So we've talked about team size. Again, we're still focused on composing your team, building your team. How big is it? And who is going to be on your team? So we've talked about the trade offs. The pros and cons of larger teams, smaller teams, and tried to figure out where is that optimal team size? Whether you want satisfaction or effectiveness. Now I wanna turn to who's on your team. And as soon as we ask the question who should be on our team, you have to start thinking about diversity, diversity of backgrounds, diversity of input, diversity of personalities. And here, I like to use the imagery of an iceberg. With an iceberg, there are certain things above the water that you can see. And there's certain things below the water that you cannot see. And the same is true for diversity. In our research on diversity in teams, we differentiate fundamentally between what we call surface-level diversity and deep-level diversity. Surface-level being those things above the water that you can see, deep-level being those things below the water that are non-observable, that you cannot see. So surface-level diversity, for example, again, these are the observable characteristics of the person, gender, race, nationality, age, at least in ballpark, educational background is something that's often observable. Maybe not just by looking at the person, but something that is reasonably known about the person and is relatively objective. But then there are all these attributes, all these characteristics of the person that are, again, what we call deep-level diversity, underneath the water that you cannot see, the non-observables. So these are the personality, of course you can observe behavior, but you can't directly observe the personality. Or the values of the person or the abilities, or even more so, the beliefs or the motivations or the motives of the person. And it's important for you as a leader of a team to really differentiate and think very carefully about how you manage surface-level diversity versus how you manage deep-level diversity. Now interestingly, what we find in our research, on average, when we look across surface-level and deep-level diversity is that both matter. So we'll explore these dynamics, but both of these aspects, surface and deep-level diversity matter. But interestingly, as teams work together over time for longer periods, they get to know each other. What we're finding in our work is that the effects of deep-level diversity on team performance, team processes, become greater over time as the team works together and gets to know each other, relative to those surface-level attributes. So over time, the impact of the surface-level diversity goes down, whereas over time, the effect of the deep-level diversity actually increases over time. And so before we even get started, again, I want you to reflect on the teams you've been part of. The team that maybe you're a part of now at work or otherwise. Maybe it's even a team that you are leading. And I want you to reflect on your own team. When you think about surface-level diversity, for example, how much of that diversity do you have in your team? Does that surface-level diversity, in your opinion, help or hurt your team? And how so? Likewise, for deep-level diversity, how much deep-level diversity do you have on your team? On what dimensions? Are you diverse or not diverse? And in your opinion, based on your observations, does that deep-level diversity help, or does it hurt your team and how so? These are really important questions that I would encourage you, again, in the discussion forums, with your classmates, to really dive into and explore, share your experiences, and learn from the experiences of others. And what I'm going to do is share with you some of our latest thinking, our latest research, some of the data on surface-level and deep-level diversity. So that you can compare our research, our data, with your own experiences and develop your own point of view on how to best manage both surface and deep-level diversity. So again, take a moment. Go to the discussion forum. Discuss, share, learn from, learn with your classmates on your own experiences, your own intuitions. And then we'll move forward with the actual research and data and work that we've been doing on these topics. So you've had a chance to discuss with and learn from your classmates in terms of surface-level and deep-level diversity. Now let's look at a little bit of the research that we've been doing. Let's go back to this same study that I shared with you earlier, across 24 unique studies, over 1,300 teams, and what we find. Job-related or job-relevant diversity versus background diversity. Job-relevant diversity, which would often be things like abilities, has a positive effect on team innovation in this case, whereas background diversity, that would be something like race, nationality. It could be educational background. It could be functional background. On average, at least according to these studies or these data, has a negative effect on innovation. And so that would be something to think about with respect to your own team. But what's important is to really then go even deeper into the specific dimensions of job-relevant or job-related diversity and background-related diversity. Because what we find is certain dimensions of background diversity have a positive effect, and other dimensions of background diversity have a negative effect. And here's an example. So surface-level diversity and innovation, the study I'm going to share with you was based on a sample of 199 banks, largely in the United States. And so this is in the financial services industry. And the outcome