"Culture isn't just one aspect of the game," Lou Gerstner wrote in his memoir of his historic turnaround at IBM, Who Says Elephants Can't Dance? "It is the game. What does the culture reward and punish - individual achievement or team play, risk taking or consensus building?" Culture is, in many ways, is how an enterprise honors its mission.

Yet all too often, culture becomes an excuse for uniformity. Managers hire people like themselves and encourage their teams to see things the same way, which can hinder a team's ability to take on new ideas. On the other hand, studies have shown that diversity can create discord that can make it hard to get things done.

Clearly, we need to balance diversity with cohesion, but that not as easy as it would seem. It takes more than just putting people of diverse backgrounds and perspectives together and seeing what happens, you need a strategy to help them to work together. So while building a diverse team is a worthy goal, we need to put some thought into how to make it work. 

How Diversity Improves Performance

Managers like things to run smoothly. They tend to hire people with similar backgrounds and skills, usually based on traits they see in themselves or in others they have worked with. These preferences get reinforced through the job descriptions recruiters use to identify qualified applicants. Those who don't meet the criteria are unlikely to get interviewed.

However, there is abundant evidence that seeking out a specific "type" can lead to poor performance. Researchers at the University of Michigan found that diverse groups can solve problems better than a more homogenous team of greater objective ability. Another study that simulated markets showed that ethnic diversity deflated asset bubbles.

While the studies noted above merely simulate diversity in a controlled setting there is also evidence from the real world that diversity produces better outcomes. A McKinsey report that covered 366 public companies in a variety of countries and industries found that those which were more ethnically and gender diverse performed significantly better than others.

The problem is that when you narrow the backgrounds, experiences and outlooks of the people on your team, you are limiting the number of solution spaces that can be explored. At best, you will come up with fewer ideas and at worst, you run the risk of creating an echo chamber where inherent biases are normalized and groupthink sets in.

The Downside Of Diversity

While the benefits of diversity are clear, there are also significant challenges. In Political Tribes, Yale Professor Amy Chua notes that we are hardwired to be suspicious of others. For example, in a study where young children were randomly assigned to a red or a blue groups, they liked pictures of other children who wore t-shirts that corresponded to their own group better.

These reactions are not necessarily the result of cultural upbringing or racial stereotypes, but seem to be even more deeply rooted. In a study of adults that were randomly assigned to "leopards" and "tigers," fMRI studies noted hostility to outgroup members regardless of their race. Group identification, without any of the normal social cues, is enough to produce bias.

The innate distinctions we make regarding each other carry over to work environments. When researchers at Kellogg and Stanford put together groups of college students to solve a murder mystery, groups made up of students from the same sorority or fraternity felt more successful, even though they performed worse on the task than integrated groups.

These findings highlight the challenge for creating a diverse workplace. While being exposed to people different than ourselves helps us become more productive, it also adds an element of discomfort to an already stressful professional environment. When combined with the demands of an increasingly competitive economy, that stress can boil over.

What Really Works

The key to balancing the demands of diversity and cohesion can be found in a study done by Muzafer Sherif back in the 1960s called the Robbers Cave Experiment. Now considered a classic, Sherif invited 22 boys of similar religious, racial and economic backgrounds to spend a few weeks at a summer camp.

In the first phase, they were separated into two groups of "Rattlers" and "Eagles" that had little contact. As each group formed its own identity, they began to display hostility on the rare occasions when they met together. During the second phase, the two groups were given competitive tasks and tensions boiled over, with each group name calling, sabotaging each others efforts and violently attacking one another.

In the third phase, the researcher attempted to reduce tensions. At first, they merely brought them into friendly contact, with little effect. The boys just sneered at each other. However, when they were tricked into challenging tasks where they were forced to work together in order to be successful the tenor changed quickly. By end of the camp the two groups had fallen into a friendly camaraderie.

We can't expect people to understand each other simply by putting them together. However, when they are given a common goal, diversity and inclusion can peacefully coexist. Incidentally, this effects strengthens when the task becomes more critical to achieve. During the Korean War, for example, despite a rocky start, racially integrated units performed equal to or better than segregated ones.

Managing Diversity

During the Iraq war, General Stanley McChrystal ran into many of the problems described above. As he explains in Team of Teams, he had a diverse group of Navy SEALs, Army Special Forces and other elite units under his command. Yet despite their individual prowess, their group identities made it hard for them to integrate their efforts and collaborate effectively.

He responded by implementing a number of strategies, such as upgrading liaison officers and embedding key personnel to serve in other units. For example, a commando would spend six months in an analyst unit and vice versa. Over time, internal silos broke down as the group identity of the force as a whole became dominant over the unit identities.

One interesting thing to note is that in a follow-up book, One Mission, Chris Fussell, recounts his experience as a liaison officer while still a junior officer. Because he had little clout at the time, he was mostly ignored. While he felt it benefited him as an officer, it did little to improve decision-making. McChrystal's later innovation was to send only top people to be liaisons.

So the lesson is that for diversity to work, it has to create a little tension and that will cause some discomfort. However, if we make it a priority and invest the resources of our best people to make it successful, the benefits will far outweigh the costs.

Published on: Apr 22, 2018