how does team diversity enhance decision making and problem solving

22 Working in Diverse Teams

Learning Objectives

• Describe how diversity can enhance decision-making and problem-solving
• Identify challenges and best practices for working with multicultural teams
• Discuss divergent cultural characteristics and list several examples of such characteristics in the culture(s) you identify with

Decision-making and problem-solving can be much more dynamic and successful when performed in a diverse team environment. The multiple diverse perspectives can enhance both the understanding of the problem and the quality of the solution. Yet, working in diverse teams can be challenging given different identities, cultures, beliefs, and experiences. In this chapter, we will discuss the effects of team diversity on group decision-making and problem-solving, identify best practices and challenges for working in and with multicultural teams, and dig deeper into divergent cultural characteristics that teams may need to navigate.

Does Team Diversity Enhance Decision Making and Problem Solving?

In the Harvard Business Review article “Why Diverse Teams are Smarter,” David Rock and Heidi Grant (2016) support the idea that increasing workplace diversity is a good business decision. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Similarly, in a global analysis conducted by Credit Suisse, organizations with at least one female board member yielded a higher return on equity and higher net income growth than those that did not have any women on the board.

Additional research on diversity has shown that diverse teams are better at decision-making and problem-solving because they tend to focus more on facts, per the Rock and Grant article. A study published in the Journal of Personality and Social Psychology showed that people from diverse backgrounds “might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking.” It turned out that in the study, the diverse panels raised more facts related to the case than homogeneous panels and made fewer factual errors while discussing available evidence. Another study noted in the article showed that diverse teams are “more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant. By breaking up workforce homogeneity, you can allow your employees to become more aware of their own potential biases—entrenched ways of thinking that can otherwise blind them to key information and even lead them to make errors in decision-making processes.” In other words, when people are among homogeneous and like-minded (non-diverse) teammates, the team is susceptible to groupthink and may be reticent to think about opposing viewpoints since all team members are in alignment. In a more diverse team with a variety of backgrounds and experiences, the opposing viewpoints are more likely to come out and the team members feel obligated to research and address the questions that have been raised. Again, this enables a richer discussion and a more in-depth fact-finding and exploration of opposing ideas and viewpoints in order to solve problems.

Diversity in teams also leads to greater innovation. A Boston Consulting Group article entitled “The Mix that Matters: Innovation through Diversity” explains a study in which they sought to understand the relationship between diversity in managers (all management levels) and innovation (Lorenzo et al., 2017). The key findings of this study show that:

• The positive relationship between management diversity and innovation is statistically significant—and thus companies with higher levels of diversity derive more revenue from new products and services.
• The innovation boost isn’t limited to a single type of diversity. The presence of managers who are either female or are from other countries, industries, or companies can cause an increase in innovation.
• Management diversity seems to have a particularly positive effect on innovation at complex companies—those that have multiple product lines or that operate in multiple industry segments.
• To reach its potential, gender diversity needs to go beyond tokenism. In the study, innovation performance only increased significantly when the workforce included more than 20% women in management positions. Having a high percentage of female employees doesn’t increase innovation if only a small number of women are managers.
• At companies with diverse management teams, openness to contributions from lower-level workers and an environment in which employees feel free to speak their minds are crucial for fostering innovation.

When you consider the impact that diverse teams have on decision-making and problem-solving—through the discussion and incorporation of new perspectives, ideas, and data—it is no wonder that the BCG study shows greater innovation. Team leaders need to reflect upon these findings during the early stages of team selection so that they can reap the benefits of having diverse voices and backgrounds.

Challenges and Best Practices for Working with Multicultural Teams

As globalization has increased over the last decades, workplaces have felt the impact of working within multicultural teams. The earlier section on team diversity outlined some of the highlights and benefits of working on diverse teams, and a multicultural group certainly qualifies as diverse. However, there are some key practices that are recommended to those who are leading multicultural teams so that they can parlay the diversity into an advantage and not be derailed by it.

People may assume that communication is the key factor that can derail multicultural teams, as participants may have different languages and communication styles. In the Harvard Business Review article “Managing Multicultural Teams,” Brett et al. (2006) outline four key cultural differences that can cause destructive conflicts in a team. The first difference is direct versus indirect communication, also known as high-context vs. low-context communication . Some cultures are very direct and explicit in their communication, while others are more indirect and ask questions rather than pointing our problems. This difference can cause conflict because, at the extreme, the direct style may be considered offensive by some, while the indirect style may be perceived as unproductive and passive-aggressive in team interactions.

The second difference that multicultural teams may face is trouble with accents and fluency. When team members don’t speak the same language, there may be one language that dominates the group interaction—and those who don’t speak it may feel left out. The speakers of the primary language may feel that those members don’t contribute as much or are less competent. The next challenge is when there are differing attitudes toward hierarchy. Some cultures are very respectful of the hierarchy and will treat team members based on that hierarchy. Other cultures are more egalitarian and don’t observe hierarchical differences to the same degree. This may lead to clashes if some people feel that they are being disrespected and not treated according to their status. The final difference that may challenge multicultural teams is conflicting decision-making norms. Different cultures make decisions differently, and some will apply a great deal of analysis and preparation beforehand. Those cultures that make decisions more quickly (and need just enough information to make a decision) may be frustrated with the slow response and relatively longer thought process.

These cultural differences are good examples of how everyday team activities (decision-making, communication, interaction among team members) may become points of contention for a multicultural team if there isn’t adequate understanding of everyone’s culture. The authors propose that there are several potential interventions to try if these conflicts arise. One simple intervention is adaptation , which is working with or around differences. This is best used when team members are willing to acknowledge the cultural differences and learn how to work with them. The next intervention technique is structural intervention , or reorganizing to reduce friction on the team. This technique is best used if there are unproductive subgroups or cliques within the team that need to be moved around. Managerial intervention is the technique of making decisions by management and without team involvement. This technique is one that should be used sparingly, as it essentially shows that the team needs guidance and can’t move forward without management getting involved. Finally, exit is an intervention of last resort, and is the voluntary or involuntary removal of a team member. If the differences and challenges have proven to be so great that an individual on the team can no longer work with the team productively, then it may be necessary to remove the team member in question.

Developing Cultural Intelligence

There are some people who seem to be innately aware of and able to work with cultural differences on teams and in their organizations. These individuals might be said to have cultural intelligence . Cultural intelligence  is a competency and a skill that enables individuals to function effectively in cross-cultural environments. It develops as people become more aware of the influence of culture and more capable of adapting their behavior to the norms of other cultures. In the IESE Insight article entitled “Cultural Competence: Why It Matters and How You Can Acquire It,” Lee and Liao (2015) assert that “multicultural leaders may relate better to team members from different cultures and resolve conflicts more easily. Their multiple talents can also be put to good use in international negotiations.” Multicultural leaders don’t have a lot of “baggage” from any one culture, and so are sometimes perceived as being culturally neutral. They are very good at handling diversity, which gives them a great advantage in their relationships with teammates.

In order to help people become better team members in a world that is increasingly multicultural, there are a few best practices that the authors recommend for honing cross-cultural skills. The first is to “broaden your mind”—expand your own cultural channels (travel, movies, books) and surround yourself with people from other cultures. This helps to raise your own awareness of the cultural differences and norms that you may encounter. Another best practice is to “develop your cross-cultural skills through practice” and experiential learning. You may have the opportunity to work or travel abroad—but if you don’t, then getting to know some of your company’s cross-cultural colleagues or foreign visitors will help you to practice your skills. Serving on a cross-cultural project team and taking the time to get to know and bond with your global colleagues is an excellent way to develop skills.

Once you have a sense of the different cultures and have started to work on developing your cross-cultural skills, another good practice is to “boost your cultural metacognition” and monitor your own behavior in multicultural situations. When you are in a situation in which you are interacting with multicultural individuals, you should test yourself and be aware of how you act and feel. Observe both your positive and negative interactions with people, and learn from them. Developing “ cognitive complexity ” is the final best practice for boosting multicultural skills. This is the most advanced, and it requires being able to view situations from more than one cultural framework. In order to see things from another perspective, you need to have a strong sense of emotional intelligence, empathy, and sympathy, and be willing to engage in honest communications.

In the Harvard Business Review article “Cultural Intelligence,” Earley and Mosakowski (2004) describe three sources of cultural intelligence that teams should consider if they are serious about becoming more adept in their cross-cultural skills and understanding. These sources, very simply, are head, body, and heart . One first learns about the beliefs, customs, and taboos of foreign cultures via the head . Training programs are based on providing this type of overview information—which is helpful, but obviously isn’t experiential. This is the cognitive component of cultural intelligence. The second source, the body , involves more commitment and experimentation with the new culture. It is this physical component (demeanor, eye contact, posture, accent) that shows a deeper level of understanding of the new culture and its physical manifestations. The final source, the heart , deals with a person’s own confidence in their ability to adapt to and deal well with cultures outside of their own. Heart really speaks to one’s own level of emotional commitment and motivation to understand the new culture.

The authors have created a quick assessment to diagnose cultural intelligence, based on these cognitive, physical, and emotional/motivational measures (i.e., head, body, heart). Please refer to the table below for a short diagnostic that allows you to assess your cultural intelligence.

Cultural intelligence is an extension of emotional intelligence. An individual must have a level of awareness and understanding of the new culture so that he or she can adapt to the style, pace, language, nonverbal communication, etc. and work together successfully with the new culture. A multicultural team can only find success if its members take the time to understand each other and ensure that everyone feels included. Multiculturalism and cultural intelligence are traits that are taking on increasing importance in the business world today. By following best practices and avoiding the challenges and pitfalls that can derail a multicultural team, a team can find great success and personal fulfillment well beyond the boundaries of the project or work engagement.

Digging in Deeper: Divergent Cultural Dimensions

Let’s dig in deeper by examining several points of divergence across cultures and consider how these dimensions might play out in organizations and in groups or teams.

Low-Power versus High-Power Distance

How comfortable are you with critiquing your boss’s decisions? If you are from a low-power distance culture, your answer might be “no problem.” In low-power distance cultures , according to Dutch researcher Geert Hofstede, people relate to one another more as equals and less as a reflection of dominant or subordinate roles, regardless of their actual formal roles as employee and manager, for example.

In a high-power distance culture , you would probably be much less likely to challenge the decision, to provide an alternative, or to give input. If you are working with people from a high-power distance culture, you may need to take extra care to elicit feedback and involve them in the discussion because their cultural framework may preclude their participation. They may have learned that less powerful people must accept decisions without comment, even if they have a concern or know there is a significant problem. Unless you are sensitive to cultural orientation and power distance, you may lose valuable information.

Individualistic versus Collectivist Cultures

People in individualistic cultures  value individual freedom and personal independence, and cultures always have stories to reflect their values. You may recall the story of Superman, or John McLean in the Diehard series, and note how one person overcomes all obstacles. Through personal ingenuity, in spite of challenges, one person rises successfully to conquer or vanquish those obstacles. Sometimes there is an assist, as in basketball or football, where another person lends a hand, but still the story repeats itself again and again, reflecting the cultural viewpoint.

When Hofstede explored the concepts of individualism and collectivism across diverse cultures (Hofstede, 1982, 2001, 2005), he found that in individualistic cultures like the United States, people perceived their world primarily from their own viewpoint. They perceived themselves as empowered individuals, capable of making their own decisions, and able to make an impact on their own lives.

Cultural viewpoint is not an either/or dichotomy, but rather a continuum or range. You may belong to some communities that express individualistic cultural values, while others place the focus on a collective viewpoint. Collectivist cultures  (Hofstede, 1982), including many in Asia and South America, focus on the needs of the nation, community, family, or group of workers. Ownership and private property is one way to examine this difference. In some cultures, property is almost exclusively private, while others tend toward community ownership. The collectively owned resource returns benefits to the community. Water, for example, has long been viewed as a community resource, much like air, but that has been changing as business and organizations have purchased water rights and gained control over resources. Public lands, such as parks, are often considered public, and individual exploitation of them is restricted. Copper, a metal with a variety of industrial applications, is collectively owned in Chile, with profits deposited in the general government fund. While public and private initiatives exist, the cultural viewpoint is our topic. How does someone raised in a culture that emphasizes the community interact with someone raised in a primarily individualistic culture? How could tensions be expressed and how might interactions be influenced by this point of divergence?

Masculine versus Feminine Orientation

There was a time when many cultures and religions valued a female figurehead, and with the rise of Western cultures we have observed a shift toward a masculine ideal. Each carries with it a set of cultural expectations and norms for gender behavior and gender roles across life, including business.

