In Professor's Model, Diversity Equals Productivity - Claudia Driefus

Claudia Driefus, In Professor’s Model, Diversity Equals Productivity

[interviewing Scott Page, University of Michigan economist]

Rather than ponder moral questions like, “Why can’t we all get along?” Dr. Page asks practical ones like, “How can we all be more productive together?” The answer, he suggests, is in messy, creative organizations and environments with individuals from vastly different backgrounds and life experiences.

“New York City is the perfect example of diversity functioning well,” he said in an interview. “It’s an exciting place that produces lots of innovation and creativity. It’s not a coincidence that New York has so much energy and also so much diversity.”

Q. In your book you posit that organizations made up of different types of people are more productive than homogenous ones. Why do you say that?

A. Because diverse groups of people bring to organizations more and different ways of seeing a problem and, thus, faster/better ways of solving it.

People from different backgrounds have varying ways of looking at problems, what I call “tools.” The sum of these tools is far more powerful in organizations with diversity than in ones where everyone has gone to the same schools, been trained in the same mold and thinks in almost identical ways.

The problems we face in the world are very complicated. Any one of us can get stuck. If we’re in an organization where everyone thinks in the same way, everyone will get stuck in the same place.

But if we have people with diverse tools, they’ll get stuck in different places. One person can do their best, and then someone else can come in and improve on it. There’s a lot of empirical data to show that diverse cities are more productive, diverse boards of directors make better decisions, the most innovative companies are diverse.

Breakthroughs in science increasingly come from teams of bright, diverse people. That’s why interdisciplinary work is the biggest trend in scientific research.

Q. The term “diversity” has become a code word for inclusion of racial, ethnic and sexual minorities. Is that what you’re talking about?

A. I mean differences in how people think. Two people can look quite different and think similarly. Having said that, there’s certainly a lot of evidence that people’s identity groups — ethnic, racial, sexual, age — matter when it comes to diversity in thinking.

Here’s the bottom line: I myself am an affirmative action child. I got into the University of Michigan in the 1980s on a program. I’m from a rural part of Michigan. No calculus in high school. So I was given bonus points toward undergraduate admissions.

If the policy had been to consider mainly grades and SATs and not to make room for some geographic diversity, maybe I wouldn’t have gotten in.

This is another thinker contributing to the discussion about superlinear scaling requiring messiness at scale. One metric that probably approximates messiness is diversity: the more diverse the employees in a company, the more uneven their response to stresses, the more varied their approaches to seeking shortcuts, or how — or with who — they build bridges across barriers.

Messiness At Scale

I stumbled onto a hilarious but unenlightening Twitter flame war instigated by Dave Winer — the Godfather of RSS — in response to MG Siegler’s ‘RSS is dead’ wisecrack.

At the risk of putting my fingers in the sausage machine, let me add a touch of nuance:

  • RSS has declined in use, as web heads shift their source of ‘things to read’ away from RSS readers — like Google Reader — to tools like Twitter and Flipboard.
  • The role of RSS in web infrastructure is being threatened by non-RSS based architectures, like Flipboard’s. That product ignores RSS and fetches through the URL to get directly at images, text, and other content.

Winer is ideologically opposed to closed, proprietary approaches like that of Twitter (or, by extension, of Flipboard):

Dave Winer, What I mean by “the open web”

Anyway, here’s what I meant by “open web.”

I meant not in a corporate blogging silo.

If I put stuff in Twitter, the only way to get it out is through a heavily regulated and always-changing API. It will change a lot in the coming months and years. It will certainly narrow more than it expands. I feel very confident in predicting this, because I understand where Twitter is going.

If you put stuff in Facebook, it’s even more silo’d than it is in Twitter.

However, if you put stuff in WordPress, even on wordpress.com, you have full fluidity. You are not silo’d. You can get data in and out using widely-supported APIs that are implemented by Drupal, Movable Type, TypePad, etc etc. At least there’s some compatibility. And in a pinch you could probably move your content to a static website and have it be useful.

If you write in static HTML and RSS, you’re very portable, there will be no lock-in at all.

So to the extent you’re locked in, that’s the extent you are not on the open web. The perfectly open web has zero lock-in. The silos are totally locked-in and therefore not on the open web.

Winer’s complaints are about control of our content: that we should be able to easily manage what we write. It’s a political argument. 

But his points fly in the face of innovation, where a Twitter or Quora or Facebook create very different — and not solitary — models of open social discourse, which need to be managed in ways that are different from old school blogging. It’s not every man for himself, anymore. Time is a shared resource on today’s web: our time is not our own, anymore. And that’s largely good.

I liken this problem to the trade offs inherent in living in large cities versus towns or the country. There’s more noise, bigger crowds, and longer lines at the DMV: more things that we can’t control, or where our control is restricted, relative to folks living in bucolic Des Moines.

