When Does Diversity Lead to Innovation?

It is widely accepted that diversity is a key driver of innovation, and multiple studies such as this one by Forbes  confirm this assumption. However, there are also some studies which show exactly the opposite. But how is this possible?

In their book “Innovation through collaboration“, Paulus and Nijstad provide us with an important part of the puzzle in the search of the answer to that question. They speak of diversity as a “double-edged sword”, which can have both positive or negative effects on innovation. On the one hand, it allows employees to transfer their different types of knowledge among each other, and to synergize and synthesize that knowledge, in order to create something new. On the other hand, diversity can also lead to communication problems, conflicts, and lower levels of group cohesiveness.

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While diversity leads to a higher potential to generate a multitude of different ideas, it is exactly these differences in viewpoints which create a much higher potential for conflict among team members. This is something no diversity manager should ever deny. What it comes down to is what our organizational culture is in terms of handling conflicts. Collette Meehan talks of the “difference between constructive and destructive conflict“. In a culture where the emphasis is on office politics, on a competition for power, people have the feeling that they are being judged for opinions or blamed for problems. An environment like that is likely to create the outcomes I have mentioned above: distrust, dissatisfaction, and lower group cohesiveness.

But there is a reason why I say ‘potentially creates distrust’, and ‘potentially creates dissatisfaction’. There is another way. If criticism it focused on the content, and not on the person. If it is descriptive in nature, and with the goal of finding the best solution instead of downgrading the ideas of others, then there is still conflict, but it is constructive in nature. Sure, in such an environment there will still be a healthy sense of competition, but as long as employees feel that they are working together on finding a solution to the same problem, with the same goal in mind, neither distrust nor dissatisfaction will develop. Instead, people learn to embrace the diversity in opinions, and strive on the creative atmosphere.

To summarize this, diversity leads to innovation if the right kind of environment is created. Employees need a shared goal, shared values, a performance appraisal program and rewards based on team performance, as well as an environment in which dissenting opinions are embraced, not frowned upon. Furthermore, organizations need to find the right balance between diversity in knowledge, and a shared knowledge base. If their knowledge bases are too different, then information sharing is going to be difficult. If they are too similar, then they are not going to be able to achieve high levels of creativity and innovation.

Diverse teams strive if they receive a task which is nearly impossible to solve without each individuals complementary skill set. Dissatisfaction arises when the task is a simple routine task and  could easily be solved by a homogeneous team. Combine diversity with constructive conflict and you get a highly innovative team. 

Tim

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