Hofstede describes the masculine-feminine dichotomy not in terms of whether men or women hold the power in a given culture, but rather the extent to which that culture values certain traits that may be considered masculine or feminine . Thus, “the assertive pole has been called ‘masculine’ and the modest, caring pole ‘feminine.’ The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men’s values and women’s values” (Hofstede, 2009).

We can observe this difference in where people gather, how they interact, and how they dress. We can see it during business negotiations, where it may make an important difference in the success of the organizations involved. Cultural expectations precede the interaction, so someone who doesn’t match those expectations may experience tension. Business in the United States has a masculine orientation—assertiveness and competition are highly valued. In other cultures, such as Sweden, business values are more attuned to modesty (lack of self-promotion) and taking care of society’s weaker members. This range of difference is one aspect of intercultural communication that requires significant attention when the business communicator enters a new environment.

Uncertainty-Accepting Cultures versus Uncertainty-Rejecting Cultures

When we meet each other for the first time, we often use what we have previously learned to understand our current context. We also do this to reduce our uncertainty. Some cultures, such as the United States and Britain, are highly tolerant of uncertainty , while others go to great lengths to reduce the element of surprise. Cultures in the Arab world, for example, are high in uncertainty avoidance ; they tend to be resistant to change and reluctant to take risks. Whereas a U.S. business negotiator might enthusiastically agree to try a new procedure, the Egyptian counterpart would likely refuse to get involved until all the details are worked out.

Short-Term versus Long-Term Orientation

Do you want your reward right now or can you dedicate yourself to a long-term goal? You may work in a culture whose people value immediate results and grow impatient when those results do not materialize. Geert Hofstede discusses this relationship of time orientation to a culture as a “time horizon,” and it underscores the perspective of the individual within a cultural context. Many countries in Asia, influenced by the teachings of Confucius, value a long-term orientation, whereas other countries, including the United States, have a more short-term approach to life and results. Native American cultures are known for holding a long-term orientation, as illustrated by the proverb attributed to the Iroquois that decisions require contemplation of their impact seven generations removed.

If you work within a culture that has a short-term orientation ,  you may need to place greater emphasis on reciprocation of greetings, gifts, and rewards. For example, if you send a thank-you note the morning after being treated to a business dinner, your host will appreciate your promptness. While there may be a respect for tradition, there is also an emphasis on personal representation and honor, a reflection of identity and integrity. Personal stability and consistency are also valued in a short-term oriented culture, contributing to an overall sense of predictability and familiarity.

Long-term orientation  is often marked by persistence, thrift and frugality, and an order to relationships based on age and status. A sense of shame for the family and community is also observed across generations. What an individual does reflects on the family and is carried by immediate and extended family members.

Time Orientation

Edward T. Hall and Mildred Reed Hall (1987) state that monochronic time-oriented cultures consider one thing at a time, whereas polychronic time-oriented cultures schedule many things at one time, and time is considered in a more fluid sense. In monochromatic time , time is thought of as very linear, interruptions are to be avoided, and everything has its own specific time. Even the multitasker from a monochromatic culture will, for example, recognize the value of work first before play or personal time. The United States, Germany, and Switzerland are often noted as countries that value a monochromatic time orientation.

Polychromatic time  looks a little more complicated, with business and family mixing with dinner and dancing. Greece, Italy, Chile, and Saudi Arabia are countries where one can observe this perception of time; business meetings may be scheduled at a fixed time, but when they actually begin may be another story. Also note that the dinner invitation for 8 p.m. may in reality be more like 9 p.m. If you were to show up on time, you might be the first person to arrive and find that the hosts are not quite ready to receive you.

When in doubt, always ask before the event; many people from polychromatic cultures will be used to foreigner’s tendency to be punctual, even compulsive, about respecting established times for events. The skilled business communicator is aware of this difference and takes steps to anticipate it. The value of time in different cultures is expressed in many ways, and your understanding can help you communicate more effectively.

Review & Reflection Questions

• Why are diverse teams better at decision-making and problem-solving?
• What are some of the challenges that multicultural teams face?
• How might you further cultivate your own cultural intelligence?
• What are some potential points of divergence between cultures?
• Brett, J., Behfar, K., Kern, M. (2006, November). Managing multicultural teams. Harvard Business Review . https://hbr.org/2006/11/managing-multicultural-teams
• Dodd, C. (1998). Dynamics of intercultural communication (5th ed.). New York, NY: Harper & Row.
• Earley, P.C., & Mosakowski, E. (2004, October). Cultural intelligence. Harvard Business Review . https://hbr.org/2004/10/cultural-intelligence
• Hall, M. R., & Hall, E. T. (1987). Hidden differences: Doing business with the Japanese . New York, NY: Doubleday.
• Hofstede, G. (1982). Culture’s consequences (2nd ed.). Newbury Park, CA: Sage.
• Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: Sage.
• Hofstede, G. (2005). Cultures and organizations: Software of the mind (2nd ed.). New York, NY: McGraw-Hill.
• Lee, Y-T., & Liao, Y. (2015). Cultural competence: Why it matters and how you can acquire it. IESE Insight . https://www.ieseinsight.com/doc.aspx?id=1733&ar=20
• Lorenzo, R., Yoigt, N., Schetelig, K., Zawadzki, A., Welpe, I., & Brosi, P. (2017). The mix that matters: Innovation through diversity. Boston Consulting Group. https://www.bcg.com/publications/2017/people-organization-leadership-talent-innovation-through-diversity-mix-that-matters.aspx
• Rock, D., & Grant, H. (2016, November 4). Why diverse teams are smarter . Harvard Business Review . https://hbr.org/2016/11/why-diverse-teams-are-smarter

Author & Attribution

This remix comes from Dr. Jasmine Linabary at Emporia State University. This chapter is also available in her book:  Small Group Communication: Forming and Sustaining Teams.

The sections “How Does Team Diversity Enhance Decision Making and Problem Solving?” and “Challenges and Best Practices for Working with Multicultural Teams” are adapted from Black, J.S., & Bright, D.S. (2019). Organizational behavior. OpenStax. https://openstax.org/books/organizational-behavior/ . Access the full chapter for free here . The content is available under a Creative Commons Attribution License 4.0 license .

The section “Digging in Deeper: Divergent Cultural Dimensions” is adapted from “ Divergent Cultural Characteristics ” in Business Communication for Success from the University of Minnesota. The book was adapted from a work produced and distributed under a Creative Commons license (CC BY-NC-SA) by a publisher who has requested that they and the original author not receive attribution. This work is made available under the terms of a Creative Commons Attribution-NonCommercial-ShareAlike license .

A set of negative group-level processes, including illusions of invulnerability, self-censorship, and pressures to conform, that occur when highly cohesive groups seek concurrence when making a decision.

a culture that emphasize nonverbal communication and indirect communication styles

a culture that emphasizes verbal expression and direct communication styles

a competency and a skill that enables individuals to function effectively in cross-cultural environments

cultures in which people relate to one another more as equals and less as a reflection of dominant or subordinate roles, regardless of their actual formal roles

culture tends to accept power differences, encourage hierarchy, and show respect for rank and authority

cultures that place greater importance on individual freedom and personal independence

cultures that place more value on the needs and goals of the group, family, community or nation

cultures that tend to value assertiveness, and concentrate on material achievements and wealth-building

cultures that tend to value nurturing, care and emotion, and are concerned with the quality of life

cultures with a high tolerance for uncertainty, ambiguity, and risk-taking. The unknown is more openly accepted, and rules and regulations tend to be more lax

cultures with a low tolerance for uncertainty, ambiguity, and risk-taking. The unknown is minimized through strict rules and regulations

focus on the near future, involves delivering short-term success or gratification and places a stronger emphasis on the present than the future

cultures that focus on the future and delaying short-term success or gratification in order to achieve long-term success

an orientation to time is considered highly linear, where interruptions are to be avoided, and everything has its own specific time

an orientation to time where multiple things can be done at once and time is viewed more fluidly

Working in Diverse Teams Copyright © 2021 by Cameron W. Piercy, Ph.D. is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License , except where otherwise noted.

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Groups & Teams Overview

Decision-making and problem-solving are more dynamic and thrive in a diverse team environment. Diverse perspectives enhance the understanding of the problem and the quality of the solution. Yet, working in diverse teams can be challenging, given different identities, cultures, beliefs, and experiences. In this chapter, we will discuss the effects of team diversity on group decision-making and problem-solving, identify best practices and challenges for working in and with multicultural teams, and dig deeper into divergent cultural characteristics that teams may need to navigate.

Does Team Diversity Enhance Decision Making and Problem-Solving?

In the Harvard Business Review article “Why Diverse Teams are Smarter,” David Rock and Heidi Grant (2016) write that increasing workplace diversity is a good business decision. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Similarly, in a global analysis conducted by Credit Suisse, organizations with at least one female board member yielded a higher return on equity and higher net income growth than those without women on the board.

Additional research on diversity has shown that diverse teams are better at decision-making and problem-solving because they tend to focus more on facts, per the Rock and Grant article. A study published in the Journal of Personality and Social Psychology showed that people from diverse backgrounds “might alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking.” In the study, the diverse panels raised more facts related to the case than the homogeneous panels and made fewer factual errors while discussing available evidence. Another study in the article showed that diverse teams are “more likely to reexamine facts and remain objective constantly. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant. By breaking up workforce homogeneity, you can allow your employees to become more aware of their own potential biases—entrenched ways of thinking that can otherwise blind them to key information and even lead them to make errors in decision-making processes.” In other words, the team is susceptible to groupthink when people are among homogeneous and like-minded (non-diverse) teammates. It may be reticent to think about opposing viewpoints since all team members are in alignment. In a more diverse team with various backgrounds and experiences, opposing viewpoints are more likely to emerge, and the team members feel obligated to research and address the questions raised. Again, this enables a richer discussion, more in-depth fact-finding, and exploration of opposing ideas and viewpoints to solve problems.

Diversity in teams also leads to more significant innovation. A Boston Consulting Group (BCG) article entitled “The Mix That Matters: Innovation through Diversity” explains a study in which they sought to understand the relationship between diversity in managers (all management levels) and innovation (Lorenzo et al., 2017). The key findings of this study show that:

• The positive relationship between management diversity and innovation is statistically significant—and thus, companies with higher levels of diversity derive more revenue from new products and services.
• The innovation boost isn’t limited to a single type of diversity. The presence of managers who are either female or are from other countries, industries, or companies can cause an increase in innovation.
• Management diversity seems to have a particularly positive effect on innovation at complex companies with multiple product lines or that operate in multiple industry segments.
• To reach its potential, gender diversity needs to go beyond tokenism. In the study, innovation performance only increased significantly when the workforce included more than 20% of women in management positions. A high percentage of female employees doesn’t increase innovation when only a few women are managers.
• At companies with diverse management teams, openness to contributions from lower-level workers and an environment where employees feel free to speak their minds are crucial to fostering innovation.

When you consider the impact that diverse teams have on decision-making and problem-solving—through the discussion and incorporation of new perspectives, ideas, and data—it is no wonder that the BCG study shows more significant innovation. Team leaders must reflect upon these findings during the early stages of team selection to reap the benefits of having diverse voices and backgrounds.

Challenges and Best Practices for Working with Multicultural Teams

Over the last decades, globalization has increased and workplaces have felt the impact of working within multicultural teams. There are some key recommended practices that for those leading multicultural teams so that they can parlay the diversity into an advantage and not be derailed by it.

People may assume that communication is the primary element derailing multicultural teams, as participants may have different languages and communication styles. In the Harvard Business Review article “Managing Multicultural Teams,” Brett et al. (2006) outline four vital cultural differences that can cause destructive conflicts in a team.

• Direct versus indirect communication is also known as high-context vs. low-context communication. Some cultures are very direct and explicit in their communication, while others are more indirect and ask questions rather than pointing out our problems. This difference can cause conflict because, at the extreme, some may consider the direct style offensive. In contrast, the indirect style may be perceived as unproductive and passive-aggressive in team interactions.
• Multicultural teams may face trouble with accents and fluency. When team members don’t speak the same language, there may be one language that dominates the group interaction—and those who don’t speak it may feel left out. The primary language speakers may feel that those members don’t contribute as much or are less competent.
• Differing attitudes toward hierarchy. Some cultures respect the hierarchy and treat team members based on that hierarchy. Other cultures are more egalitarian and don’t observe hierarchical differences to the same degree. This may lead to clashes if some people feel they are being disrespected and not treated according to their status.
• Conflicting decision-making norms. Different cultures make decisions differently; some will apply much analysis and preparation beforehand. Those cultures that make decisions more quickly (and need just enough information to make a decision) may be frustrated with the slow response and relatively longer thought process.

