The Hidden Factor: Why Thinking Differently Is Your Greatest Asset

Course No. 5133
Professor Scott E. Page, Ph.D.
University of Michigan
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Course No. 5133
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Course Overview

From technology to business, two (or more) heads often prove to be better than one—but only if those heads are cognitively diverse. Top-performing companies, universities, and innovation centers are increasingly finding ways to encourage a greater exchange of ideas among their staff. Scientific journals continue to see the number of authors per paper rise, while both Nobel Prizes and patents are frequently granted to teams. The need for group problem solving has never been more critical. So what’s driving the demand?

  • The changing nature of work: The complexity of challenges faced by today’s “creative class” has produced a new reliance on teams. A group with diverse experience and education can often more effectively provide solutions by bringing myriad viewpoints to the table.
  • Demographic trends and technology: Technology is making the world smaller and connecting us with diverse sets of people and ideas. Our cultural identities influence everything from the books we read to the stories we hear in childhood and, thus, the way we make sense of the world.

Diverse perspectives are a powerful tool for maximizing productivity and enhancing collective performance. Believe it or not, you can even be “diverse” all by yourself. You can, to quote Walt Whitman, “contain multitudes.”

The Hidden Factor: Why Thinking Differently Is Your Greatest Asset is your opportunity to learn the strategies that make you a more diverse thinker and position you to break down institutional silos and build robust, effective teams. Delivered by Professor Scott E. Page of the University of Michigan—a pioneering researcher in his field—these 24 thought-provoking lectures are packed with case studies, cautionary tales, and formal mathematical methods that prove the case for cognitive difference.

Whether you’re in a leadership position or striving to advance your career, Professor Page’s techniques will train you to

  • tackle problems with the right mix of individuals,
  • drive innovation and avoid collapse,
  • adapt to changing circumstances and challenges,
  • forecast outcomes with greater accuracy, and
  • identify conditions in which diversity trumps ability.

By teaching you to “see around the bend” and analyze decisions from multiple perspectives, The Hidden Factor even has practical benefits beyond the workplace. From determining which house to buy to where to invest your money, life requires making smart predictions at every turn.

Build a Winning Team

At the outset of the course, Professor Page acknowledges the elephant in the room: that diversity is a politically charged term. Although there is a strong correlation between identity diversity (differences in cultural backgrounds) and cognitive diversity (differences in how people think), the professor makes it clear that the focus of this course is cognitive diversity and how we can leverage it to solve complex problems.

In The Hidden Factor, you’ll learn diversity creates a significant advantage on multiple levels:

  • As an individual: You’ll benefit personally by being able to view problems from multiple perspectives and by building a diverse tool kit.
  • As a team: Teams of cognitively diverse people can produce more ideas, find better solutions, encounter fewer mistakes, and make better forecasts than will individuals or homogeneous groups.
  • As a society: Diverse societies are productive, innovative, and interesting, while societies that lack diversity risk collapse.

Of particular use to those in management or hiring positions, The Hidden Factor demonstrates how variety in staffing engenders organizational strength. Typically, candidates are evaluated in a linear fashion on the basis of how a certain skill applies to a certain task. However, new hires bring along “toolboxes” filled with unique perspectives that current employees may not offer.

To illustrate this key tenet of the course, Professor Page uses a number of eye-opening examples and mental exercises. One such scenario highlights the tests that companies like Microsoft and Google administer to job applicants. Talent-based logic implies only those with the highest scores should be hired. Diversity-based logic says otherwise.

Say you have three applicants for two positions on a team. Each is asked 10 questions, and the scores are as follows:

Candidate A: 7
Candidate B: 8
Candidate C: 8

Following talent logic, you should add candidates B and C to the team. But diversity logic suggests that you look at the distribution of questions answered correctly in addition to the scores.

Applicants B and C each get 1 through 8 correct but cannot solve question 9 or 10. Applicant A misses 1 through 3, but correctly answers 4 through 10. Diversity-based logic tells you that the team will do better if it contains cognitively diverse people, so you should hire person A and either B or C.

