Not all diversity is equally beneficial.

Some fascinating research was published this week on the subject of diversity. Unsurprisingly the researchers determined that cultural diversity is beneficial for team performance. But they also found that language and experience diversity negatively affect performance. The study was published in the journal Applied Economics.   

The researchers analyzed the results of a Counter-Strike: Global Offensive (CS:GO) game played between 2013-2015 and the composition of the top 100 teams from 23 countries.   

What the researchers say: Several types of diversity were identified: diversity of experience, diversity of culture, and diversity of language. The researchers used characteristics described in the work of Geert Hofstede to measure the cultural aspects of different countries: individualism, uncertainty avoidance, long-term orientation, masculinity, and power distance.   Using regression analysis, the authors of the study determined that the absence of diversity among team members reduces the amount of prize money by an average of 30%. So, generally, when teams are diversified, profit increases. 

Amazingly a representative from just one additional country increases the prize money by almost 32%, all else being equal.   However not all aspects of cultural diversity positively impact performance. For example, if a team has representatives of countries with different attitudes towards power distance inequality, productivity drops. On the other hand, players from countries which have a wide range of ideas about individualism had a positive effect on team performance.   

The researchers also analyzed language diversity and determined that the more homogeneous a team is, the better its performance will be. In other words, the best-performing teams are those with representatives of different countries that speak the same language, e.g., English-speaking players from the U.S. and Australia or Russian-speaking players from post-Soviet countries.   

So, what? The main result of the study is that companies might benefit from diversity in their workforces, as the absence of diversity reduces performance by 30%. It is important to note, however, that different aspects of diversity affect performance in different ways. This latter is the real news from this study and something for businesses to ponder when constructing teams—especially teams comprised of individuals from different countries.