here that we're interested in, again, is innovation within teams. The innovations in the banks took the flavor of both technical innovations, so that could be related to the technology that's underlying bank operations, as well as administrative innovation. So sort of innovations in the managerial processes of the bank. And look at what's actually found here. In this study, they've predominantly looked at age, tenure, members of the team, how long they've been with the organization or the team, education level, and functional background. And what's very interesting here is age has really no effect in terms of the average age of the team, and if any effect, maybe a little bit negative. Variance here, variability, are represented by V-A-R, means how diverse, or how heterogeneous the group is in terms of age. So low variance would be everybody is the same age. A high variance would be I had some that are young and some that are older. Interestingly, the variability of age, zero impact on innovation in this case in these banks. Tenure, you can see here, average tenure, the longer the people have been with the team, the less innovation you see. And the greater the variability in tenure, the less innovation you see. But then look at education and functional background. On average, the more educated the team, the more innovative. And then with functional background, the more variability we have in the team in terms of functional background, functional being we have some people from marketing, some people from finance, some people from operations. That would be a high variance in terms of functional background, a high variance team. Whereas if everybody was from marketing, that would be a low variance team. What we find is that the more variability or variance we have in functional background, the more diversity. The better our team performs in terms of innovation. So on average, the more innovative banks are managed by more educated teams who are diverse with respect to functional areas of expertise. So I give you these data to emphasize that as a manager, what you have to be able to do is determine what are the dimensions of diversity that matter for what I'm trying to accomplish in my team. If I'm trying to drive innovation, for example, then it's likely that on average, I want more highly educated people in my team. And then, if innovation's the goal, what I really want is diversity in terms of functional backgrounds. People coming from different functions, different backgrounds with different areas of expertise, so that we can combine their inputs into something that's more creative and innovative. Again, what do you require of your team? Is it innovation? Is it efficiency? And then, on what dimensions would you need diversity? Very important when thinking about these surface-level diversity characteristics. But it's also important to recognize that it's not just about the level of diversity. Or even the variability of that diversity within the team. I gave you mean and variability here with this study of banks, but it's not just about the level, the mean, or the variability. We've been studying something over the last decade or so that we call faultlines, demographic faultlines. And I'm giving you an example here to start the conversation, and then we will explore it to a much greater degree in our next session. But I give it to you simply to reinforce that it's not just about the level of diversity in your team. So I've given you an example here with three different teams, or three different groups, 1, 2, and 3. And what you see are the characteristics, the demographic and functional background characteristics of the four team members in each team. And then the overall assessment of diversity and what we call faultline strength. So look at group 1. Everybody's white. Two members are female, two members are male. Everybody is relatively young and they are all from sales. So if you were to characterize that team other than race, diversity is really low. And what we call faultline strength is weak. And what I mean by faultline will become clear in the next example. So now look at group 2. What you have are two whites, two blacks, two males, two females. Two people that are older, relative to two people who are younger. Two people in their 30s, two people in their 50s. And then, two people from the maintenance function. And two people who are plant managers. So from a diversity point of view, it's low, maybe moderate in that regard. We don't have every race, we don't have a whole full spectrum of age, and we only have two functions per se, so low to moderate diversity. But what you refer to as faultline strength is extremely strong here. For example, the first dimension of diversity, race, white versus black. But then the next dimension of diversity, gender, is exactly aligned with race, the whites are male, the blacks are female. Keep going, the white males are also part of the older group versus the black females who are both in that younger group. And then same with function. So what we have here is what we call a faultline, where it's similarity on multiple dimensions, creating subgroups that are extremely strong on these demographic faultlines within the group. Now, the third group I give you to illustrate that you can have an extremely diverse group, but very, very weak faultlines, where everybody's different on every dimension, function, age, gender, and race. And so what you're really looking for in these faultlines is the subgroup formation. And so what I'd like you to do is think about your own team. And do you have demographic faultlines in your team? And that's where we'll pick up on the next session.
