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With increasing globalisation, many organisations face tougher competition at the same time they are working in a more complex environment, needing to coordinate geographically dispersed operations and a cross-cultural workforce.
This leads to diverse teams becoming more common at all levels of the organisation. Diversity can be based on various characteristics such as gender, age, nationality, ethnic and/ or cultural group etc, or on indicators of cognitive diversity such as international experience, education, industry and work experience that can all lead to different perspectives.
Research shows that diversity results in better performance on complex decisions and problems, just the type of challenges faced by global firms. Also, diversity has a bigger impact on organisations with greater managerial discretion such as the high-tech sector or when undertaking new initiatives.
Diversity is increasingly necessary for working globally, to ensure a global mindset, and for long-term cultural agility. In much of the literature, diversity is seen as balancing the tendency for homogenous groups to think in similar ways. If differing views can be combined in problem-solving or decision-making, the outcome is usually better than that of a single view, this is the synergy of working with diverse groups.
However, diverse teams can also experience their differences as barriers to communication, so that reaching a common understanding or outcome takes more time and effort, and raises the transaction costs of teamwork.
Many studies assume that a global mindset, often defined as openness and global knowledge, is key to executives and organisations succeeding in a highly interlinked world.
In 2011, Nokia’s leadership group is an example of a diverse team of thirteen members. This includes three women, one non-white, six Finns, four Americans, one Canadian, one British and one Australian. Three were born in the ‘50s, one in the 70’s and the rest in the ‘60s. Their work experience covers Europe, North American and East Asia and their educational backgrounds include engineering, technology, psychology, law, economics and finance from a variety of institutions while the team members represent many functions.
It remains to be seen whether they can make successful decisions that profit from their diverse perspectives and experiences without getting into the conflicts that can arise when people have different assumptions about how things work.