WannaCryDiversity

On a single day last May, a massive cyber-attack called WannaCry Ransomware blighted over 200,000 Windows computers in some 150 countries. It might have been more had it not been for the quick actions of Marcus Hutchins, a cyber-security expert, who discovered a kill-switch built into the ransomware’s code. Apparently, before infecting a system, locking its files, and demanding a ransom from its owner, the ransomware first checked for the non-existence of a gobbledygook web domain. Hutchins simply registered the domain for $10, brought it into existence by pointing URL requests to his own server, and thereby thwarted the attack. Hutchins became an overnight hero (sadly for him, the new status did not last much longer than overnight). However, you or I could have claimed some credit for halting WannaCry. All we would have needed was Hutchins in our team, and set him to work. Failing that, we would have to have had at least one person in our team capable of coming up with the idea of looking for a kill switch, another able to find it hidden in the code, and another with a credit card to put in a call to GoDaddy.

While we cannot all recruit Hutchins to our team, assembling the others is more easily attainable. Indeed, whenever we face complex tasks, all we need to do is to make sure we have a team that consists of one person capable of understanding the problem, one capable of finding a solution, and preferably one other able to recognise whether the proposed solution is tenable or flawed. In order to be sure of having at least one of each in our team, irrespective of the task, we should prefer a collection of people with a wealth of non-overlapping expertise, experience, information, and access to networks and resources, i.e., a very heterogeneous group. Only in this way could we be sure to have all our bases covered. A further precondition is that these people must communicate well with each other so that each can benefit from what others bring to the table. It is here that diverse groups sometimes run into difficulty.

Multiple perspectives from which to look at a problem, to understand it, and to find creative solutions, are precisely the wealth of diverse teams. It can also be a curse if members find the diversity divide – the differences in gender, ethnicity, personality, attitudes, or values – too wide to bridge. If one is unable to empathise with others, because they are perceived as ‘one-of-them’, trust is diminished and cooperation is undermined. Commitment to the group wanes, because individual members cannot see themselves engaging in such groupwork in the future. Sometimes tensions rise, or break out into open conflict. Under these conditions, fruitful communication becomes hardly possible.

In an entirely diverse group, everybody is in a minority of one – unique perspectives, skills, and opinions. Here, at least, there is no ‘us’, although there could still be a perception of a ‘them’. Corporate working groups, though, rarely attain this degree of thoroughness. Rather, diversity is something that emerges at the periphery – sometimes in the form a single individual. This does not mean marginal efforts are futile, as the advantages of diversity do not result solely from the contribution of the heterogeneous team member. Other team members tend to change their behaviour in a beneficial way in the presence of diversity. For instance, juries are more thorough in their deliberations, make fewer factual errors, and correct each other more readily in the presence of ethnic diversity.[1] Similarly, male board members’ attendance at, and preparation for board meetings improves when a woman joins the board.[2] If, as  Woody Allen reminds us, “eighty percent of success is showing up”, this should contribute to the effectiveness of the board. However, minorities of one often fall victim to what is known as ‘majority influence’. Wary of upsetting the status quo, and desirous to fit in, single-person minorities sometimes self-censor, and do not speak out. Here too, communication is hindered, and the group does not gain the advantage of that person’s unique perspective or constructive dissent.

How can one secure the advantages of diversity without the downside? Firstly, although there is growing evidence of economic, as well as process advantages to diversity in management and in boardrooms[3],[4],[5], the issue should not be reduced to one of simple utility. Diversity at senior levels in a firm sends positive signals to labour markets, product markets, and financial markets, that the firm values equality and social justice. This provides legitimacy for firms in their interactions with external stakeholders, i.e., customers, investors, regulators, etc. It also helps them to reinforce internal governance norms.[6] Hence, diversity must be recognised as desirable in and of itself. Secondly, groups must embrace diversity more thoroughly. Although a group with a single heterogeneous member is technically ‘diverse’, evidence does suggest that advantages might only be secured beyond a critical mass. Minority voices, apparently, like to have someone to back them up.

Research has also revealed that the width of the diversity divide is to some extent just a matter of perception. It resides in the beliefs of the team members. In one experiment, deliberately diversified teams were tasked with finding solutions in a brainstorming task. The information required to do so, while available to teams as a whole, was selectively distributed to individual team members. To succeed, therefore, members would have to communicate and share the information that each held. All teams had the same information at their disposal. The only difference between them was in what they were told to expect from the exercise. One set of teams were told in advance that diverse groups typically performed better on the task. The other set was told that homogeneous teams typically outperformed heterogeneous ones. The results were striking: the groups that held pro-diversity beliefs shared significantly more information than the pro-similarity groups.[7] The pre-experiment manipulation of the teams’ beliefs about diversity was sufficient to unleash the benefits.

It is understandable how the experimenter’s manipulation might have changed behaviour. By identifying diverse teams as more successful, members were encouraged to change their perception of those members whose characteristics differed from their own. Diversity no longer identified someone as being ‘one-of-them’, but rather as ‘one-of-us’ – a top-performing team. This became an invitation for members to rise to the occasion and to exploit the advantages of diversity. Of course, this laboratory experiment is not easily replicable in field. Bosses might struggle to convince corporate teams that diversity improves performance simply by saying the words, even though the empirical evidence is on their side. Yet, the experiment does reveal that some obstacles to outperformance reside solely in the heads of team members. As the authors noted, managing diversity, therefore, also means managing beliefs about diversity.

 

 

[1] Samuel R. Sommers, “On Racial Diversity and Group Decision Making: Identifying Multiple Effects of Racial Composition on Jury Deliberations,” Journal of Personality and Social Psychology 90, no. 4 (April 2006): 597–612, doi:10.1037/0022-3514.90.4.597.

[2] Renee Adams and Daniel Ferreira, “Women in the Boardroom and Their Impact on Governance and Performance,” Journal of Financial Economics 94, no. 2 (2009): 291–309.

[3] M. K. Julizaerma and Zulkarnain Mohamad Sori, “Gender Diversity in the Boardroom and Firm Performance of Malaysian Public Listed Companies,” Procedia – Social and Behavioral Sciences, International Congress on Interdisciplinary Business and Social Sciences 2012 (ICIBSoS 2012), 65, no. Supplement C (December 3, 2012): 1077–85, doi:10.1016/j.sbspro.2012.11.374.

[4] David Carter et al., “The Diversity of Corporate Board Committees and Financial Performance,” Corporate Governance: An International Review 15 (March 1, 2008), doi:10.2139/ssrn.1106698.

[5] Q. Roberson and H. Park, “Examining the Link between Diversity and Firm Performance: The Effects of Diversity Reputation and Leader Racial Diversity,” Group & Organization Management 32, no. 5 (2007): 548–68, doi:10.1177/1059601106291124.

[6] Carter et al., “The Diversity of Corporate Board Committees and Financial Performance.”

[7] Astrid C. Homan et al., “Bridging Faultlines by Valuing Diversity: Diversity Beliefs, Information Elaboration, and Performance in Diverse Work Groups,” The Journal of Applied Psychology 92, no. 5 (September 2007): 1189–99, doi:10.1037/0021-9010.92.5.1189.

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