Summary 

Our recent study that was published in the Journal of Management Studies, entitled “Disentangling Knowledge Diversity: The Interactive Effect of Heterogeneity-Based Knowledge Diversity and Inequality-Based Knowledge Diversity,” challenges a common assumption in team innovation research: members’ diverse knowledge backgrounds will facilitate innovative outcomes in teams. This prevailing belief focuses on individuals’ differences in knowledge domain and neglects an important corresponding dimension of knowledge diversity: members’ differences in recognized knowledge level. We demonstrate how knowledge diversity consists of these two foundational elements, and find that differences in knowledge level among team members diminished the positive effect of differences in knowledge type on innovation in over 29,000 pharmaceutical patent teams over a 25-year period.   

Why Different Knowledge Backgrounds Aren’t Always Enough 

In a world where innovation is the key to competitive advantage, organizations often assume that simply putting diverse minds together will naturally lead to breakthrough ideas. It’s an appealing proposition: more perspectives within a team foster a variety of new ideas that lead to better innovation. But our study suggests a more complicated reality.  While teams with diverse knowledge backgrounds (what we call heterogeneity-based knowledge diversity) were more likely to generate innovative outcomes, those benefits were significantly weakened when status is concentrated within an individual in a knowledge team (what we term inequality-based knowledge diversity). That is, when one individual on a team holds a high level of recognized expertise in comparison to other members, the different knowledge backgrounds of all members do not matter as much for innovation.   

The Cost of Silence 

Innovation isn’t just about collecting knowledge – it’s more about how to effectively combine and process these diverse viewpoints. This collective integration of knowledge requires information elaboration: the free exchange, discussion, and effective combination of perspectives.  Under high status inequality, a few high-status members can dominate discussions, and lower-status individuals may self-censor or defer, especially in professional settings where status is tied to prior success. As a result, teams with diverse types of knowledge may fail to realize their full innovative potential. Including a single superstar on a team without nurturing an inclusive environment where everyone can contribute may have potential risks of stifling voices with diverse ideas and consequently hinder team innovation.  

Rethinking Team Design for Innovation 

Managers therefore should not just attend to structure teams with diverse backgrounds.  They also need to think about facilitating flatter status hierarchies in terms of members with similar levels of expertise.  Having a superstar working with a group of nascent knowledge professionals is not necessarily bad, but proper team dynamics should be fostered such that everyone feels free to express their views to best combine diverse knowledge for innovative outcomes.  For instance, a leading scientist might offer small internal awards for critical feedback from junior colleagues or publicly recognize those who engage in respectful debate with visiting senior experts. These efforts signal that it is intellectual contribution, not rank, that drives innovation, thereby enabling diverse perspectives to coalesce into more creative and robust outcomes.