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“I can imagine nothing more terrifying than an Eternity filled with men who were all the same. The only thing which has made life bearable...has been the diversity of creatures on the surface of the globe.” ― T.H. White
Traditionally, San Franciscans along with most Bay Area residents pride themselves on living happily among people of diverse backgrounds. For as long as I can remember, the word diversity was used in context to refer to people who have a range of racial, ethnic and sexual orientation differences. For many people who moved here from other parts of the nation or globe, this was something different (in a good way), which ought to be encouraged and celebrated. So far, so good.
But in San Francisco and many places like it, diversity of philosophy and/or thought is not as openly tolerated. To me this is not okay, as it can lead to group-think and potentially dangerous outcomes. General George S. Patton famously remarked, “If everyone is thinking alike, then someone isn’t thinking.” I concur and will take this idea one step further. Allowing other people or an affinity group to do the difficult thinking for oneself may be comforting at times, but is not so different from giving up one’s independence – in a free society it should be avoided at all costs.
For this month’s newsletter, I am passing along a thoughtful, non-investment-oriented blog post published over Farnam Street. Let this be a reminder to all, that diversity in all of its forms is to be celebrated and ultimately makes us stronger. *****
The Stormtrooper Problem: Why Thought Diversity Makes Us Better
Diversity of thought makes us stronger, not weaker. Without diversity we die off as a species. We can no longer adapt to changes in the environment. We need each other to survive.
Diversity is how we survive as a species. This is a quantifiable fact easily observed in
the biological world. From niches to natural selection, diversity is the common theme of success for both the individual and the group.
Take the central idea of natural selection: The genes, individuals, groups, and species with the most advantageous traits in a given environment survive and reproduce in greater numbers. Eventually, those advantageous traits spread. The overall population becomes more suited to that environment. This occurs at multiple levels from single genes to entire ecosystems.
That said, natural selection cannot operate without a diverse set of traits to select from! Without variation, selection cannot improve the lot of the higher-level group.
This is why I find it frustrating that we often seem to struggle with diversity of thought. This type of diversity shouldn’t threaten us. It should energize us. It means we have a wider variety of resources to deal with the inevitable challenges we face as a species.
Imagine that a meteor is on its way to earth. A crash would be the end of everyone. No matter how self-involved we are, no one wants to see humanity wiped out. So, what do we do? Wouldn’t you hope that we could call on more than three people to help find a solution?
Ideally there would be thousands of people with different skills and backgrounds tackling this meteor problem, many minds and lots of options for changing the rock’s course and saving the life as we know it. The diversity of backgrounds—variations in skills, knowledge, ways of looking at and understanding the problem—might be what saves the day. But why wait for the threat? A smart species would recognize that if diversity of knowledge and skills would be useful for dealing with a meteor, then diversity would be probably useful in a whole set of other situations.
For example, very few businesses can get by with one knowledge set that will take their product from concept to the homes of customers. You would never imagine that a business could be staffed with clones and be successful. It would be the ultimate in social proof. Everyone would literally be saying the same thing.
The Stormtrooper Problem
Intelligence agencies face a unique set of problems that require creative, un-Googleable solutions to one-off problems.
You’d naturally think they would value and seek out diversity in order to solve those problems. And you’d be wrong. Increasingly it’s harder and harder to get a security clearance.
Do you have a lot of debt? That might make you susceptible to blackmail. Divorced? You might be an emotional wreck, which could mean you’ll make emotional decisions and not rational ones. Do something as a youth that you don’t want anyone to know? That makes it harder to trust you. Gay but haven’t told anyone? Blackmail risk. Independently wealthy? That means you don’t need our paycheck, which means you might be harder to work with. Do you have a nuanced opinion of politics? What about Edward Snowden? Yikes. The list goes on.
As the process gets harder and harder (trying to reduce risk), there is less and less diversity in the door. The people that make it through the door are Stormtroopers.
And if you’re one of the lucky Stormtroopers to make it in, you’re given a checklist career development path. If you want a promotion, you know the exact experience and training you need to receive one. It’s simple. It doesn’t require much thought on your part.
