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Managing diverse teams

Managing diverse teams

By Teresa Meek

Changing demographics and technologies have made today’s workplace more socially, culturally and ethnically diverse than ever before.

Research shows that workplace diversity can be a cauldron of innovation that produces tangible benefits to the bottom line. Yet it also poses challenges that can lead to missed deadlines, hurt feelings and dysfunctional teams. Business leaders that deal with these problems proactively fare better than those who close their eyes to them, experts say.

 

The evolving workplace

Demographic diversity has undeniably changed the makeup of today’s offices. In the United States, millennials are now the largest generation in the workforce; and they’re far more ethnically diverse than their predecessors, according to U.S. Census data. Meanwhile, older workers hit by the financial crisis are postponing retirement, raising the proportion of employees over age 55 by 40 percent, a CareerBuilder study found.

Women make up 49 percent of today’s workforce. Workers of Hispanic and Asian descent have increased, and African-Americans have gained share of employment in 44 percent of the 50 highest-paying jobs. It’s a far cry from the Mad Men days – or even the early 2000s.

Technology has further magnified workplace diversity. Even the term “workplace” no longer means what it once did (a physical building). A team is no longer a group of people who huddle together in an office corner —it may include employees based in Silicon Valley and Salt Lake City, contractors in India and remote workers in Boston and Ireland.

 

Benefits of demographic diversity

Working with people from different backgrounds is challenging as well as stimulating. New perspectives result in ideas that can benefit companies, especially at a time when marketplace demographics are also shifting. Companies with diverse management teams are more likely to introduce new product innovations than those with homogeneous leadership, a study of London businesses found.

Such innovations ultimately benefit the bottom line. Companies in the top quartile for ethnic and racial diversity in management were 35 percent more likely to have financial returns above their industry mean, McKinsey research found. Those in the top quartile for gender diversity were 15 percent more likely to have higher returns.

In the United States, earnings rise 0.8 percent for every 10 percent increase in racial and ethnic diversity, McKinsey found. And a Deloitte study showed that diverse organizations had more than twice as much cash flow compared with non-diverse companies.

Diversity at the board level also may improve results. Fortune 500 companies with the highest percentage of women board directors outperformed those with the fewest women by wide margins in sales, return on equity and return on invested capital, a Catalyst study found.

 

Management challenges

Yielding positive results from workplace diversity requires cooperation between the board and the C-suite, and differing experiences with diversity can cause conflicts, according to research by David Zhu and Wei Shen of Arizona State University.

Traditional boards respect the CEO’s decision-making authority and autonomy. “That’s how tradition gets carried on over time,” Zhu says.

Boards with women and minority members are less likely to cling to established traditions and more likely to question CEO decisions and monitor their behavior. If the CEO comes from a company with a similarly diverse board and is used to such scrutiny, such oversight may not be an issue. But a CEO who is accustomed to a more traditional board is likely to clash with one that’s diverse, which can lead to executive turnover and instability.

“Even CEOs can get into trouble if they don’t have the necessary skill set to work with diverse boards,” Zhu says.

Not surprisingly, diverse teams experience more conflicts than others, too. That’s not necessarily a bad thing —getting people out of their comfort zone can lead to better performance, Harvard researchers found. But it does mean diverse teams need support to function optimally.

“You can’t just put people from different backgrounds in the same room and hope for the best,” explains Claude Koehl-Gundlich, founder of the diversity consulting and training firm Intercultural Services. “Communication is difficult enough even when people come from the same culture — just look at couples. We all have unconscious biases. We use our life experience to get an idea of who we’re talking to. With information coming in from left and right, it’s just how the human brain works.”

The problem is, our unconscious assumptions aren’t always correct, and that can lead to conflict. Koehl-Gundlich gives an example of a car at a stoplight with a woman driving and a male passenger. “It’s green,” the man says when the light changes.

While the man may think his remark is perfectly clear and reasonable, the woman may interpret it as, “Hey, it’s been green for an hour — get going already!”

No one is right or wrong in this situation—it’s a matter of different perspectives. “We’re all in our little bubble,” she says. “Perception is very flawed, and what you hear is not what has been said.”

 

Making diversity work

The solution to such problems, which crop up often in diverse groups, is to add information for context. In this case, the man might have said, “I don’t know if you saw it, but the light’s green.” Tone of voice and body language are also important, she says.

For diversity to produce benefits, both leaders and their employees must try to understand cultural differences and hone their communication and listening skills. These skills can’t be picked up by reading about them — they need to be practiced, Koehl-Gundlich says. Giving diverse teams time to get to know one another and build personal relationships is a good idea, and so are team-building exercises centered on communication.

When they function well, diverse teams foster creativity and produce impressive bottom-line results. But they’re also prone to conflicts. Managers without training in communication or diversity should consider bringing in experts to help guide them to success.

 

7 tips for managing diverse teams

Here are a few suggestions for managing diverse teams from diversity expert Claude Koehl-Gundlich:

  1. When possible, arrange a social event, such as a meal, at the start of a project to give team members time to get to know one another and start building relationships.
  2. To avoid communication mistakes, rephrase important points others have made and ask questions to make sure you’ve understood. For example, “So you meant to say…” or “Am I right that you’re saying…?”
  3. Communicate with a positive attitude. Anger and negativity are intimidating, and people in a cross-cultural environment are naturally reticent.
  4. Clarify expectations, especially about time. “On time” means different things to different cultures. Be specific about deadlines and allow tolerance for meeting times.
  5. Hold a team-building exercise in which each person demonstrates a form of greeting from another culture. These exercises can be enjoyable and funny, loosening up team members while educating them about communication differences.
  6. Encourage team members traveling overseas to research customs of the countries they are visiting. Unlike communication skills, cultural knowledge can be absorbed through reading.
  7. Consider offering voluntary employee resource groups where minorities and others can meet to help acclimate themselves to a company. These groups may also offer leaders insight into specific customer segments.