The Mix at the Top: The Power of Psychological Diversity

The following excerpt from Chapter 1 of my book ‘The Power of Global Teams’ looks at different team types and different attributes of diversity, highlighting the less visible differences and challenging the idea that more diversity in the top team automatically leads to better performance.

Although academics may not always be the first to spot future trends, they have questioned the “hero” leadership model for many years. Sessions at the American Management Association (one of the largest international conferences of business school academics and practitioners) targeted this issue convincingly in 2005: is our notion of hero leadership at CEO level outdated and shouldn’t we look at leadership at the top in a different way, particularly at the leadership trio of Chief Executive, Chief Financial officer (CFO) and Chief Operating Officer (COO) – or the leadership of the entire executive team. This idea does not neglect the importance of strong individual leadership of a CEO but expands leadership to the whole executive team and focuses on the ability of the CEO to select and build high- performing teams at the top. Given the complexity of today’s business through globalization and the fast pace of change, the best leaders intuitively understand the need to get the right mix of talent at the top to create a competitive advantage.

Belbin was one of the first writers to focus on the mix and the complementarity of management teams. He showed that our innate preference to recruit “people like us” is fatal in teams as it results in a group of clones that is ineffective at solving complex problems. This is nowhere more evident than in the so-called Apollo syndrome (Belbin, 1993), when a group of similar, highly intelligent experts get together: the result is a group that debates forever, engages in intellectual upmanship and does not agree on anything or get anything done.

Belbin’s recommendation was to put a team together comprising of people with complementary preferences, skills and behaviours. His eight team styles ranged from Chairman to Innovator to Resource Investigator. His idea was that some people like to take charge straight away whereas others like to develop new ideas and use their creativity, whilst others again love networking and are best placed to think about external and internal networks they can establish to help the team with resources, connections and alliances. Manfred Kets de Vries, the well-known leadership guru and founder of the IGLC (INSEAD’S Global Leadership Centre), developed this idea of complementarity further and also differentiated eight team types, easily identifiable as “needed” capabilities at the top of organizations.

Kets de Vries’ Eight Team Types (2006):

  1. Strategist
  2. Turnaround specialist
  3. Deal-maker and negotiator
  4. Business builder/entrepreneur
  5. Innovator
  6. Efficiency expert
  7. People developer
  8. Communicator / stage manager.

 

Of course, very few of us fall neatly into one or the other category, as most of us have preferences for two or three styles and hopefully also abilities and skills in different areas.

In essence, business leaders have to ask themselves whether they have enough strategists and lateral thinkers on the team, supported by executives with strong operational excellence, networking and marketing skills. As many studies have shown, it is the mix of different backgrounds, skills, thinking and behaviour that marks a high-performance team.

And it is this diversity in the broadest sense that characterizes effective global teams, as we will see in research studies and practical examples throughout this book.

However, diverse teams do not always perform better than less diverse or homogenous teams. It entirely depends on the complexity of the challenge. For example, with non-complex problems, homogenous teams perform better. Here, a diverse team may simply get distracted by too much lateral thinking. In complex challenges, however, as in most international business situations, diverse or heterogeneous teams produce much better solutions than homogeneous teams, as shown by Gratton and Erickson (2007). In their study, teams consisting of men and woman developed more creative solutions than all-male or all-female teams. The positive effect of diversity also applies to company boards. In a study on board diversity, I found that the boards of the Most Admired Companies in the UK’s FTSE 100 group (as evaluated and ranked by the magazine Management Today) had more diverse boards in the broadest sense: they had more board directors with international experience, greater functional diversity, a broader diversity in age and more women on their boards (Marx, 1998). If we just look at the very topical issue of gender diversity, we are receiving more and more data showing that gender-diverse boards and the performance of companies are positively correlated.

Commenting on the topic in Britain, one UK Chairman remarked: “We were an all-male board – typical of the ‘stale, pale and male’ category. Once the first women joined, the dynamics of the board clearly changed; not only were we more polite with each other but, more importantly, we started to discuss things more”. The argument at board level is similar to the argument in teams: we need different experiences and skills, and to have psychologically or cognitively diverse boards that can analyze complex business scenarios, challenge one another and develop productive strategies to deal with the massive challenges most businesses face today and in the future.