Diversity isn’t just a ‘nice thing to do’ – studies show that it is a way forward for companies to perform better, and even increase the bottom line. Studies by psychologists such as Irving Janis, and social psychology experiements by luminaries such as Solomon Asch, show that diverse teams make better decisions. The complexity scientist Scott Page has looked at mathematical models.
There is the thinking in the Dilbert comic below:
Here, Dilbert is commenting whether these companies are well run because their Boards are diverse, or do well-run Boards decide to appoint diverse boards? It is a horse and cart question.
What does the data science say? Do organisations do this because it is a ‘nice’ thing to do? According to complexity specialist Scott Page, professor of complex systems, political science and economics at the University of Michigan, diversity:
- produces organisational strength
- leads to higher productivity
- strongly linked to innovation
Using mathematical models, he was able to link diversity to productivity and innovation.
Furthermore, research by McKinsey, an international management consultancy firm, has shown that diversity makes for better decision-making at all organisational levels, with companies with women in top management performing better operationally and financially compared to other companies in similar sectors.