Thursday, November 8, 2007

Why diversity works

I found myself giving a press interview this morning about leadership style and was reminded of one of my core beliefs: that diversity in senior management teams makes good business sense.

Diversity is often cited as "the right thing" for soft reasons but in my experience getting the diversity right leads to better decisions in significantly less time. When I use the term diversity in my business I mean all the usual (gender, race etc.) but just as importantly personal style, approach, thinking processes and experience. I've been on uniform exec staffs (except for me) and I've watched companies where the exec team are all the same (and golfing buddies) and those structures have major blind spots.

If you have a major decision, or really any decision, to make there are two things that factor into the quality of the decision in a small company: how fast can you make the decision and do you make the right decision?

When you bring very diverse points of view and experiences together - and you do it in a culture of trust (see my prior post on the efficiency of trust) - you get to the right decision much more quickly. As a team you can look at a problem from many angles, debate the pros and cons of the possible outcomes and have a much higher probability that you are not missing something. It's the last point that is where the improvement comes in. While it might take a little longer in the moment to get all the data out the chances of making the best decision the first time substantially improve.

The challenge is to the leader of the team. Leading a group of very different people through strategy discussions or a contentious operational discussion can be messy and exhausting. You have to make sure everyone participates - which means calling people on non-participation in the moment; you have to require direct and honest expression of opinions; and you have to have zero tolerance for posturing and politics. Sounds easy right? Well, it's not but when you get it right and get both diversity and a great culture in the room there is no problem you can't solve.

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