Unlocking the performance potential of functionally diverse teams: The paradoxical role of leader mood

Abstract

In a multisource, lagged design field study of 66 consulting teams, we investigated the role of leader mood in unlocking the performance potential of functionally diverse teams. In line with our hypotheses, we found that, given high levels of leader positive mood, functional diversity was positively related to collective team identification. In contrast, given high levels of leader negative mood, functional diversity was positively associated with information elaboration in teams. Furthermore, results showed that functional diversity was most strongly related to team performance when both leader positive mood and leader negative mood were high. This study highlights the value of examining seemingly contradictory leadership aspects in the effort to gain a fuller understanding of how to foster performance in diverse teams.Practitioner points To effectively lead diverse teams, leaders need to navigate between the need to promote unique ideas (i.e., information elaboration) and the simultaneous need to pull together diverse members towards a common identity. Leader mood addresses both of these needs. When the team leader exhibited a positive mood, team functional diversity was positively related to members’ identification with the team. By contrast, when the team leader displayed a negative mood, team functional diversity was positively related to information elaboration. Over a 12‐day period, diverse teams performed best when the leader showed both positive and negative mood. Leaders of diverse teams are required to be sensitive to the affective tone of their team and aware of how their emotional displays influence team members’ moods and behaviours as well as team processes.