This article is intended to present research illustrating the positive effects of diverse teams in the workplace. Many companies are rolling out diversity and inclusion efforts, and we believe it’s important to provide employees with clear reasons why diversity is good for business as part of these programs.

Defining Diversity

We define diversity with the broadest possible definition:

  • Gender Diversity
  • Racial Diversity
  • Age Diversity
  • Ethnographic Diversity: Encompassing people from different cultural backgrounds.
  • Experiential Diversity: Inclusion of employees who come from a diverse background of prior work experience.
  • Educational Diversity: Inclusion of many different educational backgrounds and perspectives when hiring. This has its limitations; for disciplines such as medicine, advanced degrees are mandatory. But when possible, including qualified, equally skilled applicants from both academic and practical backgrounds.
  • Idealogical Diversity: Bringing together people of various different viewpoints and belief systems.

There is no magic quotient for what diversity breakdown is the perfect balance for a company or team. Diversity targets may vary dramatically.

In addition, we take the pragmatic approach that for any given circumstance, the goal should be to increase the diversity of the team by those groups who are currently underrepresented. Practically speaking, that may for example mean the inclusion of more males into a group, such as in the field of nursing, or women in STEM. This is to maximize the benefits we cite below.

Positive benefits of diverse teams:

  1. Team Performance Increases: A McKinsey study shows that teams that are gender diverse are 15% more productive, and teams that are ethnically diverse are 35% more productive. In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent for the groups studied.
  2. Better Outcomes: A group of professors conducted a study that proved that diversity leads to better results when problem solving. The groups with racial diversity significantly outperformed the groups with no racial diversity.
  3. More Effective Debates: Diversity of perspective forces us to make our viewpoints more honed and data-driven, because we know we need to be prepared to defend our ideas against others who may not share the same views. This leads to stronger pressure-testing of major decisions and assumptions,  which results in enhancement of the decision making abilities within the organization. A research project concluded that even the introduction or suggestion of idealogical diversity led to more thorough preparation of ideas and more thoughtful debates. This is especially useful in fields where the socratic method is valued.
  4. More Impactful Research:  Researchers examined the ethnic identity of the authors of 1.5 million scientific papers written between 1985 and 2008 using Thomson Reuters’s Web of Science, a comprehensive database of published research. They found that papers written by diverse groups receive more citations and have higher impact factors than papers written by people from the same ethnic group. Moreover, they found that stronger papers were associated with a greater number of author addresses. Geographical diversity, and a larger number of references, is a reflection of more intellectual diversity. This could also be explained by the network effect of conducting work amongst widely diverse networking circles, with a broader aperture of resources to tap into.
  5. More Human-centric and Lovable Products: Teams from a wide range of perspectives and backgrounds can bring forth a broader understanding of human user experiences when developing products. There have been many reports of big misses companies make when they do not user test or incorporate diverse needs or use cases into their product, with potentially embarrassing consequences.  Other examples include mistranslation of documents by not having people who fluently speak the language within your organization.

These are just several of the reasons why diversity is correlated with good business. Feel free to share these statistics and studies with your leadership team and your employees as part of your holistic diversity and inclusion initiatives.