Research tells us diversity enables teams to work at full potential. The differences in gender, race, generation, culture, education, values, and economic background all play a hand at digging up different angles, examining not-so-obvious details, and constructive conversation surrounding the task at hand.
The greater spread of experience a group has, the higher its ability to uncover potential problems before someone outside the team finds them first. A 2011 study found that business teams with a balance in gender performed best because both parties were doing “mutual monitoring,” or checking to make sure everyone’s doing their job. In fact, switching from an all-male team to one split evenly with female colleagues increased one large professional services firm’s revenue by roughly 41%, according to a study recently published in the Journal of Economics and Management Strategy.
But even though diversity has been proven to lead to higher productivity and revenue, people, in general, prefer to work in flatter, more decentralized environments. This is why people tend to hire others who are similar to them.
“Everything [about diversity] is basically better, except that people tend to not be as happy when they’re in more diverse teams,” says MIT economist Sara Ellison, a co-author of the study. “They also tend to work slower.”
“From my perspective, [the study’s results] are not super encouraging, but it’s not so surprising that human nature pushes us towards contributing to a group when a group is more like us,” Ellison tells Fast Company.
As an early-stage investor where most of her investments are made based on faith in the person more so than in the product or service (it doesn’t yet exist), high-profile venture capitalist Christine Herron understands all too well how important it is to have multiple heads from different backgrounds and experiences make a strategic decision.
In general, Herron says that while diversity gets you “a more thoughtful decision” because “more perspective has been put into that decision,” diversity “does not always help when you have to execute on the decision that has already been made.”
Why? Because every difference will create friction, which will, inevitably, “slow the execution process down,” she says. Put quite simply, there is a higher feeling of fellowship among individuals when they can talk openly about their thoughts without fear that they’ll be judged or misunderstood.
Herron says this friction never resolves itself unless the team members get to know each other and work out those differences. Only then will they be able to “hand the ball off” to another person during decision-making time.
This doesn’t mean that the finished work won’t be good; it often is, but just takes longer to complete because of the friction, says Herron, who says it always took her diverse teams “twice as long as it needed to” when preparing presentations because “we all consume information differently based on our experiences.”
So, what’s the bottom line with diverse versus homogenous teams?
Herron says if you have an extreme time crunch, but still want the benefit of diversity in thoughts, simply put together a smaller group or have a single point of view before workshopping it with the rest of the team.
“Your product might take a bit longer with a diverse team because you have to manage more, but the product is just so much more fantastic in the end,” she says.
Just like different types of meetings require different structures and number of participants, one should also think about what their end goal is when putting together the different types of participants in a team.
Ellison suggests not looking at diversity as having a positive or negative effect, but as having many different results, and an understanding and managing of those differences is what will make firms productive and successful in the end.