These cultural differences are good examples of how everyday team activities (decision-making, communication, interaction among team members) may become points of contention for a multicultural team if there isn’t adequate understanding of everyone’s culture. The authors propose several potential interventions to try if these conflicts arise.

• A straightforward intervention is an adaptation , which is working with or around differences. This is best used when team members are willing to acknowledge the cultural differences and learn how to work with them.
• S tr uctural intervention , or reorganizing to reduce friction on the team. This technique is best used if unproductive subgroups or cliques within the team need to be moved around.
• Managerial intervention is the technique of making decisions by management without team involvement. This technique should be used sparingly, as it shows that the team needs guidance and can’t move forward without management involved.
• Finally, exit is an intervention of last resort and is the voluntary or involuntary removal of a team member. If the differences and challenges have proven so great that an individual on the team can no longer work with the team productively, then removing the team member in question may be necessary.

Developing Cultural Intelligence

Some people seem to be innately aware of and able to work with cultural differences in teams and their organizations. These individuals might be said to have cultural intelligence . Cultural intelligence is a competency and skill that enables individuals to function effectively in cross-cultural environments. It develops as people become more aware of the influence of culture and more capable of adapting their behavior to the norms of other cultures. In the IESE Insight article entitled “Cultural Competence: Why It Matters and How You Can Acquire It,” Lee and Liao (2015) assert that “multicultural leaders may relate better to team members from different cultures and resolve conflicts more easily. Their multiple talents can also be used in international negotiations.” Multicultural leaders don’t have a lot of “baggage” from any one culture and are sometimes perceived as being culturally neutral. They are very good at handling diversity, which gives them a significant advantage in their relationships with teammates.

In order to help people become better team members in an increasingly multicultural world, the authors recommend a few best practices for honing cross-cultural skills. The first is to “broaden your mind”—expand your cultural channels (travel, movies, books) and surround yourself with people from other cultures. This helps raise your awareness of the cultural differences and norms you may encounter. Another best practice is ” developing your cross-cultural skills through practice” and experiential learning. You may have the opportunity to work or travel abroad—but if you don’t, getting to know some of your company’s cross-cultural colleagues or foreign visitors will help you practice your skills. Serving on a cross-cultural project team and getting to know and bond with your global colleagues is an excellent way to develop skills.

Once you have a sense of the different cultures and have started to work towards developing your cross-cultural skills, another good practice is to “boost your cultural metacognition” and monitor your behavior in multicultural situations. When you are in a situation in which you are interacting with multicultural individuals, you should test yourself and be aware of how you act and feel. Observe both your positive and negative interactions with people and learn from them. Developing “ cognitive complexity ” is the final best practice for boosting multicultural skills. This is the most advanced, requiring viewing situations from multiple cultural frameworks. To see things from another perspective, you must have a strong sense of emotional intelligence, empathy, and sympathy and be willing to communicate honestly.

In the Harvard Business Review article “Cultural Intelligence,” Earley and Mosakowski (2004) describe three sources of cultural intelligence that teams should consider if they are serious about becoming more adept in their cross-cultural skills and understanding. These sources, very simply, are head, body, and heart . One first learns about foreign cultures’ beliefs, customs, and taboos via the head . Training programs are based on providing this type of overview information—which is helpful but isn’t experiential. This is the cognitive component of cultural intelligence. The second source, the body , involves more commitment and experimentation with the new culture. This physical component (demeanor, eye contact, posture, accent) shows a deeper understanding of the new culture and its physical manifestations. The final source, the heart , deals with a person’s confidence in their ability to adapt to and deal well with cultures outside of their own. The heart speaks to one’s emotional commitment and motivation to understand the new culture.

The authors have created a quick assessment to diagnose cultural intelligence based on these cognitive, physical, and emotional/motivational measures (i.e., head, body, heart). Please refer to the table below for a short diagnostic to assess your cultural intelligence.

Cultural intelligence is an extension of emotional intelligence. An individual must be aware and understand the new culture to adapt to the style, pace, language, nonverbal communication, etc., and work together successfully with the new culture. A multicultural team can only succeed if its members take the time to understand each other and ensure everyone feels included. Multiculturalism and cultural intelligence are increasingly essential traits in the business world today. By following best practices and avoiding the challenges and pitfalls that derail a multicultural team, a team can find great success and personal fulfillment beyond the boundaries of the project or work engagement.

Digging in Deeper: Divergent Cultural Dimensions

Let’s dig in deeper by examining several points of divergence across cultures and consider how these dimensions might play out in organizations and in groups or teams.

Low-Power versus High-Power Distance

How comfortable are you with critiquing your boss’s decisions? If you are from a low-power distance culture, your answer might be “No problem.” In low-power distance culture s, according to Dutch researcher Geert Hofstede, people relate to one another more as equals and less as a reflection of dominant or subordinate roles, regardless of their formal roles as employees and managers.

In a high-power distance culture , you would probably be less likely to challenge the decision, provide an alternative, or give input. Suppose you work with people from a high-power distance culture. In that case, you may need extra care to elicit feedback and involve them in the discussion because their cultural framework may preclude their participation. They may have learned that less powerful people must accept decisions without comment, even if they have a concern or know there is a significant problem. You may lose valuable information if you are sensitive to cultural orientation and power distance.

Individualistic versus Collectivist Cultures

People in individualistic cultures value individual freedom and personal independence, and cultures consistently have stories to reflect their values. You may recall the story of Superman or John McLean in the Diehard series and note how one person overcomes all obstacles. Through personal ingenuity, despite challenges, one person rises successfully to conquer or vanquish those obstacles. Sometimes there is an assist, as in basketball or football, where another person lends a hand, but still, the story repeats itself repeatedly, reflecting the cultural viewpoint.

When Hofstede explored the concepts of individualism and collectivism across diverse cultures (Hofstede, 1982, 2001, 2005), he found that in individualistic cultures like the United States, people perceived their world primarily from their viewpoint. They perceived themselves as empowered individuals, capable of making their own decisions and impacting their own lives.

Cultural viewpoint is not an either/or dichotomy but rather a continuum or range. You may belong to some communities that express individualistic cultural values. In contrast, others focus on a collective viewpoint. Collectivist cultures (Hofstede, 1982), including many in Asia and South America, focus on the needs of the nation, community, family, or group of workers. Ownership and private property is one way to examine this difference. In some cultures, the property is almost exclusively private, while others tend toward community ownership. The collectively owned resource returns benefit to the community. Water, for example, has long been viewed as a community resource, much like air. However, that has changed as businesses and organizations have purchased water rights and gained control over resources. Public lands, such as parks, are often considered public, and individual exploitation is restricted. Copper, a metal with various industrial applications, is collectively owned in Chile, with profits deposited in the general government fund. While public and private initiatives exist, the cultural viewpoint is our topic. How does someone raised in a culture that emphasizes the community interact with someone raised in a primarily individualistic culture? How could tensions be expressed, and how might this point of divergence influence interactions?

Masculine versus Feminine Orientation

There was a time when many cultures and religions valued a female figurehead, and with the rise of Western cultures, we have observed a shift toward a masculine ideal. Each carries a set of cultural expectations and norms for gender behavior and gender roles across life, including business.

Hofstede describes the masculine-feminine dichotomy not in terms of whether men or women hold power in a given culture but rather the extent to which that culture values certain traits that may be considered masculine or feminine . Thus, “the assertive pole has been called ‘masculine’ and the modest, caring pole ‘feminine.’ The women in feminine countries have the same modest, caring values as the men; in the masculine countries, they are somewhat assertive and competitive, but not as much as the men, so these countries show a gap between men’s values and women’s values” (Hofstede, 2009).

We can observe this difference in where people gather, how they interact, and how they dress. We can see it during business negotiations, where it may make an important difference in the organizations’ success. Cultural expectations precede the interaction, so someone who doesn’t match those expectations may experience tension. Business in the United States has a masculine orientation—assertiveness and competition are highly valued. In other cultures like Sweden, business values are more attuned to modesty (lack of self-promotion) and taking care of society’s weaker members. This range of differences is one aspect of intercultural communication that requires significant attention when the business communicator enters a new environment.

Uncertainty-Accepting Cultures versus Uncertainty-Rejecting Cultures

When we meet each other for the first time, we often use what we have learned to understand our current context. We also do this to reduce our uncertainty. Some cultures, such as the United States and Britain, are highly tolerant of uncertainty , while others go to great lengths to reduce the element of surprise. Cultures in the Arab world, for example, are high in uncertainty avoidance ; they tend to be resistant to change and reluctant to take risks. Whereas a U.S. business negotiator might enthusiastically agree to try a new procedure, the Egyptian counterpart would likely refuse to get involved until all the details are worked out.

Short-Term versus Long-Term Orientation

Do you want your reward right now, or can you dedicate yourself to a long-term goal? You may work in a culture whose people value immediate results and grow impatient when those results do not materialize. Geert Hofstede discusses this relationship of time orientation to culture as a “time horizon,” underscoring the individual’s perspective within a cultural context. Many countries in Asia, influenced by the teachings of Confucius, value a long-term orientation, whereas other countries, including the United States, have a more short-term approach to life and results. Native American cultures are known for holding a long-term orientation, as illustrated by the proverb attributed to the Iroquois that decisions require contemplation of their impact seven generations removed.

If you work within a culture with a short-term orientation, you may need to emphasize the reciprocation of greetings, gifts, and rewards. For example, your host will appreciate your promptness if you send a thank-you note the morning after being treated to a business dinner. While there may be respect for tradition, there is also an emphasis on personal representation and honor, a reflection of identity and integrity. A short-term-oriented culture also values Personal stability and consistency, contributing to an overall sense of predictability and familiarity.

Long-term orientation is often marked by persistence, thrift, frugality, and order to relationships based on age and status. A sense of shame for the family and community is also observed across generations. What an individual does reflects on the family and is carried by immediate and extended family members.

Time Orientation

Edward T. Hall and Mildred Reed Hall (1987) state that monochronic time-oriented cultures consider one thing at a time, whereas polychronic time-oriented cultures schedule many things at one time, and time is considered more fluid. In monochromatic times , interruptions are to be avoided, and everything has its specific time. Even the multitasker from a monochromatic culture will, for example, recognize the value of work first before play or personal time. The United States, Germany, and Switzerland are often noted as countries that value a monochromatic time orientation.

Polychromatic time looks a little more complicated, with business and family mixing with dinner and dancing. Greece, Italy, Chile, and Saudi Arabia are countries where one can observe this perception of time; business meetings may be scheduled at a fixed time, but when they begin may be another story. Also, note that the dinner invitation for 8 p.m. may be more like 9 p.m. If you were to show up on time, you might be the first person to arrive and find that the hosts are not quite ready to receive you.

When in doubt, always ask before the event; many people from polychromatic cultures will be used to foreigners’ tendency to be punctual, even compulsive, about respecting established event times. The skilled business communicator knows this difference and takes steps to anticipate it—the value of time in different cultures.

• Brett, J., Behfar, K., Kern, M. (2006, November). Managing multicultural teams. Harvard Business Review . https://hbr.org/2006/11/managing-multicultural-teams
• Dodd, C. (1998). Dynamics of intercultural communication (5th ed.). New York, NY: Harper & Row.
• Earley, P.C., & Mosakowski, E. (2004, October). Cultural intelligence. Harvard Business Review . https://hbr.org/2004/10/cultural-intelligence
• Hall, M. R., & Hall, E. T. (1987). Hidden differences: Doing business with the Japanese . New York, NY: Doubleday.
• Hofstede, G. (1982). Culture’s consequences (2nd ed.). Newbury Park, CA: Sage.
• Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: Sage.
• Hofstede, G. (2005). Cultures and organizations: Software of the mind (2nd ed.). New York, NY: McGraw-Hill.
• Lee, Y-T., & Liao, Y. (2015). Cultural competence: Why it matters and how you can acquire it. IESE Insight . https://www.ieseinsight.com/doc.aspx?id=1733&ar=20
• Lorenzo, R., Yoigt, N., Schetelig, K., Zawadzki, A., Welpe, I., & Brosi, P. (2017). The mix that matters: Innovation through diversity. Boston Consulting Group. https://www.bcg.com/publications/2017/people-organization-leadership-talent-innovation-through-diversity-mix-that-matters.aspx
• Rock, D., & Grant, H. (2016, November 4). Why diverse teams are smarter . Harvard Business Review . https://hbr.org/2016/11/why-diverse-teams-are-smarter

Author & Attribution

This remix comes from Dr. Jasmine Linabary at Emporia State University. This chapter is also available in her Small Group Communication: Forming and Sustaining Teams book .

