The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy

by Scott E. Page, Earl Lewis (Introduction), Nancy Cantor (Introduction)

How businesses and other organizations can improve their performance by tapping the power of differences in how people think

What if workforce diversity is more than simply the right thing to do? What if it can also improve the bottom line? It can. The Diversity Bonus shows how and why. Scott Page, a leading thinker, writer, and speaker whose ideas and advice are sought after by corporations, nonprofits, universities, and governments, makes a clear and compelling practical case for diversity and inclusion. He presents overwhelming evidence that teams that include different kinds of thinkers outperform homogenous groups on complex tasks, producing what he calls “diversity bonuses.” These bonuses include improved problem solving, increased innovation, and more accurate predictions―all of which lead to better results. Drawing on research in economics, psychology, computer science, and many other fields, The Diversity Bonus also tells the stories of businesses and organizations that have tapped the power of diversity to solve complex problems. The result changes the way we think about diversity at work―and far beyond.

Genres: Business, Leadership, Nonfiction, Professional Development, Management, Cultural, School

328 pages, Paperback

Published March 26, 2019

Reviews

[Mehrsa · Rating 4 out of 5]

Fantastic book that is a must read for any leader in any institution. The premise is that diverse groups (diversity is broadly defined) produce bonuses that homogenous groups cannot access. For example, a diverse group will outperform a homogenous group even when that homogenous group has higher average scores or rankings than the diverse group. Though the models and the math are in Page's first book, this book is more accessible to the non-academic. I am still torn about having to justify diversity on these grounds--or really, on any grounds--when it comes to inclusion efforts. But that outside, it's nice to have this valid justification in your back pocket. Also, because it applies to realms outside of just identity diversity.

[Sarah Jensen]

Book Review: The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy by Scott E. Page

In The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy, Scott E. Page argues that diversity is not merely a social good but a crucial component of organizational success in the knowledge economy. The book articulates how diverse teams outperform homogeneous ones by leveraging a broader range of perspectives, experiences, and skill sets. Here, Page draws on empirical research from various fields, including economics, biology, and organizational theory, to support his claims and make a compelling case for the value of diversity.

Summary and Key Themes
Theoretical Framework: Page provides a robust theoretical foundation for understanding the mechanisms through which diversity enhances team performance. He explores concepts such as different cognitive perspectives, problem-solving capabilities, and creativity. By illustrating how diverse teams approach complex problems from multiple angles, he highlights their superior ability to generate innovative solutions.

Empirical Evidence: Throughout the book, Page supports his arguments with empirical data and case studies that showcase the benefits of diversity in various contexts, including business, academia, and social organizations. He analyzes real-world examples that illustrate how diverse teams can produce better outcomes, thus grounding his theoretical assertions in practical scenarios.

Diversity and Innovation: A significant theme in the book is the link between diversity and innovation. Page posits that diversity fuels creativity by fostering an environment where different viewpoints challenge conventional wisdom. This dynamic leads to a more comprehensive exploration of ideas and potential solutions, ultimately driving innovation and competitive advantage.

Practical Implications: Page does not merely dwell on the theoretical aspects of diversity; he also offers practical recommendations for organizations seeking to harness the benefits of diverse teams. He discusses strategies for building inclusive environments that encourage collaboration among diverse members. These insights are invaluable for leaders and managers aiming to optimize team performance in a multicultural and multifaceted workforce.

Challenges of Diversity: While celebrating the advantages of diversity, Page acknowledges the challenges it can present, such as communication barriers and potential conflicts. He emphasizes the need for effective leadership, organizational culture, and policies that facilitate constructive collaboration. This balanced perspective adds depth to his analysis, acknowledging that diversity must be managed thoughtfully to realize its full potential.

Critical Analysis
The Diversity Bonus is an essential read for scholars, practitioners, and anyone interested in the intersection of diversity and organizational performance. Page’s writing is clear and engaging, making complex concepts accessible without oversimplifying the issues at hand. His integration of diverse academic perspectives enriches the discussion, offering a comprehensive view of the topic.

