How important is diversity for team performance?
Updated: May 11, 2022
by Silvia F. Castro
A recent paper by researchers from Stanford and Berkeley, uses a novel measure of diversity to shed light into the relevance of diversity for team work. According to their findings, diversity is indeed associated with better team performance. Yet, this effect is contingent on a project’s timeline: it is positive when a team’s next milestone is distant but may turn negative as the next milestone approaches.
Pros and cons of team diversity
Non-routine analytical team tasks are the norm rather than the exception in modern economies. Nowadays, work is frequently organized in teams and a large share of the workforce performs tasks that require more intellectual effort than physical labor. This new world of required interactions among team members raises several questions. A significant one is whether diverse teams perform better compared to more homogenous ones.
Diversity can be a double-edged sword according to research: it can boost performance through an increase in creativity or problem-solving effectiveness, but it might also reduce team productivity due to increased group conflict or barriers to communication.
Prior research mainly relied on proxies for cognitive diversity, such as the team’s demographic composition, team members’ personality traits, and their self-reported attitudes and beliefs.
It has been found that cognitive diversity can improve team problem-solving effectiveness, creativity and innovation, as well as group learning. The mechanism behind is that teams that go over a broader search space have a greater probability of discovering novel ideas and of surfacing new ways to recombine known ideas. At the same time, cognitive diversity can impede teams’ ability to coordinate effectively. If team members differ in their perceptions of what must be done and when, or if they hold incompatible interpretations of key internal and external events, chaos can arise. Yet, in many cases, the measures of cognitive diversity within a group may correspond poorly to how group members actually think when interacting with one another. Whereas the benefits of diversity relate primarily to how group members engage with and respond to each other’s ideas, it is typically not possible to observe these aspects directly.
New measure of team diversity
Aiming at closing some of the gaps on the topic, researchers Lix, Goldberg, Srivastava, and Valentine introduce a novel construct to measure diversity: discursive diversity, or the differences in how team members interact. The paper looks at how well teams perform depending on the diversity and variety of the team members’ interactional language usage. Hence, the results of the study are driven by an expressed level of intellectual diversity among teams’ members, rather than by their demographic differences, team size or topic of the project.
The study uses a unique dataset on 117 software development teams and their 421 team members. Teams are remotely located, and the team members collaborate with each other through an online platform GitHub and communicate using the Slack tool. The researchers apply text-analysis techniques to the content of over 800,000 anonymized Slack messages sent by these developers to obtain time-varying measures of discursive diversity within teams.
The researchers address two questions:
1. Do teams with higher discursive diversity outperform teams that are less discursively diverse?
2. Are these effects of discursive diversity dependent on time?
The answer to both questions is yes. First, the paper finds a positive main effect of discursive diversity on team performance. This is in line with the hypothesis that diverse teams possess a broader knowledge space, they are better able to generate novel ideas and to recombine known facts. However, the effect of diversity is contingent on teams’ life cycle. While the discursive diversity benefits team performance when a team’s next milestone is relatively distant (at least, one week away), it hampers team performance when the deadline approaches. When the deadline is far away, the team is exploring and the novelty is valued. Yet, when the deadline is close, the team focuses on executing where the novelty becomes a distraction.
This research shows that diversity within a team might be relevant in more dimensions than in the purely demographic or cultural one. For firms, it is important to keep in mind when hiring or creating new teams that diversity matters, specifically when it comes to performance at different stages of a project. Homogeneity might be the direction to go when the end line of the task is close, however if the deadline is long-term, having a heterogeneous team can boost team performance.
Innovative HR practices may comprise:
· Measuring discursive diversity to predict when a team risks to miss a milestone. As this research paper shows, discursive diversity can be measured using data generated within a firm (e.g. Slack messages, exchanges on Microsoft Teams, etc.) ensuring security and anonymity of personalized data
· Introducing nudges to dial discursive diversity up or down throughout a project’s life cycle
· Adding the measure of discursive diversity to real-time dashboards that track team performance and employees’ satisfaction
· Analyzing past communication histories of employees to construct highly performing teams
Lix, K., Goldberg, A., Srivastava, S., & Valentine, M. A. (2020, June 12). Timing Differences: Discursive Diversity and Team Performance. https://doi.org/10.31235/osf.io/8pjga