The sections “How Does Team Diversity Enhance Decision Making and Problem-Solving?” and “Challenges and Best Practices for Working with Multicultural Teams” are adapted from Black, J.S., & Bright, D.S. (2019). Organizational behavior. OpenStax. https://openstax.org/books/organizational-behavior/ . Access the full chapter for free here . The content is available under a Creative Commons Attribution License 4.0 license .

The section “Digging in Deeper: Divergent Cultural Dimensions” is adapted from “ Divergent Cultural Characteristics ” in Business Communication for Success from the University of Minnesota. The book was adapted from a work produced and distributed under a Creative Commons license (CC BY-NC-SA) by a publisher who has requested that they and the original author not receive attribution. This work is made available under a Creative Commons Attribution-NonCommercial-ShareAlike license .

Working in Diverse Teams Copyright © by Kathy DesRoches is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License , except where otherwise noted.

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10.5: Team Diversity

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5. How does team diversity enhance decision-making and problem-solving?

Decision-making and problem-solving can be much more dynamic and successful when performed in a diverse team environment. The multiple diverse perspectives can enhance both the understanding of the problem and the quality of the solution. As I reflect on some of the leadership development work that I have done in my career, I can say from experience that the team activities and projects that intentionally brought diverse individuals together created the best environments for problem-solving. Diverse leaders from a variety of functions, from across the globe, at varying stages of their careers and experiences with and outside of the company had the most robust discussions and perspectives. Diversity is a word that is very commonly used today, but the importance of diversity and building diverse teams can sometimes get lost in the normal processes of doing business. Let’s discuss why we need to keep these principles front of mind.

In the Harvard Business Review article “Why Diverse Teams are Smarter” (Nov. 2016), David Rock and Heidi Grant support the idea that increasing workplace diversity is a good business decision. 9 A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Similarly, in a global analysis conducted by Credit Suisse, organizations with at least one female board member yielded a higher return on equity and higher net income growth than those that did not have any women on the board.

Additional research on diversity has shown that diverse teams are better at decision-making and problem-solving because they tend to focus more on facts, per the Rock and Grant article. 10 Journal of Personality and Social Psychology showed that people from diverse backgrounds “might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking.” It turned out that in the study, the diverse panels raised more facts related to the case than homogenous panels and made fewer factual errors while discussing available evidence. Another study noted in the article showed that diverse teams are “more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant. By breaking up workforce homogeneity, you can allow your employees to become more aware of their own potential biases—entrenched ways of thinking that can otherwise blind them to key information and even lead them to make errors in decision-making processes.” In other words, when people are among homogeneous and like-minded (nondiverse) teammates, the team is susceptible to groupthink and may be reticent to think about opposing viewpoints since all team members are in alignment. In a more diverse team with a variety of backgrounds and experiences, the opposing viewpoints are more likely to come out and the team members feel obligated to research and address the questions that have been raised. Again, this enables a richer discussion and a more in-depth fact-finding and exploration of opposing ideas and viewpoints in order to solve problems.

Diversity in teams also leads to greater innovation. A Boston Consulting Group article entitled “The Mix that Matters: Innovation through Diversity” explains a study in which BCG and the Technical University of Munich conducted an empirical analysis to understand the relationship between diversity in managers (all management levels) and innovation. The key findings of this study show that:11

• The positive relationship between management diversity and innovation is statistically significant—and thus companies with higher levels of diversity derive more revenue from new products and services.
• The innovation boost isn’t limited to a single type of diversity. The presence of managers who are either female or are from other countries, industries, or companies can cause an increase in innovation.
• Management diversity seems to have a particularly positive effect on innovation at complex companies—those that have multiple product lines or that operate in multiple industry segments.
• To reach its potential, gender diversity needs to go beyond tokenism. In the study, innovation performance only increased significantly when the workforce included more than 20% women in management positions. Having a high percentage of female employees doesn’t increase innovation if only a small number of women are managers.

When you consider the impact that diverse teams have on decision-making and problem-solving—through the discussion and incorporation of new perspectives, ideas, and data—it is no wonder that the BCG study shows greater innovation. Team leaders need to reflect upon these findings during the early stages of team selection so that they can reap the benefits of having diverse voices and backgrounds.

concept check

• Why do diverse teams focus more on data than homogeneous teams?
• How are diversity and innovation related?

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8.5 Team Diversity

• How does team diversity enhance decision-making and problem-solving?

Decision-making and problem-solving can be much more dynamic and successful when performed in a diverse team environment. The multiple diverse perspectives can enhance both the understanding of the problem and the quality of the solution. As I reflect on some of the leadership development work that I have done in my career, I can say from experience that the team activities and projects that intentionally brought diverse individuals together created the best environments for problem-solving. Diverse leaders from a variety of functions, from across the globe, at varying stages of their careers and experiences with and outside of the company had the most robust discussions and perspectives. Diversity is a word that is very commonly used today, but the importance of diversity and building diverse teams can sometimes get lost in the normal processes of doing business. Let’s discuss why we need to keep these principles front of mind.

In the Harvard Business Review article “Why Diverse Teams are Smarter” (Nov. 2016), David Rock and Heidi Grant support the idea that increasing workplace diversity is a good business decision. 9 A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Similarly, in a global analysis conducted by Credit Suisse, organizations with at least one female board member yielded a higher return on equity and higher net income growth than those that did not have any women on the board.

Additional research on diversity has shown that diverse teams are better at decision-making and problem-solving because they tend to focus more on facts, per the Rock and Grant article. 10 A study published in the Journal of Personality and Social Psychology showed that people from diverse backgrounds “might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking.” It turned out that in the study, the diverse panels raised more facts related to the case than homogenous panels and made fewer factual errors while discussing available evidence. Another study noted in the article showed that diverse teams are “more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant. By breaking up workforce homogeneity, you can allow your employees to become more aware of their own potential biases—entrenched ways of thinking that can otherwise blind them to key information and even lead them to make errors in decision-making processes.” In other words, when people are among homogeneous and like-minded (nondiverse) teammates, the team is susceptible to groupthink and may be reticent to think about opposing viewpoints since all team members are in alignment. In a more diverse team with a variety of backgrounds and experiences, the opposing viewpoints are more likely to come out and the team members feel obligated to research and address the questions that have been raised. Again, this enables a richer discussion and a more in-depth fact-finding and exploration of opposing ideas and viewpoints in order to solve problems.

Diversity in teams also leads to greater innovation. A Boston Consulting Group article entitled “The Mix that Matters: Innovation through Diversity” explains a study in which BCG and the Technical University of Munich conducted an empirical analysis to understand the relationship between diversity in managers (all management levels) and innovation. The key findings of this study show that: 11

• The positive relationship between management diversity and innovation is statistically significant—and thus companies with higher levels of diversity derive more revenue from new products and services.
• The innovation boost isn’t limited to a single type of diversity. The presence of managers who are either female or are from other countries, industries, or companies can cause an increase in innovation.
• Management diversity seems to have a particularly positive effect on innovation at complex companies—those that have multiple product lines or that operate in multiple industry segments.
• To reach its potential, gender diversity needs to go beyond tokenism. In the study, innovation performance only increased significantly when the workforce included more than 20% women in management positions. Having a high percentage of female employees doesn’t increase innovation if only a small number of women are managers.
• At companies with diverse management teams, openness to contributions from lower-level workers and an environment in which employees feel free to speak their minds are crucial for fostering innovation.

When you consider the impact that diverse teams have on decision-making and problem-solving—through the discussion and incorporation of new perspectives, ideas, and data—it is no wonder that the BCG study shows greater innovation. Team leaders need to reflect upon these findings during the early stages of team selection so that they can reap the benefits of having diverse voices and backgrounds.

CONCEPT CHECK

• Why do diverse teams focus more on data than homogeneous teams?
• How are diversity and innovation related?

Source contents: Principles of Management and Organizational Behavior . Please visit OpenStax for more details: https://openstax.org/subjects/view-all

Introduction to Management and Organizational Behavior Copyright © by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Are You Prepared to Lead a Diverse Team?

New managers need to develop cultural competence.

If you envision managerial roles in your future, now is the time to start developing cultural competence, or “the ability to understand, appreciate, and interact with people from cultures or belief systems different from one’s own.” Here are a few strategies to get you started.

• Build self-awareness around your biases.  To create an inclusive work environment, you must first be comfortable recognizing situations in which your biases are most likely to negatively impact your decision-making or judgment.
• Practice active listening.  In a culturally diverse workplace, successful managers know how to interact with people who have different communication styles (verbal, nonverbal, written, or visual), approaches to problem-solving, and even methods of asking for help.
• Ensure equity in retention and promotion.  Hold yourself accountable to your DEI goals by tracking how promotions are awarded on your team and within the larger organization. Note any inequities, and then work explicitly on how to address them.

Where your work meets your life. See more from Ascend here .

Moments of crisis have a funny way of forcing our proverbial hand. They reveal what is (and isn’t) important, and they push us to solve old problems in new ways. Necessity is the mother of invention, as they say.

• JM Jeff Meade is the founder and CEO of MEADE , a management consulting firm. At MEADE, Jeff relies on his years of marketing experience to provide small to midsize marketing services firms and in-house marketing teams with the trusted advice needed to scale their business and performance. Prior to his consulting role at MEADE, Jeff founded and scaled his own agencies, including Mjini, a Millennial-focused consumer insights agency, and The Reason, both of which partnered with Fortune 500 companies and household-name brands.

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10.6 Team Diversity and Multicultural Teams

Learning objectives.

• Describe the impact of team diversity on decision-making and problem-solving.

How does team diversity enhance decision-making and problem-solving?

As discussed earlier, decision-making and problem-solving can be much more dynamic and successful when performed in a diverse team environment. The multiple diverse perspectives can enhance both the understanding of the problem and the quality of the solution.  Diversity is a word that is very commonly used today; leaders must ensure that diversity and building diverse teams does not become lost in the normal processes of doing business.

In the  Harvard Business Review article “Why Diverse Teams are Smarter” (Nov. 2016), David Rock and Heidi Grant support the idea that increasing workplace diversity is a good business decision. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Similarly, in a global analysis conducted by Credit Suisse, organizations with at least one female board member yielded a higher return on equity and higher net income growth than those that did not have any women on the board.

Additional research on diversity has shown that diverse teams are better at decision-making and problem-solving because they tend to focus more on facts (Rock & Grant, 2016). A study noted in the article showed that diverse teams are “more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant. By breaking up workforce homogeneity, you can allow your employees to become more aware of their own potential biases—entrenched ways of thinking that can otherwise blind them to key information and even lead them to make errors in decision-making processes” (Rock & Grant, 2016). In other words, when people are among homogeneous and like-minded (nondiverse) teammates, the team is susceptible to groupthink and may be reticent to consider opposing viewpoints since all team members are in alignment. In a more diverse team with a variety of backgrounds and experiences, the opposing viewpoints are more likely to come out and the team members feel obligated to research and address the questions that have been raised. Again, this enables a richer discussion and a more in-depth fact-finding and exploration of opposing ideas and viewpoints in order to solve problems.

Diversity in teams also leads to greater innovation. A Boston Consulting Group article entitled “The Mix that Matters: Innovation through Diversity” (Lorenzo et al., 2017) explains a study in which BCG and the Technical University of Munich conducted an empirical analysis to understand the relationship between diversity in managers (all management levels) and innovation. The key findings of this study show that:

• The positive relationship between management diversity and innovation is statistically significant—and thus companies with higher levels of diversity derive more revenue from new products and services.
• The innovation boost isn’t limited to a single type of diversity. The presence of managers who are either female or are from other countries, industries, or companies can cause an increase in innovation.
• Management diversity seems to have a particularly positive effect on innovation at complex companies—those that have multiple product lines or that operate in multiple industry segments.
• To reach its potential, gender diversity needs to go beyond tokenism. In the study, innovation performance only increased significantly when the workforce included more than 20% women in management positions. Having a high percentage of female employees doesn’t increase innovation if only a small number of women are managers.
• In companies with diverse management teams, openness to contributions from lower-level workers and an environment in which employees feel free to speak their minds are crucial for fostering innovation.

What are some challenges and best practices for managing and working with multicultural teams?

