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BY MAI!\1/1lntA MAYi!
"At IBM, no matter who you are, you will have to work with and customers who are
different from you-black, white. brown, red or yellow. young or old, gay or straight, male or
female, able·bodie.d ot physically chal1eng£!ii.. n
J.T. cmLPS jlt, V!CE"?RE..<;l\JENi. GLOBAL   IBM
-he work environment described by JT. Childs is
becoming more and more familiar to those of us
working in organizations that are becoming
increasingly diverse. People of different race, sex, tenure,
culture and educational and functional backgrounds are
bt'ing reqUired to work effectively, side by side.
Teamwork in such a diverse environment brings about
both opportunities and challenges for organizations and
managers. The opportunities arise from the numbt:r and
variety of perspectives that can be used to solve problems
and the extemal links that individuals provide to the
group. The challenges come from the conflicting values
and stereotypes that people often bring to the team.
Capitalizing on the opportunities and minimizing the
challenges assodated with increasing diversity have
become top priorities for today's business leaders who arc
trying [0 compete successfully in a global business
environment. This article suggests two leadership practices
that can deliver the benefits of diversity: matching task
requirements to members' skills and managing acro!"s
group boundaries. Two additional leadership practices that
can mtenuate the dO\'lrTIsideof diversity-deve!oping a
common vision and values and promoting a collective
identity-are also discussed.
Several demographic and business trends have
combined to push diversity to the top of the bUsiness
agenda. First, increasing diversity is a worldWide trend. At
home, Canadian Sodal Trends reports that minorities are
expec.ted to make up 20 per..:ent of all adults in Canada by
2016. This is more than double the proportion in 1.99l.
Also. the total number of women employed in Canada
increased from 3.4 million in 1975 to 5.6 million in 1993,
These trends extend beyond Canada., For example, 85
percent of the net additions to theD.S. workforce by the
end of the century Will be women and non-white lnen. In
Europe, 375 mOIion people of l1i.unerous nationalities,
languages and cultures have Joined together in one
remarkably div€'tse entity, the EUT()pean Union,
Secondly, the consumer market is becomIng inLTcasingly
di,,'el'se. As markets become global, companies keep up by
  offering and meeting an.· ever-expanding variety of
  customers' needs. As Canadian and US. markets become
g more heteroge.neous, dome:5uc companies ate being forced
f to take a closet look at their business st.rategies. Alld in an
attempt to improve their understanding of this emerging
marketplace, all companies are aggreSSively competing to
attract and retain talented employees of diverse
/\ third major factor highlighting the impoltance of
diversity is the growing use of teams as building blocks of
organizations. A recent survey by PurchCl$ing magazine
found that 57 percent of companies use multifunctional
teams to make strategic decisions. Teams are becoming a
favourite way of organizing work, especially as the number
of success stories \vith work teams proliferates. For
example, General Mills plants that use teams are 40-percent
more productive than plants that have a more traditional,
hierarchical struct.ure. With its workforce in teams,
Westinghouse Canada in Edmonton, Alberta, reduced the
time cycle for made-tel-order motor control devices from 17
weeks to one week. In Memphis, Tennessee, a team of
clerks in the back-office operation of federal Express
improved quality and solved a billing problem that was
costing the company U.S.$2'! million a year. What's the
main reason for this superior pClfonnance? Its effective
teamwork. Jnstead of fOCUSing on individuals and their
narrowly defined functions, team-based organizations
promise high perfonnance, innovation and fle.,,\ibility by
creating and managing interdependencies among
individual.s and functions,
Globalization, the changing nature of the workforce and
the popularity of tealhwork are proViding managers with
new challenges and 0pPi,Yrrunities. As the workplace
becomes more divetse and team-oriented, the likelihood
increases that people lrom different backgrounds \\ill work
side by side. More face-to-face interaction is likely and
people win be asked not just to co-exist in the same
organization but to co-operate to achieve team and
organizational goals. !\1.anaging diversity then becomes a
matter of buHding co-operation and teamwork among
members of the minMity and the majority group.
It is imperative that organizations prepare their
managers to lead in th'is new workplac.e. Traditional
dlversity pnlgrams such as sensitivity training for
execuU",cs arid min(Wlty/women recruiting initiatives have
illtegr'ated more mi.nmities into the workplace. Yet, these
progran1$ do not capitalb:t on the opportunities that
diversity presents because they tend to focus on issues that
affect only individual minority members rather than
diverse teams of both minorily and members.
While organizations need to maintain their rraditional
diversity programs, they must also invest in new
leadership training. Leaders-team leaders, project
managers or traditional supervisors--need to develop
skills that help them provide the guidance, support and
vision that\vi.ll make a diverse group of people excel.