Only in cities we get superlinear scaling, as Geoffrey West and his colleagues have shown:

Jonah Lehrer, A Physicist Turns the City Into an Equation

When a superlinear equation is graphed, it looks like the start of a roller coaster, climbing into the sky. The steep slope emerges from the positive feedback loop of urban life — a growing city makes everyone in that city more productive, which encourages more people to move to the city, and so on. According to West, these superlinear patterns demonstrate why cities are one of the single most important inventions in human history. They are the idea, he says, that enabled our economic potential and unleashed our ingenuity. “When we started living in cities, we did something that had never happened before in the history of life,” West says. “We broke away from the equations of biology, all of which are sublinear. Every other creature gets slower as it gets bigger. That’s why the elephant plods along. But in cities, the opposite happens. As cities get bigger, everything starts accelerating. There is no equivalent for this in nature. It would be like finding an elephant that’s proportionally faster than a mouse.

I maintain that Twitter, Facebook, and other ‘closed’ systems are really something else: they are dense and complex social systems, more like modern cities than Web 1.0 publishing platforms. And, like cities, there is more going on, less being controlled by specifications like RSS, and the food is better, the music is better, and there is more dangerous sex taking place.

Brian Eno uses the term ‘scenius’ to define the quality of the great cities, their ability to foster deep shared understanding and purpose for large networks of people. This collective intellect arises from messiness at scale, not carefully mediated and clearly defined standards. 

Said differently, the best food comes from cities with the highest number of health code violations, and the best art is produced where the largest number of building code infractions are found.

So, if you are looking for clean bathrooms and no traffic jams, stay in Iowa. But it is in cities — dense, loud, unplanned, messy — where the breakthroughs emerge.

Getting back to the specific case, here, let’s look at Flipboard. Flipboard rejects the use of neat-and-tidy RSS, and reaches through the URLs it finds in Twitter to directly paw the text, images, and links placed into articles and posts, and then it chooses what to display based on a proprietary algorithm inside the guts of the app, not based on the publisher’s RSS specification. 

Flipboard, Twitter, and other dense, complex social tools create a messier world, one that has superlinear scale. The tradeoff between complete ‘openness’ (or individual control of information and its experience) and superlinear social density is one I am willing to make. And so are all the users of these tools, or should I say, residents of these cities?

It’s when West switches the conversation from infrastructure to people that he brings up the work of Jane Jacobs, the urban activist and author of “The Death and Life of Great American Cities.” Jacobs was a fierce advocate for the preservation of small-scale neighborhoods, like Greenwich Village and the North End in Boston. The value of such urban areas, she said, is that they facilitate the free flow of information between city dwellers. To illustrate her point, Jacobs described her local stretch of Hudson Street in the Village. She compared the crowded sidewalk to a spontaneous “ballet,” filled with people from different walks of life. School kids on the stoops, gossiping homemakers, “business lunchers” on their way back to the office. While urban planners had long derided such neighborhoods for their inefficiencies — that’s why Robert Moses, the “master builder” of New York, wanted to build an eight-lane elevated highway through SoHo and the Village — Jacobs insisted that these casual exchanges were essential. She saw the city not as a mass of buildings but rather as a vessel of empty spaces, in which people interacted with other people. The city wasn’t a skyline — it was a dance.

If West’s basic idea was familiar, however, the evidence he provided for it was anything but. The challenge for Bettencourt and West was finding a way to quantify urban interactions. As usual, they began with reams of statistics. The first data set they analyzed was on the economic productivity of American cities, and it quickly became clear that their working hypothesis — like elephants, cities become more efficient as they get bigger — was profoundly incomplete. According to the data, whenever a city doubles in size, every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita. It doesn’t matter how big the city is; the law remains the same. “This remarkable equation is why people move to the big city,” West says. “Because you can take the same person, and if you just move them to a city that’s twice as big, then all of a sudden they’ll do 15 percent more of everything that we can measure.” While Jacobs could only speculate on the value of our urban interactions, West insists that he has found a way to “scientifically confirm” her conjectures. “One of my favorite compliments is when people come up to me and say, ‘You have done what Jane Jacobs would have done, if only she could do mathematics,’ ” West says. “What the data clearly shows, and what she was clever enough to anticipate, is that when people come together, they become much more productive.”

West illustrates the same concept by describing the Santa Fe Institute, an interdisciplinary research organization, where he and Bettencourt work. The institute itself is a sprawl of common areas, old couches and tiny offices; the coffee room is always the most crowded place. “S.F.I. is all about the chance encounters,” West says. “There are few planned meetings, just lots of unplanned conversations. It’s like a little city that way.” The previous evening, West and I ran into the novelist Cormac McCarthy at the institute, where McCarthy often works. The physicist and the novelist ended up talking about Antarctic icefish, the editing process and convergent evolution for 45 minutes.
Of course, these interpersonal collisions — the human friction of a crowded space — can also feel unpleasant. We don’t always want to talk with strangers on the subway or jostle with people on the sidewalk. West admits that all successful cities are a little uncomfortable. He describes the purpose of urban planning as finding a way to minimize our distress while maximizing our interactions. The residents of Hudson Street, after all, didn’t seem to mind mingling with one another on the sidewalk. As Jacobs pointed out, the layout of her Manhattan neighborhood — the short blocks, the mixed-use zoning, the density of brownstones — made it easier to cope with the strain of the metropolis. It’s fitting that it’s called the Village.

