Studies Find Diverse Teams to Be More Effective

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Numerous studies have found that both inherent and acquired diversity is associated with business success. For example, a 2009 analysis of 506 companies showed that firms with more racial or gender diversity had more sales revenue, more customers, and greater profits. Additionally, a 2016 analysis of more than 20,000 firms in 91 countries found that companies with more female executives were more profitable.

Laboratory experiments have also shown the direct effects of diversity on team performance. In a 2006 study of mock juries, when African Americans were added to the group, white jurors processed facts more carefully and deliberated more effectively.

Although evidence suggests that diversity leads to greater success, many companies continue to struggle with attracting and retaining a more diverse workforce. This is, in part, because research shows that homogenous teams feel more effective, and people believe diverse teams are associated with greater conflict than they actually are.

A 2009 study of fraternity and sorority members published in Personality and Social Psychology Bulletin demonstrates the difference between how diverse and homogenous teams work together. In the study, teams were tasked with solving a murder mystery. First, students were individually given 20 minutes to study the clues and determine the likely suspect. They were then placed into teams of three with fellow members from the same Greek house and were given 20 minutes to discuss the case together and provide a joint answer. Five minutes into the discussion, a fourth team member joined the group — someone from either their own house or another one.

After collectively identifying a suspect, members individually rated aspects of the discussion. Groups joined by someone outside their Greek house judged their team interactions to be less effective than the groups joined by those from their same house; they were also less confident in their final decisions. Often, people more easily understand one another on homogenous teams, which can give the perception of progress, while dealing with outsiders can cause friction and feel counterproductive. However, in this case, the teams’ judgments were wrong. Among groups where all three original members didn’t already know the answer, adding an outsider doubled their chance of arriving at the correct solution — from 29 to 60 percent — which suggests that working on diverse teams produces better outcomes precisely because it’s more difficult.

A common bias, which psychologists refer to as the “fluency heuristic,” shows we prefer information that is processed more easily, judging it to be truer or more pleasant. This effect partially explains why we gain greater appreciation of songs or paintings when they become familiar.

Another common bias, made evident by a 2015 paper in Organization Science, involves people overestimating the amount of conflict cause by diverse teams. This type of thinking can impact hiring as well as the ways in which leaders create teams and encourage collaboration. Other research suggests that when people with different perspectives are brought together, they may seek to minimize those differences; however, researchers say that in order to benefit from them, differences should be taken seriously and highlighted. Indeed, another study found that if racial and ethnic differences were recognized and celebrated, minorities reported feeling more engaged in their work.

This collection of research suggests that diversity initiatives may not be successful until the way diversity is perceived is addressed more thoroughly.