Does diversity make individuals smarter?

Thursday, April 7, 2016 - 16:27

We've all heard how diversity is good for society, the economy and communities in general. Anyone who has been through leadership training will also know that diversity can lift the performance of a company.

However, research has so far avoided the question of how diversity can make a person smarter. So what positive influences does diversity have on individual actions?

Diversity: A group project

One of the major obstacles to understanding the effect of diversity on the individual is that diversity is considered a group dynamic. Think about the the conversation on corporate diversity. From the offset, the debate is framed through the lens of a large organisation with a multitude of stakeholders. 

When people talk about increasing, for instance, gender diversity on corporate boards, they tend to offer solutions based on the concepts of quotas and targets. What this does is reformat diversity into a numbers game that can misconstrue the aim of the project in the first place

But let's not get mixed up here. Diversity targets and quotas are a means to an end, and in this position they can be excellent mechanisms for creating heterogeneous companies and organisations. However, if this approach becomes the end goal, we can lose sight of the very real qualitative and quantitative effects diversity can have on an individual's mental capacities.

Yet, when we reframe the debate to think about the impact diversity can have on an individual, we open up new understanding that can have a positive influence on everyone associated with an organisation.

Informational diversity and personal growth

Now this is an interesting turn. According to research from the Scientific American, to understand the positive impact of diversity, we must first talk about 'informational diversity'.

When we bring a range of individuals from different backgrounds together, the information they bring to the table is influenced by who they are and where they come from.

A study from Tufts University looked at the effect diversity had on information sharing in a courtroom setting. The outcome was that groups which were composed of people from a range of ethnicities typically exchanged a much wider range of information than a homogenous group. 

As you can most probably guess by now, the heterogeneous groups were much better at considering a case facts, fewer errors occurred when recalling important data and the group were much more inclined to confront any elephant in the room - in this case race.

But what does this mean for an organisational leader?

Have you ever heard of the saying: No man is an island? Well this is particularly important for CEOs and other organisational leaders. 

Take this research on market trading in homogenous groups published in the National Academy of Science of the United States. Researchers found groups that were ethnically diverse were 58 per cent more more accurate when choosing the value of their assigned stocks. 

The research highlights that when an individual is within a group, they are more likely to listen and follow the advice others. However, in many cases this advice can influence individuals to make bad decisions.

Yet, if the group of people stem from a range of gender and ethnic backgrounds, the information shared and utilised within the decision-making process is more varied and can have a much bigger positive impact. 

For organisational leaders, creating a diverse company can have a great impact on their decision-making capabilities and in effect, make a person smarter. By reframing the great diversity debate through the lens of individuality, the ability to perceive the positive effects become more explicit to individual leaders.