Make More Accurate Predictions

Throughout the course, formal mathematical models nail down the logic behind the professor’s conclusions. While the theorems and formulas are important for understanding the conditions necessary for a proposition, a love of numbers is not required to master the concepts. As Professor Page walks you through the math, you’ll arrive at some astounding realizations—such as the fact that diversity and ability are of equal value in producing collective wisdom. Also, a diverse crowd will always be more accurate than its average member.

You’ll also see the central role forecasting plays in organizations and even in your daily life. Not only is it important for nuts and bolts operational issues, it enables more effective design of products and policies. In order to give people what they want, you must know what they want, and that involves forecasting.

You’ll learn many heuristics, or tools, for making smart predictions:

  • Analogies allow you to make estimates about an unknown entity by using the value of something comparable.
  • The Fermi method/dimensional analysis breaks an estimate into parts, and then multiplies those parts together.
  • Linear decomposition relies on dividing a whole intoparts and then finding the sum of those parts, assuming the value of the individual components is known.
  • Trend analysis is based on what statisticians call a time series. This method uses a sequence of data—such as daily temperatures or stock prices—to forecast the future.

While the models presented are not “all-knowing oracles,” they do provide strong foundations from which to launch the decision-making process.

In a rapidly changing world, it’s imperative to stay agile by possessing a diverse set of tools. Institutional practices that may have worked well in previous years may cease to perform as the landscape changes. The Hidden Factor recounts numerous noteworthy examples of large-scale failure and collapse, a common cause of which is groupthink. From the U.S. housing market crash to the fall of entire civilizations, you’ll take an in-depth look at reasons this phenomenon occurs and strategies to avoid it.

A One-of-a-Kind Experience

As a leading expert on complexity and diversity, Professor Page offers his original research alongside that of other noted practitioners to put you on the cutting edge of this field. His engaging, often humorous teaching style leaves no doubt why he is a sought-after lecturer at top universities, businesses, and nonprofit organizations.

All 24 lectures are filled with a colorful array of down-to-earth analogies and examples that illuminate the intriguing, perception-shifting concepts at the core of this ambitious course. Professor Page also provides concrete, factual logic undergirding this hidden factor of success. Charts, graphs, and other images clarify the data, while math equations make the lessons easy to follow.

The Hidden Factor clearly demonstrates that the problems facing society will grow ever more complex as the low-hanging fruit all but disappears. Leveraging diversity isn’t as simple as counting up the number of types and saying more is better; it requires the proper connections and interactions between those diverse parts. Stay competitive by training your mind to think differently with this invaluable course.

