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Australian Dollar Strength RevisitedEmail Marketing Business Opportunity - Helen BairstowDiversity, Good for Business or Not?The Easiest way to do a Client NewsletterWhy Warren Buffett won't buy a NewspaperRevised Stats, Tax Agents and Tax EfficiencyHow do I use ATC articles for my clients?
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Diversity, Good for Business or Not?

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Lester Wills

According to HR experts, diversity in the workplace can have a number of benefits, including improved understanding of the marketplace, enhanced creativity and problem-solving ability in teams, and better use of talent. Sounds great, but.... research findings are mixed on whether diversity does indeed have a positive effect on work-group performance or not.

According to research from Stanford diversity across dimensions, such as functional expertise, education, or personality, can increase performance by enhancing creativity or group problem-solving. So far so good. However, more visible diversity, such as race, gender, or age, can actually have negative effects on a group. So is diversity good or not?

The answer is, that depends.

According to one of the researchers, the worst kind of group for an organization that wants to be innovative and creative is one in which everyone is alike and gets along too well. However, she adds that the key to making nearly any kind of diversity work is managing it well.

It appears that the mere presence of diversity you can see, such as a person's race or gender, actually cues a team in that there's likely to be differences of opinion. The researcher goes on to add this cuing turns out to enhance the team's ability to handle conflict, because members expect it and are not surprised when it surfaces.

The flip side to this is that a more homogeneous team is less likely to handle conflict as well because the team doesn't expect it. It seems that this is because of an inherent assumption that people who look like us think alike, but of course that is often not the case.

This is because group conflict is what actually makes a team function with more of the razor's edge it needs to be innovative. The conflict in question however is intellectual conflict, debate, and controversy, not personality conflict. As the researcher so aptly points out, a good manager wants to encourage the former but prevent the latter.

In order to use this effect it is a good idea to rotate the composition of groups from time to time as a way of keeping things fresh. But what about when new people join.

To maximize the benefit, newcomers should be different in some critical way, be it in an area of expertise, level of education, manner of thinking etc. creating more of the desired diversity. What the researchers found was that when the newcomers were socially similar to the team, old team members reported the highest level of subjective satisfaction with the group's productivity. But, when objective standards were measured, they performed the worst on a group problem-solving task.

In contrast, when newcomers were different, the reverse was true. Old members thought the team performed badly, but in fact it accomplished its task much better than the homogeneous group.

It was found that teams with a very stable membership deteriorate in performance over time because members become too similar in viewpoint to one another or get stuck in ruts. The researchers added that one rut for individuals is that of continually playing the same role in the group.

Consequently, managers should purposefully assign roles such as 'devil's advocate', or 'cheerleader', and occasionally switch around those roles. If this is not done, after a while a chronic devil's advocate will simply be ignored, to the detriment of the group. As the researchers note, if a manager publicly assigns someone else to play that role for a while, that new person initially will be much more influential, even if he or she doesn't do it as well.

Sadly not all managers are insightful enough to make such changes so team members should consider how they could change their own role from time to time to surprise the group and keep it on its toes. According to the researcher, a good question to ask yourself is, do you want to be right or do you want to be effective?

One area in which diversity is absolutely, positively a liability, warns Neale, concerns a group's goals and values. "Conflicts and differences in this area will generally destroy a team," she says. "Managers simply must get team members to be in agreement about what the task is and the values that drive its pursuit." The tone that a manager sets from the very beginning in meetings around a group's mission and values can go a long way toward bridging diversity along both visible and invisible lines.

While it may seem paradoxical, one way to foster cooperation is to create an atmosphere in which dissenting views can be freely aired. "The minority viewpoint, whatever that may be, and whether it comes from a person who looks different or not, needs to be supported," she says.

Also counterintuitive is the idea that "a lot of diversity is better than a little diversity." The worst scenario is one in which a member is seen as a token representative of any given group. In her work studying dynamics of race, Neale, along with her colleagues Katherine Phillips of Northwestern and Gregory Northcraft of University of Illinois, found that three-person teams performed better when each person was a member of a different ethnic or racial group. "Two-on-one scenarios with, say, two Caucasians and an African-American, resulted in poorer performance than when the team comprised a Caucasian person, an African-American person, and an Asian-American person," she says.

Most of the research findings, Neale notes, are unexpected. "You wouldn't necessarily think that the conflict caused by diversity could lead to better performance, or that a team that feels more comfortable with itself in fact underperforms, but that's what studies show," she says. Her most important recommendation to managers? "Pay attention to the research. It will help you figure out whether what you're learning by doing is really the right thing."


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