Managers need to develop skHL" that help them lead not
different individuals, but teams of different individuals. If
managed properly, diversity can be the cornerstone of a
globally competitive organization. But if mismanaged,
diversity can be counterproductive and costly.
opportunities does diversity present and how can
managers capitalize on them?
More and more business leaders believe that innovation,
creative solutions and better decisions can be more easHy
reached by a diverse group of people. Ivan Seidenberg,
CEO of Bell Atlantic, says that, ".,. diverse groups make
better decisions." James P. Holden, vice.president of
Chrysler Corporat.ion, noted that, "In the corporate c:ulnm:
of <lny efficient organization, teamwork is the lubricant
between functions. But teamwork alone isn't enough.
Team.s become truly effective when they reptesent the fun
spectrum of diverSity;" Adding to this optimism, William
C. Vanfaasen, President and CEO, Blue Cross and Blue
Shield of Ma..'lSachusetts, says that, "The workplace is much
mort entertaining, engaging and fascinating because we
have people with different creative thoughts and
experiences. $0 itt addition to being morally and ethiCally
right. celebtating diversity is the smart thing to do," These
  1e-aders clearly believe that a diverse group of
people brings more perspectives and positive outcomes for
the team and the organization.
Research seems to confirm this belief. For example, a
study comparing homogeneous and heterogeneous groups
found that teams of people who had different views and
personalities were more creative in solving problems.
Studies of top-management teams also seem to Suppo111he
idea that a variety of cognitive skills and perspectives have
a positive impact 011 decision-making at the top. For
example, having people with different capabilities and
educational backgrounds on top-management teams is
associated with greater strategic clarity, an increased ability
to make and manage strategic change, increased
::,',::" '::, ",
innovation and better performance. These benefits are
magnified when the organization operates in a highly
dynamic environment, such as the high-technology
industry, in which innovation and change management are
critical to success.
Why does diversity produce these benefits? Part of the
answer is that, as Rich McGinn, CEO of Lucent
Technologies, says, "Different people approach similar
problems in different ways." A field study I conducted in a
U.S. manufactUring company !>upports this notion. 1
surveyed 73 work teams at all levels, from production to
senior management. The study showed that well-managed
diversity had a positive impact on perfonnance, by
facilitating an exchange of information among experts with
dissimilar perspectives and a discussion of different
viewtmints related to a task. One may conclude that the
gelicral advantage of diversIty is that it increases the
knowledge pool available. for or decision-
maldng. When group members have a variety of skilL",
abilities and opini(ms, there is a greater chance t.hat the
team will have the resources it needs to perform effectively.
However, these benefits are not always realized when it
comes to mixed-sex, mixed-race teams. When I compared
same-sex, same-race groups with mixed-sex, mixed-race
groups, I found that mixed groups develop fewer
friendships. This, in turn, decreases the overall
effectiveness of the team. Furthermore, mixed groups tend
to be more hierarchical, with one or two people who take
control and clearly emerge as informal leaders.
Over all, we learned that a diverse group's perfonnance
1S optimized in certain situations; for example, where there
is a fit between the type of diversity and the task.
Heterogeneous groups whose characteristics are relevant to
a task-for example, educational background and
functional expertise-are more likely than homogeneous
groups to be creative, reach decisions and
perform a task effectively. Because the tasks performed by
the employees in the study did nOt reqUire cultttral
knowledge, the benefits of diversity in terms of sex and
race were not evident. However, tasks that require
knowledge of a specific ethnic or sex group, such as
market segmentation, would clearly benefit from having
mixed-sex, mixed-race teams.
Maybelline Inc. is a distinct example. The Wall Street
Joumal reported that in the early 19905, the company
started a new product line, Shades of You, for women with
darker skin tones [The WalT StreetJournal,J\.ily 3/96, p.Bll.
With no minorities working in marketing, Maybelline hired
people of colour to promote the line. Shades of You seized
41 percent of the $.'55-million ethnic cosmetics market,
making Maybelline the main player in the ethnic market.
A"1other reason why diversity has a positive impact is
that a diverse group forms a relatively high number and
V<tti.ety of links to the rest of the organization. The benefits
of diversify can be linked not only to (he skills and
perspectives that each individual member brings, but also
to his or her unique connections to people in the rest of
the organization. Most organizational teams need to
develop a network of external communication ¥lith other
organizational members. The better the communication
that team members have with outsiders, the better the
team will perform.
