Diversity is good, goes the conventional wisdom of the business world: companies that look and think more like the spectrum of their customers serve their clientele better. With a greater number of perspectives brought to a problem, diversity opens up new opportunities for synergistic information sharing, lifting a team's creativity and work quality, proponents say. Successes such as inventing cosmetics for women with various skin tones, employing Spanish-speaking sales representatives, and marketing vacations to locations of historical importance to African-Americans readily come to mind.
Yet the diversity picture is not all rosy, reveals our analysis of 50 years of research. How a company chooses to diversify is a critical yet overlooked aspect of why it does so. Diversity can be a powerful tool--but it is one that can cut both ways. Without proper management or worker training, diversity can actually dampen group performance. And the very ways that managers typically judge differences when they are staffing teams--in particular, surface attributes such as ethnicity, gender and age--may be more likely to have negative effects on the ability of these groups to collaborate.