As globalization has increased over the last decades, workplaces have felt the impact of working within multicultural teams. The earlier section on team diversity outlined some of the highlights and benefits of working on diverse teams, and a multicultural group certainly qualifies as diverse. However, there are some key practices that are recommended to those who are leading multicultural teams so that they can parlay the diversity into an advantage and not be derailed by it.

People may assume that communication is the key factor that can derail multicultural teams, as participants may have different languages and communication styles. In the  Harvard Business Review  article “Managing Multicultural Teams,” (Brett et al., 2006), the authors point out four key cultural differences that can cause destructive conflicts in a team. The first difference is direct versus indirect communication . Some cultures are very direct and explicit in their communication, while others are more indirect and ask questions rather than pointing out problems. This difference can cause conflict because, at the extreme, the direct style may be considered offensive by some, while the indirect style may be perceived as unproductive and passive-aggressive in team interactions.

The second difference that multicultural teams may face is  trouble with accents and fluency . When team members don’t speak the same language, there may be one language that dominates the group interaction—and those who don’t speak it may feel left out. The speakers of the primary language may feel that those members don’t contribute as much or are less competent. The next challenge is when there are  differing attitudes toward hierarchy . Some cultures are very respectful of the hierarchy and will treat team members based on that hierarchy. Other cultures are more egalitarian and don’t observe hierarchical differences to the same degree. This may lead to clashes if some people feel that they are being disrespected and not treated according to their status. The final difference that may challenge multicultural teams is  conflicting decision-making norms . Different cultures make decisions differently, and some will apply a great deal of analysis and preparation beforehand. Those cultures that make decisions more quickly (and need just enough information to make a decision) may be frustrated with the slow response and relatively longer thought process.

These cultural differences are good examples of how everyday team activities (decision-making, communication, interaction among team members) may become points of contention for a multicultural team if there isn’t an adequate understanding of everyone’s culture. The authors propose that there are several potential interventions to try if these conflicts arise. One simple intervention is ‘ adaptation’ , which is working with or around differences. This is best used when team members are willing to acknowledge the cultural differences and learn how to work with them. The next intervention technique is  structural intervention , or reorganizing to reduce friction on the team. This technique is best used if there are unproductive subgroups or cliques within the team that need to be moved around.  Managerial intervention  is the technique of making decisions by management and without team involvement. This technique is one that should be used sparingly, as it essentially shows that the team needs guidance and can’t move forward without management getting involved. Finally,  exit  is an intervention of last resort, and is the voluntary or involuntary removal of a team member. If the differences and challenges have proven to be so great that an individual on the team can no longer work with the team productively, then it may be necessary to remove the team member in question.

There are some people who seem to be innately aware of and able to work with cultural differences on teams and in their organizations. These individuals might be said to have  cultural intelligence . Cultural intelligence is a competency and a skill that enables individuals to function effectively in cross-cultural environments. It develops as people become more aware of the influence of culture and more capable of adapting their behavior to the norms of other cultures. In the  IESE Insight article entitled “Cultural Competence: Why It Matters and How You Can Acquire It” (Lee & Liao, 2015), the authors assert that “multicultural leaders may relate better to team members from different cultures and resolve conflicts more easily. Their multiple talents can also be put to good use in international negotiations.” Multicultural leaders don’t have a lot of “baggage” from any one culture, and so are sometimes perceived as being culturally neutral. They are very good at handling diversity, which gives them a great advantage in their relationships with teammates.

In order to help employees become better team members in a world that is increasingly multicultural, there are a few best practices that the authors recommend for honing cross-cultural skills. The first is to “broaden your mind”—expand your own cultural channels (travel, movies, books) and surround yourself with people from other cultures. This helps to raise your own awareness of the cultural differences and norms that you may encounter. Another best practice is to “develop your cross-cultural skills through practice” and experiential learning. You may have the opportunity to work or travel abroad—but if you don’t, then getting to know some of your company’s cross-cultural colleagues or foreign visitors will help you to practice your skills. Serving on a cross-cultural project team and taking the time to get to know and bond with your global colleagues is an excellent way to develop skills and increase your cultural intelligence.

• What are some of the challenges of a multicultural team?
• Explain the cultural intelligence techniques of head, body, and heart.
• Why do diverse teams focus more on data than homogeneous teams?
• How are diversity and innovation related?

Key Takeaways

Diverse teams lead to more creativity, innovation, and better decision making. Ultimately, diverse teams can have a significant positive impact an organization’s bottom line, but they can also create challenges due to cultural differences around decision-making, communication, and interaction among team members. By honing their cross-cultural skills leaders can expand their cultural intelligence to not only function more effectively in diverse teams, but help create a team environment of respect and trust where true collaboration can thrive.

“ Team Diversity ” in Principles of Management by OpenStax is licensed under under Creative Commons Attribution 4.0 International License .

Principles of Leadership & Management Copyright © 2022 by Laura Radtke is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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How a Diverse Team Drives Better Decision-Making

August 16, 2019  |  Hassina Obaidy

Diversity matters when it comes to your company’s bottom line. Companies that prioritize ethnic, cultural, and gender diversity are seeing positive results—that outpace their less diverse peers. Do groups with diverse members make better decisions? According to research by Cloverpop , companies with diverse and inclusive teams “lead to better business decisions up to 87% of the time. ”  Diversity plays an active role in better inclusive decision making, not just from a team perspective, but from an overall organization standpoint. A focus and genuine commitment to workplace diversity additionally helps companies build loyal relationships with their employees, customers, and community.

Diversity isn’t one-size fits all—it comes in many forms and can be achieved in a variety of ways. Two significant ways diversity results in better decision making are a diverse executive team and cognitive diversity.

Diverse executive teams lead to better financial performance

Positive change in an organization always begins at the top. Promoting ethnically and gender diverse leadership teams create significant value in an organization. When companies address ethnic and cultural diversity at the executive level, employees know that the organization genuinely understands and values the customers and community that they serve.

Gender diversity in executive or management positions increases profitability as well. In a 2018 Mckinsey report , “Companies in the top-quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability than companies in the fourth quartile. For ethnic/cultural diversity, top-quartile companies were 33% more likely to outperform on profitability.”

Sodexo , a global hospitality service, wanted to achieve gender balance as the starting point for diversity. After internal research, the company realized that greater representation of women in management positions (between 40% and 60%) correlated with superior performance on measures such as customer satisfaction and employee engagement. Since then, the company has pledged to increase the number of senior female executives to 40% by 2025.

For companies that have overcome the challenge of retaining a diverse organization, they’re one step ahead to build a diverse executive team. Ensure the promotion of top talents while keeping diversity in mind will also attract new talent.

Cognitively diverse teams accelerate decision making

Cognitive diversity is defined as the inclusion of different styles of problem-solving and perspectives and how individuals think about and engage with new, complex situations, according to Harvard Business Review . Unlike ethnic or gender diversity, cognitive diversity is not predicted by factors such as gender, ethnicity, or age. It’s also not easily detectable from the outside. Therefore, it requires us to work harder to recognize these internal differences and surface them. For example, Harvard Business Review measured cognitive diversity with a strategy execution task among different teams in a recent research study. They found that groups of the same skillsets, but the difference in age and gender, failed in cognitive diversity. On the other hand, teams with the same gender, generation, and education, “demonstrate[d] a high degree of cognitive diversity and solve[d] the task at speed.”

In addition to better decision making, cognitive diversity accelerates the decision-making process. Fresh perspectives, new ways of thinking, and a variety of skillsets naturally help teams make decisions faster. Cognitively diverse teams bring in fresh perspectives from each other to department level or project level decisions. According to Cloverpop , “highly diverse teams were twice as more likely to both make better choices and also deliver results that met or exceeded expectations.”

Like any new approach, cognitive diversity has its challenges, but, if done right, it can bring positive change. Cognitively diverse teams reinforce collaboration, think outside of the box , and challenge each other to not fit into what everyone else is thinking or doing or how they’d approach a situation or make a decision. If your organization is continuing to hire the same “Ted” because he is good at his job, the effectiveness of the same “Ted” on the organization will subside over time. Individuals who are different from your original workforce will see things differently and bring fresh ideas based on their distinctive experiences and backgrounds. This isn’t to say you shouldn’t hire or promote people who are not good at their job just for the sake of diversity. Rather, it’s important to commit to building and growing team diversity.

Do groups with diverse members make better decisions?

Having a diverse team allows for a wide range in experiences and backgrounds and allows for a broader set of ideas. Each person comes with a different way of thinking that widens the scope of what a company is able to do. When making decisions, each person is able to contribute different approaches, ideas, and thoughts, all coming together to reach a more educated and thoughtful decision.

Gender, ethnic and cultural, age, and even cognitive diversity is all around us outside of our organizations. In addition to diversity and inclusion training, organizations must go beyond traditional approaches to truly make a difference in the workplace. It’s time to elevate the awareness of the importance of diversity as more than a feel-good initiative.

There are many other ways to make your workplace more diverse and inclusive. For more thoughts, diversity and inclusion, learn how you can use the most recent California gender identity regulation to make your workplace more inclusive.

Hassina Obaidy

Product marketing manager | emtrain.

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Kellogg School of Management at Northwestern University

Organizations Leadership Oct 1, 2010

Better decisions through diversity, heterogeneity can boost group performance..

Katherine W. Phillips

Katie A. Liljenquist

Margaret A. Neale

Expanding diversity in the workplace is often seen as a good way to inject fresh ideas into an otherwise stagnant environment, and incorporating new perspectives can help members tackle problems from a number of different angles. But only a few have looked into exactly why or how this is so.

New research finds that socially different group members do more than simply introduce new viewpoints or approaches. In the study, diverse groups outperformed more homogeneous groups not because of an influx of new ideas, but because diversity triggered more careful information processing that is absent in homogeneous groups.

The mere presence of diversity in a group creates awkwardness, and the need to diffuse this tension leads to better group problem solving, says Katherine Phillips, an associate professor of management and organizations at the Kellogg School of Management. She and her coauthors, Katie A. Liljenquist, an assistant professor at Brigham Young University, and Margaret A. Neale, a professor at Stanford University, demonstrate that while homogenous groups feel more confident in their performance and group interactions, it is the diverse groups that are more successful in completing their tasks.

Diversity in the Workplace Can Produce New Ideas

Though people often feel more comfortable with others like themselves, homogeneity can hamper the exchange of different ideas and stifle the intellectual workout that stems from disagreements. “Generally speaking, people would prefer to spend time with others who agree with them rather than disagree with them,” Phillips explains. But this unbridled affirmation does not always produce the best results. “When you think about diversity, it often comes with more cognitive processing and more exchange of information and more perceptions of conflict,” Phillips says. In diverse settings, people tend to view conversations as a potential source of conflict that can breed negative emotions, and it is these emotions that can blind people to diversity’s upsides: new ideas can emerge, individuals can learn from one another, and they may discover the solution to a problem in the process. “It’s kind of surprising how difficult it is for people to actually see the benefit of the conversations they are having in a diverse setting,” observes Phillips.

“Generally speaking, people would prefer to spend time with others who agree with them rather than disagree with them.”

Phillips says the study is one of the first to look beyond the newcomer’s impact on a group and to focus instead on how the newcomer shifts alliances, thereby enlivening group interaction. “A lot of the research on newcomers has really specifically focused on the effect of newcomers as a source of new information,” Phillips says. “We know though that not all new ideas come from newcomers. Sometimes new ideas are sitting in the group already, just waiting for the right moment to come up.”

In their study, the researchers focus on whether the newcomer to the group agreed or disagreed with established group members, or “oldtimers” as Phillips refers to them. Sometimes a newcomer’s perspective aligned with one held by one or more of the current oldtimers (these agreeing oldtimers were called allies). By identifying allies, Phillips and her colleagues could determine if the benefits of having a newcomer only occurred when they brought in a new idea.

In the experiment, participants from fraternities and sororities were divided into fifty same-gender four-person groups. Each group performed the same task: read a set of interviews conducted by a detective investigating a murder. Participants decided on the most likely suspect individually before entering the groups to discuss his or her decision. In each four-person group, three individuals were always members of the same fraternity or sorority (the oldtimers) and the fourth individual (the newcomer) was either from that same fraternity or sorority (an “in-group”) or from a different one (an “out-group”).

After completing an unrelated task, the oldtimers were brought together and were given twenty minutes to come to a consensus on the most likely murder suspect. Five minutes into the discussion, a newcomer joined the group. Their task remained the same, but now they had to take the newcomer’s views into consideration. After the discussions were finished, each member rated their confidence in the group’s decision on the murder suspect, their feelings on how effective the group discussion went, how each person felt they fit into the group, and who they believed really committed the murder.