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24 lectures
 |  Average 30 minutes each
  • 1
    Individual Diversity and Collective Performance
    In this opening lecture, Professor Page shares his intellectual excitement for the topic of diversity as he presents an outline for the course. Explanations of the importance of diversity, the types of diversity you will be covering, and the “big ideas” that motivate the course lay the groundwork for the discussion ahead. x
  • 2
    Why Now? The Rise of Diversity
    How do cognitive diversity and identity diversity differ? Where do they intersect? Investigate the key trends that have made diversity such a hot topic and understand why leveraging diversity of thought is necessary to meet today’s challenges. x
  • 3
    Diversity Squared
    What does the professor really mean when he says “diversity”? Examine the connotations commonly associated with the term and how the notion of diversity is changing. Further your understanding of the connection between cognitive and identity diversity as you begin your exploration of the “diversity bonus.” x
  • 4
    The Wisdom of Crowds
    How can diverse ways of thinking contribute to a group’s ability to make accurate predictions? Walk through the diversity prediction theorem using clear examples—from guessing the weight of a steer to the height of the tallest building in Rio de Janeiro—to learn why the diversity and talent level of a crowd’s members play equal roles. x
  • 5
    The Diversity Prediction Theorem Times Three
    Now, turn to another application of forecasting: using knowledge of a population to more appropriately serve it. Analyze the case of the Netflix Prize—where teams competed to outperform the company’s movie-prediction model, Cinematch—to see how putting a diverse “ensemble” of ideas into action proved successful in the real world. x
  • 6
    The Weighting Is the Hardest Part
    Determining how much we listen to some people at the expense of others requires careful analysis. Learn strategies for assembling productive teams by zeroing in on the conditions that make assigning unequal weights to certain opinions and predictions desirable. x
  • 7
    Foxes and Hedgehogs—Can I Be Diverse?
    The course of your life depends on a handful of key decisions that are based on making predictions, from where you live to the career you choose. Compare the traits of the “fox,” who knows many things, and the “hedgehog,” who knows one big thing, to see how being a many-model thinker can impact your ability to make more accurate predictions. x
  • 8
    Fermi’s Barbers—Estimating and Predicting
    Hone your predictive skills with a discussion of four models: analogies, Fermi’s method or dimensional analysis, linear decomposition, and trend analysis. Learn which types of phenomena may be predicted—and which cannot—and why in this information age, we need to make estimations and predictions at all. x
  • 9
    Problem Solving
    As you turn your attention to problem solving, trace the ways it differs from prediction and how diverse heuristics—tricks, algorithms, and rules of thumb—can help devise better solutions. In this lecture, you’ll encounter a key insight of the course: A person’s contribution depends on individual talent and diversity relative to the team in equal measure. x
  • 10
    Diverse Perspectives
    Laser technology exists because Einstein saw light in a completely new way. Charge ahead with problem solving by exploring how a new perspective can bring order to complex questions. Analyze how diverse perspectives expand the set of the “adjacent possible,” and play a game of Sum to 15 to see how new perspectives can be transcendent. x
  • 11
    Heuristics and the Adjacent Possible
    Take your study of the “adjacent possible” to the next level by considering how diverse heuristics produce outside-the-box thinking and transcendent perspectives simplify difficult problems. Learn how individuals, organizations, and computers all use heuristics of varying levels of sophistication, and why computers may have an advantage. x
  • 12
    Diversity Trumps Ability
    A diverse group can outperform a team of the best talent, provided the problems are hard, the people differ, and the members have germane knowledge. Hear about the experiments that opened the professor’s eyes to diversity’s value in problem solving. Then, learn how the diversity prediction theorem illustrates how differences in perspectives and heuristics enable us to find better solutions. x
  • 13
    Digging Holes and Splicing Genes
