Seeing Through the Eyes of Others : Dissonance Within and Across Trading Rooms

In this essay we explore the crucial role of diversity in the context of a financial organization. Trading rooms, like many organizations, face two major cognitive challenges. The first is the challenge of recognizing opportunities. The second cognitive challenge is that of recognizing error. As the organization of diversity, dissonance counters lock-in. As we shall see, disparate valuation metrics in the trading room provide multiple vantage points to test the market. Interaction across these metrics provides opportunities for innovation. We also demonstrate that the organization of dissonance provides traders with opportunities to be reflexive about the models they deploy. Dissonant cues can serve as a kind of epistemic rupture, stimulating traders to reassess and re-calibrate their models. In both cases, dissonant diversity allows the traders to grapple with the mismatches between the representations of the environment they created and changes in the environment itself