The Out-group Advantage

Unsurprisingly, oldtimers felt more comfortable with newcomers who belonged to their sorority or fraternity. But the biggest discovery was the sheer advantage an out-group newcomer gave a group—and this advantage was even more pronounced when the newcomer did not bring in a new idea. Diverse groups with out-group newcomers guessed the correct murder suspect with far greater frequency, while in-group newcomers hindered the groups’ accuracy (Figure 1). And though out-group newcomers increased group accuracy and performance, these groups reported much lower confidence in their decisions.

“When these diverse groups perform well, they don’t recognize their improved performance,” Phillips points out. “When people have visceral feelings and emotions,” she says, “it’s really hard to explain them away as “good” when they are feeling really bad.” Regardless of the outcome, a diverse group’s members will typically feel less confident about their progress largely due to the lack of homogeneity.

Homogeneous groups, on the other hand, were more confident in their decisions, even though they were more often wrong in their conclusions. In non-diverse groups, Phillips says, “often times the disagreements are just squelched so people don’t really talk about the issue. They come out of these groups really confident that everybody agreed when in fact not everybody agreed. There were new ideas and different opinions that never got discussed in the group.”

Phillips believes understanding the relationship between oldtimers who ally themselves with both in-group and out-group newcomers is important, because these relationships allow for disagreements to occur as well as newcomers’ opinions to be heard. “It is important to remember that these group members did not know each other for very long before identifying strongly with the group,” she says.

“When a newcomer comes in, it interrupts the group. It changes the flow of the process and makes people stop and pay attention to the person,” Phillips says. Whether they stop and pay attention to the newcomer is up to the group. But if they do, the pain will probably be worth the gain.

Member of the Department of Management & Organizations faculty until 2011

About the Writer Bunkhuon Chhun is a freelance science and legal writer based in Longmont, Colorado.

Phillips, Katherine W., Katie A. Liljenquist and Margaret A. Neale. 2009. Is the pain worth the gain? The advantages and liabilities of agreeing with socially distinct newcomers. Personality and Social Psychology Bulletin 35: 336-350.

Read the original

12.3 Diversity and Its Impact on Companies

• How does diversity impact companies and the workforce?

Due to trends in globalization and increasing ethnic and gender diversity, it is imperative that employers learn how to manage cultural differences and individual work attitudes. As the labor force becomes more diverse there are both opportunities and challenges to managing employees in a diverse work climate. Opportunities include gaining a competitive edge by embracing change in the marketplace and the labor force. Challenges include effectively managing employees with different attitudes, values, and beliefs, in addition to avoiding liability when leadership handles various work situations improperly.

Reaping the Advantages of Diversity

The business case for diversity introduced by Taylor Cox and Stacy Blake outlines how companies may obtain a competitive advantage by embracing workplace diversity. 96 Six opportunities that companies may receive when pursuing a strategy that values diversity include cost advantages, improved resource acquisition, greater marketing ability, system flexibility, and enhanced creativity and better problem solving (see Exhibit 12.6 ).

Cost Advantages

Traits such as race, gender, age, and religion are protected by federal legislation against various forms of discrimination (covered later in this chapter). Organizations that have policies and procedures in place that encourage tolerance for a work climate of diversity and protect female and minority employees and applicants from discrimination may reduce their likelihood of being sued due to workplace discrimination. Cox and Blake identify this decreased liability as an opportunity for organizations to reduce potential expenses in lawsuit damages compared to other organizations that do not have such policies in place.

Additionally, organizations with a more visible climate of diversity experience lower turnover among women and minorities compared to companies that are perceived to not value diversity. 97 Turnover costs can be substantial for companies over time, and diverse companies may ameliorate turnover by retaining their female and minority employees. Although there is also research showing that organizations that value diversity experience a higher turnover of White employees and male employees compared to companies that are less diverse, 98 some experts believe this is due to a lack of understanding of how to effectively manage diversity. Also, some research shows that White people with a strong ethnic identity are attracted to diverse organizations similarly to non-White people. 99

Resource Acquisition

Human capital is an important resource of organizations, and it is acquired through the knowledge, skills, and abilities of employees. Organizations perceived to value diversity attract more women and minority job applicants to hire as employees. Studies show that women and minorities have greater job-pursuit intentions and higher attraction toward organizations that promote workplace diversity in their recruitment materials compared to organizations that do not. 100 When employers attract minority applicants, their labor pool increases in size compared to organizations that are not attractive to them. As organizations attract more job candidates, the chances of hiring quality employees increases, especially for jobs that demand highly skilled labor. In summary, organizations gain a competitive advantage by enlarging their labor pool by attracting women and minorities.

When organizations employ individuals from different backgrounds, they gain broad perspectives regarding consumer preferences of different cultures. Organizations can gain insightful knowledge and feedback from demographic markets about the products and services they provide. Additionally, organizations that value diversity enhance their reputation with the market they serve, thereby attracting new customers.

System Flexibility

When employees are placed in a culturally diverse work environment, they learn to interact effectively with individuals who possess different attitudes, values, and beliefs. Cox and Blake contend that the ability to effectively interact with individuals who differ from oneself builds cognitive flexibility , the ability to think about things differently and adapt one’s perspective. When employees possess cognitive flexibility, system flexibility develops at the organizational level. Employees learn from each other how to tolerate differences in opinions and ideas, which allows communication to flow more freely and group interaction to be more effective.

Creativity and Problem Solving

Teams from diverse backgrounds produce multiple points of view, which can lead to innovative ideas. Different perspectives lead to a greater number of choices to select from when addressing a problem or issue.

Life experience varies from person to person, sometimes based on race, age, or sex. Creativity has the opportunity to flourish when those experiences are shared. Diverse teams not only produce more alternatives, but generate a broader range of perspectives to address tasks and problems. One way in which diverse teams enhance problem-solving ability is by preventing groupthink , 101 a dysfunction in decision-making that occurs in homogeneous groups as a result of group pressures and group members’ desire for conformity and consensus. Diverse group membership prevents groupthink because individuals from varied backgrounds with different values, attitudes, and beliefs can test the assumptions and reasoning of group members’ ideas.

Aligning Diversity Programs with an Organization’s Mission and Strategic Goals

Diversity helps organizations perform best when it is aligned with a specific business strategy. For example, when companies use heterogeneous management teams that are directed by an entrepreneurial strategy focusing on innovation, the companies’ productivity increases.

When an entrepreneurial strategy is not present, however, team diversity has little effect on productivity. 102 An entrepreneurial strategy includes innovation that reflects a company’s commitment to being creative, supporting new ideas, and supporting experimentation as a way to gain a competitive advantage. In other words, managers may properly utilize the multiple perspectives that emerge from heterogeneous teams by integrating them as a resource for pursuing the overall strategy of the organization.

Using Human Resources Tools Strategically

To effectively align diversity with an organization’s strategy, the human resources function must be able to engage employees at dynamic levels. Using a strategic human resources management approach to an organization can successfully integrate diversity with the organization’s goals and objectives. 103 Strategic human resources management (SHRM) is a system of activities arranged to engage employees in a manner that assists the organization in achieving a sustainable competitive advantage. SHRM practices vertically integrate with the mission and strategy of the organization while horizontally integrating human resources activities across its functional areas. By doing so, a unique set of resources can be made available to specific to the needs of the organization. Furthermore, when human resources becomes a part of the strategic planning process instead of just providing ancillary services, improved communication, knowledge sharing, and greater synergy between decision makers can occur within the organization to improve organizational functioning.

The resource-based view of the firm has been used to support the argument for diversity because it demonstrates how a diverse workforce can create a sustainable competitive advantage for organizations. Based on the resource-based view of the firm, when companies possess resources that are rare, valuable, difficult to imitate, and non-substitutable, a sustained competitive advantage can be attained. 104 The SHRM approach assumes that human capital—the current and potential knowledge, skills, and abilities of employees—is instrumental to every organization’s success and sustainability and longevity.

If a diverse composition of employees within organizations is rare, employing minorities in positions of leadership is even rarer. One exception is Northern Trust, an investment management firm that was recently listed on Forbes magazine’s 2018 Best Employers for Diversity list. 105 Thirty-eight percent of Northern Trust’s top executives are women, which is impressive because it matches the average percentage of women in full-time one-year MBA programs over the past five years. 106 The average for S&P 500 companies is just 27%. In addition, African Americans make up 23% of Northern Trust’s board, which also demonstrates the commitment Northern Trust has to diversity. This rare degree of diversity helps Northern Trust become an employer of choice for minorities and women. In turn, attracting minority applicants increases the labor pool available to Northern Trust and increases its ability to find good talent.

Diverse companies may capitalize on the multiple perspectives that employees from different backgrounds contribute to problem solving and idea generation. In group settings, members from collectivist cultures from Asia and South America, for example, engage with others on tasks differently than members from North America. Similarly, Asian, Black, and Hispanic people usually act more collectively and engage more interdependently than White people, who are generally more individualistic. More harmonious working interactions benefit group cohesion and team performance, 107 and employees can grasp better ways of doing things when there is a diverse population to learn from.

For a company to attain a sustained competitive advantage, its human resource practices must be difficult to copy or imitate. As we will see later in the chapter, companies may hold one of three perspectives on workplace diversity. The integration and learning perspective results in the best outcomes for employees and the organization. However, it is not easy to become an employer that can effectively manage diversity and avoid the challenges we learned about earlier in this chapter. Historical conditions and often-complex interplay between various organizational units over time can contribute to a company’s ability to perform effectively as a diverse organization. Best practices for targeting diverse applicants or resolving conflicts based on cultural differences between employees may occur organically and later become codified into the organizational culture. Sometimes, however, the origin of diversity practices is unknown because they arose from cooperation among different functional areas (e.g., marketing and human resources working strategically with leadership to develop recruitment ideas) that occurred so long ago that not even the company itself, let alone other companies, could replicate the process.

Diversity and Organizational Performance

Research indicates that having diversity in an organization produces mixed results for its success. Some studies show a positive relationship, some show a negative relationship, and others show no relationship between diversity and performance. Some researchers believe that although findings regarding a direct relationship between diversity and success in the marketplace may be inconsistent, the relationship may be due to other variables not taken into account.

Taking the resource-based view perspective, Richard and colleagues demonstrated that racially diverse banking institutions focused on innovation experienced greater performance than did racially diverse banks with a low focus on innovation. 108 These findings suggest that for the potential of racial diversity to be fully realized, companies should properly manage the system flexibility, creativity, and problem-solving abilities used in an innovative strategy. Other studies show that when top management includes female leadership, firm performance improves when organizations are innovation driven. 109

Concept Check

• What are the challenges and opportunities that diversity provides to companies?
• What are the responsibilities of human resources regarding diversity?
• Can diversity be a strategic advantage to organizations?

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More From Forbes

New research: diversity + inclusion = better decision making at work.

• Companies can capitalize on the diversity they already have by including more diverse employees in business decisions at all levels.
• Inclusive teams make better business decisions up to 87% of the time.
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Inclusive decision making contributes directly to the bottom line. Shutterstock

Every day there are more headlines about the challenges of workforce diversity. A focus on diversity often means a focus on hiring, and even with substantial investments of time and money, it takes years to turn the tide for companies with thousands of employees.

But there is a way to make change happen faster. Companies can capitalize on the diversity they already have by including more diverse employees in business decisions at all levels. Directly measuring this inclusive behavior focuses attention on leadership actions that executives can take today. The simple concept of inclusive decision making can bring about faster change —  and contribute directly to the bottom line.  

We recently researched inclusive decision making to understand just how much improvement is possible. The study analyzed approximately 600 business decisions made by 200 different business teams in a wide variety of companies over two years, using the Cloverpop decision-making database. The full research results on inclusive decision making  are available for download if you’d like to dive in. To topline it, our research shows a direct link between inclusive decision making and better business performance:

• Inclusive teams make better business decisions up to 87% of the time.

• Teams that follow an inclusive process make decisions 2X faster with 1/2 the meetings.

• Decisions made and executed by diverse teams delivered 60% better results.

“Diversity and inclusion must go hand-in-hand to drive results,” said Laura Sherbin, CFO and Director of Research at the Center for Talent Innovation. “Cloverpop's research bolsters the case that employers who build diverse and inclusive teams see the best outcomes."

Increased team diversity results in better decision making.

