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The idea that diversity boosts corporate performance and innovation is becoming mainstream.
So far, the focus of attention has been mostly on factors of social diversity: the diversity of race, gender, and sexual identity.
Unfortunately, less is known about the importance of cultural diversity: the diversity of religion, ethnicity, and nationality. For example, I’m aware of only one study explicitly addressing the relation between innovation and religiosity. (I wrote about this study here).
That’s why I was excited to come across a 2016 paper by a group of Italian researchers led by Prof. Alessandro Ancarani. Ancarani et al. analyzed the performance of 66 multinational healthcare teams operating in three large hospitals in Dubai, United Arab Emirates, a predominantly Muslim country.
Using the proportion of Muslims vs. non-Muslims within a team as a measure of religious diversity, the authors found an inverted U-shaped relation between diversity and performance: moderate diversity was associated with higher performance, while homogeneous and highly heterogeneous teams underperformed moderately diverse ones (see the picture below, reproduced from Ancarani et al., 2017)
Interestingly, the positive effect of moderate diversity on performance was stronger for teams performing more complex tasks (e.g., surgical vs. clinical teams), which reminds me of the fact the positive effect of liberal social policies on innovation is especially strong in knowledge-intensive industries like tech.
The authors argue that there should be a “right mix” of religious diversity. A moderate degree of diversity is beneficial to the performance of the teams, adding new capabilities and perspectives. This happens when there is a dominant religious group and a smaller subgroup within a team.
However, when diversity is high, large homogeneous subgroups emerge, making communication more difficult and conflicts more likely. Supporting this last point was a finding that negative effects of high diversity can be mitigated by the presence of robust conflict resolution protocols within teams.
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The particular design of the study makes it difficult to generalize its results; more research analyzing different religions, countries, and professional settings are needed.
However, I was intrigued by the notion that an “optimal dose” of religious diversity is required for better performance.
I feel the same may be happening when we observe the positive effects of social diversity. When we say that the presence of women on corporate boards improves board performance, we mean that women are usually added to the boards that are composed predominantly of men.
Do the effects of gender diversity on performance follow the same inverted U-shaped relation?
How will women-dominated boards perform compared to boards composed of equal numbers of women and men? Will the addition of a few men improve the performance of a women-only board? Will the same inverted U-shaped pattern hold in the case of racial and sexual minorities?
It will be important to have answers to these and similar questions. But regardless of the answers, one thing is clear: diversity is a powerful tool, and we need to figure out how to use it in the most effective and efficient way.
Image credit: Noah Holm on Unsplash
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