There is growing recognition that diversity — differences — matter in groups and teams. From small project teams up to executive and non-executive boards, people are starting to realise that it makes no sense if everyone is the same; that differences are important. Many organisations have put in place plans to increase diversity in their top teams and further down the organisation.

However, there is considerably less understanding of why this is important. Contrary to what some commentators would have you believe, this is not ‘political correctness gone mad’. Increasing diversity makes sound business sense for any organisation.

This page explains more about why this is the case.

What is Diversity?

Diversity, as a word, is from the Latin words divertere, meaning to turn aside, and diversus, meaning diverse or different. The word has come into common use only in the last 50 to 60 years, from about 1960 to 1970.

Diversity is about differences and variety: a diverse group contains people from different backgrounds, of different ages and sexes, and/or with a wide variety of interests.

It is therefore worth saying that diversity is NOT:

• Having a single person from a minority group, whether that is someone young or old, from a particular ethnic background, or a particular gender. This practice is known as tokenism; or

• A tick-box exercise. Genuine diversity requires mixing people from a wide range of backgrounds, skills and ideas. It cannot be done by ticking boxes.

Diversity Makes Sense

Why does diversity matter?

Research shows that being more diverse improves business performance. For example:

• A report by consultancy McKinsey from 2015 found that businesses that were in the top 25% for ethnic and racial diversity in their management structure were 35% more likely to have financial returns that were above the average for their industry. Those in the top 25% for gender diversity were 15% more likely to have above average returns.

• Research by Credit Suisse found that organisations with at least one woman on the board had a higher return on equity and higher net growth in income than those without any women on the board.

Working with people who are different from you seems to improve performance. It has been suggested that this is because it challenges ways of thinking.

It also seems to reduce bias, perhaps because it challenges it and exposes it more readily to individuals. Diverse teams also seem to consider evidence and process information more carefully.

Basically, it seems that being around people who are different from you sharpens up your mind, and helps you to think better.

In other words, the saying about being ‘pale, male and stale’ may actually be correct: that too much conformity does constrain your thinking. Diversity makes you think in new ways, which encourages innovation and better performance.

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Increasing Diversity in Teams and Groups

Over the last ten years or so, governments and organisations have put considerable effort into increasing diversity at all levels of organisations.

Board diversity is seen as extremely important, because of the perceived impact on decision-making and risk.

However, disappointingly, it has proved somewhat difficult to persuade both women and people from minority ethnic groups to join boards. Where quotas have been set, many boards are now short of directors. In other cases, the same few women sit on multiple different boards—which does not really increase diversity.

Why is this happening?

Some commentators suggest that there are simply not enough qualified women and people from minority ethnic backgrounds. In other words, these groups have not had the time or opportunities to acquire the skills to enable them to contribute at board level—or even to feel confident applying for those posts.

This is possible, but it seems more likely to be for another reason.

When groups try to increase diversity by adding just one person from a ‘different’ background, it tends to be very hard for that person to contribute effectively (see box).

It is also important to consider diversity in a much wider sense than simply sex or ethnic background. Instead, you need to consider what one commentator described as diversity of ideas.

In other words, organisations and groups need to increase diversity more generally, and not just by adding more women or people from different racial backgrounds.

Diversity means consciously building groups with people from and with a wide range of:

• Backgrounds, in terms of upbringing, schooling, experience, even where people have lived, because these can all affect the ideas to which they have been exposed, and what they consider to be ‘normal’.

• Ages, because people of different ages have different views and experiences. They may have been trained differently, even in the same field or profession. You do not want to stereotype by generation, but stereotypical generational differences may be a helpful way of seeing that growing up at a different time can lead to different experiences.

• Genders, because this too can affect views and experiences. Again, you should not stereotype people by gender, but you need to be aware that biology affects experience.

• Race, nationality and ethnic backgrounds. Racial diversity is not just about ethnic backgrounds within one country, or ethnic minority groups. Recruiting from different countries can also be a very effective way to increase diversity and creativity—and is entirely feasible for remote or semi-remote teams.

• Specialisms, because people with different expertise often have very different ways of thinking. Lawyers, for example, are trained very differently from doctors or accountants. Bringing together different specialities can often improve diversity of thinking.

• Skills, because teams need a range of skills. One of the biggest problems with teams and groups that are very similar is that they tend to have a similar range of skills. When recruiting for a group, consider the skills that you need. Aim to recruit people who can bring different skills to the table, and you will very likely also get a more diverse team.

See our pages on Understanding and Combating Stereotypes and Understanding and Addressing Unconscious Bias for more.

Finally, organisations must also consider the biases and potential biases of the recruiting team. It is much easier to build rapport and get on with people who are similar to us. The common ground is more obvious. However, this is NOT a good foundation for interviewing or recruitment. Hiring teams need to be aware of this, and take action to avoid allowing their biases to influence decisions. For example, it can be very helpful to bring in people from different backgrounds to contribute to the hiring process.

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And Finally…

The final part of the jigsaw, of course, goes beyond recruitment. Once you have recruited a diverse team or group, you then need to help them to develop group cohesion, and retain the group members in the longer term.

This may even require some cultural change, to ensure that everyone on the new group feels welcome in the organisation, and can contribute to its success.

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