The paradox of teams: diverse teams are smarter but not easy

Teamwork is one of the defining characteristics of the modern workplace. It is widely acknowledged that bringing different perspectives together results in increased performance, innovation and creative problem-solving.

In fact, McKinsey found that diversity on teams can boost financial returns by 35 per cent.

The reality for Irish organisations is that they have increasingly diverse workforces, with the potential to drive more opportunities. As Mark Redmond of the American Chamber put it: "To serve global markets you need to have a global workforce."

It's also true that a diverse team is simply smarter – less likely to succumb to groupthink, make assumptions or show bias. Ajay Banga, executive chairman of Mastercard, says, "If you surround yourself with people who look like you, walk like you, talk like you, went to the same schools as you and had the same experiences, you'll have the very same blind spots as them. You'll miss the same trends, curves in the road and opportunities."

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Challenge

However, a major challenge for managers is that the differences between individual team members, which can bring so many benefits to a team, can destroy it too. The very differences that can lead to creativity and innovation can be the reason that team members fail to gel.

There is no precise formula in building a team but we do know that, in order to benefit from teamwork, the group has to be able to bond.

Google carried out a multi-year research project into what makes for a good team. The most important characteristic was not who was in the team, but how they work together. The key requirement for a good team is a strong bond, which creates trust. High levels of trust support both sides of teamwork – the safety to share new ideas and the communication needed for good co-ordination.

Teams bond by building a shared group identity. We create a sense of shared values based on being similar to other people, where that similarity is in some way meaningful and positive. Just because we both prefer tea to coffee may not be enough to form a group bond. The fact that we are both accountants may be very meaningful and help us to feel like an in-group. This shared similarity helps us to overlook other differences between us and makes us feel like we work together for a common goal.

Social categories

Common social categories that support a group identity are age, gender, and ethnicity. As you can see, the basis for a group bond can easily become prejudice against out-groups. So how do you take a multicultural workforce and build strong teams?

NUI Galway researcher Laura Tighe looked at overseas experience to see if it could serve as a basis for group bonding. Ireland has a long experience of emigration; many Irish people have had summer jobs and other short overseas work followed by a return to Ireland. Could this experience and the characteristics associated with people who do this form the basis for connection with employees of other ethnicities who have moved to Ireland?

Overseas experience was found to be a salient social category, which means that people inside and outside of the group attribute specific labels to people with that experience. However, more research is needed to see if this is enough for a group bond.

It does offer one way to potentially allow the benefits of diversity to be retained in the group, while providing another, non-threatening, bonding mechanism. Managers could intentionally use overseas experience as a basis for forming team bonds.

So how can organisations reap the benefits of diverse teams?

Organisational climate

Organisational climate is one lever: the leadership team can create a climate of openness that embraces multicultural difference as a value. A Harvard Business Review study found that a clear message from the top will support successful teams by countering the mistaken perception that diversity brings conflict.

Team leaders can be intentional about finding and reinforcing grounds for team bonds, such as past overseas experience or other shared values. And team members assigned to a diverse team can tap into the higher performance benefits by working through the friction of difference to actively look for common ground to build a shared group identity.

Remote working has the potential to increase the diversity of teams, but how do remote teams build a shared identity?

Axonista, for example, is a remote-first Irish technology company selling interactively all around the globe with a dispersed remote workforce. They pay close attention to culture and communication, and build in regular connection through daily virtual coffee mornings, a Friday end-of-week ritual, and special events.

Shopify has always had remote employees. It also emphasises communication practices, both to ensure smooth co-ordination and "connecting to build trust, empathy, and understanding". The company uses technology for daily hangouts, for sharing informal snippets of life and also has a clear protocol for online project communications to create reliability.

Diverse teams may be harder to manage and require working through some friction: but when the rewards are so great, it’s definitely an investment worth making.

Laura Tighe works as an education development specialist at the Insurance Institute. She carried out her prize-winning research on team diversity while studying for an MSc in Human Resource Management at the J.E. Cairnes School of Business and Economics, NUI Galway

Dr Rachel Hilliard is a senior lecturer in innovation management at the J.E. Cairnes School of Business and Economics, NUI Galway