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One of the prickliest issues in business over the past decade is encapsulated in a single word: diversity. Starting in the 2000s, the received wisdom from consultants and human-resource firms was that increasing some kinds of diversity—predominantly race and gender—would improve not only fairness but business outcomes as well. A boom in DEI programs occurred at organizations large and small. These programs institutionalized new hiring and promotion targets, mandated diversity training, and revised grievance systems.
Two decades on, DEI programs have come under attack. Some of this criticism has involved a political backlash, but some has involved research questioning their effectiveness. As far back as 2016, Harvard Business Review published an article titled “Why Diversity Programs Fail,” showing that, as generally practiced, DEI programs actually reduced gender and racial diversity in companies. Last year, psychologists reviewing the literature found that these policies also generally lowered the performance of the targeted groups and increased the perception of workplace unfairness. Many companies are now rapidly unwinding DEI programs.
Companies tend to run in a herd, which results in being either all in or all out for an innovation such as DEI. But if we allow the debate about DEI to fall into this binary trap, where diversity is just great or totally terrible, we risk losing some important insights. Instead, we should expand our understanding of the ways that diversity can truly enhance organizational success, and focus on those.
There are two kinds of human diversity. The first is the type celebrated by the philosopher Aristotle, who argued that because “of all animals man alone is capable of deliberation,” we have a unique potential to be the most diverse species on Earth. He was talking about what modern researchers call acquired attributes—education, skills, opinions, and the like. This is not the kind of diversity that most DEI programs focus on, which is the second type, based on innate or inherited attributes such as race.
The early business case for higher diversity of this second type came from studies purporting to find that it was good for financial performance. One such survey in 2009 linked greater representation of women and minorities on sales teams to better results; another study, involving experiments with college students, showed that when small teams assigned a murder-mystery puzzle were all white, they discussed the problem less than when they included a minority member, and the greater discussion led to improved outcomes.
Whether these benefits resulted specifically from greater racial and gender diversity was not clear, however. Another plausible explanation is that the team’s decision making improved by having people on the team from different backgrounds and with divergent experiences and opinions—diversity more of the Aristotelian variety, which newer research finds to be truly valuable. The most effective teams are cognitively and creatively diverse, combining people who come up with different kinds of ideas with others who are good at developing those ideas.
This is especially important for driving innovation, according to a 2020 study. But it doesn’t stop with creative style. The authors also found that ideological diversity among colleagues—seeing the world in different, even opposing ways—was beneficial (though “too much” ideological diversity, implying more frequent disagreement, had a negative effect on innovation). An obvious conclusion from this finding is that viewpoint diversity protects against groupthink, which has been shown to harm companies.
This isn’t so easy, however. Some people naturally embrace or resist diversity in ideas and thinking, which is at least in part a function of personality. Writing in 2023 in the Journal of Research in Personality, three psychologists found that people high in extroversion and openness enjoy “psychological richness” (meaning diverse experiences that change a person’s perspective) much more than introverts and those low in openness. Personality traits such as these are about half genetic. And for some people, a resistance to new ideas is biological: Research has linked varying degrees of openness with activity of the amygdala, which also controls the fight-or-flight response. In short, it is possible that new ideas might scare some people.
Achieving ideological diversity in the workplace is especially tricky because, in aggregate, people’s resistance to accepting political differences is growing. According to the polling firm YouGov, back in 2016, only 10 percent of both Republicans and Democrats said they had no friends with whom they significantly differed politically; by 2020, this figure had risen to 12 percent for Republicans and 24 percent for Democrats. This trend was corroborated by the research firm Generation Lab and the publication Axios, which found in 2021 that 71 percent of college students who are Democrats said they wouldn’t go on a date with a Republican, while 31 percent of Republican college students said they wouldn’t date a Democrat. Similarly, 41 percent of Democratic college students would not support a Republican-run business, 37 percent would not be friends with a Republican, and 30 percent would not work for one. (The Republican numbers regarding Democrats were 7, 5, and 7 percent.) You probably have your own ideas about how to account for this. Unfortunately, though, I am not aware of any differential studies of the amygdala response of progressives and conservatives.
Whatever the fate of modern DEI programs in corporate America, diversity of experience, thought, and ideology is a meritorious goal for a company to pursue. Done right, it will be good for business. Here are three pointers for that purpose.
1. Demographic proxies are not enough for useful diversity.
I have little doubt that diversity of ideas and experience correlate to some degree with categories of race and gender. But the research above has shown the possible costs of using these categories as proxy measures. This practice may harm the very people they purport to help, not least by making implicit assumptions about the way people of a particular gender or race think and act—which is not just incorrect and counterproductive, but also fairly insulting. Companies need to identify different kinds of thinkers without relying on demographic categories as a shortcut to do the sorting.
2. Look for people with high openness to new ideas.
The diversity that has the greatest business benefit is in people’s style of thinking and how they see the world. Look for ways to get more balance and broader representation in your workplace by making this a priority. For example, search specifically both for people who have a lot of ideas and for people who are passionate about bringing ideas to fruition. By all means, seek those who learned critical-thinking skills at good universities, but also seek those formed by very different experiences—in the military, in missionary or volunteer work, or through a hardscrabble childhood.
3. Get serious about political diversity.
I shared the evidence on political intolerance, but political views might seem a special case, outside the concept of diversity we’re trying to address here. I don’t believe it is. By all means, encourage civility and tolerance at work—no one needs a pot-stirrer who bullies others with their opinions and creates bad blood—but true political diversity can offer a trove of valuable market information and keep organizations from making errors. Think of the companies that have stumbled into a major political controversy because they assumed that what everyone in their bubble thinks is the same as what everyone in the rest of this huge country thinks. Political diversity protects against that.
Diversity of thought is, in many ways, harder to be comfortable with than demographic diversity. Here’s one last thought about how to make viewpoint diversity easier to achieve in the workplace and in life: Cultivate curiosity. I have written previously that a good way to achieve a more harmonious life with friends and relatives who vote and think differently is to adopt the mindset of a social scientist, genuinely fascinated by the things that others believe and say, without having either to agree or to do battle. Lots of research shows that such curiosity about others can foster trust, well-being, even health.
Corporate leaders are in an ideal position to turn curiosity about others’ beliefs into a cultural norm. This will attract and empower the diversity most needed in our society today. And it’ll be great for their business, too.
The post How Diversity Can Be Truly Profitable appeared first on The Atlantic.