    Delve more deeply into the diversity prediction theorem. Think about its implications for groups and individuals, and how it adds to your understanding of the paradigm-shifting trends related to changes in the nature of work, global demographics, and the proliferation of technology. Conclude with a look at models that inform decisions of hiring and college admissions. x
  • 14
    Ability and Diversity
    Can people be ranked in order of intelligence? Consider IQ tests in light of the course’s toolbox model of intelligence. Then, shift to a tree-of-knowledge-style model to think about with greater subtlety the connections between diversity and ability. Learn how to balance those elements and effectively structure teams for maximum output. x
  • 15
    Combining and Recombining Heuristics
    From the telegraph to the laser, a great deal of innovation stems from taking existing ideas, technologies, and tools and recombining them. Explore how ideas combine and recombine to drive economic growth. Then, probe how society can ensure continued innovation. Do we let people own ideas? Or do we set them free? x
  • 16
    Beware of False Prophets—No Free Lunch
    In a rapidly changing, complex world, having a diverse set of tools is imperative. In this lecture, you’ll focus on formal and informal heuristics—procedures that try to improve performance—through a comparison of popular business and self-help books. Then, ponder opposite proverbs and the “no free lunch” theorem to comprehend the conditionality of heuristics. x
  • 17
    Crowdsourcing and the Limits of Diversity
    Big companies like Microsoft and Pfizer don’t necessarily make their problems and solutions public. Would they be better off if they did? Revisit the Netflix competition and look at other fascinating case studies as you weigh the benefits and limitations of crowdsourcing, the practice of offering up a problem to a population. x
  • 18
    Experimentation, Variation, and Six Sigma
    How do diversity and variation differ? Analyze how variation can make individual and system-level performance more robust by enabling faster adaptation. Conversely, learn about the six sigma movement toward anti-variation and when variation should be prevented through minimizing experimentation. x
  • 19
    Diversity and Robustness
    Before discussing how diversity contributes to system robustness, the professor takes a moment to reiterate the definition of robustness and the differences between variation and diversity. Analyze how portfolio effects, Ashby’s law of requisite variety, and redundancy and overlap support the case for diversity. x
  • 20
    Inescapable Benefits of Diversity
    Diverse ecologies, cities, and groups often outperform their homogeneous counterparts. Learn why this is often the case, then identify why additional contributions sometimes produce negative results or diminishing returns. Participate in a thought experiment involving diverse ecosystems to drive home the lesson. x
  • 21
    The Historical Value of Diversity
    See how the need for diversity has echoed throughout human history by evaluating how lack of cognitive difference leads to stagnation. You’ll weigh the literal implications of the business adage “adapt or die” through tales of collapsed civilizations, including the Easter Islanders, the Anasazi of the American Southwest, and the Mayans of Central America. x
  • 22
    Homophily, Incentives, and Groupthink
    Groups aren’t always productive. In this lecture, the professor cautions against the dangers of groupthink and defines four processes that explain why it occurs: conformity, drift, homophily, and common incentives. Learn strategies to avoid the phenomenon, both as an individual who wants to stand out from the crowd and as an organization. x
  • 23
    The Problem of Diverse Preferences
    Can disagreement be desirable? Through a more in-depth look at homophily—the propensity to associate with like-minded people—and Arrow’s impossibility theorem, see how preference diversity creates problems and why good outcomes are often conflated with comfort. Discern the key differences between fundamental disagreements vs. instrumental disagreements. x
  • 24
    The Team. The Team. The Team.
    What challenges should you take on? What should your objective function be? In this final lecture, you’ll understand the critical importance of teams sharing a common goal, as well as the case for embracing dissent. You’ll revisit preference diversity to pinpoint conditions in which it can hinder progress or help prevent collapse. x

