This post is devoted to the debate on the advantages and challenges of diverse teams in business and explores how a manager can benefit from the diversity to improve the performance of the team, and whether the ability to manage diverse teams is key to success in IT industry.
Imagine yourself being listening to music. Can you remember your favourite composition or song? How many notes can you hear? How many musical instruments were used to create this composition? Can you imagine a piece of music consisting of just one note extracted from just one musical instrument? No. It would not sound pleasant, interesting and impressive, would it? It is the diversity of notes, instruments and their combinations that creates the harmony of sound. In the same way the diversity of people in a team gives birth to creativity and harmonious performance.
The nature of diverse team can be different. It might be either cultural diversity resulting from the emergence of global workforce due to globalization and increasing migration (UN DESA 2013) or psychological diversity originating from differences in personalities and individual behavioural attributes (Afolabi and Osayawe 2005).
Diversity might have a controversial effect
Diversity holds both advantages and challenges for teams and their managers. Multiple researches and case studies have been conducted to explore the impact of diversity on team performance (Senichev 2013; Woehr, Arciniega and Poling 2013; Nielsen and Nielsen 2013; Boone and Hendriks 2009; Jackson, Joshi and Erhardt 2003).
Most of them tend to agree that diversity has mainly positive influence. Indeed, there is a range of widely recognized benefits for organizations from the diversity of workforce:
- greater creativity – views from different perspectives help to find fresh, unusual approaches to team tasks and the diversity of ideas gives birth to innovation, which is a vital element of organization’s success in the modern highly competitive business environment;
- increased productivity – a team comprising people with different but complementary skills is likely to deliver better results and work more efficiently. The evidence suggests that diversity is positively related to team productivity (Richard et al. 2004);
- wider customer base – diverse team has better opportunity to understand needs and wants of the global and diverse target audience and, therefore, find the way to satisfy more people with their corporate product.
One of successful examples of how a company might benefit from the cultural and psychological diversity of its employees is the case of the Lenovo-IBM alliance. After Lenovo took over IBM’s PC division in 2006, the new integrated corporation emerged where eastern and western business cultures were blended. The outcome of this fusion was the launch of a new line of PC’s targeted at small and medium sized U.S. businesses – a market traditionally ignored by IBM – which finally resulted in increased sales and the stock market price immediately going up (Johnson, Whittington and Scholes 2011). However, this merger also caused several problems.
As far as the negative impact of diversity is concerned, it might become the source of conflict. What would music sound like, if ten different musical instruments simultaneously played different melodies at the same time in one place? Would it be music at all? Each being producing a beautiful sound, altogether they would cause disgusting noise. Analogically, the difference in cultural backgrounds or just personal values among team members at workplace might cause argument and misunderstanding. Stereotypes and biases are additional obstacles to effective communication. When diverse teams fail to cooperate and exchange information – diversity becomes a burden. This was exactly the case with Lenovo-IBM at the first stage of their merger.
Chinese and American colleagues faced communicational difficulty due to differences in national and business cultures (medium age of employees and managers, attitude to time, behaviour at meetings), language barer and lack of face-to-face contact between teams. At the forming stage, according to Tuckman model (1965), if applied to global corporation scale, this discrepancy significantly impeded the working process. But at the second stage – storming – they managed to establish constructive dialogue: Chinese, who traditionally like to listen, started to be more direct in addressing problems, while Americans, who are typically talkative, learned to listen to their Asian colleagues. Finally, they created a new shared corporate culture at the norming stage and even came out with positive results on the last – performing – stage.
A team is just like a musical band
Each member has its role and each member is essential. You can hardly imagine an orchestra made up of ten pianists. Each member of the band is playing its own part on a particular instrument, and similarly each member of a business team should do its own job that reflects personal strengths, as described in the Belbin team roles theory (1993).
One of the nine Belbin’s “functional” team roles is co-ordinator, or leader in other words. Any orchestra as a diverse team has a bandmaster – its leader and co-ordinator. The task of co-ordinator is to manage diversity – to recognize it, understand individuality of team members and allocate a suitable role for each member.
Ibarra and Hansen argue that the diverse teams demonstrate better results only if they are wisely led. “The ability to bring together people from different backgrounds, disciplines, cultures, and generations and leverage all they have to offer, therefore, is a must-have for leaders” (2011: 71).
For Lenovo-IBM it turns out to be true. Each division had different competences and different market sectors coverage, but through adopting diversity as their corporate HR management strategy the alliance achieved higher competitiveness and gained larger market share. The Lenovo-IBM example proves the ability to manage diverse teams to be a crucial skill for leaders in modern IT companies.
