February 19th, 2019

3 Ways in which diversity and inclusivity strengthen your team

Hiring is essential for every business out there. It’s the foundation on which all the products, services and success are built. The success of each company hangs on the quality of the hiring practices.

Diversity is one of the biggest trends in hiring at the moment, with 78% of companies ranking it as extremely important. Companies are focused on increasing inclusion and belonging alongside diversity because feeling like an essential part of the team is what makes people stick with you. It’s what makes your team comfortable and improves performance.

And it doesn’t hurt that hiring a diverse team gives you a measurable competitive advantage in terms of earnings. McKinsey found that:

  • Companies in the top 25% for racial and ethnic diversity are 35% more likely to beat the industry average earnings
  • Companies in the top 25% for gender diversity are 15% more likely to earn above the industry average
  • Companies in the bottom 25% for gender, ethnicity and race are less likely to hit above average earnings than the companies sitting in the middle

Over the last few weeks we already examined specific ways you can optimize your hiring process. If you missed an article, you can catch up here:

  1. 5 Ways To Increase Diversity and Inclusion in Your Hiring (And Strengthen Your Team)
  2. How to review your hiring process (and make it stronger)
  3. How to craft a compelling internal job description that improves candidate quality and diversity

Today I’d like to take a broader look and examine exactly why diversity strengthens your team by looking at some compelling scientific research. A lot of the reasons diversity works may not be what you think- and the studies are fascinating. So let’s dive right into 3 ways diversity helps you build a high-performing team and gives you an extra competitive advantage.

1. Diverse teams are better at talking to each other and sharing information

Studies suggest that socially diverse groups - based on race, ethnicity, gender or sexual preference- are better at sharing information than homogenous groups. Seeing that clear communication is vital for success - and a compelling competitive factor - a more diverse team could help you perform better.

Katherine Phillips, Margaret Neale and Gregory Northcraft studied the impact of racial diversity on small group decision making. Their findings were very interesting.

Here’s what they did:

They split up a group of undergraduate business students from the University of Illinois into groups of three. Some groups were made up of just white members and other groups had two white and one non-white members. Then they asked the students to participate in a murder mystery exercise.

The objective was simple. The groups had to work together to solve the mystery. Each group was given shared information. However, each member of the group was given a key piece of information that the other members did not have. Those pieces of data were critical for solving the mystery so in order to win, the group would have to communicate what they knew effectively.

That’s where things got rather intriguing. Groups with racial diversity did better than homogenous groups. They shared the information more effectively and solved the problem more successfully.

The researchers theorized that this was because homogenous groups assumed they all had access to the same data and did not communicate it well. This can really put a stopper on innovation.

So if out-of-the-box thinking and strong communication is important to your team’s success, then racial and ethnic diversity can help improve everyone’s performance.

2. Inclusive teams with opposing perspectives work harder

Including people from different perspectives, ages, ethnicities, genders and nationalities can make everyone work harder.

Researchers Denise Lewin Loyd, Cynthia Wang, Robert B. Lount. Jr and Katherine Phillips ran an experiment to test how people with different ideologies work together. Participants were from mixed genders and ethnicities but each identified as either a Democrat or a Republican.

Each participant read a murder mystery and tried to guess who did it. Afterwards they were asked to prepare for a short meeting with a different group member who disagreed with their take on the mystery- the purpose of the meeting was to try to convince their partner. To prep they had to write an essay sharing their take on the story and defending their choice for the perpetrator.

But there was a second twist: half the participants were told that their partner was from the opposing political party, while the other half were told their partner shared their political views.

Both Democrats and Republicans prepared less when they thought their partner shared their views. However, both prepared a lot more- and did a better job - when faced with a partner with opposing views.

Talking to people with different opinions than you sparks action in a way that homogeneity does not. The experiment uncovered one other fascinating thing. When participants were asked to focus on getting along with their partner, they produced even better results- when you bring together a group of different people working towards a common goal, they create amazing things.

And it’s not just people with opposing social and political views that work harder together. Richard Freeman and Wei Huang from Harvard University reviewed more than 2.5 million scientific papers and found that those with diverse teams- in terms of ethnicity and geographic location- had more citations, more research and more rigor. Papers with diverse authors also tended to get published in higher impact journals and have a greater effect on their industry.

3. Racial and ethnic diversity opens up the door for innovation

Anthony Lising Antonio from the Stanford University ran an experiment alongside five colleagues. The researchers wanted to explore the effect race had on opinions in a small group dynamic.

The participants - students from various universities in California- were asked to discuss a social issue - either child labor practices or the death penalty - for 15 minutes. Then the researchers gave written dissenting opinions to white and black students and asked them to present those to the group.

The researchers found that when a black student delivered the opinion to a group of white students, the students paid more attention. They saw the perspective as more novel and gave it deeper consideration than when the same perspective was presented by a white student.

Antonio and the other researchers posited that we pay more attention to a dissenting opinion when it’s presented by someone different than us. Listening to distinct and opposing views can increase both creativity and innovation - two crucial things in today’s hyper-competitive marketplace.

A better, shared future

Hiring diverse candidates from different backgrounds can have a profound impact on team performance. It can help your team work harder, think outside the box and come with innovative, creative solutions that are much harder to reach in a homogenous environment.

It’s a distinct competitive advantage. And who doesn’t want one of those?