A diverse team's social capital resides in the set of
connections between each member and the group he or
she represenLs. For example, a cross-functional
team of three individuals representing different
arcas such as operations., marketing and finance
has a relatively greater number and variety of
connectlons to other organizational members
than a homogeneous team. This set of diverse,
e}.'terna] links can be useful when lobbying for
support and resources, looking for useful
'1 rs· information or trying to legitimize the team in
front of other organizational groups. Indeed,
research on new product-development teams found that
groups with greater functional diversity communicate
relatively more often with outSiders, resulting in more
innovation. Yet this be.nefit can be lost when managers
develop a silo mentality and isolate their group frmn the
rest of the. organization.
Managing a diverse workforce requires leadership
practices that capitalize on the knt)wledge pool and social
capital inherent in diversity. Two leadership practices can
foster these opportunities, matching tasks to the people
and managing cross-boundaries.
To ca.pitalize on the social capital, a leader needs to create
and maintain group structures by as..<;igning roles and co-
ordinating the efforts of individuals. ThL<; should be carried
out according to members' skins and knowledge. Otherwise,
the organization will not realize the benefits of diversity. The
most common problem} however, is that managers may
assign a role to match their own stereotype rather than the
individuals' skills and abilities. Managers must be aware of
their OViin stereotypes and avoid Using them.
Traditional diversity pmgrams, such as sensitivity
workshops, were ihi.ended to make managers aware of
their own stereotypes and suggest ways to avoid using
them. However, some of these programs may be counter-
productive because their emphasis on individual
differences reinforces the very stereotypes they are trying
to break down. Instead of focusing on individual
djfferences, management training should focus on
characteristics common t.o all members of the group.
The task is probably the single most unifying element on
a diverse team. Thus, when managing a diverse team, a
managers allention should be directed first and foremost
to achieving the task at hand. Leaders must the
task to break um'l'l1 members' parochialism and win their
commitment to a common goal. A good leader arLiculates
the requirements of the task and the role that each member
plays in accomplishing it. Everyone is included and
everyone5 talents are utilized. All members are aware that
they need each other and that they must pool their
abilities, energy and resources to get the job done.
At the same time, leaders can capitalize on the extemal
connections of diverse teams by managing across group
boundaries and encouraging le"m members to be
ambassadors for the team. A leader ofa diverse team not
While managers should celebrate diversity, they need to
be cautious when managing its challenges. Retaining a
diverse workforce and buHding cooperation among it is a
significant challenge. Diversity increases a team's potential
for high performance, but it decreases its stability Studies
have conSistently found that diverse work team.':; have
higher tumover rates. [n particular, haVing members with
different ages and tenures increases the proponion of
group members who will leave the group and the
organization. l'urthermore, women and minorities are
more likely to leave organizations t.han white males. An
article in the Harvard Business Review QanlFeb. 1989)
reported that the turnover rate for black people in the U.S.
workforce is 40-percent higher than the rate for whites.
Turnover among women is twice as high as it is for men.
Contrary 1:0 popular belief, minority members are not
the only ones affected by diversity in the workplace. A
recent research study reports that white males are also
affected. A survey ()f more than 1,000 employees working
in 152 groups showed that increased diversity was
with lower leveL.;; of psychological commitment
only needs to maintain team unity but also needs to find a
way of working effectively with other parts of the
organization tlun influence the group (e.g.,
marketing, finance, senior management). Team
leaders should encourage the development of
outside networks of allies In other parts of the
organization whose co-operation is required. Fdr
example, the leader of new prOihH.:t-deve1opment
instead of foclIsing on
individual dif£erences,
management training
should focus on
team tmtst make sure that the team ha:s a
communication network that ensures support from
the top-m.anagement team, finandal resources from
the finance department and market-related
information from the marketing group.
ch.aracteristics common to
all members of tl'le group
On a homogeneous t.eam, leaders typically are in charge
of this cmss-boundary communication because their
external network is probably wider than that of the other
members of the group. However, leaders on a diverse
team must delegate cross-boundary responsibilities if they
want to maximize lhe human capital ill the group. Leaders
who encourage members of diverse teauns to develop
external networks em increase the group); breadth of
resources and information, build commitment to its
prodU(:tsand decisions and increase the team's own
credibility and importance.
to the otganization. What is most interesting about this
study is that white men were less committed than white
women. The authors eX'Plained these findings in tenns of
status and social identity. Both men and women use gender
to assign a social category and identity and to develop a
  indication of status and power. Given that men
have traditionaUy held high-status jobs, balanced or
female-dominated settings may reduce a group's appeal for
:men. F()r women, however, working in male-dominated
envi.ton:ments may be an indiCation of a high sodal status.
