How Diversity Works

Could a greater miracle take place than for us to look through each other's eyes for an instant? | Henry David Thoreau

In a previous post, Getting Diversity Right: Start At The Beginning, I discussed the unconscious biases that cloud our judgment in selecting candidates in hiring decisions. In this second post in this series on diversity, I am exploring how the social interactions in diverse and non-diverse groups lead to the benefits and difficulties involved. The benefits — like improved performance and innovation — have an obvious appeal, but learning how to harness diversity comes from understanding how it works, which is, as we will see, directly related to the quote from Thoreau, above.

People report higher job satisfaction when teamed with others of the same gender. These are the findings of economists Sara Fisher Ellison and Wallace Mullen as reported in Diversity, Social Goods Provision, and Performance in the Firm. Their research was focused on a large professional services firm with many small offices, and they correlated financial data with survey results about job satisfaction. In particular, they inquired about morale, satisfaction, cooperation, and attitudes about diversity: in some cases, the groups were diverse (mixed male and female), and others were of only one gender. The revenues align with the perhaps expected finding: the more diverse teams had better financial results. The mismatch with job satisfaction is perhaps startling, but not when lined up with other research: diversity comes with benefits but they incur a cost.

As Katherine Phillips states bluntly,

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.

There is a useful distinction between diversity of expertise — where a group’s members combine their skills, experience, and perspectives toward a shared goal, such as making a Hollywood movie — and social diversity. Diversity of expertise is a requirement for movie-making and myriad other enterprises.

Social diversity, however, isn’t as obvious a positive — leaving aside the social justice issues of opportunity — and, in fact, comes at a cost, as the decrease in job satisfaction in Ellison and Wallace’s work demonstrated.

Phillips asks the most important question:

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 answer is that diversity leads to innovation. And given the high value of innovation in any line of business, innovation is worth the pain. Diversity can have a direct positive impact on a company’s bottom line, increase creativity, and change the way people think.

How does it work, though?

Bringing together a diverse group of people improves the likelihood of innovative thinking by increasing the range of information, perspectives, and opinions available to the group.

A specific example is that of bringing women into leadership teams. A study by Cristian Dezsö and David Gaddis Ross showed that between 1992 and 2006, when companies in the S&P Composite 1500 list introduced women onto their top management teams, those companies generated an average of 1 percent more economic value, averaging more than $40 million.

Katherine Phillips describes the benefits of racial diversity, boiling down years of research from dozens of studies to a single sentence:

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.

So, racial diversity leads to more and broader consideration of ideas and, therefore, better results.

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All of this stretching of perceptions and working to understand diverse opinions and perspectives comes with a price tag: some members of diverse teams — even when shown the evidence of better results — don’t believe the process of adapting to more and broader perspectives leads to better outcomes. These findings come from a different study by Phillips and fellow researchers, where they selected some members of a group with an existing connection — like sorority sisters — and paired them with a newcomer.

We argue that these individuals, who are in agreement or allied with socially dissimilar group members, will feel insecure, and this alliance will threaten their social ties with the other in-group members on the team. Because they feel threatened, allies with socially dissimilar group members should be motivated to reconcile the differing opinions in the group. The motivation to resolve the discrepancy in opinions should benefit group performance as members dig deeper into the alternative perspectives in an effort to reconcile the divergent opinions. A critical issue here though is that this improved performance may still come at a cost. Group members may not recognize the improved performance and may feel that the interactions in surface-level diverse groups are more uncomfortable and less effective than in homogeneous settings where they receive support from socially similar others.

Although diversity wins the race, the racers — at least some — don’t want to run that race again. The friction involved is demotivating, and shades perceptions

That is one of the downsides of diversity, and which may explain the job satisfaction issues Ellison and Wallace discerned.

In the third post in this series, I will explore some practical advice about making diversity work and other insights into its complexities, perhaps leading to a finer-grained appreciation — and balancing — of harnessing diversity in the organization and ways to decrease some of the friction involved.

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