Benefits of Diverse Teams and How to Manage Them Well

Posted on August 02, 2021 by Renata Urban, One of Thousands of Executive Coaches on Noomii.

Diversity – one of the top 10 buzzwords today. Everyone wants it, but very few really understand what this means, how to deal with ‘diversity and inclusion’, and how to really benefit from having a diverse team or staff. We keep reading about companies that try to make an effort, such as delivery giant UPS, and companies that fall short of understanding the root causes of the problem, such as banking group Wells Fargo. While UPS announced in November 2020 to eliminate gender-specific rules and celebrate diversity rather than corporate restrictions by making every employee feel “comfortable, genuine and authentic”, Wells Fargo chief executive Charlie Scharf got into hot water with a statement he made during a Zoom meeting in August 2020 claiming that the only reason why Wells Fargo did not meet its diversity goals was because there is not enough qualified minority talent.

But why is diversity such a big deal and why is diversity & inclusion so hard to achieve?

Diversity means that your team or workforce represents a variety of ethno-socio-cultural backgrounds such as ethnicities, nationalities, genders, generations, abilities, orientations, lifestyles, experiences, disciplines, competencies, and hierarchies, but also often overlooked varieties of values, beliefs, norms, assumptions, attitudes, and preferences. However, the visual representation of such variety on the surface does not provide any advantages other than a ‘photo-op’ for an image campaign, which might even backfire. The true advantages of DEI (diversity, equity, and inclusion) can only be achieved by what I call “living and breathing the lifestyle of DEI” and the attitude of “do it like you mean it”.

This is a long journey that requires a lot of effort but well worth it.

According to two McKinsey reports, ‘Why Diversity Matters’ (2015) and ‘Delivering through Diversity’ (2018), gender diverse companies (top quartile for diversity) are 15% more likely to financially outperform those in the bottom quartile for diversity, while ethnically diverse companies are even 35% more likely to do so. The reports found that: “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.”

The McKinsey reports as well as other studies have consistently shown over time that making DEI a priority is not just the right thing to do but provides businesses with the following advantages:
• increased profit
• more creativity and innovation
• better customer insight
• more objectivity and less cognitive bias
• higher level of employee satisfaction
• boost in recognition, value, and global image
• higher success rate in employee retention and attracting new talent

But how do we get DEI right and benefit from the advantages of diverse teams?

Managing a diverse team poses certain challenges and risks. While the most successful teams are well-managed diverse teams, the least successful teams are poorly-managed diverse teams. Well-managed diverse teams may be smaller in numbers than homogeneous teams but perform better overall.

Benefits of Diverse Teams and How to Manage Them Well

Homogeneous teams can work well in many situations, but when you already have a diverse team or want to build a diverse team for increased creativity, more innovation, better customer insight, more objectivity and less cognitive bias, higher employee satisfaction, and a boost in recognition, global image, value, and profit, managers need to be ready for this challenge.

Leadership – What Managers Can Do

Managers need to be aware of the role of the individual and the role of the group. These two roles may seem counterproductive, but they can be complementary when managed well. The success of diverse teams depends on managers and leaders acting as a role model, providing psychological safety, and fostering trust and relationships. Taking a variety of values, beliefs, preferences, orientations, attitudes, lifestyles, abilities, experiences, competencies, genders, generations, nationalities, and ethnicities in your team into consideration may seem like herding cats but can be attained with the right mindset, a commitment to agility and constant improvement, and coaching to move into the right direction.

Take Baby Steps to Success

A great way to start is looking at your team meetings. Bringing different preferences and perceptions of team members to light will create awareness. Realizing that ‘your normal’ is not what everybody else considers normal and that treating them the way they want to be treated and not the way you think you should treat them is an eye-opening experience and the first step in building successful diverse teams. As for team meetings, you can brainstorm how people feel about agendas, time, delays, speaking up, listening, turn-taking, decision-making, disagreeing, giving feedback, and many other topics that can cause misunderstanding and discomfort. Setting up a framework, discovering people’s comfort zone and then expanding it with the help of a coach will further the success of a diverse team.

Taking it to the Next Level

Understanding how we build trust and relationships, showing respect for each individual team member, and providing transparency, equality, and consistent positive experiences will take your team to the next level. The most successful managers to achieve that for their teams share certain traits that we also find in people who are very successful in building intercultural competences, such as self-awareness, open-mindedness, a high level of curiosity and empathy coupled with a low level of fear and prejudice, the aptitude to listen and learn, the ability to adapt, and the willingness to see the WHY beyond the WHAT.

Want to learn more about this topic?

Then sign up for a free webinar I am offering in collaboration with the World Trade Center Palm Beach. During the 90-minute webinar “Benefits of Diverse Teams and How to Manage Them Well” on Wednesday, August 11th, 11:30am – 1:00pm EDT, I will provide some background information and research on diverse teams and why diversity is beneficial, and I will be talking about the role of the individual and the group in a team, what managers of diverse teams can do to achieve team cohesion and efficiency, and how teambuilding activities and a code of conduct can help create and maintain successful diverse teams.

You can register on the World Trade Center Palm Beach website or on my company website: Renata Urban Training.

Missed the webinar? Watch out for a recording of the webinar, which will be published on both websites about a week after the event.