Posted: 18 Dec. 2015 10 min. read

Helping leaders make great decisions

The hidden benefits of racial diversity

In Washentaw County, 29 different juries – each with six people – are hearing the same sexual assault case. One group of juries finish their deliberations in 50 minutes, discuss 30 of the 46 major case facts, make four mistakes and notice that two pieces of evidence are missing.

Another group of juries finish their deliberations faster – in 38 minutes – but they only discuss 25 of the 46 major facts, make eight mistakes and notice just one piece of missing evidence.

Cross to the other side of the world and in Singapore, stock market traders are deciding whether to buy or sell shares. In small clusters of six traders, they make their decisions over ten trading periods, each lasting two minutes. Some of the clusters make few pricing errors and trade accurately about 65% of the time. Other clusters regularly overprice, create pricing bubbles and trade accurately only 40% of the time.

Both scenarios entailed people making difficult decisions, under pressure, with imperfect information and significant impact. That sounds like day-to-day life for leaders.

Guilt or innocence? Financial loss or gain? What was the difference between the groups which made better decisions and those that were prone to error? It wasn’t capability: the jurors were all adult citizens of Washentaw County and fitted the profile of an able juror. The traders were financially literate, in fact they were all skilled traders. It wasn’t unique knowledge: the higher performing groups did not comprise individuals with special insights into sexual assault or share markets respectively.

The difference lay in the group composition. With the jurors, the more accurate groups comprised African Americans and whites, not just whites. With the Singaporean traders, the groups comprised Malays, Indians andChinese, not just Chinese. And the presence of visible racial diversity triggered different behaviours in the jury room and on the trading floor. It stimulated curiosity, uncertainty and more listening. On the other hand, visible similarity stimulated feelings of comfort, confidence and assumptions of like-mindedness.

Just to lay it down with absolute clarity: a group’s visible racial diversity caused individual team members to pay closer attention to each other’s words and behaviours, and make fewer assumptions about shared views. It stimulated thoughtfulness and ultimately good decision making. This is the conclusion of Tufts University Professor Sommers, author of the jury study, and Columbia University Professor Levine and his colleagues in relation to the trader study.

Their conclusions are fortified by other researchers, such as Stanford University Professor Antonio and his colleagues. They found that small groups of white students – formed to discuss the topic of child labour practices or the death penalty – were likely to rate contributions by an African American research collaborator as “novel” and “interesting”. Conversely, the contributions of the white collaborators were rated as less noteworthy and in fact had less impact on the students’ thinking.

How did Antonio and his colleagues know these things? Firstly they had asked the white and African American research collaborators to say exactly the same script to the student clusters. In essence, the message stayed the same, but the messenger changed. Secondly, students were asked to write an essay (about child labour practices or the death penalty) before the group discussion, and then rewrite it afterwards. Those students in a group with an African American collaborator demonstrated more complex thinking in their post-discussion essays.

This was probably not what you expected to read. The story we often hear about racial diversity in the workplace is usually tied to human rights, employment outcomes (attracting and retaining talent) and customers (reflecting the broader community). Who would have known that there are additional benefits in relation to decision making without Sommers’, Levine’s and Antonio’s insightful studies?

It’s a powerful message for leaders. Although we’d all like to believe that we are logical and thoughtful decision makers, everyone is prone to inattention and assumptive thinking. Visible racial diversity subtly steers a group’s conversation towards more robust thinking and therefore better decisions.

“The hidden benefits of racial diversity” is just one of the insights from “Which two heads are better than one? How diverse teams create breakthrough ideas and make smarter decisions” – by Juliet Bourke (Australian Institute of Company Directors, forthcoming February 2016).

References:

Sommers, S. R., (2006) On racial diversity and group decision-making: Identifying multiple effects of racial composition on jury deliberations. Journal of Personality and Social Psychology Vol 90(4), pp 597-612.

Levine, S. S., Apfelbaum, E. P., Bernard, M., Bartelt, V. L., Zajac, E. J. and Stark, D., (2014) Ethnic diversity deflates price bubbles. PNAS Early edition http://www.pnas.org/content/111/52/18524 retrieved 19 November 2014.

Antonio, A. L., Chang, M. J., Hakuta, K., Kenny, D. A., Levin, S., and Millem, J. F., (2004) Effects of racial diversity on complex thinking in college students. Psychological Science Vol 15(8), pp. 507-510.

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