Diversity and Productivity

In business diversity has come into focus only recently, but in ecology diversity has been centre stage from the beginning. Traditionally, ecologists have been concerned with two overarching questions. First, the paradox of alpha diversity – diversity within small, local subregions of ecosystems. Why can we find 35 different species of plants living in a 1 x 1 m section of European grassland, or hundreds of species of trees living in a 100 x 100 m section of rainforest? Why don't one or a few 'best' species outcompete all the others? Second, the question of beta diversity – the variation in alpha diversity from location to location. Why are there are hundreds of tree species native to the small island of Costa Rica, but only 37 species native to the whole of the Great Britain and Ireland? There are many ecological ideas regarding species diversity that might help some businesses and other organizations to understand, increase and maintain diversity in local teams; and to understand why diversity can vary so much among and within different businesses or parts of businesses.

However, the ecological research topic I am focussing on here is the more recent ecological interest in the question of what happens to the function of ecosystems when biodiversity is decreased. It is interesting that ecology has framed the ecology-productivity debate in this way. In the world of business, the discussion is always about the benefits of increasing diversity. This difference reflects the fact that historically, homogeneous business teams (at least, homogeneous in the more obvious traits of race, gender, and sexuality) were the norm, but in modern times diversity in such teams has been increasing, albeit slowly sometimes. In contrast, in natural ecosystems, high diversity was the historical norm, but in modern times diversity has been decreasing.

So what did ecologists find, and what might be the analogies with productivity in the world of work? First, diverse ecosystems are more productive! Ecologists have created sets of relatively natural ecosystems that differed only in their diversity, and found a huge effect of diversity on productivity. They have repeated the experiments in many different biomes and the results have always been the same – more diverse ecosystem function better. The implication of this result for the world of work is obvious, so let's move on to subtler issues.

Second, ecologists have been able to show that the overall positive effect of diversity on productivity can be broken down into The Sampling Effect and Niche Complementarity, two concepts that I will illustrate by jumping straight into business analogies. The sampling effect occurs where, by virtue of having a more diverse ecosystem – sorry, team! – you are more likely to have just the right kind of person to tackle the next challenge, whatever it might be. Imagine you are a food company, and suddenly Caribbean home cookery becomes fashionable. If you have a more diverse team, you are more likely to have at least one person with an understanding of this culture and cuisine – perhaps even someone who grew up in the Caribbean. Now, had you known that Caribbean cuisine was going to become the next big thing, you could have hired only people with Caribbean heritage, and for this reason some ecologists do not consider the sampling effect to not be a 'real' effect of diversity. I disagree, because you never know what the future holds, and so you need diversity to hedge your bets. Why is this not real?

Niche complementarity is, however, definitely a real effect of diversity because it describes the way that more diverse are able to combine the strengths and weaknesses of their constituent species -- sorry, people -- in a way that makes the team more productive than any possible homogenous team. A nice analogy often quoted in ecology is the ‘snowballs on a roof’ idea. Throw more snowballs (species) and you gradually cover more and more of the roof (niche space). For this idea to work in the world of business we have to assume that, to some extent, peoples' strengths and weaknesses are related to the factors that we use to measure diversity, such as gender, race, age, nationality, or whatever. Otherwise, we could just as well get the same set of strengths and weaknesses in an apparently homogeneous team. But overall, the idea that people with very different diversity backgrounds might come to have different strengths and weaknesses is, whilst somewhat sensitive, also reasonable, if for no other reason than those backgrounds will themselves be correlated with many other factors, including treatment by people with alternative backgrounds, that are likely to have led to different strengths and weaknesses (i.e., the differences need not be biological in origin at all). An obvious example of niche complementarity in a business setting could result from having a mixture of ages in a team. Perhaps the younger members have, on average, better instincts for what might appeal to young customers (if this was the target demographic). Older members might, on average, have more experience in thinking strategically, or remember the ideas that have succeeded and failed in the past, and why. Younger people might be better able to work evenings and weekends. Older people might be better at early starts, and at mediating disagreements among team members. For these and many other reasons, a mixed-age team would be expected to be better than either a pure team of younger people, or a pure team of older people. Similar reasoning leads us to expect productivity benefits of having a greater mix of genders, races, sexualities, nationalities, socioeconomic backgrounds and so on.

However, one thing that was not discussed enough when the ecological results were first published was that, although diverse ecosystems were more productive, this overall pattern was mostly driven by the differences between very homogeneous ecosystems (with around 1-3 species) vs the rest (4 species or more). You got this pattern not just for productivity defined in terms of production of plant material, but other measurements of ecosystem function like nutrient cycling. This result seemed to imply that you only need a little bit of diversity, after which any more diversity has very little positive effect. A few snowballs covered most of the roof. Transferring this conclusion over into the world of work could lead to a rather depressing view that any more than a token sprinkling of diversity is pointless. Oh dear.

But fear not -- the apparent initial pattern was later found to be misleading because it was based on considering only a single definition of ecosystem productivity at a time. In contrast, if you consider multiple aspects of ecosystems at once – what my friend and colleague Andy Hector called Ecosystem Multifunctionality – then the positive effects of diversity extend up to much more diverse ecosystems. In a business context, the implication is that if you want your team to be able to generate new ideas, and be able to develop these ideas properly, and to be able to present them to key people, and to be able to fix problems when they arise, and work well with other teams, then you really are going to need as much diversity as you can get. There is also an implication here for research into diversity and productivity in business teams – be very wary of measuring productivity according to any single metric.

There are many more potential insights and analogies from ecology that might be applied to diversity, for example the idea that more diverse ecosystems are more stable through time and less vulnerable to external shocks. But I feel I should perhaps not say too much more here, not least because the whole issue of diversity in the workplace is, for good reason, a highly sensitive one that – given my somewhat cliched race, gender, age, and sexuality – I feel I have a somewhat reduced right to comment on! But I do feel that I can end on a somewhat positive note. My impression is that, at least in the world's leading companies, diversity has mostly completed its transition from being seen as a legal issue, through a PR issue, through an ethics issue, to a core business issue. The first three steps are important, but as long as diversity is seen solely as an issue of ethics, it will only increase slowly. In contrast, when workplace diversity comes to be seen primarily as a productivity issue – as it now is in ecology, and is in some of the world’s leading companies – we will surely see it increase very rapidly indeed. That would be a good thing in every way, and a nice counterpoint to the rapid trend in the opposite direction occurring in the world's ecosystems.

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