Wednesday, April 17, 2019

Multicultural Individuals and Organizational Innovation: More is Better

I have a son who is proudly multicultural, with a geographical range that covers three continents and a skill range that goes from playing violin to programming for parallel processing, with some things in between. He mainly thinks of that range as useful for him personally, but now there is research suggesting that organizations should also be interested. The reason relates to an old dilemma about the costs and benefits of diversity.

A research paper by Matthew Corritore, Amir Goldberg, and Sameer B. Srivastava in Administrative Science Quarterly explains the dilemma well and gives new evidence. The dilemma is that diversity is both good and bad. It is good because diversity means there is a wide range of ways of looking at a problem and thinking of solutions, and combining these can fuel creative solutions that are better than what any individual skill set would produce. It is bad because diversity makes communication harder as a result of fewer shared assumptions and skills, and it generates less agreement on how to describe solutions. This good-and-bad combination has made it very hard for managers to best make use of the diversity available.

Corritore, Goldberg, and Srivastava found out that diversity has very different effects depending on whether it is found between people or within people. A multicultural organization or team in which each member has one cultural value each is exactly where the good-and-bad dilemma happens. It cannot be fully creative, and it will be less efficient than a monocultural organization or team. In fact, interpersonal diversity in organizations predicts lower profitability. But if the multicultural organization or team has members with more than one cultural value each, the result is different. Now the potential creativity can be fully realized, so firms with such people will make more innovations and experience greater economic growth.

The findings are neat. They confirm that the dilemma experienced by managers and measured by researchers is real. Diversity is good and bad at the same time, and it may be best when it is intrapersonal. This gives a solution to the managers trying to hire for creativity, because they can now see that hiring people who are different from one another is too simple a solution. Intrapersonal flexibility should also become a target of hiring, such as the diversity that can be gained from varied backgrounds and experiences.

Of course, the solution has a few problems attached to it. First, people who are truly multicultural are scarce, so hiring for that characteristic will be difficult. I can imagine that my son would be pleased about that problem of becoming a valued scarce resource, but firms looking for his type will not. Second, it can be difficult to even recognize who is multicultural. Researchers can do it through analyzing their writing, as in this research paper, but firms don’t have access to such tools.

Going by simple indicators is not enough, as I know from living in Singapore. Many foreigners from Australia, Europe, and America are introduced to Asia through spending time in Singapore, but they can be divided into those who live the expat life with little local contact and those who learn the culture more deeply. Multiculturalism is in the mind, and so is the willingness to obtain it.