Why Diverse Software Teams Are More Innovative

Gimena Aguerreberry
July 7, 2021

A 2018 Boston Consulting Group (BCG) study of 1700 companies in eight countries found that businesses with above-average diversity realize 9 percent higher margins and 19 percent more revenue from innovation than businesses with below-average diversity. In other words, diverse teams are more profitable and innovative than homogeneous teams.

But there’s another, more nuanced benefit of workplace diversity: nonhomogeneous teams are simply smarter. Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance.

Having diverse teams lead to increased problem-solving abilities. Solving complex problems is pivotal to software development and producing high-quality software. Creating diverse development teams is a key element on the road to software quality.

What Is a Diverse Team?

Diversity means different things to different people. But for the most part, when we’re talking about diverse teams, we are talking about gender, nationalities, disabilities, age, and ethnic and racial diversity. It can also mean a variety of expertise, experiences, skills, and so on.

You might be surprised, but the diversity of an organization can influence customer purchasing decisions.

In 2017, Deloitte found that in the preceding 12 months, up to one-half of customers’ purchasing decisions had been influenced by an organization’s support for equality.

According to Glassdoor, 67% of active and passive job seekers said that a diverse workforce is an important factor when evaluating companies and job offers. What’s more, your competitors are focusing on diversity.

Benefits of Diversity

There are many direct and indirect benefits to having diversity on your teams and in your leadership. Diversity leads to broader perspectives for problem-solving which ultimately leads to greater innovation and better bottom lines.

1. Greater Innovation

Socially diverse groups are more innovative than homogeneous groups. A Harvard Business Review research study has highlighted how diversity does play a critical role in innovation.

When employees see that their company is committed to and supportive of diversity, their ability to innovate increases by up to 83% according to Deloitte. That’s a pretty powerful finding.

Consider what happens when you ask a group of people from, for example, different professional backgrounds, to analyze a product or solve a problem. It’s often the collective knowledge and experience in the room that provides the key insights. When you add other elements of diversity into the mix, you benefit from the multiplier effect.

2. Make better decisions

Diverse teams tend to make better decisions. Cloverpop found that gender diverse teams make better business decisions 25% of the time, and including age and geographic diversity increases that advantage to 50%.

3. Retain team members and attract talent

Retention is higher in teams and companies known to value diversity. Companies with a reputation for valuing diversity not only retain diverse hires but their approach also attracts talent.

PwC found that 86% of female millennials consider prospective employers’ policies on diversity, equality, and inclusion before applying for a role.

  1. They focus more - and better - on facts

People from diverse backgrounds might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking.

Diverse teams are more likely to constantly reexamine facts and remain objective. By breaking up workplace homogeneity, you can allow your employees to become more aware of their own potential biases that can otherwise blind them to key information and even lead them to make errors in decision-making processes.

Greater diversity may also change the way that entire teams digest information needed to make the best decisions. Diverse teams may outperform homogenous ones in decision-making because they process information more carefully.

Conclusion - Why Diverse Software Teams Are More Innovative

Every day more research comes out to show the benefits of having a diverse team and an inclusive workplace. Diversity not only boosts team performance but can lead to better products, better decision-making, and above-average profitability at a company level.

Enriching your employee pool with representatives of different genders, races, and nationalities is key for boosting your company’s joint intellectual potential. This can make your teams smarter and, ultimately, make your organization more successful, whatever your goals.

Diversifying through distributed engineering teams is easier than ever with most developers working remotely. Geography is less and less of a factor in hiring as software teams get better at all-remote work.

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"Why Diverse Software Teams Are More Innovative" by Gimena Aguerreberry is licensed under CC BY SA. Source code examples are licensed under MIT.

Photo by Clay Banks.

Categorized under software development.