The combination of these two things means that employees increasingly look at—and attempt to solve—problems the same way. The workforce is less effective than it used to be. This means you have to hire more people to do the same thing or outsource more work to people that hire misfits. This is the Stormtrooper problem.
Creativity and Innovation
Diversity is necessary in the workplace to generate creativity and innovation. It’s also necessary to get the job done. Teams with members from different backgrounds can attack problems from all angles and identify more possible solutions than teams whose members think alike.
Companies also need diverse skills and knowledge to keep a company functioning. Finance superstars may not be the same people who will rock marketing. And the faster things change, the more valuable diversity becomes for allowing us to adapt and seize opportunity.
We all know that any one person doesn’t have it all figured out and cannot possibly do it all. We can all recognize that we rely on thousands of other people every day just to live. We interact with the world through the products we use, the entertainment we consume, the services we provide. So why do differences often unsettle us?
Any difference can raise this reaction: gender, race, ethnic background, sexual orientation. Often, we hang out with others like us because, let’s face it, communicating is easier with people who are having a similar life experience. And most of us like to feel that we belong. But a sense of belonging should not come at the cost of diversity.
Where Birds Got Feathers
Consider this: Birds did not get their feathers for flying. They originally developed them for warmth, or for being more attractive to potential mates. It was only after feathers started appearing that birds eventually began to fly. Feathers are considered an exaptation, something that evolved for one purpose but then became beneficial for other reasons. When the environment changes, which it inevitably does, a species has a significantly increased chance of survival if it has a diversity of traits that it can re- purpose. What can we re-purpose if everyone looks, acts, and thinks the same?
Further, a genetically homogeneous population is easy to wipe out. It baffles me that anyone thinks they are a good idea. Consider the Irish Potato Famine. In the mid-19th century a potato disease made its way around much of the world. Although it devastated potato crops everywhere, only in Ireland did it result in widespread devastation and death. About one quarter of Ireland’s population died or emigrated to avoid starvation over just a few years. Why did this potato disease have such significant consequences there and not anywhere else?
The short answer is a lack of diversity. The potato was the staple crop for Ireland’s poor. Tenant farms were so small that only potatoes could be grown in sufficient quantity to— barely—feed a family. Too many people depended on this one crop to meet their nutritional needs. In addition, the Irish primarily grew one type of potato, so most of the crops were vulnerable to the same disease. Once the blight hit, it easily infected potato fields all over Ireland, because they were all the same.
You can’t adapt if you have nothing to adapt. If we are all the same, if we’ve wiped out every difference because we find it less challenging, then we increase our vulnerability to complete extinction. Are we too much alike to survive unforeseen challenges?
Even the reproductive process is, at its core, about diversity. You get half your genes from your mother and half from your father. These can be combined in so many different ways that 21 siblings are all going to be genetically unique.
Why is this important? Without this diversity we never would have made it this far. It’s this newness, each time life is started, that has given us options in the form of mutations. They’re like unexpected scientific breakthroughs. Some of these drove our species to awesome new capabilities. The ones that resulted in less fitness? These weren’t likely to survive. Success in life, survival on the large scale, has a lot to do with the potential benefits created by the diversity inherent in the reproductive process.
Diversity is what makes us stronger, not weaker. Biologically, without diversity we die off as a species. We can no longer adapt to changes in the environment. This is true of social diversity as well. Without diversity, we have no resources to face the inevitable challenges, no potential for beneficial mutations or breakthroughs that may save us. Yet we continue to have such a hard time with that. We’re still trying to figure out how to live with each other. We’re nowhere near ready for that meteor.
Justin Kobe, CFA Founder & Portfolio Manager
Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Cambridge and Pacificus Capital Management are not affiliated.Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. These are the opinions of Justin Kobe and not necessarily those of Cambridge Investment Research, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing in the bond marketis subject to risks, including market, interest rate, issuer credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies is impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Diversification and asset allocation strategies do not assure profit or protect against loss.