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How diversity actually works, and helps the bottom line

Diverse companies perform better. This is a fact borne out by data. There is some confusion though, as to how and why this happens.

The way in which diversity helps the bottom line isn’t magic. Beyond the natural advantage of making it more likely that people’s opinions will be different, it hacks what are typically negative unconscious biases. In a sentence: diversity makes people work harder, and think more deeply.

The US studies proving this are now fairly widely cited in the business world. In one, as reported in Scientific American, it was found juries with some black members “were better at considering case facts, and made fewer errors recalling relevant information”. It turns out the “white jurors changed their behaviour in the presence of black jurors. In the presence of diversity, they were more diligent and open-minded”.

Another study found that people spent more time thinking through their arguments when they believed they would be presenting them to people with opposing political points of view. Importantly for innovation, a different study found people were more likely to pay attention and find a dissenting opinion fresh if it was presented by someone of a different race. When the exact same perspective was presented by someone of the same race, they paid less attention.

Again, it’s just as much about the perception of diversity as it is the reality. If you’re working with people who you assume think pretty much the way you do, you will not seek differences of opinion and will not think too long about your own opinion – because you don’t imagine it will receive any pushback.

Often it’s when you deconstruct your initial idea in order to rationalise it to others, that you realise how to make it better – or realise you need to change it.

Interestingly, this greater effort that we give when in a diverse group might be why we’d prefer to not be in them. As previously reported in HRM, research has shown that people generally want to be in homogenous and teams that are not diverse. We also tend to think diverse teams perform poorly, even though the evidence shows the opposite is true.

Colour blindness doesn’t work

It follows that if the business benefits of diversity work by taking advantage of our unconscious biases, demanding people pretend they don’t have any biases would be counterproductive. This is what the research has proven.  

A colour-blind approach seems promising, as it seems to achieve an inclusivity agenda while removing any appearance that a group of people will be favoured. The appeal of them is in preventing backlash like that expressed by the now-fired Google Engineer James Damore. And there is evidence that white men feel left out and threatened generally by diversity and inclusion initiatives. 

However, in a recent HBR article, the negative impact of colour-blind policies is outlined succinctly in a way that’s supported by data.

It turns out such policies decrease the engagement and increase the perception of bias from underrepresented employees. They also encourage majority employees to group together and avoid being in diverse teams (because of the “cognitive load” of maintaining the colour-blind policy).

Demanding that employees don’t outwardly acknowledge what they inwardly perceive, is both asking too much and seems silly on its face (“Oh you’re Indonesian? I hadn’t noticed, Arief”). But how do you strike the balance, and make the majority feel included in a policy seemingly tailored to promote voices that aren’t their’s?

The current go-to answer is to encourage all employees, at every level, to be allies of your program. To make everybody part of your organisation’s mission. It will be interesting to see what the research says about the best way to make this work.

Regardless, the lesson is inclusion doesn’t work when you pretend everybody is already included, and diversity doesn’t work when you want to believe everyone is treated the same. Without explicitly acknowledging that the organisation values difference and letting it be known what those differences are, people will revert to their conscious and unconscious biases.


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