Balancing Teams and Perspectives.
The Third in a series of three articles on our discussion with Abby Cohen, Partner and senior investment strategist at Goldman Sachs.
Dūcere Global Faculty Member, Abby Cohen is an American economist and financial analyst on Wall Street. She serves as apartner and senior U.S. investment strategist at Goldman Sachs.As a Dūcere Global Faculty Memberunique content with Abby Cohen is featured in the following MBA topic areas.
– Managerial Economics
– Strategic Decision Making
Our previous articles discussed the importance of adequate time-horizons that are not arbitrarily limited or narrow. And further that research, analysis and data need to be suitably broad and diverse. Research into strategic decision making shows that diverse teams tend to develop better insights into complex, dynamic and uncertain environments than groups that are more uniform. Decision making thus benefits not only from diversity in the inputs or data, but equally from diversity amongst those making the decisions.
We asked Abby Cohen, Partner and senior investment strategist at Goldman Sachs to share her thoughts on the need to for more diversity in business, and the progress made towards realising a more inclusive workplace. This article provides opportunity for readers to share in Ms. Cohen’s experience, and apply her insights to further their own learning.
Cohen on the need for diversity in teams: “There is in my view nothing more important for a people manager in this business than to have a balanced team. It should be obvious. We have to understand that having a diverse group whether it’s in this industry or any other, add something. If all you do is hire somebody just like you with the same sort of education, the same sort of training, it isn’t really value-add. You certainly don’t get as much as you would by adding somebody with an entirely different type of background, different training, different mindset, and we find that the diverse groups are the most productive groups.”
Today’s economy, its markets and industry are increasingly knowledge-based. The statement that a firm’s most valuable assets are its employees may seem somewhat tired. Yet it is useful to remind oneself that the core competency, and thus the competitive advantage of a business resides in majority within the intellect and experience, the skills and capabilities, the tacit and explicit knowledge of its people. Unsurprisingly, ‘talent’ is key to a business success, a fact which can be recognised in the salaries and bonuses sought after talent can command. This then begs the question why some groups remain comparatively underrepresented.
Cohen on hiring for diversity versus promoting diversity: “We often talk about hiring our firms in a certain industry, hiring enough women… historically under-represented groups. What we see is that there’s been good progress in many industries in terms of bringing people into the industry. Where there’s been less success has been in promoting them, making sure that they get the right sort of mentorship, the right sort of sponsorship which is different than mentorship, and the right sort of opportunities for growth so they can go from being successful at an entry level position and moving into more senior roles. This is something where we have seen very significant progress in financial services and I hope it will continue.”
Diversity is more than the distribution of groups of people. It also requires recognising the opportunity costs arising from a lack of diversity.
Cohen on missed opportunities: “if it’s a woman or if it’s a member of a minority group…, we don’t know whether everyone is being given the access they need. We don’t really know what would have happened if … what would have happened – how successful would a certain person have been if that person was of the dominant gender in the industry or the dominant ethnic background in that industry”
‘The more concerning things not just in terms of history, in terms of what happens today are the things we don’t know about’
In summary: Investment strategy, and the objectives and returns to be achieved involve understanding diverse and dynamic environments within an uncertain future. Time-horizons and data need to reflect reality, not common or arbitrary practices. Similarly, decision making and execution, and thus the organisation benefit from diversity amongst the individuals and their backgrounds, experience and knowledge.
This article concludes our series on discussions with Abby Cohen.
Earlier Articles in this series:
Abby Cohen is a leading economist, Partner and senior investment strategist at Goldman Sachs, and President of the Global Markets Institute. Ms Cohen serves on the White House-appointed Innovation Advisory Board for economic competitiveness, as a presidential councillor at Cornell University, and on the boards of the Weill Cornell Medical College, the Brookings Institution and The Economic Club of New York.