Tech's mistaken consensus on workforce diversity

The Boardroom

by Jimmy Nicholls| 11 August 2014

The surge against ‘pale, stale males’ is not supported by the evidence.

Another day, and another set of diversity statistics rolled off the floor of a Silicon Valley tech company. At a ratio of four women to every six men eBay claimed greater gender parity than the likes of Google and Facebook, and could only boast that a quarter of its US workforce is ethnically Asian, less than its rivals.

"We believe in the same power of inclusion and opportunity inside our company," read the obligatory press release waffle. "Enabling talented people to thrive matters. Diversity matters. It makes us stronger, and makes us better." But does it?

Quest for a diverse boardroom

Tech is more interested in diversity than most. Earlier this year Brendan Eich decided to resign as chief executive of Mozilla because of public outrage over his donation to Proposition 8, an anti-gay marriage group, in a furore it would be hard to imagine taking place over an oil company.

As Mitchell Baker, executive chairwoman of Mozilla said at the time: "Our culture of openness extends to encouraging staff and community to share their beliefs and opinions in public. This is meant to distinguish Mozilla from most organizations and hold us to a higher standard."

Mozilla may be a nonprofit, but Silicon Valley's reputation for enticing sandal wearing, asparagus eating, Guardian readers is deeper set than that. As evinced by Google's famous company motto of "Don't be evil", there's a engrained utopianism in tech that lends itself to the doctrine that diversity is good.

For now the boardrooms seem to agree. Research conducted last November by Korn Ferry, a recruitment firm, showed most global executives believed greater diversity could lead to better business results. This optimism is not without evidence: in the last few years two studies by Catalyst and McKinsey showed a correlation between gender balance at boardroom level and returns on equity, albeit without establishing a causal link.

One reason it might make a difference is through strengthening of empathy between company and consumer. "eBay has a diverse customer base made up of buyers and sellers from around the world," a spokesman for the firm told CBR. "When we have a diverse workforce, we are better able to serve our diverse customer base."

Diversity is "not all rosy"

Not everyone is impressed by the fixation. These days it's possible for employees of various ethnicities to have grown up in much the same culture, especially in the West. Though a firm may assemble a rainbow coalition for brownie points, the real potential value of diversity is in perspectives.

Conflict is a breeding ground for innovation, but sceptics argue it requires mediation. Management professors Margaret Neale and Elizabeth Mannix studied 50 years of research on how diversity affects business, and their conclusions in a 2006 report were by their own admission "not all rosy".

"Without proper management or worker training, diversity can actually dampen group performance," they said. "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."

Thomas Kochan of the Massachusetts Institute of Technology (MIT) found that racial diversity tended to damage team processes, but noted that diverse functional backgrounds, educations and personalities could improve teamwork. Yet he also stressed the need for competent management.

An earlier piece of work by Neal also found differences in sex and ages had a positive effect, while differences in education created controversy that boosted performance. The most troublesome area for any team to diverge on was goals or values, which reduced commitment and satisfaction between members.

Mannix and Neale therefore recommended that diversity be used with care. "A diverse team with a purely fact-gathering mission might be likely to have very different success than a diverse team with a short-term, goal-directed project," they said.

A mistaken consensus

Any number of surveys report that diversity is a good idea, and the likes of Twitter, Facebook, Google and eBay clearly feel guilty about their propensity to hire "pale, stale males", as the identity activists phrase it.

Yet while some research indicate the potential for diversity in business, the tentative verdicts are equivocal. On the back of the current evidence managers should be careful when putting teams together, and tech companies should stop their senseless pursuit of difference.

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