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Your professor

Scott E. Page

About Your Professor

Scott E. Page, Ph.D.
University of Michigan
Professor Scott E. Page received a B.A. in Mathematics from the University of Michigan and an M.A. in Mathematics from the University of Wisconsin–Madison. He then received his M.S. in Business and his Ph.D. in Managerial Economics and Decision Sciences from the Kellogg School of Management at Northwestern University. He completed his Ph.D. thesis under the guidance of Stan Reiter and Nobel laureate Roger Myerson. He has...
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The Hidden Factor: Why Thinking Differently Is Your Greatest Asset is rated 4.0 out of 5 by 21.
Rated 5 out of 5 by from Massively Applicable to Organizations and Politics Of the few reviews available, many have some truth to them. Klaatu’s review brings out the sore need for this information to reach the cocoons of large non-diverse organizations, especially colleges. PROS: 1. Page is an excellent teacher overall. He DOES start out slowly, as others have noted BUT there is so much jargon, he needs to. By mid-course, he started putting things together. This is why so many reviewers emphasize that you need to FINISH this course. 2. By explaining many complicated sounding “theorems” & “heuristics”, much of their mystery is taken away. Sigma Six, in simple terms, is just writing down what must be done, often as a checklist (“a technique that’s recently gained traction”). 15 years ago over a weekend, I stopped people from frantically running up and down the halls at a military clinic by taping individualized checklists on their computer screens (complete with subroutines for problems). On Monday morning the halls were quiet for the patients (no Sigma Six costs entailed). Supervision requires thinking out people’s jobs for them and that’s where this course is very successful. 3. In L21-24 Page shines. He takes on topics like the destructiveness of homophily, incentives and groupthink. He deals with the collapse of societies, with administrative functions that suck energy from the system, hints at the destructiveness of media groupthink, makes clear the dangers of societal peer pressure conformity and drift; clearly states how preference diversity creates painful cycles that can end in dictatorship, and talks about the various strategies of voter manipulation. This is not done from a “left or right” perspective but is based on what the course has taught. CONS: 1. My only problem with Dr. Page’s teaching was the premise of L4’s "diversity prediction theorem”. Here he noted that if A shoots an arrow 4 inches below a target and B shoots the arrow 4 inches above, “the net error would be zero”. Then he said the error MUST be squared “because squaring the errors makes all errors positive and prevents them from canceling each other". Squaring the errors ALSO results in a massive magnification of the actual error vs simply taking the errors as ABSOLUTE VALUES (which also prevent error cancellation). Worse, Page picked numbers so that the average crowd's error was 1. 1 squared is conveniently 1, so of course the crowd ended up doing much better than individual errors squared. A careful review of the rest of the course shows the “diversity prediction theorem” of crowd wisdom is not a really a mathematical certainty but is conditional. Only in L12 do we get to the 4 conditions required for diversity to trump ability. L22 provides other conditionals that affect crowd wisdom. 2. Vanity is apparently core to business school (not Page’s fault). Examples: (a.) A nephew business major asked me to help him with homework involving what turns out to be the "Quinn & Cameron’s 4-box model" for organizational assessment (L7). The idea seemed so simple that its existence can only be justified by Page's assertion that chimps given a 3 button random choice selection were superior to college student organizational choices. My wife reminds that life is a learning process. (b.) In L12 the #2 condition for diversity to trump ability is that diverse people have to be smart. Here we learn that this is labeled the “calculus condition” because of their ability to locate peaks on their “dancing landscapes” Why? In calculus “You can take derivatives and find points with 0 slope which includes all of the peaks. But, 0 slope also defines all of the troughs, ie not-smart people. Vanity, oh vanity. (c.) By L19, covariance between 2 investments is used to measure their acting dependently or independently. Negative covariance means the investments move oppositely providing stability. But next we define the "BETA between b and a as the ratio of the covariance of a and b to the variance of a”. Logically, if you buy an investment with a negative beta, you started with a negative covariance. But the redundant "BETA" is a much more mystical "heuristic" (ie: tool, so why not say tool?) in the hands of a financial manager. (d.) Then there is “Ashby’s Law of Requisite Variety”: for every problem, business needs an answer. Soooo…when one company takes over another, the new inherit all the old one’s disturbances. The "Law" says that “Harley Davidson...should not buy a grocery store chain" because: "Harley's "core competencies probably don’t include responses …to food spoilage." Core competency is easily understood. “Ashby's Law of Requisite Variety" is merely a vainglorious restatement. Kudos to Page. This is indeed a Great Course and if more people understood it, we’d have fewer riots in our streets. This course was a gift from a friend.
Date published: 2020-06-18
Rated 1 out of 5 by from Title didn't match the content This was terrible. I sent it back in the middle of the sixth lecture.
Date published: 2020-05-04
Rated 5 out of 5 by from Interesting Interesting interplay between diversity vs specialization relating to the evolution of technology.
Date published: 2019-10-10
Rated 4 out of 5 by from My Review for The Hidden Factor: Why Thinking Diff IT WAS GOOD I ENJOYED IT WHEN I READ IT AWHILE AGO
Date published: 2019-10-10
Rated 3 out of 5 by from Important Points This course makes important point to improve analysis. I am not impressed by the mathematics used though, and I think the essence of the course can be condensed into a only a couple hours.
Date published: 2019-10-03
Rated 1 out of 5 by from A boring exercise in political correctness Do not judge a book by its cover. This course will not tell you why thinking differently is your greatest asset. I listened to twelve of the lectures and then called it quits. What this course gives organizational executives is a heuristic for employing diverse people other than granting people from underprivileged groups employment opportunity in order to conform with statutes. The course is loaded with politically correct jargon, but not much concrete information. Names like Tegmark and Kahneman are dropped but without an examination of what they have to say. When I wasn't bored I was angry,
Date published: 2019-02-08
Rated 5 out of 5 by from Fascinating Study of Cognitive Diversity I've purchased a number of courses over the years, but this is the first one I actually finished! The profession gives some very interesting theoretical / mathematical explanations of why cognitive diversity leads to better outcomes, and which conditions must be true for that (it's not always true). My only small criticism is that I think the course could have been a bit shorter.
Date published: 2018-10-03
Rated 5 out of 5 by from Surprising and entertaining I wasn't initially sure whether I'd like this course, but I decided to give it a try, and I'm glad I did. It changed my mind about a lot of things with respect to teamwork and cognitive diversity (i.e., differences in thinking styles). The instructor is engaging and fun and uses stories, such as the Netflix prize, to illustrate his points. The course is a pretty thorough treatment of cognitive diversity and when it provides benefits and when it doesn't. I would highly recommend this course to managers or people working in team-based environments. It will probably be easier to understand if you have some background in economics, math, and/or statistics. I certainly found my understanding of those topics enhanced my understanding of and enjoyment of this course.
Date published: 2018-05-26
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