However, some may find that the book could further explore quantitative measures detailing the extent of diversity’s impact across different industries. While Page provides compelling qualitative evidence, additional empirical studies that quantify the relationship between diversity and performance could strengthen his arguments.

Conclusion
In The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy, Scott E. Page makes a compelling case for the transformative power of diversity in enhancing organizational effectiveness and innovation. Through a thoughtful blend of theory, empirical evidence, and practical recommendations, Page equips readers with the understanding and tools to embrace diversity as a strategic asset. This book is a vital contribution to the fields of organizational behavior and management, advocating for a future where diverse teams are not just encouraged but recognized as essential for sustainable success in the knowledge economy.

[Jerrod · Rating 2 out of 5]

Thesis: (cognitive) diversity leads to increased team productivity when the task is complex and the skills involved can be attained in a non-linear direction.

This book is ok for what it is. If you understand the wisdom of crowds, comparative advantage, and issues of sample selection, the theory really won't add too much to your understanding of when "diversity" leads to increased productivity. It seems Page did lots of research on cognitive diversity and wanted to tie that in with identity diversity. I'm not sure he succeeded. I think the insights he provides are something every manager should take seriously, but your mind will not be blown. If you want to read about identity, I highly recommend Sen's Identity and Violence.

My problem with The Diversity Bonus was the framing of the issue. The introduction was all about examples where identity (race, gender, etc.) diversity was salient, yet the the very beginning of the next chapter pivots to cognitive diversity (education, training, etc.). The rest of the book dances around the issue by doing some hand-waving about the correlation between identity diversity and cognitive diversity. Most of the examples cited where identity diversity is beneficial is when a team from a company adds someone who is from the same identity group as the people the company is selling to or the hospital is treating, i.e. the company adds representation for a consumer group (note: one could interpret these as benefits of homogeneity given that they are examples of someone from an identity group serving that identity group better).

It is also kind of hard to take seriously the frequently stated mantra of "there is no one test" for selecting a team when members of several of the best teams in his examples (especially the Netflix prize example) were chosen because they had performed well in a task (e.g. while the winning team for the Netflix prize might have benefitted from adding insight from feature selection, regression analysis, etc., the members of the team were identified by how they had performed on the task thus far).

This is an example of how cognitive diversity (while certainly a real thing) is a fuzzy concept at best and incredibly hard to implement. A tautological reading of most of the chapters is that diversity is beneficial when the task requires diversity, and the best team will have the right kind of diversity. When you start thinking this way, you might just start seeing successful teams and try finding where diversity might be a compelling story (even if something else was the cause of success).

He goes through many examples (your mileage may vary). From Page's reading, identity diversity has a much more mixed record of beneficial outcomes than just plain old cognitive diversity (setting aside the issues of operationalizing that concept. The commentary (which is a nice addition to a volume likes this) is much more bullish on identity diversity's benefits and is much more realistic about the non-separability of identity and cognitive diversity (most of the commentary is extremely biased, though). As Page mentions (but the author of the commentary ignores), the replicability of experiments in social psychology is an issue, but the book really does just brush it under the rug (Page writes it off by writing something along the lines of "setting aside replication issues").

Diversity is a hard topic to write about because the concepts are so fuzzy. Is an example of a company adding in Latinos to its marketing team and increasing its sales among Latinos an example of the benefits of diversity (the Latinos increased sales for a company that had previously not had Latinos on the marketing team) or an example of the benefits of homogeneity (it was the Latinos who could sell to the Latinos)? One issue Page doesn't wade into is the anthropological literature on learning. Presumably Page would consider education a complex task (and many of the examples where he touts the potential benefits of identity diversity are when dealing with consumers (healthcare, marketing, higher ed, etc.)), but many studies suggest that children learn better from those they identify more closely with (i.e. look more similar to, talk similarly to, etc.). Given the relevance of identity to the product (i.e. basic education), diversity in the sales team (i.e. teachers) might not provide a bonus.

