Organizations that develop cross-disciplinary, diverse teams perform better – but lack of “inclusive leaders” hinder success

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Kuala Lumpur, 19 December 2013 An overwhelming majority (84%) of business executives say that their organization’s ability to develop and manage teams will be essential for future competitiveness, according to a global EY survey. Those who rate their companies as “excellent” at building diverse teams are much more likely to have achieved earnings before interest, taxes, depreciation and amortization (EBITDA) growth of greater than 10% over the past year. The same correlation is true for companies with teams that have become more geographically dispersed over the past three years and increased EBITDA growth levels.

Yet, half of the 821 respondents to The power of many: How companies use teams to drive superior corporate performance do not have the leaders with the ability to manage and motivate these teams. This is despite 85% deeming “inclusive leadership”, or the ability to encourage teams to voice diverse perspectives and dissent, to be an effective means of improving performance.

Lee Soo Fern, EY Malaysia Talent Leader says, “Strong leadership is a pre-requisite for any high-performance team and is particularly important in dynamic situations that require people to analyse and adapt their responses accordingly. Good leadership provides clear direction, creates an open and inclusive team culture and empowers each member to take responsibility towards contributing to the success of the team.”  

“People increasingly need to know when to make a decision, regardless of their position within the organization, and that takes leadership. A collaborative approach enables them to know directionally where they need to go, but someone has to make the decisions. You also need accountability to ensure that everyone understands their role and responsibility. If one member is consistently dominant and the other team members feel subordinate to him or her, the team is unable to make use of the diverse skills and experience that it possesses,” Soo Fern adds.

Many companies also struggle to resolve the dilemma of the need for cross-border, cross-functional teams, and the preference of employees for face-to-face meetings over other forms of communication. Sixty-five percent say that the extent to which teams are facilitated by technology rather than face-to-face interaction has increased over the past three years, but face-to-face communication is the clear leader as the most valued method of communication.

“Inclusiveness or ‘making the diverse mix work’ is also essential to building high-performance teams. Organizations these days must take into account that diversity extends beyond ethnicity, gender and cultural backgrounds and includes the varying traits and expectations of different generations. Companies who are devoted to getting the chemistry right through facilitating teaming across various functions and developing leadership at every level of its employees will be best positioned for long-term, sustainable success,” comments Soo Fern.

Mike Cullen, EY’s Global Managing Partner - Talent, says: “Increasingly, a company’s ability to form, lead and nurture high-performance teams will be critical to its long-term success. To achieve superior performance, tapping into the full range of diverse skills and expertise at their disposal is essential. High-performance teams have a shared commitment to quality and results. They focus on achieving the highest standards and the best outcome, and are aligned behind achieving this goal.”

The findings also highlight three broad characteristics that high-performance teams are likely to demonstrate:

  • A shared vision
  • The right mix
  • Commitment to quality and results

Cullen concludes: “It’s crucial for companies to define what they mean by high-performance teams and then to embed that in a more consistent way, transferring best practice from one team to another so that it evolves into a high-performance culture. By setting a minimum baseline and then a set of aspirational goals for teams around the world to reach, you can define what ‘best in class’ looks like and move towards that globally.”


Notes to editors

About the report

This report draws on a survey of 821 business executives conducted for EY by Longitude Research in April and May 2013. Respondents represented 14 countries around the world across Asia-Pacific, Europe and the Americas. Approximately 50% of the respondents were board-level, or C-level executives, and just under 50% represent the human resources function. Companies surveyed varied in size, with 30% earning in excess of US$5bn in revenues each year, and the remaining 70% with revenues between US$250m and US$5bn.

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