Industry Insights

How to Lead and Manage Diverse Teams

Posted by StratX on Jun 30, 2021 11:32:52 AM

It has been said countless times that “diverse teams perform better”, “diverse teams are smarter” or “diverse teams improve performance”, but is it that straightforward? Does it hold true for every company, situation, and team? Leading a diverse workforce is one of the new challenges of thousands of organizations today. This blog aims to collect key insights and resources for managers to understand how to set up their Diversity, Equity, and Inclusion (DE&I) strategy and lead a collaborative, inclusive, and high-performing team. 

Understanding the benefits and challenges of a diverse team

Joining a team of people with different backgrounds geographically, demographically, or professionally, could be extremely interesting and enrich your employee experience. Some of the benefits of having diverse teams include: 

  • inspire creativity and drive innovation,  
  • increase local market understanding,  
  • foster cultural sensitivity,  
  • unlock opportunities for personal and professional development. 

Nevertheless, we must flag some challenges that the organization and the team will need to overcome to achieve greater performance: 

  • certain people may be less likely to be heard depending on their culture, 
  • onboarding and integrating new members across multicultural teams may take more time and effort, especially when trying to avoid building stereotypes, 
  • messages can be misinterpreted across languages and cultures, 
  • it might feel less comfortable at the beginning. 

 As a leader, understanding the challenges that managing diverse teams represent can help you identify policies for promoting an inclusive culture that takes the best out of diversity.  As a member of a diverse team, being aware of these benefits and challenges will increase your willingness to collaborate and communicate more effectively.  

Recommended Reading # 1Why Diverse Teams Are Smarter 

Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance (….) Diverse teams are more likely to constantly reexamine facts and remain objective (…) By breaking up workplace homogeneity, you can allow your employees to become more aware of their own potential biases.

From a diverse group of people to a high-performing team 

Establishing a performing diverse workforce does not happen overnight. To build a robust DE&I strategy it’s important to consider different elements of the business in addition to employees. In our previous blog A 5-Step Plan to Improving Diversity & Inclusion in the Workplace you will find our top 5 recommendations to create a diverse and inclusive organization.  

The transformation from diversity to an inclusive environment that helps increase performance occurs when instead of hiding the differences, these are highlighted. It will be uncomfortable at the beginning, and it could generate conflict. Human beings prefer information that is familiar, and easy to process. Diversity will provoke additional and longer discussions, but this is how the team will come to more robust conclusions, considering unusual perspectives, experiences, and expertise.  

Recommended Reading # 2 - Why diverse teams make better business decisions 

It’s not just diversity in gender, race, ethnicity, and cultural background. Studies show that employees from companies which are diverse in both inherent and acquired (traits you gain from life and work experiences) diversity are 45 percent more likely to report a growth in market share over the previous year and 70 percent more likely to report the firm captured a new market. 

Recommended Reading # 3Diverse Teams Feel Less Comfortable — and That’s Why They Perform Better 

On a homogenous team, people readily understand each other and collaboration flows smoothly, giving the sensation of progress. Dealing with outsiders causes friction, which feels counterproductive. But in this case their judgments were starkly wrong. Among groups where all three original members didn’t already know the correct answer, adding an outsider versus an insider actually doubled their chance of arriving at the correct solution, from 29% to 60%. The work felt harder, but the outcomes were better. 

Getting ready to effectively lead and manage a diverse team 

There are specific skills that managers can cultivate to build a safe environment for culturally diverse teams to thrive in.  

  • Emotional intelligence and self-awareness

How well you know yourself will have a major impact on your personal development and growth, but it will also play a relevant role in the success of diverse teams. During our leadership seminars with clients, we always emphasize the importance of leading yourself to then be able to lead the team. Being conscious of your identity, your style, your strengths, and areas of improvement will help you understand and accept those from your team members.  

It’s natural to have biases. However, good managers will exercise self-awareness to identify their prejudices and those from the team. The leader should listen, promote empathy, help to create bridges and communication channels to manage conflict and enable everyone to thrive and perform better. 

  • Conflict management 

Conflict mediation should be seen as a constructive exercise that enables the diversity of your team to be a catalyst for growth. Managing conflict is a development opportunity for managers and will benefit the entire team as they will feel more comfortable voicing their unconventional ideas, disagreement, and proposals for doing something disruptive, but innovative. Frequently, conflicts occur because of miscommunication. 

