People & Human Resources

Research finds diversity leads to better decision-making

Angela Priestley /

When it comes to team decision-making, we shouldn’t need research to back the idea that more diverse and inclusive environments will lead to better outcomes.

One would think it’s a given. Two heads are clearly better than one. But two different heads are ultimately better than two that simply think the same.

Still, for those who like some stats to quote, these are good ones. Diverse teams make better decisions 87% of the time, according to a study of 200 different business teams. Even better, those teams also make decisions twice as fast as those that are not diverse.

Even better yet, those with diverse teams require half the amount of meetings to get the result!

The findings were published in Forbes, and refer to a study analysing 600 different decisions made over two years using Cloverpop, a decision-making database that enables companies to track how they’re making decisions along with the success of such decisions.

The research found gender diverse teams make better decisions 73% of time, while teams that also include a range of ages and different geographic locations hit the 87% better performance mark.

In general, the research found teams make better decisions than individuals 66% of the time.

Sadly, diverse teams are not the norm across many major organisations in Australia. Eleven boards on the ASX 200 still do not have a single female board director. Furthermore, women become significantly more difficult to spot in such positions once you venture past our 200th listed entity, given there is more scrutiny on those within the ASX 200.

According to this research, companies are missing out on achieving the best possible outcomes when it comes to decision-making.

Nothing is more important than decision-making in a business. Cloverpop quotes further research from Bain & Co that finds decision-making drivers 95% of business performance.

The firm also offers a seven-point checklist for better decision-making:

  1. Include a diverse team of three or more people.
  2. List the business goals impacted by the decision.
  3. List at least four realistic choices.
  4. Identify any critical missing information.
  5. Explain the expected future impact of the decision.
  6. Record and communicate the decision in writing.
  7. Follow up to assess how well results meet expectations.

Too bad many large companies are still unwilling to even start on step one – but that doesn’t mean the rest of us can’t.

This article was originally published in Women’s Agenda.

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on TwitterFacebookLinkedIn and Instagram.

Advertisement
Angela Priestley

Angela Priestley is the publisher and founding editor of Women's Agenda. She's an author, journalist and passionate advocate for workplace gender equality and diversity. Her first book is Women Who Seize the Moment.

We Recommend

FROM AROUND THE WEB