Page provides food for thought but nothing really that satisfying.

[Benjamin · Rating 5 out of 5]

This was a great book! (Disregard the intro and commentary, both by separate authors; more on this later, when this "review" devolves from thoughts-for-later into outright rant.) The first half of the book distills the topic down to simple models and explores situations where cognitive diversity produces or fails to produce benefits.

I was hooked by the end of the Prologue, where the author mentions one of his mathematical statements about the advantage of diversity: in a set of predictions, the error of the average prediction is at most the average error. As soon as the claim has been stated, and if your inclination and training speak this language, there's a one-line proof via the triangle inequality (this is true in any metric; it turns out that when Page gets to his proof, he is firmly in Euclidean land, which actually allows him to prove a stronger statement than what appeared in the Prologue). The point is, such a reader immediately get a sense for what the book will offer: precise statements about well-defined models. This early on, one might still be wary of logical sleight-of-hand, but it doesn't take long to become apparent that Page is proposing simple models about diversity and inferring insights from them, as opposed to deciding where he wants to end up and working backward from that goal.

(Let me temper this praise by getting two nitpicks out of my system. First, the preview of the result described above is immediately followed by the statement "In other words, diverse predictive groups must be more accurate than their average member." I don't know how to make sense of that; the average member is exactly the embodiment of diversity in the result's statement. Second, Figure 1.7 describing the way topics in advanced mathematics build on each other was nutty. Nobody learns Boolean algebra before the integers? Most people learn groups before semigroups? Page does say to ignore the facts of the figure and just focus on the form, but I just can't bring myself to do that.)

The first three chapters present the models underpinning the book's analysis. They specify that diversity bonuses will be largest for complex tasks. Specifically, additive tasks where the output is proportional to the skill and effort of the input (his odd choice of a prototypical example is splitting logs with an axe; there is no interplay between team members, and the output of the team is the sum of the outputs of the team members, so one should seek the best log-splitters and leave it at that) do not yield diversity bonus. Conversely, complex cognitive tasks do not benefit from multiple realization of the same idea, even if it is a really good idea. It also here where one learns the aforementioned Diversity Prediction Theorem and another set-theoretic model for cognitive repertoires. They provide empirical evidence for the former via the Netflix Prize (where including a worse performing team's predictions actually improves the front runner's predictions. What a great real example!). Practical evidence for the latter is less weighty, but I loved the hypothetical examples (first, what is "adjacent" is different for someone thinking in Cartesian coordinates than it is for someone thinking in polar coordinates, and, second, how different mental categorizations of cities lead to different proposals for an alternative city after New York becomes unavailable for a conference). Chapter three also presents what Page dubs the No Test Exists rule ("No test applied to individuals will be guaranteed to produce the most creative group"), an unnamed comment on how complexity breeds the necessity of diversity ("High ability people can solve moderately difficult problems. On those tasks diversity bonuses do not exist"), and the Bonus of Being on the Losing Side (see the favorite quotation below, where the point is that if one member is never wrong, there's no benefit to including the rest of the committee members).

Those three chapters were my favorite. The rest of the book is good, and thoughtful, but some of the arguments were less convincing. For example, Chapter Five's fact that the ratio of multi-author academic papers to single-author papers has been rapidly growing is taken as potential evidence of the increasing complexity of academic endeavors. My first pessimistic thought is that it could easily be a consequence of the perverse incentives created by authorship requirements for tenure (to his credit Page does address this possibility later on in the chapter). The same passages do not attempt to tease out when teams provide a bonus because they give cognitive diversity from when they give additive bonuses (this would be admittedly be hard to tease out in the academic setting, but the possibility that some co-authors are more like log-splitters than Netflix predictors should be acknowledged).

The adjective "cognitive" in all of the preceding is important; identity diversity is briefly explored from a moral view, but it is usually mentioned as an indirect driver of cognitive diversity. Which brings us to the promised rant.

