It’s reasonably well established now that gender diverse organizations tend to perform better than more homogeneous ones.  Given the slovenly pace of change, however, it’s always nice to have fresh evidence to support this fact, and new research from Cambridge University’s Judge Business School duly provides it.

It shows that gender-balanced teams not only help organizations to perform better, but this boost is especially pronounced during adverse circumstances.

“There has long been a confusing debate around gender diversity in senior executive teams,” the researchers say.  “While some reports have shown that having more women on corporate boards improves company performance including sales, profits and company value, academic research has, so far, not examined gender balance in top management teams, which are more visible day-to-day leaders of businesses.”

Diverse leadership

The researchers examined nearly 400 senior executives from 122 high tech SMEs in China, all of whom were at least six years old and had between 10 and 500 employees.

China was chosen in part because it has a high proportion of women in leadership roles, especially in the SME sector.  There has been particular growth in the number of women involved in STEM-related roles in recent years, with numbers reaching 44% of middle-ranking and senior roles by 2013.

“The fuller spectrum of gender ratios in top management teams in China allows us to test the effect of gender balance in senior business leaders,” the researchers say.  “In contrast, the number of companies with women in their top management teams in other parts of the world was way less than 50 percent and too low to test the effect of varying gender ratios.”

The analysis revealed that gender-balanced teams tended to benefit their organizations, not least due to the psychological safety they helped to create.

“Psychological safety is an environment in which staff feel comfortable enough to speak openly and freely in discussions affecting the company,” the researchers explain.  “When a company has high psychological safety, the employees feel that they are safe to speak up and are less concerned about the possible consequences of raising issues and problems in the company.”

This in turn makes it easier for organizations to uncover issues, and subsequently address them, which in turn improves the performance of the organization.  What’s more, this was especially so when the firms were under the most stress from adverse circumstances, where the propensity to brush unpopular opinions under the carpet can be extremely high for fear of repercussions.

There is a growing appreciation that diverse leadership teams produce a wide range of benefits to organizational performance, so it’s nice to have a bit more evidence to support the case.