Special Follow-up Review: Diversity and Top Management

In the November 2001 issue of LeadershipOpportunity (New Name: Integral Leadership Review) I provided a summary of Kate Sweetman, “don’t Worry, Be Happy,” MIT Sloan Management Review, Fall 2001. That article included a summary of findings from another article (Sigal G. Barsade, et al, “To Your Heart’s Content: A Model of Affective Diversity in Top Management Teams,” Administrative Science Quarterly, December 2000.) A key finding that was reported:

“The success or failure of top management may hinge on something few of us ever consider. That is the range of temperaments across the senior team.one important contributor to team success is .a common attitude toward life.”

I wondered what this meant for our notions of diversity, particularly the idea that personality, style and experience diversity is valuable for creativity and innovation and even interpretation of data and the generation of meaning. So, I decided to go to the source: the originalAdministrative Science Quarterly article.

This seems like an important area to consider since it impacts performance, recruitment and lots of assumptions that I carry (and perhaps you do to) about the nature of pluralism and its importance in business. Furthermore, this particular study is unusual just by the fact that data was gathered from 62 top management teams with a total of 239 top managers. CEOs of 36 publicly held, 20 privately held and 6 not for profit organizations and the members of their management teams were included. 97% of the CEOs were male; 11% of the team members were female.

The focus of this study is on “individual differences in positive affective personality; “the degree to which a person is cheerful and energetic (high positive affect) versus subdued and reserved (low positive affect).” These can be thought of as the general moods of individuals as opposed to transitory emotions.

I refer you to the original article if you would like the details. Here are a few things that caught my attention. Consider these to be food for thought:

• Our abiding attitudes toward life and work can be perceived and is likely to be the explanation for people who are similar attracting each other.
• “The finding that people consciously and unconsciously prefer others who are similar to them is one of the most robust and reliable social psychological findings.” [805]

The hypotheses of the research:

Hypothesis 1: “Individual members who are more similar to others in their group in trait positive affect will be more satisfied with the interpersonal nature of their group experience than those who are more affectively dissimilar.” [807]

Hypothesis 2: “Individual group members who are more similar to others in their group in trait positive affect will perceive themselves as having greater influence within the group than those who are more affectively dissimilar.” [807]

Interestingly, the authors site several research reports that indicate that diversity, affectively and demographically gets in the way of communication and teamwork and increases conflict.

Hypothesis 3: “Affectively homogeneous groups will have greater cooperation and less task and relationship conflict than will affectively diverse teams.” [808]

They cite research that shows that if team members are affectively like the CEO, the latter will trust them more and, consequently involve them more in decision making.

Hypothesis 4: “Similarity in trait positive affect between a group leader and his or her group members will lead to the leader’s using a more participative than autocratic decision-making style.” [808]

There is no clear consensus in the literature as to whether diversity influences performance outcomes. So the verdict is still out on that one. However, when we focus on the studies of affective homogeneity, the authors think that they demonstrate that homogeneity can positively influence group performance. Cooperation is increased; conflict is decreased.

Hypothesis 5a: “Affectively homogeneous groups will have better group performance than will affectively diverse groups.”

Studies have shown that diversity does positively impact creativity and the capacity to deal effectively with tasks requiring problem solving and innovation. This research also shows support for a positive relationship between diversity, on the one hand, and company growth rates, firm performance and effectiveness in responding to competitors.

Hypothesis 5b: “Affectively diverse groups will have better group performance than will affectively homogeneous groups.”

Now this is what represents the mainstream of thinking about diversity as I have understood it.

And here are some of their key findings:

• Team members are more satisfied with personal relationships under conditions of similarity.
• The more similar the member to others, the greater the influence.
• The more similar the members, the more cooperation.
• The more diversity, the greater were the stressful social relationships.
• CEOs with greater similarity to the rest of the team were marginally more participative in their decision-making style.
• There was no significant relationship between cooperativeness, task conflict, emotional conflict or CEO participativeness and financial performance.
• Financial performance was higher for top management teams with functional diversity, that is, with broad representation of different functionality in the organization (finance, marketing, operations, general management, etc.)
• Finally there was no relationship between group process and financial performance. The authors find this to be puzzling.

There was also the suggestion that when you have cultural diversity, affective similarity can help bridge the differences.

So, the study is an important one in that it is one of very few that gathers data from a meaningful base of top managers, including CEOs. On the other hand, results are somewhat mixed and it is difficult to generalize the conclusions.

Diversity is still important. And it is equally important to be aware of different kinds of diversity: culture, style, affect, functional and so on. Particularly when we get into issues of high performance teamwork we need to be more sophisticated about issues of diversity. Finally, the relationship between diversity and innovation seems to continue to be a positive one. Perhaps there are ways to work with different kinds of diversity to foster innovation even more.

> Russ Volckmann