Toni Tenicela, Global Leader at IBM, talks about how to leverage diversity to the benefit of the organization:
Conclusion
Diversity within a team might become the driving force of creativity and efficiency as well as an obstacle to understanding and cooperation. Therefore, it is a task and major challenge for a team manager to take advantage of diversity to deliver better results.
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References:
Afolabi, A. O. and Osayawe, E. B. (2005) “Psychological diversity and team interaction processes: A study of oil-drilling work teams in Nigeria”. Team Performance Management 11 (7/8) 280 – 301
Belbin, R.M. (1993) Team roles at work. Oxford: Butterworth-Heinemann
Boone, C. and Hendriks, W. (2009) “Top Management Team Diversity and Firm Performance: Moderators of Functional-Background and Locus-of-Control Diversity”. Management Science 55 (2) 165 – 180
Ibarra, H. and Hansen, M. (2011) “Are You a Collaborative Leader?” Harvard Business Review 89 (7/8) 68 – 74
Jackson, S.E., Joshi, A. and Erhardt, N.L. (2003) “Recent research on team and organizational diversity: SWOT analysis and implications”. Journal of management (29) 801 – 830
JoHnson, G., Whittington, R. and Scholes, K. (2011) “Lenovo computers: East meets West”. Exploring strategy. 9th edition. Harlow: FT Prentice Hall, 291-293
Nielsen, B.B. and Nielsen, S. (2013) “Top management team nationality diversity and firm performance: A multilevel study”. Strategic Management Journal 34 (3) 373 – 382
Richard, O.C., Barnett, T., Dwyer, S. and Chadwick, K. (2004) “Cultural diversity in management, firm performance, and the moderating role of entrepreneurial orientation dimensions”. Academy of Management Journal 47 (2) 255 – 266
Senichev, V. (2013) “Human resource diversity and performance within the frame of organizations, teams and individuals”. Business: Theory & Practice 14 (4) 337 – 345
Tuckman, B.W. (1965) “Development sequence in small groups”. Psychological Bulletin (63) 384 – 399
United Nations Department of Economic and Social Affairs/Population Division (2013) World Population Prospects: The 2012 Revision, Volume I: Comprehensive Tables [online] available from <http://esa.un.org/wpp/Documentation/pdf/WPP2012_Volume-I_Comprehensive-Tables.pdf> [22 February 2014]
Woehr, D., Arciniega, L. and Poling, T. (2013) “Exploring the Effects of Value Diversity on Team Effectiveness”. Journal of Business & Psychology 28 (1) 107 – 121
Leading in a changing world 
Unity in diversity has always proved fruitful but don’t you think that bringing out that unity in diversity in an organization is the most typical job one has to come across !
I would agree that nowadays it is becoming an increasingly common case, especially in big organizations, let alone multinational corporations. It is due to the managing “workforce diversification” trend, actually, that this very blog appeared.
I completely agree with your point of view about the benefit of diverse teams in business, I only can add that such diversity needs really good managing thanks to which employees are likely to feel more invested, more committed and more likely to try their best.
I’ m touched by your music metaphor. Thanks to it, the subject becomes vivid, easy to imagine, to feel. A company in fact resembles an orchestra. It has also been so curious to see the two sides of the matter: the undoubted advantages of the diversity along with the inevitable pitfalls. Besides, I didn’t know that my faithful friend, dear little Lenovo on which I am typing this, was nimble enough to take over IBM ! Thanks a lot. Good luck!
Thanks a lot. Follow me to learn more about leadership and management in my next coming blog.
Nice post. I like your metaphor about diversity in music. I even think there must be more similarities between business teams and bands, think of it 🙂
Thank you, Daniel. Yes, sure there are more similarities than those I’ve covered in the post. Apart from the need for diversity (the key idea of the post), the presence of a leader/bandmaster, and the necessity of coordination – which all three are kind of “organizational” and “structural” features, they also share similar purpose: to be creative, to be innovative and to make people happy.
The product of a musical band/orchestra – a piece of music – is to inspire, being it dreams or memories, and make people feel better. Any product of a collective business team work (it might be a new design of a car, a market research report, or a super-light laptop) is meant to serve someone’s need and want, and the better the quality of the product – the happier is the ultimate user. So, both are creating something, that will serve progress, move our lives forward and create a better environment. Hopefully.
Thank you for such a thought-provoking reply. You made me think of the same idea from a new perspective.