Diversity, in all its forms, is good for business in today's world. It's been proven repeatedly that companies with more diverse management teams are more successful than those without.

But why?

What is it about a group of people with different experiences, perspectives, and ideas that make them more likely to succeed than those with similar backgrounds?

A diverse mindset.

Diversity doesn't just bring new perspectives; it also changes the way team members approach problems. Research suggests that diverse teams have a better chance of solving challenges than homogenous ones because their multiple perspectives inspire novel solutions.

This article will provide insights into how embracing diversity can benefit leaders and organizations. Why Leaders Need a "Diversity Mindset"

Leaders need to embrace diversity to establish trust among employees from different cultures. Diverse teams tend to have a more inclusive culture. Moreover, diverse businesses are better at attracting and retaining top talent, which leads to improved overall financial performance. Take a look at Walmart, for example, the year after acquiring another company, Walmart made an effort to bring its employees from both companies into one location. In doing so, the company reduced cultural friction and improved trust among team members.

It also created an atmosphere of inclusion that improved communication across management hierarchies—ultimately leading to increased sales for the company over the next six years.

While having some diversity in your team is essential, leaders shouldn't stop there. If they want their organization's culture and performance to reach new heights, they need to take it a step further and instil the right mindset among their staff.

The Benefits of working with a Diversity Mindset

  1. Diverse mindsets can attain clarity quickly from unstructured data: When individuals are given unstructured data and asked to find meaning, teams with diverse opinions generate more solutions than those whose members share the same views. Teams with diverse thinking styles also achieve clarity more quickly than others working on the same issues.

  2. Diverse mindsets generate better tacit information: This data can be considered hidden or implicit because it doesn't come out in conversation but is frequently tapped during group problem-solving. When everyone has their perspective, they can better see connections between people's observations and experiences that wouldn't otherwise surface.

  3. Diverse mindsets increase team cohesion: Research has shown that diverse teams are more willing to offer ideas and share ownership of problems because they feel respected by their peers. This, in turn, improves their feelings about the task at hand—and increases cohesion among team members.

  4. Diverse mindsets can generate better quality solutions: Through a process called divergent thinking, groups with different perspectives generate higher quality answers than those made up of individuals who think alike. Divergent thinking ultimately leads to better outcomes in areas like innovation and product design.

  5. A diverse mindset can reduce bias: Research has demonstrated that individuals who work with diverse perspectives and people are less prone to stereotyping and prejudice than those who do not. One study found that managers with a diverse team were less likely to be biased against women when evaluating them for promotions than those whose employees came from similar backgrounds (e.g., men with MBAs). Thus, diverse mindsets can benefit leaders by making them more aware of issues of fairness and preventing them from passing along their own biases to others on the team or in other contexts.

Common Challenges When Building a Diversity Mindset

  1. Conflicting organizational culture: It can be challenging for individuals to avoid succumbing to the dominant perspectives or attitudes. Leaders will need to maintain a solid understanding of their perspective while continuously developing new insights into the ideas, beliefs, and values. It takes significant personal effort on behalf of leaders over time.
  2. Values that are incongruent with those present in your organization: For instance, if your organization has a history of supporting employees who are members of minority groups, but you don't have any personal experience with these issues, it will be difficult for you to overcome your biases and demonstrate support for others.
  3. Lack of diversity within the leadership team: A lack of diversity among organizational leaders can create a blind spot that prevents them from effectively understanding how to lead people from diverse backgrounds. When you're accustomed to coaching those who share similar identities as yourself, it may be challenging to develop an inclusive mindset.
  4. A lack of time or resources: This is especially common among new to management roles within their organization. As a new manager, you may not have the resources or connections necessary to build a more diverse team. If this is the case, focus on building your networks.
  5. Personal biases: Research shows that some leaders struggle with managing teams because they're unconsciously biased against certain employees. This is known as the "leader bias effect." Acknowledging this cognitive fault and actively taking steps to monitor one's thoughts is essential for preventing personal biases from negatively influencing others in your organization. How to Overcome these Challenges

Leaders should find a way to overcome these bias challenges by establishing a code of conduct. This may sound overly simplistic, but it's something that many leaders forget about. For an inclusive environment to exist within your company, you need to set clear expectations and communicate them clearly with everyone in the organization.

We have outlined some examples:

  1. Set Non-discrimination policies throughout all departments — this will help prevent people from discriminating against others based on any protected categories (e.g., age, disability status, etc.).
  2. Improve the Communication strategies when hiring — job descriptions and selection criteria must ensure that diversity is considered when making final decisions regarding candidates. If your team lacks members of different groups (e.g., women, racial minorities, etc.), make sure that you're not simply hiring people "like" yourself.
  3. Designate a diversity advocate — it's essential to have someone on staff who can serve as a resource to others for questions and concerns regarding diversity issues (both within the company and outside of work). This person will also help keep an eye out for any biases or prejudices that may creep into conversations/meetings/decisions that affect the entire organization.
  4. Consider adding a cultural diversity competency to performance evaluations — according to a recent study, this may help identify potential problems in leadership and organizational functioning. An alternative option to handle the situation is to include interview questions that tap into sensitivity to diversity issues (e.g., "what do you think about having BOTH men and women serve on corporate boards?"). Asking these questions will help identify specific areas where employees struggle with cultural biases and determine how receptive people are to other viewpoints. Conclusion

There are numerous strategies for leaders to work towards creating a more inclusive and diverse organizational culture. The challenges discussed above are just a few of the most common reasons why some organizations struggle with diversity. Successful leaders know how to identify potential roadblocks, such as biases and stereotypes, and learn how to avoid them by examining their own beliefs about other people.