their competitors. Even in the unsexy world of fishery ecosystems, diverse groups better understood “complex feedbacks and interdependencies” than homogenous groups. However, this was not simply a process of locking all of the stakeholders in a room together; the diverse inputs of fishery stakeholders needed a proper aggregation process–simply throwing every idea and stakeholder together in a room produced no advantage[4].

From global corporate boardrooms to London entrepreneurs, from fishery ecosystems to scientific innovation, increased diversity brings increased value creation. Still skeptical? What if we looked at all 1.2 million doctoral dissertations published in the last 50 years? This is exactly what was done in one of my favorite papers of 2020. Using text analysis and machine learning, the authors analyzed the career trajectories of every US doctoral recipient since 1977[5]. They found that “demographically underrepresented students innovate at higher rates''. Those who were outliers in their fields best served the very purpose of science: explore the unknown and return with novel insights to lift society.

Unfortunately, this wasn’t the paper’s only finding. Those novel contributions from underrepresented scientists were less cited than their peers’. Despite contributing greater innovation, underrepresented scientists were less recognized and had worse career outcomes, robbing us all of their future impact. This phenomenon is known as the diversity-innovation paradox: those most likely to bring originality and insight to the world are the least likely to be recognized and rewarded. Issues of fairness aside, this paradox represents a major drag on global innovation.

The Neuroscience of Trust

While the diversity-innovation paradox has deep roots in history, institutions, and personalities, it is fundamentally about trust[6]. Leaders that trust their employees foster psychological safety, which in turn increases employee creativity. Equitable turn-taking across seniority divides and flat, egalitarian teams with little hierarchy both causally drive collective intelligence and innovation. And the most productive teams at Google showed higher social intelligence and shared greater trust with their teammates.

Trust matters. Diversity matters. Integrating these two bodies of research together, however, reveals a fundamental tension between trust and diversity. They each have powerful but opposing roles in innovation and distributed cognition, and the smartest teams live deep within that tension. It is our well documented preference for trust over diversity that drives organizations into the paradox. For example, cognitively diverse teams are more effective, and yet coworkers tend to sort themselves into cognitively homogeneous groups over time[7]. Even when an individual has a clear incentive to share information with a collaborator, they share less with individuals that are more culturally dissimilar[8]. Left unchecked, these biases raise cultural barriers that suppress cognitive and broader diversity.

As cultural norms begin to favor homogeneity, individuals begin to conform to the norms of their ingroup “even when they understand that the norms…are arbitrary.” Deeper still, their emotional responses shift to align with their perceived ingroup. Although there is significant variation in how individual brains process social signals around trust[9], a pattern emerges in which ingroup trust is associated with automatic reward circuits while outgroup trust requires effortful top-down control. Those reward circuits, involving dopamine and endogenous opioids in the nucleus accumbens, trigger without explicit thought of effort, just as when a labs rat finds some cheese in a maze. In contrast, the prefrontal circuits that are needed to overcome our default behavior require intentional effort. Absent any cheese, Job the lab rat works hard to learn each maze, often without immediate payoff. Over time, though, our maze runner comes to learn the mazes with easy payoffs, and its reward circuits begin firing as soon as it recognizes the familiar, long before reaching the cheese.

Our lives are more complex than lab rats solving mazes (however much it may occasionally feel just as capricious and arbitrary), but the same fundamental neural systems subserve our social lives. When meeting a new person from our ingroup, someone very similar in appearance, education, accent…smell, those automatic rewards circuits begin firing. Trust comes before the payoff. For an outgroup stranger, however, without those cues of familiarity, there is no easy reward from simple recognition. They are a new maze to solve, and we call strongly on our prefrontal resources to explore this new relationship. All of which is fine in as much as this is what our brains have evolved to do. That effortful trust is available to us to overcome our uncertainty and see both people for who they are.

But what happens when our prefrontal resources are otherwise occupied? Stressors from work deadlines to financial pressure draw prefrontal resources away from the top-down effort needed for outgroup trust. This leaves us with little executive control to override our default preference for the familiar[10]. Egalitarian choices we may have made in a low-stress situation, such as in the ideas of our own minds, become increasingly cognitively effortful as real life intrudes, demanding access to the same prefrontal resources[11].

Those automatic reward circuits don’t suffer this same resource drain. They happily fire away, orienting us toward the familiar even when the stresses of life drain the cognitive resource away from effortful action. Our reward circuits trigger ingroup trust equally well in all conditions. And this wildly different response reveals a bias that only emerges under stress[12]. It drives us towards homophily, undermining the prosocial behaviors necessary for success in diverse teams (and societies).

