The Value of Diversity in Decision-making

The Value of Diversity in Decision-making
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If you take a quick trip through literature, both academic and popular, on the value of diversity in decision-making, a couple of ideas jump out. One is that diverse groups are smarter than homogeneous ones, in terms of solving problems and making decisions. People who bring different experiences, skills and backgrounds to group decision-making process force the group members to examine more alternatives, prepare better for decision-making, and anticipate different viewpoints. The variety of ideas that come up in diverse groups is one source of this outperformance, and another is more careful information processing that happens in more diverse groups.

Being better at group decision-making and diversity doesn’t mean being more comfortable. It is often more difficult to reach a decision, much less a consensus, in a diverse group, and the likelihood of conflict is greater. In short, just because diversity makes for better decision-making doesn’t mean it’s more fun. Perhaps that’s one reason for the glacial pace of progress in achieving greater diversity in corporate executive ranks and boardrooms; the network of people we know, like and are comfortable with, just feels more convivial than groups that include people we don’t usually think of as being in the tribe. This is a place where the “no pain, no gain” advice has some traction.

Was it fun for the board of Nike to listen to its first woman member, Jill Ker Conway, exhorting the company to pay more attention to the female athletic equipment market? We may never know, but we can certainly imagine that it wasn’t. Judy Rosener writes about Nike’s and Conway’s journey in her book America’s Competitive Secret: Women Managers, noting that the board took a while to warm up to Conway’s idea that the company create a women’s division.

“Initially her idea was rejected out of hand. As Nike president Richard Donahue recalled, “Our habit was to make a male product, color it pink and sell it.” Conway kept arguing for a separate division run by women and targeting female customers. Eventually the board acquiesced, and by late 1993 the women’s division accounted for20 percent of Nike’s domestic revenues.”

By May 2016, Nike’s revenues from its women’s segment had revenues of nearly $6.3 billion, and the company announced plans in 2015 to grow that to $11 billion by 2020.

Yes, that’s an anecdote, and that is not the same as proof. But it does comport with the results of real research, such as a Harvard study that documented that teams with more women on them outperformed teams with higher IQ scores on a set of tasks including brainstorming, decision making, and visual puzzles.

The bottom line: there are good, well-researched reasons why having more equal gender balance results in better outcomes.

Ready for a deeper dive into this topic? Read my recent whitepaper “The Business Case for Gender Equality.”

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