Diversity leads to better decision-making

We recently attended a 3-day business course about diversity and how it affects decision-making. But before we explain the relationship between those two, let’s look at a different relationship: that of a young Michael Hogue, back in 2011, when he was courting his now-wife Suzie.

Suzie is a school teacher who was, at the time, living and teaching in Hughenden, a small country town in central Queensland. The dedicated Michael would make the 4-hour trek west from Townsville to visit her (if that’s not dedication, what is?) and on one occasion, after the long drive, Michael arrived just in time to join Suzie’s local trivia team. Although he used the term ‘being roped into it’, he was actually secretly excited, because the last time Suzie played trivia, her team came dead last. But the team of 4 young women (all in their 20s) were not discouraged, and threw their hat in the ring once again, even letting 36-year-old Michael join their team. Suzie’s school principal, a woman in her 60s, joined the team, too. This time, the team won.
 
Despite Michael claiming he was the brainpower behind the win, the fact was that the team had become bigger and more diverse. They had become diverse in age and gender. And that is important – because it meant that the group had also become diverse in knowledge and experience.
 
Studies have shown clearly that diversity leads to better decision-making. Check out this article from Smart Company that clearly shows age, gender and geographical diversity can improve decision-making and lead to a better outcome. 

We’ll finish discussing Michael’s private life now, and talk about this example in financial terms. How is this example relevant to you when it comes to financial decisions? We know financial decisions are important. We also know individuals can’t be experts in everything. So when it comes to making decisions about investments, we think it’s best when a diverse group of people are involved. Often, we see that only one person in a family, or a couple, is interested in (or responsible for) making all the financial decisions. But we encourage both partners to be involved – and when it comes to our clients, we always encourage both partners to come to the meetings. Couples make better decisions together. Apart from providing expert advice, financial advisers can also add more diversity and differing points of view to decisions. Additionally, if only one person is making decisions, sometimes the decisions can be rushed and ill-considered.

Keep an eye out for our upcoming podcast about decision-making and bias.
 
And should you choose to attend a trivia night with a highly diverse team, and win – you’re welcome. Just make sure you give your team a cool name like ‘Let’s Get Quizzical’ or ‘Agatha Quiztie’.