Is diversity actually as good for innovation as most experts say?
Or is this just a policy issue which doesn’t have much evidence to show performance improvements?
In the video above, I go through a series of research studies which provide some numbers behind the assertions.
In this article, I go through those studies, as well as a number of other scientific studies to answer the question:
Does having more diversity in a company make it more innovative?
Study 1: Creativity and Collaboration
The first research study outlined in the video is by Professor Brian Uzzi, who sought to understand whether teams who have previously worked together would produce more innovative output than teams which were completely new.
He did this by assessing the performance of teams producing Broadway Musicals from 1945 – 1989 and using the playbills to determine what proportion of the crew had worked together previously.
The theory was that a team who had previously produced a “hit” would have had a combination of creativity and ability to execute the idea, and would benefit from understanding each other on future projects.
However, over time teams begin to think alike and try to solve challenges using the methods which worked for them in the past, which is not a guarantee that it will work again in the future. Therefore as time goes on, these teams with the same members will eventually become less and less creative and innovative.
Uzzi’s research supported this hypothesis. While the teams who had previously created a hit would also perform well on their next endeavor, over time their subsequent musicals became less likely to be successful.
Instead, what kept creative performance high was a regular influx of new blood, to mix with a few members of the crew who had previously worked together. This new influx brought with them new ideas, perspectives and ways of working, which would push the existing team to perform at a higher level.
After analysing the numbers, Uzzi found the ideal mixture for creative teams was approximately 50% teams who have previously worked together and 50% new blood.
So for creative output, diversity is definitely a positive thing.
Study 2: What type of diversity helps problem-solving?
The second study I discuss in the video asked about what type of diversity was actually good for innovation?
Is it effective to just make sure that you have a mix of genders, ages and ethnicities in a group, and that this will automatically produce higher results?
Alison Reynolds and David Lewis published their study in the Harvard Business Review, highlighting their finding that there was almost no correlation between the diversity makeup of 100 teams and their performance of a strategic innovation task.
However, when adding another dimension to the group, they found out what distinguished the high-performing teams from those who could not solve it was not outward diversity (what physical characteristics the members had), but instead cognitive diversity (differences in perspective and information processing styles).
If all of your team think in the same way, then it doesn’t matter if they are different ages, genders or ethnicities. They are no more likely to come up with an innovative solution than a team who all looks the same.
According to the authors:
We worked with a startup biotechnology company. When its R&D team members tried our strategy execution task, they performed terribly. The team, mixed in terms of gender, age, and ethnicity, was homogeneous in how it preferred to engage with and think about change. These were PhD scientists who had been attracted to biotech to explore their specialties. But, with little cognitive diversity, they had no versatility in how to approach the task. They never finished.
On another occasion, we worked with a group of IT consultants on the same exercise. If we had not called a halt, we would have had to cancel dinner. All activity ceased, as each individual tried to work out a solution in their own head.
Conversely, we have observed siblings of the same sex, generation, and schooling, typically considered a low-diversity group, demonstrate a high degree of cognitive diversity and solve the task at speed.
Recently, two teams of European middle-aged men went head-to-head on the challenge. One failed to complete it; the other succeeded. The difference? The successful team had much higher cognitive diversity.
While the sample size of the study is very low (only 6 teams), the results appear to correlate with other studies which show that diversity in thinking styles is directly linked to team performance, and is probably one of the factors explaining the results of study 1.
Other Studies into the effect of team diversity on innovation
According to several other research studies, there is a strong positive correlation between diversity and innovativeness:
- In a study of 4,277 companies in Spain, R&D teams with more women were more likely to introduce a radical new innovation within a 2 year period.
- In a study of 7,615 companies in the UK, companies with diverse leadership were more likely to develop new products than those with homogenous leadership.
- A 2011 study showed that management teams with a more diverse set of educational and work backgrounds produced more innovative products.
- Venture Capitalists who worked together in diverse teams were able to spot profitable opportunities more effectively than teams which were more homogenous.
So the evidence is clear.
Diversity is good for innovation.
But what makes the biggest difference is not just diversity on the outside, but instead diversity within your team’s ways of thinking.
What do you think? Do you think teams should be encouraged to bring in new blood? Let me know in the comments below.
Nick Skillicorn
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Studies suggest two conflicting trends in innovation teams working together over long periods. Productivity increases as teams learn to work together, and decreases as they align their thinking – the latter outlined in the article.
Consequently, productivity peaks after a team works together for two to three years, plateaus for a while, and goes down after 5-6 years unless a considerable portion of the team is replaced.