These barriers can be overcome, however, with engagement. Increased interpersonal experience shifts interpersonal trust from effortful medial prefrontal control to more reflexive (i.e., “automatized”) brain circuits. Continued engagement with people of different races and genders reduces belief in stereotypes and other outgroup associations. It is only when trust and diversity are brought into balance that teams can avoid the paradox and gain the full creative potential of their community.

Without that balance, lack of trust dominates and robs us of human capacity. For example, in many academic fields, including economics and the sciences, seminar audiences are systematically less trusting of women, asking more total questions and exhibiting more patronizing or hostile attitudes, even after controlling for differences in quality of work or field of research. In the world of entrepreneurship, investors of all genders strongly prefer pitches from attractive male entrepreneurs over female entrepreneurs, even when the pitches are otherwise identical.

Analysis of meetings between venture capitalists (VCs) and female startup founders reveal that VCs undermine female founders with questions about losses while supporting male founders with questions about gains, and later negatively describe qualities in female founders that receive praise in male founders (e.g., “lacks experience” vs. “full of potential”). This seemingly irrational difference in trust persists despite the finding that female founders return more than twice as much per dollar invested as male founders. Here the power differential between investors and founders might also be coming into play. Greater social power heightens attention to rewards and increases automatic information processing, which interacts with the automaticity of rewards for ingroup trust, reducing effort allocated to outgroup trust.

On the other hand, too much trust can actually make us dumb. undermines collective intelligence as well. Over-training of trust-related reward circuits reduces activity in right dorsolateral prefrontal cortex (rDLPFC) while increasing ingroup interbrain synchronization in both rDLPFC and the right temporoparietal junction (rTPJ). This not only reveals how default behavior is crowding out effortful prefrontal trust, but the brains of the members of the ingroup even begin to sync up. This ingroup rDLPFC synchronization tracks with outgroup hostility, possibly driven by synchronized reductions in prefrontal activity. Over strong ingroup identity actually reduces collective intelligences by further reducing cognitive independence within members of the group. We become less skeptical of the ideas of our ingroup that we would naturally be.

The potential anonymity of remote work suggests one possible solution to these known biases: we could all hide our differences within digital personas. Behind avatars and chat handles we could all discard our identities and hide our differences. This has appeal for many, but rather than removing difference, all of the research above suggests that it would actually produce the opposite, exaggerating even subtle differences and worsening ingroup-outgroup effects. Trust grows with engagement, not anonymity. Employees with more facetime with managers receive more recognition and more promotions. For most, though, working remotely reduces social network centrality, meaning that the average remote worker is less present in the minds of their coworkers[13]. This increases the need to manage one’s impression amongst coworkers and leaders within the company. While everyone experiences this same increased need for “job-focused impression management”, managers treat this behavior more negatively in employees of a different gender. Without the reflexive trust given to those similar to you, career management looks conniving and deceitful. This even plays out in elite levels of American politics–male senators are seen more positively the more they talk, while female senators…never know when to stop persisting.

In “Distributed Innovation”, I explore how majority influence and herding effects reduce collective intelligence and innovation, and reveal the powerful impact of minority opinion incentives[14]. This same effect is further exaggerated in situations demanding ingroup-outgroup trust. For example, when a deliberative process uses majority rule and few women are present, women experience more interruptions when speaking and their contributions are less trusted, reminiscent of the female academics described above[15]. When structural norms raise the saliency of minority opinion (e.g., including consensus rule norms early in collective decision-making), women are actually interrupted less than men, as the incentives of the system demand an effortful allocation of outgroup trust[16].

I’ve also written about how the attribution bias causes us to treat arbitrarily situational challenges as perceived failings of specific individuals. Even when we know a spotty internet connection isn’t a colleague's fault, our brains tend to treat it as evidence of their incompetence. In the context of trust, it is clear that negative attributions become even more pernicious across group divides. Even location plays a role in exaggerating attribution bias as more distant collaborators receive more blame for failures, often hiding the real source of a failure and allowing it to persist. And for all our generic complaints of “Zoom fatigue”, challenges with gaze and space in video meetings disproportionately affect those in outgroups. Cultural differences affect how we contextualize and interpret eye contact and other displays of emotion, influencing the way people interact. For example, individuals from East Asian cultures tend to perceive direct gaze as evidence of anger or sadness compared to those from Western European cultures. Even visual cues like the perceived distance or relative position of a face in an image affect perceptions of gender and emotion. And those perceptions in turn alter the neural circuitry of trust.