The closing commentary by Phillips critiques Page's focus on cognitive diversity and asks why it is necessary to justify diversity. This misses so much of the powerful simplicity of the book's arguments in support of identity diversity. To wit, maybe you default, absent any other analysis, to assuming diversity is good, and maybe I default to assuming homogeneity is beneficial. Maybe we are both prepared for a drawn-out, good faith discussion of these views; more likely, each of us has decided ahead of time what we think. Irregardless, when Page enters the discussion, we are handed some incredibly plausible and easily understood models where the benefits of diversity are self-evident. Now the implicit question on me is how much of that benefit am I willing to forgo in order to maintain homogeneity. Whatever the answer to that question, it is an incredibly telling commentary on the discussion (and that is true whether the discussion is about morality or about purely greedy optimization). So, leave it be, let it lie! Don't diminish this powerful and subtle point by demanding the author actively demonstrate affiliation with your tribe!

my favorite quote: "A committee that makes decisions can only be more accurate than a member of that committee if that member is sometimes on the losing side of the votes."

[Amir Hossein Fassihi · Rating 4 out of 5]

This book provides a rather scientific angle supported by complexity theory for seeing the benefits of diversity in teamwork. Contains many good examples.

[Pete Welter · Rating 4 out of 5]

Diversity. The word often has very different connotations to different people. Scott Page has shown, through both research and through logical arguments, that diverse groups have better outcomes when tackling hard problems. Part of baggage that comes with the word "diversity" is that it's a very broad term. Page spends significant time unpacking it into "cognitive diversity" and "identity diversity," discussing the difference and the overlap between those concepts, and how diversity in both of those dimensions plays out in real-world teams.

The most refreshing thing about Page's work is that while "diversity" is most commonly seen, especially in business and education, and something we do because it's the "right thing," the truth is that it's also the better approach to solving many hard problems, especially those with a human component (that is, most of them). He discusses when diverse teams are most powerful, and also when diversity adds little to a group. Often, attempts at diversity involved just putting people who look different onto a team and calling it "done." Page examines why that is approach is not a recipe for success, and discusses the kinds of diversity and the expectations and culture around it that are required to make it work. The short answer is: leveraging diversity takes continual hard work and attention. However, the payoff is that diverse groups can come up with solutions that are often better than any homogeneous group - in fact those solutions would not be possible to arrive at without a diverse group.

If you skeptical about diversity, and have experienced it as shallow feel-good exercise, I'd encourage you to check out "The Diversity Bonus" with an open mind. In Page's work, you'll find the deeper "whys" and a frank discussion of the tradeoffs. I've always had a problem with doing things "just because," and undestanding the deeper logic and reasoning behind diversity's effectiveness has made me build a much stronger mental model of how all the parts and pieces of the approach fit together.

It's been a number of years since I read Page's "The Difference." "The Diversity Bonus" seems like the result of Page taking his work from "The Difference" and presenting it over a period of ten years to many different people. Where "The Difference" builds the case behind the core logic behind why diverse groups are more effective, this book discusses that work in a more accessible form. (not that you can't get back to original sources, because the book contains liberal footnotes and references). Personally, because I'm a bit more technically minded, I preferred "The Difference," but both books present full discussions on Page's work.

[Darren · Rating 4 out of 5]

This is an interesting book, advocating the creation of great, diverse teams that can yield great results in the modern-day knowledge economy. Diversity, in this context, is a lot more than ensuring a mix of ethnicities and cultures and treating everybody equal. That should be a given.

The author believes that getting a diverse mix within the workforce can give many benefits, both to individual companies and society-at-large. The so-called ‘Diversity Bonus’ is a term of the author which, he argues, comes about by using diverse teams to look at often-complex tasks that can solve problems, innovate and impact positively on results. All of this is due to the different way that people process information, challenges and experiences and output this within their work. A group of diverse people, therefore, may have a greater hive mind than a homogenous group of equals.

