Decision quality increases with the number of available options. The MGRUSH technique has long promoted the concept of team diversity to improve decision quality. Most understand that properly facilitated teams are smarter than the smartest person on the team, especially when you increase team diversity.
- Teams create more options than aggregating individual inputs.
Dial-Up Decision Quality with More Diverse Teams
Diverse teams push even higher, why?
A 2015 McKinsey study found that among nearly 400 public companies in the top quartile for ethnic and racial diversity in management, they were 35% more likely to have financial returns above their industry mean. An additional positive factor was found for gender diversity as well. Credit Suisse found among 2,400 global companies that “organizations with at least one female board member yielded a higher return on equity and higher net income growth than those that did not have any women on the board.”[1]
In addition to decision quality mentioned above, a November 2016 HBR (Harvard Business Review) article by David RockHeidi and Grant Halvorson provides three additional reasons to promote diversity within your teams:
- Assuredly, diverse teams rely more on facts,
- Diverse teams process facts more carefully,
- Consequently, diverse teams are more innovative
With some strong research to back them up, the rationale for each follows.
Diverse Teams Rely More On Facts
When teams and groups are stirred up with heterogeneity, they find common ground in facts. Ethnically diverse groups make more accurate predictions than homogeneous groups. Because they focus less on the subjective feelings of individuals, they present arguments that belie the objective nature of the group at large. Therefore, by mixing up groups, participants become more aware of their own biases and heuristics.
“Diverse teams are more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant.”
Diverse Teams Process Facts More Carefully
Increased diversity forces teams to take a more disciplined approach to analyzing information. Referring to a study published in the Personality and Social Psychology Bulletin by Katherine Phillips of Northwestern University, groups with ‘newcomers’ were more likely to make accurate decisions than those without.
“Remember: Considering the perspective of an outsider may seem counterintuitive, but the payoff can be huge.”
Diverse Teams Are More Innovative
Innovation drives superior profits and customer lifetime value. The authors refer to a study of over 4,000 companies published in Innovation: Management, Policy & Practice.
“ . . . they found that companies with more women were more likely to introduce radical new innovations into the market over a two-year period.”
Separately, a study of nearly 8,000 firms in the UK indicates clearly that diverse leadership teams are more likely to develop new products. Therefore, according to RockHeidi and Halvorson:
“Hiring individuals who do not look, talk, or think like you can allow you to dodge the costly pitfalls of conformity, which discourages innovative thinking.”
While the HBR article emphasizes the enrichment of employee pools by varying gender, race, and nationality, you should aspire for heterogeneity among your teams and meetings. Divers teams monitor personal bias and validate assumptions more thoroughly. As you facilitate and lead meetings with higher-quality decisions and output, your projects will and programs will more likely succeed as well.
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Don’t ruin your career by hosting bad meetings. Sign up for a workshop or send this to someone who should. MGRUSH workshops focus on meeting design and practice. Each person practices tools, methods, and activities daily during the week. Therefore, while some call this immersion, we call it the road to building high-value facilitation skills.
Our workshops also provide a superb way to earn up to 40 SEUs from the Scrum Alliance, 40 CDUs from IIBA, 40 Continuous Learning Points (CLPs) based on Federal Acquisition Certification Continuous Professional Learning Requirements using Training and Education activities, 40 Professional Development Units (PDUs) from SAVE International, as well as 4.0 CEUs for other professions. (See workshop and Reference Manual descriptions for details.)
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Terrence Metz, MBA, CSM, CSPF, PSP01, HTTO1, is the Managing Director of MG RUSH Facilitation Leadership, Training, and Meeting Design, an acknowledged leader in structured facilitation training, and author of “Meetings That Get Results – A Facilitator’s Guide to Building Better Meetings.” His FAST Facilitation Best Practices blog features nearly 300 articles on facilitation skills and tools aimed at helping others lead meetings that produce clear and actionable results. His clients include Agilists, Scrum teams, program and project managers, senior officers, and the business analyst community among numerous private and public companies and global corporations. As an undergraduate of Northwestern University (Evanston, IL) and an MBA graduate from NWU’s Kellogg School of Management, his professional experience has focused on process improvement and product development. He continually aspires to make it easier for others to succeed.