Even within America, factors such as differences in family size or self-expression can easily fuel attribution bias. For example, census data shows that Black families have 20% more people in a household than the average US family; Mexican-American families are 80% larger. This creates more competition of bandwidth and less private space for video meetings[17]. That little extra background noise or choppiness in video quality can easily lead to false assumptions about competence. All of this while that same video feed intrudes into a private home of those in outgroups, exposing “formerly safe, private spaces” to scrutiny and ingroup judgment.

Simple access to remote work is a form of privilege many don’t fully appreciate. Even before the pandemic began, there were racial biases by income and industry in who was able to work remotely. Remote work also exacerbates broader socioeconomic and regional differences. Despite significant variation, remote “jobs typically pay more than jobs that cannot be done at home and account for 46% of all US wages.” Of the highest earners in the US, 71% report being able to work from home, compared to only 41% from the bottom quintile. All of these differences in access further reduce the connections across socioeconomic, racial, and regional divides. In the end, you are more likely to encounter certain kinds of people working remotely, reinforcing in our minds that elite work is largely white-ish, male-ish, highly educated, and culturally homogeneous. The very tools we use to stay connected tend to exaggerate ingroup-outgroup effects and bolster the Diversity-Innovation Paradox.

Even the received wisdom of those with remote work experience reveals deep assumptions about the nature of trust and collaboration. “Set the meeting to 15 minutes by default, and only make it longer if absolutely necessary (the shorter the meeting, the more succinct you will have to be, and the less time there will be for pointless small talk and rambling).” A culture of 15-minute scripted meetings is a culture of homogeneity. Where is the trust in the assumption that others will waste your time? This idea might hold for rote cognitive labor where there’s no need for chit chat, but in creative labor this mindset reinforces ingroup-outgroup divides and reduces innovation.

Fairness First

I have spent the last several thousand words presenting evidence that a tension between diversity and trust is a necessary discomfort that lifts innovation and productivity. In fact, I’ve spent a good portion of the last 10 years arguing the business case for inclusion[18]. Scientists like to call this an instrumental argument, which is to say that there is a direct, tangible benefit to you, to society. The instrumental argument for diversity and inclusion is real. It is more than valid. We all genuinely stand to benefit from overcoming the Diversity-Innovation Paradox. And yet, despite all of the force of this argument, it is not enough. Our choices must start with fairness first.

Fairness first means building a diverse team must come before all other considerations—it is non-negotiable[19]. It is not an argument about the potential business gains or the strategic value of balancing one objective against another. Fairness is about what is right. One might assume that the “rightness” of inclusion comes from its measurable value in innovation and beyond, but it is not enough to make a rational argument when so much of the research I’ve cited above reveals our deep and persistent irrationality in the face of difference. A recent study in the Proceedings of the National Academy of Science finds that instrumental arguments for diversity in universities appeal more strongly to White than Black families, and that universities that rely on instrumental arguments over fairness tend to have greater White–Black graduation disparities. When diversity and inclusion become mere considerations in a transaction, balanced against so many other pressing considerations, our long-term collective intelligence falls.

The constant demand to deliver new research, new products, new customers, new markets, places cognitive and emotional load on us all. Managing these daily stressors competes directly for the same neural resources needed to deploy outgroup trust, even as ingroup trust comes nearly automatically. Treating decisions about diversity as transactional might seem rational on its surface, one of many considerations you must balance for the good of your organization, but those same competing demands directly decrease our ability to see value in difference[20]. This is why the Paradox persists.

If you believe, as I do, the copious research demonstrating that increasing the diversity of your organization will lead to increases in innovation and collective intelligence, you must then set that instrumental argument aside. Abandon the “business case for diversity”. It is still true. It can be the argument that moves you to act, but it cannot be the act itself. Fairness first abstracts away from the transactional nature of the business case and simply states that fairness is a foundational principle to be supported independent of other considerations.

A few years ago, I developed an interest in how Hollywood balances creativity and industry, and so I began listening to The Writers Panel, a podcast about the “practice and business” of writing for television. The host interviews a panel of writers, often including a head writer, known as “showrunners”. There were two fascinating commonalities in hiring practices of showrunners. First, nearly every one of them would say that there is an endless supply of professional writers in LA who can deliver a script, but that what they actually needed was someone who could contribute an original idea the showrunner would never have had by themselves. This has been my hiring principle for years; I thought I was so clever and unusual, but I was just rediscovering what every good showrunner in Hollywood already knew[21].