According to the research, teams outperform individual decision makers 66% of the time, and decision making improves as team diversity increases. Compared to individual decision makers, all-male teams make better business decisions 58% of the time, while gender diverse teams do so 73% of the time. Teams that also include a wide range of ages and different geographic locations make better business decisions 87% of the time.

“This research highlights the potential value of team diversity as a practical tool for architecting decision-making processes,” said Harvard Business School Professor Francesca Gino. “That our decisions get sidetracked by biases is now well established. While it is hard to change how our brains are wired, it’s possible to change the context of decisions by architecting the composition of decision-making teams for more diverse perspectives.”

We also found that diverse groups are more likely to encounter operational friction when executing business decisions. In short, less diverse teams make worse decisions, and then diverse teams struggle to put their decisions into action. The worst situation is to have an all-male team make a decision that is executed by a gender-diverse group. This worst-of-both-worlds combination underperformed by 15%. In contrast, our analysis found that the most inclusive decision-making and execution teams performed 60% better than average.

Unfortunately, non-inclusive decision making is all too common. All-male teams make about 38% of the decisions in a typical large company. The gap is even worse among less diverse companies like those in Silicon Valley’s technology industry, where teams including women make less than half of business decisions.

“Given the competitiveness of the tech industry,” said Aileen Lee, founder of Cowboy Ventures who coined the term unicorn to describe billion-dollar startups, “if you don't have women and diverse people involved in decision making at all levels, you are putting your company in a vulnerable position."

On the flip-side, this is a tremendous opportunity for companies to use inclusive decision making to improve business performance. It’s the most significant business activity —  Bain and Co. research shows that decision making effectiveness is 95% correlated with financial performance. Making improvements to your company’s decision making gives a sure boost to your bottom line.

These data-driven insights are a call to arms. Leaders can use inclusive decision making to drive meaningful improvements in months by focusing on people already employed in their organizations. If your company doesn’t act, your competitors will. And most likely, the very best companies will act first.

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How diversity makes us smarter, being around people who are different from us makes us more creative, diligent, and hard-working..

The first thing to acknowledge about diversity is that it can be difficult.

In the U.S., where the dialogue of inclusion is relatively advanced, even the mention of the word “diversity” can lead to anxiety and conflict. Supreme Court justices disagree on the virtues of diversity and the means for achieving it. Corporations spend billions of dollars to attract and manage diversity both internally and externally, yet they still face discrimination lawsuits, and the leadership ranks of the business world remain predominantly white and male.

It is reasonable to ask what good diversity does us. Diversity of  expertise confers benefits that are obvious—you would not think of building a new car without engineers, designers, and quality-control experts—but what about social diversity? What good comes from diversity of race, ethnicity, gender, and sexual orientation? Research has shown that social diversity in a group can cause discomfort, rougher interactions, a lack of trust, greater perceived interpersonal conflict, lower communication, less cohesion, more concern about disrespect, and other problems. So, what is the upside?

The fact is that if you want to build teams or organizations capable of innovating, you need diversity. Diversity enhances creativity. It encourages the search for novel information and perspectives, leading to better decision making and problem solving. Diversity can improve the bottom line of companies and lead to unfettered discoveries and breakthrough innovations. Even simply being exposed to diversity can change the way you think.

This is not just wishful thinking: It is the conclusion I draw from decades of research from organizational scientists, psychologists, sociologists, economists, and demographers.

Informational diversity fuels innovation

The key to understanding the positive influence of diversity is the concept of informational diversity. When people are brought together to solve problems in groups, they bring different information, opinions, and perspectives.

This makes obvious sense when we talk about diversity of disciplinary backgrounds—think again of the interdisciplinary team building a car. The same logic applies to social diversity. People who are different from one another in race, gender, and other dimensions bring unique information and experiences to bear on the task at hand. A male and a female engineer might have perspectives as different from one another as an engineer and a physicist—and that is a good thing.

“We need diversity if we are to change, grow, and innovate”

Research on large, innovative organizations has shown repeatedly that this is the case.

For example, business professors Cristian Deszö of the University of Maryland and David Ross of Columbia University studied the effect of gender diversity on the top firms in Standard & Poor’s Composite 1500 list, a group designed to reflect the overall U.S. equity market. First, they examined the size and gender composition of firms’ top management teams from 1992 through 2006. Then they looked at the financial performance of the firms. In their words, they found that, on average, “female representation in top management leads to an increase of $42 million in firm value.” They also measured the firms’ “innovation intensity” through the ratio of research and development expenses to assets. They found that companies that prioritized innovation saw greater financial gains when women were part of the top leadership ranks.

Racial diversity can deliver the same kinds of benefits. In a study conducted in 2003, Orlando Richard, a professor of management at the University of Texas at Dallas, and his colleagues surveyed executives at 177 national banks in the U.S., then put together a database comparing financial performance, racial diversity, and the emphasis the bank presidents put on innovation. For innovation-focused banks, increases in racial diversity were clearly related to enhanced financial performance.

Of course, not all studies get the same results. Even those that haven’t found benefits for racially diverse firms suggest that there is certainly no negative financial impact—and there are benefits that may go beyond the short-term bottom line. For example, in a paper published in June of this year , researchers examined the financial performance of firms listed in  DiversityInc ’s list of Top 50 Companies for Diversity. They found the companies on the list did outperform the S&P 500 index—but the positive impact disappeared when researchers accounted for the size of the firms. That doesn’t mean diversity isn’t worth pursuing, conclude the authors:

In an age of increasing globalization, a diverse workforce may provide both tangible and intangible benefits to firms over the long run, including increased adaptability in a changing market. Also, as the United States moves towards the point in which no ethnic majority exists, around 2050, companies’ upper management and lower-level workforce should naturally be expected to reflect more diversity. Consequently, diversity initiatives would likely generate positive reputation effects for firms.

Evidence for the benefits of diversity can be found well beyond the U.S. In August 2012, a team of researchers at the Credit Suisse Research Institute issued a report in which they examined 2,360 companies globally from 2005 to 2011, looking for a relationship between gender diversity on corporate management boards and financial performance. Sure enough, the researchers found that companies with one or more women on the board delivered higher average returns on equity, lower gearing (that is, net debt to equity), and better average growth.

How diversity provokes new thinking

More on diversity.

Read about the meaning and benefits of diversity .

Discover how students benefit from school diversity .

Learn about the neuroscience of prejudice .

Explore the top ten strategies for reducing prejudice .

Large data-set studies have an obvious limitation: They only show that diversity is correlated with better performance, not that it causes better performance. Research on racial diversity in small groups, however, makes it possible to draw some causal conclusions. Again, the findings are clear: For groups that value innovation and new ideas, diversity helps.

In 2006, I set out with Margaret Neale of Stanford University and Gregory Northcraft of the University of Illinois at Urbana-Champaign to examine the impact of racial diversity on small decision-making groups in an experiment where sharing information was a requirement for success.

Our subjects were undergraduate students taking business courses at the University of Illinois. We put together three-person groups—some consisting of all white members, others with two whites and one nonwhite member—and had them perform a murder mystery exercise. We made sure that all group members shared a common set of information, but we also gave each member important clues that only they knew. To find out who committed the murder, the group members would have to share all the information they collectively possessed during discussion. The groups with racial diversity significantly outperformed the groups with no racial diversity. Being with similar others leads us to think we all hold the same information and share the same perspective. This perspective, which stopped the all-white groups from effectively processing the information, is what hinders creativity and innovation.

Other researchers have found similar results. In 2004, Anthony Lising Antonio, a professor at the Stanford Graduate School of Education, collaborated with five colleagues from the University of California, Los Angeles, and other institutions to examine the influence of racial and opinion composition in small group discussions. More than 350 students from three universities participated in the study. Group members were asked to discuss a prevailing social issue (either child labor practices or the death penalty) for 15 minutes. The researchers wrote dissenting opinions and had both black and white members deliver them to their groups. When a black person presented a dissenting perspective to a group of whites, the perspective was perceived as more novel and led to broader thinking and consideration of alternatives than when a white person introduced  that same dissenting perspective .

The lesson: When we hear dissent from someone who is different from us, it provokes more thought than when it comes from someone who looks like us. It’s a result echoed by a longitudinal study published last year, which tracked the moral development of students on 17 campuses who took a class on diversity in their freshman year. The analysis led the researchers to a robust conclusion: Students who were trained to negotiate diversity from the beginning showed much more sophisticated moral reasoning by the time they graduated. This was especially true for students who entered with lower academic ability.

Active Listening

Connect with a partner through empathy and understanding.

This effect is not limited to race and gender. For example, last year professors of management Denise Lewin Loyd of the University of Illinois, Cynthia Wang of Oklahoma State University, Robert B. Lount, Jr., of Ohio State University, and I asked 186 people whether they identified as a Democrat or a Republican, then had them read a murder mystery and decide who they thought committed the crime. Next, we asked the subjects to prepare for a meeting with another group member by writing an essay communicating their perspective. More important, in all cases, we told the participants that their partner disagreed with their opinion but that they would need to come to an agreement with the other person. Everyone was told to prepare to convince their meeting partner to come around to their side; half of the subjects, however, were told to prepare to make their case to a member of the opposing political party, and half were told to make their case to a member of their own party.

The result: Democrats who were told that a fellow Democrat disagreed with them prepared less well for the discussion than Democrats who were told that a Republican disagreed with them. Republicans showed the same pattern. When disagreement comes from a socially different person, we are prompted to work harder. Diversity jolts us into cognitive action in ways that homogeneity simply does not.

For this reason, diversity appears to lead to higher-quality scientific research.

In 2014, two Harvard University researchers examined the ethnic identity of the authors of 1.5 million scientific papers written between 1985 and 2008 using Thomson Reuters’s Web of Science, a comprehensive database of published research. They found that papers written by diverse groups receive more citations and have higher impact factors than papers written by people from the same ethnic group. Moreover, they found that stronger papers were associated with a greater number of author addresses; geographical diversity, and a larger number of references, is a reflection of more intellectual diversity.

What we believe makes a difference

Diversity is not only about bringing different perspectives to the table. Simply adding social diversity to a group makes people  believe  that differences of perspective might exist among them and that belief makes people change their behavior.

Members of a homogeneous group rest somewhat assured that they will agree with one another; that they will understand one another’s perspectives and beliefs; that they will be able to easily come to a consensus.

But when members of a group notice that they are socially different from one another, they change their expectations. They anticipate differences of opinion and perspective. They assume they will need to work harder to come to a consensus. This logic helps to explain both the upside and the downside of social diversity: People work harder in diverse environments both cognitively and socially. They might not like it, but the hard work can lead to better outcomes.

In a 2006 study of jury decision making, social psychologist Samuel Sommers of Tufts University found that racially diverse groups exchanged a wider range of information during deliberation about a sexual assault case than all-white groups did. In collaboration with judges and jury administrators in a Michigan courtroom, Sommers conducted mock jury trials with a group of real selected jurors. Although the participants knew the mock jury was a court-sponsored experiment, they did not know that the true purpose of the research was to study the impact of racial diversity on jury decision making.

Sommers composed the six-person juries with either all white jurors or four white and two black jurors. As you might expect, the diverse juries were better at considering case facts, made fewer errors recalling relevant information, and displayed a greater openness to discussing the role of race in the case.

These improvements did not necessarily happen because the black jurors brought new information to the group—they happened because white jurors changed their behavior in the presence of the black jurors. In the presence of diversity, they were more diligent and open-minded.

Consider the following scenario: You are a scientist writing up a section of a paper for presentation at an upcoming conference. You are anticipating some disagreement and potential difficulty communicating because your collaborator is American and you are Chinese. Because of one social distinction, you may focus on other differences between yourself and that person, such as their culture, upbringing and experiences—differences that you would not expect from another Chinese collaborator. How do you prepare for the meeting? In all likelihood, you will work harder on explaining your rationale and anticipating alternatives than you would have otherwise—and you might work harder to reconcile those differences.

This is how diversity works : by promoting hard work and creativity; by encouraging the consideration of alternatives even before any interpersonal interaction takes place. The pain associated with diversity can be thought of as the pain of exercise. You have to push yourself to grow your muscles. The pain, as the old saw goes, produces the gain. In just the same way, we need diversity—in teams, organizations, and society as a whole—if we are to change, grow, and innovate.

This essay was originally published in 2014 by Scientific American. It has been revised and updated to include new research.

About the Author

Katherine W. Phillips

Katherine W. Phillips, Ph.D. , is the Paul Calello Professor of Leadership and Ethics Management at Columbia Business School.

