“The standard argument is that diversity is good and you should have both men and women in a group. But so far, the data shows the more women, the better.” — Thomas W. Malone, professor at MIT Sloan School of Management
A few years ago, MIT professor Thomas Malone conducted an experiment which assessed a set of randomly-matched teams for group intelligence. The results surprised him, so he ran the experiment again.
The results were identical: teams with more women performed markedly better than teams with fewer women, even if the individual members had higher IQs. What Malone’s research demonstrated is that teams require a degree of cognitive diversity in order to maximize effectiveness. Exceedingly uniform teams were not as effective.
These findings were supplemented by research from Katherine W. Phillips, professor of leadership at Columbia Business School. According to Phillips, “diverse groups outperformed more homogeneous groups…because diversity triggered more careful information processing that is absent in homogeneous groups. Homogeneous groups, on the other hand, were more confident in their decisions, even though they were more often wrong in their conclusions.”
Why is this instructive? As entrepreneurs, we believe diverse perspectives lead to smarter answers and better decisions. As long as your team has shared goals, then contrasting backgrounds are exceptionally valuable.
Research from McKinsey & Company reinforces this viewpoint as a best practice: “companies with diverse executive boards enjoy significantly higher earnings and returns on equity.”
At kernel, we have experienced the strength of diverse perspectives in achieving smarter answers and better decisions. As one example, our team — five individuals from four countries — developed a new approach to anticipating our customers’ information requirements and solving problems. As a result, we now have customers in Argentina, Brazil, Mexico and three other countries.
So as you’re building your management team, remember: greater diversity leads to smarter teams. Smarter teams win.
Latam Entrepreneurs 