I LOVE Diversity – It’s also good for any decision process – the more diverse the better the decisions

I love diversity because it’s beautiful. But it’s also good for any decision process. Imagine a group of people standing in a circle around a campfire. Everyone has a unique vantage point. A slice of the entire view. If you wanted to describe the campfire from all angles you would add up all the individual perspectives. This would be the only way to arrive at the full description of the whole. Every slice of the view is unique and therefore important. No person on the left of the campfire can describe the view from the right. The more people who participate in the circle the more granular the description of the campfire will be. Now imagine the circle of people is not looking at a campfire but at a problem. The more people who participate the greater the chance for a “full 360 perspective”. In other words the more people observe a problem the greater the probability that it will be solved.

From this logic follows that the more people participate in a democratic or economic process the better the interests of the entire population will be considered. Thus exponential inequality of power, income, education and market participants will reduce the sustainability of the entire system.  Concentration of power in the hands of a few will reduce the number of viewpoints and therefore skew the decision process. These decisions will less likely benefit the people who are excluded from the decision process. In other words a lack of diversity of viewpoints will eventually hurt the economy.

Another pre-requisite for optimal decision processes is the quality of the information sources of the decision makers. Free and open information sources are vital. Consolidation and concentration of information sources reduce the number of observers and thus the quality of the decision. These low quality information sources can have a cascading effect on the quality of decisions because for the public they constitute the basis for their decisions.

My simple graphic also explains the classic Jelly Bean (Guessing) Experiment by Jack Treynor. If you ask a large number of people to guess how many jelly beans are in a jar in front of them, the average of all answers is very likely to be close to the accurate number. A large and diverse group of observers outperforms on average any group of experts. The Wisdom Of The Crowds thus should be called The Wisdom Of The Diverse Crowds.

The Takeaway

Diversity is not only beautiful, it’s also good for the economy and any other decision process.

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