Second, a number of successful showrunners would insist that they couldn’t take the risk of hiring anyone other than friends and long-term colleagues. The theoretical value of diversity meant nothing to them against the daily pressures of delivering a high-quality show every week. One showrunner proudly stated that he would happily pay studio fines rather than diversify his writers room[22]. Another defensively argued the value of hiring only close friends while simultaneously complaining about how he had been marginalized for his own differences. Despite the universal agreement that new ideas are the currency of their industry and the causal relationship between those ideas and diverse rooms, the Diversity-Innovation Paradox persists, even in Hollywood. In one of the most competitive, high-stakes industries in the world, only those showrunners that practiced fairness first diversified their rooms.

None of this is meant to imply that fairness first comes at no cost. Building a culture that embraces the tension between trust and diversity takes time and effort. If a diverse writers room or innovation team is non-negotiable, something else must give–usually, time. In the tech industry, the first qualified candidate who walks through the door is very likely to look and think like everyone else already in the room. Building a diverse team requires the time necessary to find a candidate that is not only individually qualified but also raises collective intelligence through complimentary diversity[23]. That inevitably requires more time and more effort on the part of recruiters, hiring managers, and the team as a whole. When a recruiter has 30 hiring managers every week scream at them for not filling open positions, you can easily understand how the instrumental value of diversity falls away as a consideration. Fairness first insists that a candidate is not qualified if they don’t increase the complimentary diversity of the team.

The additional short-term costs of diversity don’t end with recruiting. Even after a new member has joined, outgroup trust is effortful, and that effort will inevitably reduce short-term productivity. Like those TV show runners, many see the friction of diversity as an inefficiency in the system, but it's the friction that produces the sparks that are the entire point of innovation. It is the friction that allows a team of average intelligence to become as smart than the most elite individual performers. Expect to put additional work into maintaining psychological safety as you remix teams and recognize that this likely means short periods of decreased innovation as the room again finds its allostatic balance between trust and diversity. The long-term payoff for the initial effort will outweigh the lazy benefits of ingroup collaboration.

Many organizations don’t allow the time needed to hire for complimentary diversity even as they talk about the importance of inclusion. It’s one thing to understand intellectually that diverse teams and communities outperform in the long-run, but in a culture obsessed with short-term gain, the upfront costs of diversity can feel like losing. Fairness first frees us to see individuals as more than tools to complete this week’s deliverables.

Of course, there are other strategies for increasing diversity. Many organizations offer incentives for ”diversity” hires or include team diversity in managers’ annual reviews. Research has shown that these strategies do have an impact, and yet the Paradox persists. It should tell us something about ourselves that we must pay people to make choices that are already in their best interest. I’ve been known to occasionally promise my kids ice cream and cartoons in exchange for a vaccine shot; doing the equivalent with grown ass adults just to build a qualified team is absurd.

Alternatively, some organizations fall back on the dirtiest word in HR: quota. On the surface, quotas might look like a form of fairness first–you must simply hire a certain number of a certain kind of person without influence from other considerations. And if people are using the q-word around your organization, there is probably a serious problem in need of a drastic solution[24]. But in practice, reliance on quotas isn't about fairness. Rather than making a commitment of time and effort to finding a candidate that helps build the best possible team, the appeal of quotas is that they are quick and easy. Just fill the diversity hire role. But diversity is not a quality of an individual hire, and focusing purely on individuals and not the composition of the team both ignores the importance of trust in the room and is an invitation to game the system[25]. Stop paying lip service to diversity. Stop making the easy arguments for diversity that ask little sacrifice and offer little gain.

Just as an individual must be qualified, teams must also be qualified. A team is not qualified if it is not diverse.

[1] Yes, that is a rather nerdy way of describing people working together, but the dynamics of allostasis aren’t just a metaphor. The interactions of collaborators demands a massy, evolving process to maintain the desirable, if uncomfortable, tension at the heart of innovation.

[2] I wanted to understand how a bank works. And my experience is why my only surprise about Credit Suisse’s eventual collapse is that it doesn’t happen to large banks more regularly. Just wait—there’s more to come :)

[3] Companies with all-male boards had an unfortunate tendency to preside over catastrophic collapse via malfeasance and bad acquisitions. Shockingly, “boys will be boys” may not be sound corporate governance.

[4] In “Innovating Innovation” I wrote about the crucial factors necessary for maximizing collective intelligence, including novel incentive structures, flattening hierarchies, and managing the tension between ideation and maturation. I explore the idea of innovation “matchmakers” that pair the right people and ideas together at the right moment, serving a similar purpose to the structure interactions in fisheries research. Innovation has always been about more than serendipity at the watercooler.

[5] This is where AI shines. Imagine what it would have taken for humans to read every piece of published research since 1977 and systematically rate them for novelty and impact. AI’s “biases” reflect our own, producing a magical mirror that can occasionally speak hard truths.

