Rolands Mesters ( grey jacket) and Robert Bernans (black polo neck)- co-founders of Nordigen
Rolands Mesters (right) and Roberts Bernans of fintech Nordigen, introduced a cultural fit test for new hires © Charlie Bibby/FT

When Rolands Mesters and Roberts Bernans co-founded Nordigen, a fintech business based in Riga, the Latvian capital, in 2016, they made each other a promise: the company would be open and inclusive, a place where anyone could pitch in with an idea and know that their teammates would listen respectfully.

Then they began hiring salespeople from large corporations and the culture changed. The new hires cared only about making sales, made no effort to get to know the company’s engineers and rebuffed their suggestions on how to market its technology.

Though they were good salespeople, they made bad colleagues — and their manner drove others to keep their heads down and their ideas to themselves. So the co-founders did something that might seem to sit oddly with their commitment to inclusivity − they introduced a cultural fit test. “After the first round of interviews we invite team members, at random, to meet the candidate,” says Mr Mesters. The conversations range widely- the point being to find people who can work towards a common goal while remaining unafraid to challenge conventional wisdom.“ If we feel the person is ‘one of us’, we hire them.”

Diversity is often seen as an all-round good thing, an idea that research broadly supports. Teams that take in different life experiences, identities and styles of thinking beat monocultures at problem-solving and prediction. Market simulations have also found that ethnically diverse groups price assets more accurately because people are less susceptible to herd behaviour and copying each other’s mistakes.

Other studies show that teams in which people approach problems from different angles − some prioritising discovering new things and others preferring to draw on what they already know − outperform teams in which people are cognitively alike.

Yet diversity has some downsides. As Nordigen found, simply trusting people with opposing priorities to combine creatively is more likely to expose divisions than produce gains. Differing cultural assumptions can make it harder for teams to bond, and can lead to friction and misunderstandings, hampering the achievement of goals. A recent study, for example, found that people share information more readily with compatriots and colleagues from culturally similar nations.

To profit from diversity, workplaces need to support people to see beyond stereotyping and recognise the value in difference. A growing body of studies into what makes teams smart also highlights a need to keep an eye on the social dynamics. Foundational research conducted in 2010 by Carnegie Mellon University, MIT and Union College discovered that teams made up of individuals who scored highly on IQ tests performed little better on tasks than teams with lower IQ scores and stronger social skills.

In the socially intelligent teams — typically those with more women — members boosted collective brainpower by taking turns to speak and by listening attentively, says Anita Woolley, associate professor of organisational behaviour at Carnegie Mellon University, and lead author. In effect, through teamwork, the teams made themselves smart.

Setting some ground rules may be a way to stop the loudest voices drowning out other viewpoints. At Red Hat, the US-based software business, DeLisa Alexander, chief people officer, opens meetings by giving someone the job of ensuring everyone contributes. As the senior manager, she is careful not to speak first and “invites participants who dial in to speak before those in the room”.

Following set procedures may also curb the subtle biases that give cultural majorities an outsized share of talking time. From a black, Asian and minority ethnic perspective, says Harpreet Nandha, a manager at satellite broadcaster Sky UK: “If you’re in a room of people who are all agreeing, it can make you feel ‘I won’t share my opinion, because I don’t want to be different.’”

At McAfee, the cyber security business, managers are trained to pick up from body language when someone is struggling to enter a discussion, and intervene politely when a team member cuts across another or monopolises the floor. “We do it not to shame or embarrass, but to hold up a mirror that allows [the person] to reflect a little and other voices to be heard,” says chief human resources officer Chatelle Lynch.

If polite reminders don’t do the trick, Professor Woolley suggests “carving out a special role” for antisocial characters, limiting their contact with colleagues. A single bad actor can kill teamwork, because such people “have a disproportionately negative influence on group cohesion”.

Working as a team, though, does not mean always agreeing. As the Harvard academic Amy Edmondson writes in The Fearless Organization, in the strongest teams people speak candidly and “engage in productive conflict” in order to learn from each other. When colleagues are so blinkered by their beliefs that they cannot work together, however, conflict tips over into dysfunction.

Tom Marsden is chief executive of Saberr, a business that works with teams. His company recently brought together two executives who clashed repeatedly. One loathed top-down power, the other respected hierarchy. In discussion, the executive who mistrusted authority confided that during his childhood his family had suffered under a police state. His colleague then divulged that he “went off the rails” in his teens and regained a grip on life in the army.

The discussion did not change their beliefs but it “led them to a much better understanding of why they differed, and moderated their behaviour with each other,” Mr Marsden says. Teamwork flourishes when people have the confidence to speak freely — and also the courtesy to allow others to do the same.

Ultimately, teams must move from discussing to deciding and doing. Here again, “old-fashioned rules”— such as setting goals at the outset and agreeing who will make the final call avoids pain later on, says Emma de la Fosse, chief creative officer at digital agency Digitas UK.

Mr Mesters at Nordigen has introduced a rule that teammates should “disagree respectfully” − and where possible put ideas to the test. Recently, an engineer suggested adding live chat to the company’s website, which targets banks and alternative lenders. The idea flouted accepted wisdom, and the salespeople were sceptical. But they agreed to a pilot — and the results were so good that it completely upended managers’ assumptions.

Crossing cultural divides

Working in multicultural teams is often stimulating, but can have drawbacks. When meetings are held in English, for example, non-native speakers may struggle to explain their ideas and contribute less. Though not a perfect solution, managers at Red Hat invite tongue-tied teammates to switch to their own language and get a colleague to translate for them, or they can put their thoughts into writing afterwards, says Dunja Heinrich, the company’s HR director for Emea.

Differences in how cultures convey meaning add to the problem of what is lost in translation. As the Insead academic Erin Meyer explores in The Culture Map, Americans prioritise speaking “clearly and explicitly”, while the Japanese judge intention by context and what isn’t said.

When presenting ideas from Europe in Kyoto, London-based Rowan Williams, creative lead in Panasonic’s design division, relies on a colleague, Takehiro Ikeda, to translate his words “in a way that makes sense culturally”. Mr Williams says that British designers like to “provoke discussion,” whereas the Japanese build upon “shared opinion,” says Mr Ikeda.

Still, being an outsider has advantages, says Mr Williams. “It’s possible for me to be left-of-field in a way Japanese people enjoy — though they mightn’t feel comfortable assuming that role themselves.”

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