Why these challenges? It is now accepted wisdom that
individuals with different demographics, such as age and
sex, hold different work values and, in tum, develop
different understandings of organizational events and
attitudes. For ex.1mple, individual,;' values are somewhat
influenced by the era in which they grew up. A number of
studies have examined the dominant work values across
several generations in the U.S. workforce and found that
there is a set of unique values for each cohort. For instance,
employees who entered the workforce during the 1960s
through the mid-1970s valued quality of life, loyalty to self
and non-confonnity. Workers who entered the workforce
from the mid-1970s through the late 1980s valued success,
achievement and hard work. The present cohort, known as
Generation X, values flexibility; job satisfaction and loyalty.
Employees who have different work values also have
different work habits and behavioural styles. These
differences can be a source of emotional conflict when
employces need to work together on a team.
Disagreements are likely to arise not only about what
needs to be done but also about how to get it done. These
disagreements distraCt the group from the task and
feelings of dissatisfaction that make individuals feel like
leaving the group and the orgatli:zation.
Another challenge facing diverse teams is the
developmcnt of demographic groupings that encourage a
    competitiveness. Because members of diverse
teams are more likely to perceive themselves and others as
part of demographk groupings, e.g., men versus women
or black versus white., cliques based on sex, race or age are
likely to develop. IndiViduals perceive "'them" as less
trustworthy, honest and co-operative than members of
their own group. Research haa found that simply being
av"are Ot "us versus them" stimulates c1.1mpetitiQn for statUs
and organizational resources.
Retaining a diverse workforce and building co-
operation among it is a significant challenge for leaders. In
contrast to traditional diversity programs that focus on
individual differences, I propose that managers focus on
commonalities. Leaders must begin by developing a
common vision of the task to be perfonned. Then they
must unite all team members around common values and
a collective sense of identity.
Managers can deal effectively with the interpersonal
conflict that arises from conflicting values by focusing on a
common vision and positive goals. Burt Nanus, a leadership
scholar, noted that, "vi.sion is a signpost pointing the way for
all who need to understand what the organization is and
where it intends to go. The right vision is an idea so
energizing that [it] jump-stans the future by calling
forth the skills, talents and resources to make it
happen." Diverse teams need a vision that connects
all members so that when the team wins, everybody
wins. It is why managers must articulate a vision that
is acceptable and emotionally uplifting.
Another cntkal ta,<;k for leaders is to bnng all team
members together around COmmon values. Values
('.an be. defined as a persons general preferences
regarding desired ends and the appropriate means
for achieving these ends. Psychologist Milton
Rokeach divides values into two broad categones:
terminal and instrumental. Terminal values, such as
ihtegrity and fairness, reflect a person's preferences
regarding the ends to be achieved. Instrumental values,
such as non-conformity, hard work and flexibility; reflect
the means for achieving important outcomes.
Diverse teams need leaders who can focus on both
terminal and instrumental values. Managers must ensure
that all members of the team have the same understanding
of what needs to be accomplished. They may choose to be
more flexible about the means they choose to reach the.
ends: Different means may achieve the same end. If that is
the case, mattagers must inculcate a sense of mutual trust
and reSpect for each other's preferences and styles.
Managers must also combat a "we-they" mentality and
competition by promoting a strong organizational identity.
Organizational identities develop when individuals
perceive themselves and others as part of organizational
areas or categories. There are many areas in most
organizations, including regional operations, departmental
divisions, functional areas. ranKs, functional work teams.
job titks, etc. Beyond fulfilling organizational needs, these
areas meet social and psychological needs. They serve as
frames of reference that organize the social world by
locating the individual and rekvam others in the wmplex
network of relationships within the organization.
One of the clitical tasks for managers is to create
categories that help individuals define t.hemselves beyond
demographic lines. The challenge of managers in diverse
teams is to manipulate the salience of demographks by
increasing the salience of collective categories such as a
team identity. For example, managers could create a new
category by giving a name such as "The Seven O'clock
Team" to a task force that meets weekly at 7:00 a.m. to
discuss i s ~ m   s of absenteeism. This new category
discourages demographic comparisons and heightens a
sense of collt-ctive identity.
Today, a combination of demographic and business trends is
creating a more diverse, team-oriented organization that
presents a manager with new challenges and opportunities,
Traditional diversity programs and leadership training that
focus on individual differences rnay not completely address the
critical issues of the new work-place. Organizations need to
invest in new leadership training that. re...;;ponds to the unique
demand:; of a diverse, t.eam-based environment. Leadership
practices must capitalize on the benefits of diversity, such as
the multiple and diverse cognitive resources and extraordinary
social capital. It must e.limL'1ate the natural difficulties that mise
when pellple with different values and identities work
together. Some of U1C5e leadership practices include-but are
not limited to-initiating structures, managing boundaries
while building external nelwork<;, developing common vision
and v-alues and instilling organizational identities. When it
comes to diversity management, it isn't the formal policies and
program" that make a difference, its the manager who is dose
to the people. ii
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