  • Communication 

Any leader should have a good level of communication skills. When managing a diverse team, creating the conditions that encourage open communication across the team demonstrates that diverse opinions are appreciated and respected. In addition to that constructive environment, you and your team might need to master communicating effectively across different cultures, languages, generations, etc. 

  • Cultural awareness

Exercise your curiosity to discover what you really have within your team. Remember that we intend to highlight instead of hiding the differences. A good book to help you understand these differences and how to navigate them is “The Culture Map” by Erin Meyer. Erin is a professor at INSEAD and her work focuses on how the world's most successful managers navigate the complexities of cultural differences in a global environment. 

Reading # 4 How To Effectively Manage Your Diverse Team 

In teams where diversity is high, we found that cohesion tends to be low, which means that they don’t necessarily trust each other and more likely to have conflicts. Which as you probably know is pretty disastrous for productivity (…) When organisations focus on increasing diversity rather than on managing existing diversity, diverse teams are often found to collaborate less effectively and are reluctant to exchange and share ideas.  

Key Takeaways 

  • A diverse workplace will help to keep your team members’ biases in check and make them question their assumptions, base their decision on verified facts, and consider other perspectives. 
  • Diversity will feel uncomfortable at the beginning, but the team will come up with more robust conclusions, considering unusual perspectives, experiences, and expertise. 
  • Take the challenge of managing a diverse team as a development opportunity to become a more self-aware, emphatic, inclusive, and inspiring leader that the team trusts and wants to follow. 

More readings and podcasts around diverse teams 

Recommended Reading # 5Diversity wins: How inclusion matters 

Diversity wins is the third report in a McKinsey series investigating the business case for diversity, following Why diversity matters (2015) and Delivering through diversity (2018). 

Podcast # 1Katherine Phillips, Columbia Business School: Why Diverse Teams are Smarter 

How can we move diversity and inclusion beyond a conversation? It’s one of the defining questions facing the world of work, and one that it is our responsibility to answer. Katherine Phillips, Reuben Mark Professor of Organisational Character and Director of The Bernstein Centre for Leadership and Ethics, Columbia Business School, sat down with Michael Hocking to discuss how businesses can create better diversity and inclusion in the workplace. 

Podcast # 2 - Why Diverse Teams are Smarter, but Don’t Feel That Way 

In this episode of Your Brain at Work, NLI CEO Dr. David Rock is joined by Associate Professor of Psychology at Columbia University, Dr. Valerie Purdie-Greenaway, and NLI Senior Consultant Dr. Paulette Gerkovich to discuss the compelling, and science-backed, business case for diversity, how to build diversity in teams, and why despite feeling less comfortable, diverse teams perform better. 

Podcast # 3 - How diversity and inclusion can be accelerators of innovation 

In this episode of the Agents of Change podcast, EY’s Roger Park is joined by Trusha Mehta, EY Americas Financial Services Diversity and Flexibility Leader, to discuss how a diverse workforce directly impacts a company's ability to innovate, as well as its financial performance. 

Podcast # 4 - Why inclusion and diversity are key to great teams 

Top-down approaches to leadership are the least effective way of managing healthcare organisations whereas inclusive and compassionate leadership helps create a psychologically safe workplace and reduced patient mortality. Roger Kline tells the Editor of BMJ Leader James Mountford how inclusion and an evidence-based approach to leadership could ultimately improve healthcare and the health of staff at work. 

Topics: Women Leadership, Workforce Diversity

More Insights

Talent engagement is a must for tackling ESG goals

How does talent engagement relate to ESG?


Learn More

ESG and Value Creation

ESG refers to the Environmental, Social, and Governance...

Learn More

Experiential learning could be the key to your ESG transformation

Environmental, social and corporate governance (ESG) is a...

Learn More

Characteristics of High-performing Teams

In the world of business, effective teamwork is critical in...

Learn More

The Challenges of Creating a Diverse Cross Functional Team

What is a cross functional team?

A cross functional team...

Learn More

What is a T-Shaped Leader?

T-shaped leadership provides a more agile alternative to...

Learn More