In recent decades, though, many of the fastest-growing cities in America, like Phoenix and Riverside, Calif., have given us a very different urban model. These places have traded away public spaces for affordable single-family homes, attracting working-class families who want their own white picket fences. West and Bettencourt point out, however, that cheap suburban comforts are associated with poor performance on a variety of urban metrics. Phoenix, for instance, has been characterized by below-average levels of income and innovation (as measured by the production of patents) for the last 40 years. “When you look at some of these fast-growing cities, they look like tumors on the landscape,” West says, with typical bombast. “They have these extreme levels of growth, but it’s not sustainable growth.” According to the physicists, the trade-off is inevitable. The same sidewalks that lead to “knowledge trading” also lead to cockroaches.

Consider the data: When Bettencourt and West analyzed the negative variables of urban life, like crime and disease, they discovered that the exact same mathematical equation applied. After a city doubles in size, it also experiences a 15 percent per capita increase in violent crimes, traffic and AIDS cases. (Of course, these trends are only true in general. Some cities can bend the equations with additional cops or strict pollution regulations.) “What this tells you is that you can’t get the economic growth without a parallel growth in the spread of things we don’t want,” Bettencourt says. “When you double the population, everything that’s related to the social network goes up by the same percentage.”

West and Bettencourt refer to this phenomenon as “superlinear scaling,” which is a fancy way of describing the increased output of people living in big cities. When a superlinear equation is graphed, it looks like the start of a roller coaster, climbing into the sky. The steep slope emerges from the positive feedback loop of urban life — a growing city makes everyone in that city more productive, which encourages more people to move to the city, and so on. According to West, these superlinear patterns demonstrate why cities are one of the single most important inventions in human history. They are the idea, he says, that enabled our economic potential and unleashed our ingenuity. “When we started living in cities, we did something that had never happened before in the history of life,” West says. “We broke away from the equations of biology, all of which are sublinear. Every other creature gets slower as it gets bigger. That’s why the elephant plods along. But in cities, the opposite happens. As cities get bigger, everything starts accelerating. There is no equivalent for this in nature. It would be like finding an elephant that’s proportionally faster than a mouse.”

- Jonah Lehrer, A Physicist Turns the City Into an Equation

(via underpaidgenius)

After buying data on more than 23,000 publicly traded companies, Bettencourt and West discovered that corporate productivity, unlike urban productivity, was entirely sublinear. As the number of employees grows, the amount of profit per employee shrinks. West gets giddy when he shows me the linear regression charts. “Look at this bloody plot,” he says. “It’s ridiculous how well the points line up.” The graph reflects the bleak reality of corporate growth, in which efficiencies of scale are almost always outweighed by the burdens of bureaucracy. “When a company starts out, it’s all about the new idea,” West says. “And then, if the company gets lucky, the idea takes off. Everybody is happy and rich. But then management starts worrying about the bottom line, and so all these people are hired to keep track of the paper clips. This is the beginning of the end.”

The danger, West says, is that the inevitable decline in profit per employee makes large companies increasingly vulnerable to market volatility. Since the company now has to support an expensive staff — overhead costs increase with size — even a minor disturbance can lead to significant losses. As West puts it, “Companies are killed by their need to keep on getting bigger.”

For West, the impermanence of the corporation illuminates the real strength of the metropolis. Unlike companies, which are managed in a top-down fashion by a team of highly paid executives, cities are unruly places, largely immune to the desires of politicians and planners. “Think about how powerless a mayor is,” West says. “They can’t tell people where to live or what to do or who to talk to. Cities can’t be managed, and that’s what keeps them so vibrant. They’re just these insane masses of people, bumping into each other and maybe sharing an idea or two. It’s the freedom of the city that keeps it alive.”

- Jonah Lehrer, A Physicist Turns the City Into an Equation

Consider this idea: the most successful companies of the future will be those that operate more like cities. ‘More of a village than an army’, as I wrote in Defining Social Business:

Metaphorically, a social business will seem more like a village than an army, and where a lot of 20th management approaches will be obsolete. We can expect these features:

  • ubiquitous use of social tools, and social networks,
  • greater levels of personal autonomy,
  • self-organization of groups and projects,
  • very porous boundaries with the world,
  • high reliance on non-financial motivation, or personal meaning and purpose,
  • internal marketplaces for ideas and talent,
  • and senior management operating more like Hollywood producers or investors than autocrats. 

Or perhaps a CEO operating like a mayor? Would senior management actively create a context in which their control was limited and much of the company’s activities were not directed by top-down commands? 

As Gibson said, ‘The future is already here; it’s just unevenly distributed.’ Many companies have some of these characteristics, but very few have all of them.

I will be pursuing these ideas, and topics related to them, in my Future of Work research initiative this year. Stay tuned for a manifesto in the early new year.