This should not be written off as some wishy-washy liberal thinking. The author digs into many scientific disciplines such as psychology, economics and computer science to formulate these views, backed up with his own real-world experience and research. It is a credible compilation of thoughts that sound obvious, when you consider it, but sometimes the obvious things can be overlooked, whether inadvertently or by design. It can be time for change and a book like this can either light the fuse for action or help validate and guide your work-so-far.

The result changes the way we think about diversity in the workplace—and far beyond it. A business case can be made for this change and this can be essential as seemingly everything must be justified today, as if just doing the right thing wasn’t enough on its own.

Unfortunately, the book feels to be a bit of a ‘slow burner’, requiring more attention and focus to what is an important subject. It was a little inaccessible and proved to be a bit too easy to dip out of – and this is a big risk when you are trying to advocate a possibly radical course of action. If you can persevere you may be rewarded, as the subject is worth it. A more direct approach to writing would have been more suitable and it need not have watered down the book’s content, authority or purpose.

[Emma Langford · Rating 5 out of 5]

Did you know that companies who hire diverse teams are on average 19% more profitable than those who don't?

The Diversity Bonus by Scott E. Page is a must-read for business professionals everywhere. The phrase "great minds think alike" is proven false time and time again in the examples presented in this book. I learned that the most effective and creative teams are made up of people who think differently.

In one of her YouTube videos, Brene Brown said that our perspective is "fused to our face" we can't just take it off and take up someone else's. Our perspective is shaped by our life experiences, circumstances, and the people we surround ourselves with. The Diversity Bonus explains that each of our perspectives is unique and valuable. If your teams are struggling to come up with innovative ideas, mix it up! Bring in people from a wide range of backgrounds and you'll start to see the benefits take form.

Diversity, Equity, and Inclusion, (EXDM 350) has been one of the most important and impactful classes I've taken at BYU. As a part of this class, I've had the opportunity to hear stories from people of color, people with disabilities, and people from the LGBTQIA2S+ community. I've also been given the opportunity to read great books such as this one.

The diversity bonus is a real thing and any business can have it if its executives and managers are willing to put in the work it takes to hire various kinds of people and construct diverse teams.

[Sandeep Nair · Rating 4 out of 5]

This is a timely and grounded dissertation on the value of diversity in any institution.

The simple thesis of the book is this: A team made of diverse identities will do better than individuals or a homogeneous team at solving complex problems owing to their wider cognitive repertoire gained through varied life experiences. This incrementality in performance (the diversity bonus) works only for complex and cognitively heavy tasks, and is big enough to offset any headwinds from the difficulties of working in teams. This is different to (but not against) the normative and demographic representation arguments for introducing D&I.

The thickness of the book comes from the long list of evidence and philosophical discussion needed to convert the idea into a scientific theory. Some of it is fun, specially the parts that are counterintuitive and where the author's thorough thinking comes through as poetry, but the repetitive themes get tiring. I suspect the publisher asked the author (a popular complexity scientist and otherwise excellent writer) to convert a good scientific paper into a 300 page book.

A must read nevertheless if you want to learn how to build high performance teams, set up a D&I initiative, or just how to make a sound argument.

[Eli Pollack · Rating 4 out of 5]

If, upon hearing the title, you are either turned on or turned off by this book, I strongly recommend you read introduction.
Both those that reacted favorably and unfavorably to the title are likely to be disappointed with the book, because their preconceptions will be undermined and, depending on how open minded you are, possibly destroyed.

The book discusses when diversity helps businesses and when it doesn't help and can hurt...which is maybe a spoiler.

I would recommend the book to anyone in management who is dealing with issues related to diversity and has not yet found a clear, but simple discussion that helps them through the competing arguments.

[Derek · Rating 4 out of 5]

This book was a good read and covered this topic at a high level. If you're into data and statistical psychology you'll probably want to read his other book on the topic which goes into great detail. If you're a manager of a team this will be a good use of your time, even if you already "believe" in the premise of the title you will have arguments to support your hiring strategy even when it doesn't map with the typical "picture" of diversity that most people would consider to represent diverse teams.