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Diversity and Communication in Teams: Improving Problem-Solving or Creating Confusion?

• Published: 07 May 2011
• Volume 21 , pages 791–820, ( 2012 )

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• M. Laura Frigotto 1 &
• Alessandro Rossi 1  

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Despite the rich and interdisciplinary debate on the role of diversity and communication in group problem-solving, as well as recognition of the interactions between the two topics, they have rarely been treated as a joint research issue. In this paper, we develop a computational approach aimed at modeling problem-solving agents and assess the influence of various levels of diversity and communication in teams on agents’ performance in problem-solving. By communication, we intend a conversation on the persuasiveness of the features characterizing problem-setting. By diversity, we mean differences in how agents build problem representations which allow them to access various solutions. We deploy the concept of diversity along two dimensions: knowledge amplitude, which accounts for the level of available knowledge allowing access to poorer or richer problem representations (compared with complete problem representations), and knowledge variety, which pertains to the differences in the constituents of agents’ representations. We define performance as the frequency with which diverse agents choose the same alternative representation of an agent displaying complete representations of the problem. Our results indicate that communication is more effective when agents elaborate from relatively richer problem representations, as this provides a basis for integrating the variously diverse beliefs of their teammates. Conversely, poorer diverse representations may lead to worse performance when knowledge variety also applies. Lastly, we show that the influence of communication is not monotonically positive, as increasing communication intensity performance may worsen at any level of knowledge availability and knowledge variety.

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Frigotto, M.L., Rossi, A. Diversity and Communication in Teams: Improving Problem-Solving or Creating Confusion?. Group Decis Negot 21 , 791–820 (2012). https://doi.org/10.1007/s10726-011-9250-x

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The Power of Diversity: Building Stronger Teams and Driving Innovation

• August 15, 2023
• Teamwork & Collaboration

The concept of diversity holds immense potential in fostering the growth and innovation of teams. Presently, conventional hiring practices often favor candidates who mirror the existing workforce, resulting in a dearth of diversity in various aspects. This limitation impedes the organization from realizing its maximum potential. By embracing diverse teams, organizations can benefit from fresh perspectives, novel ideas, and a challenge to internal thinking, ultimately leading to innovative solutions. Additionally, diverse teams offer a more comprehensive understanding of the customer base, thereby enhancing decision-making and overall performance. However, inherent human tendencies and habitual thinking often perpetuate the cycle of familiar choices in hiring, thereby restricting diversity and impeding innovation. In order to counteract these biases, it becomes imperative to broaden hiring criteria, tap into a wider pool of candidates, and consider an array of personality traits during the interview process. The implementation of blind hiring techniques and the cultivation of an inclusive culture that values diversity can also contribute to the development of stronger teams and the acceleration of innovation.

Table of Contents

Key Takeaways

• Diversity in team building brings forth bold new ideas and challenges internal thinking.
• Diverse teams bring a variety of perspectives, generating a wider range of ideas and solutions.
• Overcoming unconscious biases creates a more inclusive and diverse team, fostering innovation.
• Utilizing complementary skillsets within a team enhances problem-solving effectiveness.

The Importance of Diversity in Team Building

The importance of diversity in team building lies in its ability to bring forth bold new ideas, challenge long-standing internal thinking, and lead to innovative solutions. Promoting diversity in leadership is a crucial aspect of team building, as it helps address unconscious biases that may exist within the team. By having diverse leaders who come from different backgrounds and perspectives, it becomes easier to create an inclusive environment that values diversity. This, in turn, helps to address any unconscious biases that may exist and ensures that team building efforts are more effective. By actively addressing unconscious biases in team building, organizations can create teams that are more diverse and inclusive, leading to a greater range of ideas and perspectives, which ultimately drives innovation.

How Diversity Drives Innovation

Different perspectives and backgrounds contribute to the generation of innovative ideas and solutions. The impact of diversity on creativity is significant, as it brings together individuals with unique experiences, knowledge, and ways of thinking. This diversity plays a crucial role in driving business growth by fostering innovation and adaptation to changing market demands.

• Diverse teams bring a variety of perspectives, which helps generate a wider range of ideas and solutions.
• The different backgrounds and experiences of team members can lead to more creative problem-solving approaches.
• Diversity promotes a culture of inclusion and openness, allowing for the exploration of unconventional ideas and approaches.

Overcoming Hiring Biases for a Diverse Team

Expanding hiring criteria and implementing blind hiring techniques can help organizations overcome biases and foster a more diverse team. Unconscious biases often influence hiring decisions, leading to the perpetuation of homogeneous workforces. To promote diversity awareness, companies should broaden their hiring criteria beyond traditional factors such as education and skillsets. This can include considering candidates from a wider range of companies and industries. Additionally, during the interview process, organizations should focus on assessing a variety of personality traits rather than solely relying on qualifications. Blind hiring techniques, such as removing identifying information from resumes and conducting blind auditions, can further mitigate biases by ensuring that candidates are evaluated based solely on their skills and qualifications. By actively addressing and overcoming unconscious biases, organizations can create a more inclusive and diverse team, fostering innovation and enhanced performance.

The Value of Different Perspectives in Problem-Solving

Varied perspectives contribute to more effective problem-solving by bringing together a range of insights and approaches. Leveraging diverse perspectives is crucial in unleashing innovation through diversity.

• Multiple perspectives offer a broader understanding of the problem at hand. Each individual brings their unique knowledge, experiences, and skills, allowing for a comprehensive analysis.
• Diverse perspectives encourage creative thinking and the exploration of alternative solutions. Different viewpoints challenge conventional thinking and foster innovative ideas that may not have been considered otherwise.
• Through the inclusion of diverse perspectives, a team can avoid groupthink and ensure that all possible options are explored. This leads to more robust decision-making and problem-solving processes.

Building Stronger Teams Through Inclusion

Incorporating a range of perspectives within a team fosters an inclusive environment and enhances problem-solving capabilities. Building trust and promoting equality are key components of creating a strong and cohesive team. Trust is essential for team members to feel comfortable expressing their opinions and challenging each other’s ideas. When trust is established, individuals are more likely to share diverse perspectives without fear of judgment or retribution. This allows for a greater variety of ideas to be considered, leading to more innovative solutions. Promoting equality within the team ensures that all members have an equal opportunity to contribute and be heard. This not only enhances team dynamics but also creates a sense of fairness and respect. By building trust and promoting equality, teams can harness the power of diversity and drive innovation.

Harnessing the Power of Diverse Skillsets

Utilizing a range of complementary skillsets within a team contributes to its overall effectiveness in problem-solving and decision-making processes. Leveraging diverse backgrounds is a key aspect of this approach. By bringing together individuals from different educational and professional backgrounds, teams can tap into a wide range of knowledge and perspectives. This diversity of backgrounds fosters innovation and creativity as team members approach problems from different angles. Furthermore, promoting cross-functional collaboration is essential for harnessing the power of diverse skillsets. When team members from different functions and disciplines collaborate, they bring their unique expertise and knowledge to the table, leading to more comprehensive and well-rounded solutions. This cross-functional collaboration allows for a more holistic approach to problem-solving and decision-making processes, ultimately enhancing the overall effectiveness of the team.

Expanding Hiring Criteria for a Diverse Workforce

Expanding hiring criteria beyond traditional qualifications allows for a broader pool of candidates and increases the likelihood of creating a diverse workforce. Inclusive hiring practices involve looking beyond educational background and skillsets when evaluating candidates. By sourcing candidates from a wider range of companies and considering a variety of personality traits during interviews, organizations can overcome biases and foster diversity. Implementing blind hiring techniques further reduces bias by removing identifying information from candidate profiles. This approach emphasizes merit and potential rather than personal characteristics. Creating an inclusive culture that values diversity is also crucial in attracting and retaining diverse talent. Such practices lead to the formation of teams with diverse perspectives, which in turn drives innovation and improves overall company performance. By expanding hiring criteria and adopting inclusive hiring practices, organizations can build stronger teams and drive innovation.

The Role of Diversity in Understanding Customer Needs

Expanding on the previous subtopic of expanding hiring criteria for a diverse workforce, it is important to consider the role of diversity in understanding customer needs. The impact of diversity on market research and the relationship between diversity and customer satisfaction cannot be understated.

• Diverse teams bring a variety of perspectives to market research, allowing for a more comprehensive understanding of customer needs.
• Different cultural backgrounds and experiences within a team can uncover unique insights that may have otherwise been overlooked.
• Customer satisfaction is closely tied to a company’s ability to meet diverse needs and expectations. A lack of diversity may result in a limited understanding of these needs, leading to a disconnect between the company and its customers.

Creating an Inclusive Culture That Embraces Diversity

Fostering a culture of inclusivity that embraces diversity is essential for organizations to create an environment where all individuals feel valued and can contribute their unique perspectives. Creating an inclusive culture promotes diversity in the workplace and encourages individuals from different backgrounds to feel welcome and included. This can be achieved through various initiatives, such as implementing diversity and inclusion training programs, forming employee resource groups, and establishing clear policies against discrimination and bias. Organizations should also provide opportunities for individuals to engage in open and respectful dialogue, allowing for the exchange of diverse viewpoints. By promoting diversity and creating an inclusive culture, organizations can tap into the full potential of their workforce, leading to increased innovation, improved problem-solving capabilities, and enhanced overall performance.

Strategies for Fostering Collaboration in Diverse Teams

Collaboration among individuals from diverse backgrounds is crucial for leveraging their unique perspectives and achieving collective success. To foster effective collaboration in diverse teams, several strategies can be implemented:

Promoting cross-cultural understanding:

Encourage team members to learn about different cultures, traditions, and perspectives.

Organize workshops or training sessions to enhance cultural awareness and sensitivity.

Foster an inclusive environment where individuals feel comfortable sharing their cultural backgrounds and experiences.

Encouraging open and respectful communication:

Establish clear communication channels to facilitate the exchange of ideas and information.

Encourage active listening and valuing diverse opinions.

Create an atmosphere where individuals feel safe to express their thoughts and ask questions, without fear of judgment or discrimination.

Emphasizing teamwork and shared goals:

Encourage team members to focus on common objectives rather than individual differences.

Foster a collaborative mindset by highlighting the importance of collective success.

Establish team-building activities that promote cooperation and trust among team members.

Maximizing the Benefits of Diversity for Company Performance

Maximizing the benefits of a diverse workforce requires organizations to implement strategies that enhance the utilization of different perspectives and backgrounds in order to enhance company performance. Leveraging diverse strengths within a team is crucial for achieving this goal. By recognizing and valuing the unique skills and experiences that individuals from different backgrounds bring, organizations can create a collaborative environment that maximizes team performance. This can be achieved through initiatives such as cross-functional projects, where employees are encouraged to work together and leverage their diverse strengths to solve complex problems. Additionally, organizations can provide training and development opportunities that promote cultural awareness and sensitivity, enabling employees to better understand and appreciate the contributions of their diverse colleagues. By actively leveraging the diverse strengths of its workforce, an organization can create a dynamic and high-performing team that drives innovation and ultimately enhances company performance.

Frequently Asked Questions

How can hiring managers expand their hiring criteria beyond educational background and skillsets to promote diversity.

By expanding hiring criteria beyond educational background and skillsets, hiring managers can promote diversity by embracing unconventional experiences and considering a wider range of qualifications, leading to a more diverse and innovative workforce.

What Are Some Strategies for Implementing Blind Hiring Techniques to Reduce Bias in the Hiring Process?

Implementing blind hiring techniques is an effective strategy for reducing bias in the hiring process. By anonymizing candidate information, such as names and demographic details, evaluators are forced to focus solely on qualifications, promoting a fair and unbiased selection process.

How Can Companies Foster an Inclusive Culture That Values Diversity?

Companies can foster an inclusive culture that values diversity by implementing inclusion initiatives and enhancing employee engagement. This can be achieved through promoting diversity awareness, creating diverse leadership teams, providing diversity training, and establishing employee resource groups.

What Are the Benefits of Having Different Perspectives in Problem-Solving Within a Diverse Team?

Different perspectives in problem-solving within a diverse team have benefits such as increased creativity, improved decision-making, and enhanced innovation. Diverse teams can overcome challenges of communication and collaboration through the role of empathy in problem solving.

How Can Companies Harness the Power of Diverse Skillsets to Drive Innovation and Improve Company Performance?

Leveraging diverse skillsets in decision making improves company performance and drives innovation. By tapping into unique strengths and perspectives, teams can challenge traditional thinking and generate bold ideas, ultimately enhancing overall organizational success.