[6] Untrusted nodes are a serious problem in distributed computing. “If you don’t want everything to be taken down by one malfunction you need to defend against invalid inputs and being overwhelmed. Sometimes you also need to defend against actual attackers.” The nearly trillion dollar computer security industry exists to protect distributed systems from untrusted interlopers through the simplest of solutions: trust no one. Whenever some developer forgets that rule, your credit card and social security numbers show up on a dark website in the “1,000,000 numbers for 1 bitcoin” bin.

[7] It’s interesting that even when “diversity” is not immediately visible, such as cognitive diversity or intestinal flora diversity, cultural and psychological forces still tend to favor homophily. Who knew we were all just a bunch of terrestrial spaceships being piloted by horny protozoa looking for a hookup.

[8] When people made judgments about sharing money with others, the lateral OFC “represents the content of stereotypes about members of different social groups”, increasing the likelihood of giving for those perceived as “warm" but decreasing it for those seen as “competent”.

[9] Recent research has suggested that most acts of explicit discrimination are carried out by only 5-20% of individuals. Much like Covid-19 superspreaders, perhaps a small number of people produce the biggest outbreaks. But also like Covid, the community as a whole suffers as these acts can become normalized or when this small population rises to powerful positions. How might 5-20% of professors drive large decreases in citations for innovative research by outgroup academics?

[10] Again, people are different. There is substantial heterogeneity in homophily—some people are much more attracted to uncertainty and different than others.

[11] Specifically, the interplay between the medial prefrontal cortex and the anterior cingulate is involved in regulating the trade-off between social hierarchies of competition. It’s involved in the personal economics of whether it's worth fighting for your idea with a higher status colleague.

[12] These aren’t the only biases at play in these social contacts. When receiving social feedback, people “learn from positive feedback but dismiss negative feedback” and are less likely to change traits more associated with their identities after self-reflection.

[13] A huge number of us have been working remotely for over a year, and many have asked me if we’ll ever go back to the office. The shift may be slow at first, but eventually the most ambitious will want to move back to the center of the action, and when they do everyone else will be forced to follow.

[14] “Minority opinion” is a market incentive structure that only returns rewards when the majority of the market participants are wrong. This dramatically increases the collective intelligence over traditional markets.

[15] There has been a great deal of research on the complex dynamics of the classroom participation by female students. In many contexts, female students participate less than their male peers; these differences are further exaggerated in online and computer-supported learning.

[16] Wondering how to get started building norms around “minority opinion” or “unanimous rule”? Start with being completely transparent about the expectations: “...displaying the rules increased newcomer rule compliance by >8 percentage points and increased the participation rate of newcomers in discussions by 70% on average.”

[17] Less space per family member is particularly difficult for balancers that already struggle with intrusions between family and work life.

[18] I even have an upcoming book on this topic, The Tax on Being Different. Because you visited socos.org, our terms of service clearly state that you are now legally obligated to purchase copies for yourself and 12 friends. If, like me, you have no friends, you can choose to substitute a year-long subscription to my upcoming Netflix comedy series, I Wonder Who’s Losing Their Job for Greenlighting This Pile of Shit? 

[19] If your immediate instinct in reading this is to reply, “But I don’t want to hire a bunch of unqualified people to satisfy a diversity quota,” then (1) of course they have to be qualified—how strange to assume they are not—and (2) diversity is a quality of a collection of individuals, not a single person, and teams that lack diversity are not qualified.

[20] And those initial interactions too easy teach us the wrong lessons. “An initial arbitrary interaction, if rewarding enough, may discourage people from investigating alternatives that would be equal or better” leading to inaccurate stereotypes emerging “in the absence of real group differences.” In fact, “the mere act of choosing among groups with the goal of maximizing the long-term benefit of interactions is enough to produce inaccurate assessments of different groups.”

[21] I bet von Neumann was already doing this in his writers room 80 years ago.

[22] Writers rooms are a curious and somewhat unique practice to American television. In most other countries and other branches of entertainment, the economics doesn't support an entire team of writers dedicated to a single product. It is curious how this parallels many of the practices I’ve observed in innovation cells.

[23] This research, also from the lab of Superminds author Thomas Malone, shows that hiring the “smartest” or “most qualified” individuals without thinking about the whole group doesn’t actually lift collective intelligence.

[24] Quotas, like democracy, are sometimes seen as the least worst option.

[25] For example, use the studio’s diversity fund to hire a staff writer for your show. Then use her as a free writing assistant. Bonus, in the rare script that includes a character that looks vaguely like her, she can kick a line or two.