[Gary Cohen · Rating 4 out of 5]

Although not a casual read, the author does a nice job of laying out a logical proof of why diverse teams perform better than non-diverse teams at certain tasks. By understanding the reason why diverse teams perform best in certain tasks, one can form better teams for complex tasks like prediction, problem solving, and innovation.

For those interested, the author presents the Diversity Prediction Theorem as a foundation of his claims. He also discusses the concepts of diversity bonuses in an attempt to quantify why diverse teams perform better at these specific tasks.

[Cássia O'Neill]

It was going well until the author mentioned that the Diversity Bonus doesn't apply that well in non-routine manual jobs.
I think this book is great for people that work in economics or research, but as for myself I found it too complicated and couldn't finish it because it was a bit boring and difficult. I usually try hard to stick to the book even though I'm not enjoying as much but I just couldn't get myself to finish this one.

[Tony Balfour · Rating 4 out of 5]

Well worth a read for anyone who wants to understand and operationalise diversity. A topic where a "little bit of knowledge is a dangerous thing".

Some strong simple and actionable ideas, backed up by acres of research.

Like most "business" books, it could be synthesised into 50 pages, but it's well written so the additional 200 pages aren't a burden to read.

[Shellie Ware · Rating 4 out of 5]

Interesting data re: the impact of cognitive and identity diversity. Book was very academic and sometimes difficult to read, as well as a bit longer than it needed to be. Would recommend for organizational leaders who need to figure out how to put people together to get things done.

[Sushanth Vasuki · Rating 3 out of 5]

Seminal book on effects of Diversity in Businesses in today's world. It is interesting to see how Scott Page elucidates that need for diversity by talking about how it positively affects the bottom line of the company. It is a clinical take down of Business folks who no not see value in Diversity.

[Nicole · Rating 2 out of 5]

I could not get into this book. I really wanted to, i wanted to learn how a diverse group can be better, how to build the group and how to see my own bias...

To much weird math, and outcomes that just didn't speak to me.

I'm glad others are getting lots out of it, and that makes me happy.

[Amanda LOOPER · Rating 3 out of 5]

The author makes the case for diversity of thought in teams. It attempts to demonstrate the value of true diversity on teams is not based on identity alone. I wish it had more concrete examples and less corporate speak. I liked the message but the book felt like it could be much shorter.

[Kathy Cowie · Rating 3 out of 5]

To be reviewed in the November-December issue of Global Business and Organizational Excellence

[Riccardo · Rating 4 out of 5]

Nice development of Page's previous work. Alas it could have been much shorter. Very nice final commentary adding new ideas on how diversity might work.

[Brian · Rating 4 out of 5]

A lot of good ideas to think about.

[Danaja · Rating 3 out of 5]

Well reasoned discussion of one aspect of diversity . Clear, if somewhat dry delivery.

[Steve Warnick · Rating 5 out of 5]

The concluding remarks alone are worth the read!

[Darren Sapp · Rating 4 out of 5]

A bit dry and repetitive, but a solid primer on diversity beyond what we normally think of as diversity.

[Darko Meszaros · Rating 4 out of 5]

Excellent points being made, all backed up with empirical evidence! Worth a read by any means!

[Mike Williams · Rating 5 out of 5]

Scott Page's phenomenal book about bringing different minds together can lead to an organization's success. Furthermore, Scott Page backed up his theories with factual information to bolster his case. I personally appreciate Page writing this book because it only makes people in the workforce who are for DEI stand their ground with a brazen approach.

[Ezra Shively · Rating 4 out of 5]

Great application of complexity theory and diversity. Definitely will need a re-read to take notes for work.

[Lucia van den Brink · Rating 4 out of 5]

We're still hiring for the best, but if we would hire based on how the person differs this could lead to 'diversity bonusses'. & more. Learned a lot.

[Rebecca Smith · Rating 2 out of 5]

This book has some good ideas but felt like the never ending research article.

[Guy Jones · Rating 4 out of 5]

Great book - a bit of a trudge to get through, it’s worth it for the commentary and appendix to drive the points home.