Through globalization, businesses today operate in a complex and diverse world. This also means challenges such as political turbulence, higher market volatility, and global financial crises. Therefore, successful organizations need to have resilience: the ability to anticipate problems, cope with unexpected problems, and learn from crises to strengthen business capability.
Authors of this study (Duchek et al., 2020) highlight research that says diversity aids in resilience. Diversity is both observable (race, ethnicity, age, gender) and unobservable (knowledge, experience). The authors interviewed 11 diversity experts who were HR managers in large international companies in Germany. From these interviews and their review of the research, the authors describe ways in which diversity can help develop organizational resilience.
DIVERSITY CAN HELP SOLVE ORGANIZATIONAL PROBLEMS
The authors cite a study that showed that teams diverse in experience, industry tenure, and educational background were better able to extensively and deeply scan their environments. One of the interviewees reported “mixed teams better reflect and know the market,” allowing them to identify risks and trends. In addition, research has shown that diverse teams tend to be more creative, innovative, and productive.
The authors state that diverse teams can use different perspectives when assessing a problem. This can produce less groupthink and problems can be addressed more critically. When a crisis cannot be solved with a company’s current approach, designing new solutions requires “broad knowledge, the interaction of different people, and creativity in making use of limited resources.”
Adaptation is not simply restoring the organization’s functions after a crisis, but rather the development of new capabilities. Some research suggests that diverse viewpoints can lead to a better post-mortem, or reflection, on the crisis because a greater number of potential causes can be generated and analyzed.
Researchers say that appropriate diversity practices and policies can help minimize any negative impacts stemming from a high level of diversity (e.g., conflicts). The authors suggest organizations utilize Resilience-enhancing Diversity Management (REDM), which consists of three parts. The first part is diversity culture: only if diversity is truly valued and embraced can its positive effects reach their full potential. Moreover, open and frank communication about diversity is just as important.
The second part of REDM is that managers should purposefully create diverse groups to help maximize performance. That is, managers should identify what a group needs to be effective and what gaps in diversity it has. Some differences, such as in deeply held values, could hinder group effectiveness. However, diversity in viewpoints, experience, and knowledge can further team success. One study found a positive relationship between gender diversity and team effectiveness, and between nationality diversity and team effectiveness.
The third part of REDM emphasizes the importance of certain leadership qualities. Leaders should have diverse work experience with a diverse group of people. They should also utilize transformational leadership, which means going beyond managing employees to inspiring them to adopt organizational values as their own. This leadership style makes people feel good and enhances resilience.
Studies have shown that diverse teams, in the long run, perform equally well or better than homogenous teams. In order to thrive in the global marketplace, organizations should embrace diversity as an investment for long-term growth and success. As one diversity expert explained, diversity can initially be a challenge, but it is a catalyst toward finding more sustainable organizational solutions.
Duchek, S., Raetze, S. & Scheuch, I. (2020) The role of diversity in organizational resilience: A theoretical framework. Business Research, 13, 387-423.