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The importance of leaders as diversity managers is widely acknowledged. However, a dynamic and comprehensive theory on the interplay between team diversity and team leadership is missing. We provide a review of the extant (scattered) research on the interplay between team diversity and team leadership, which reveals critical shortcomings in the current scholarly understanding. This calls for an integrative theoretical account of functional diversity leadership in teams. Here we outline such an integrative theory. We propose that functional diversity leadership requires (a) knowledge of the favorable and unfavorable processes that can be instigated by diversity, (b) mastery of task-and person-focused leadership behaviors necessary to address associated team needs, and (c) competencies to predict and/or diagnose team needs and to apply corresponding leadership behaviors to address those needs. We integrate findings of existing studies on the interplay between leadership and team diversity with insights from separate literatures on team diversity and (team) leadership. The resulting Leading Diversity model (LeaD) posits that effective leadership of diverse teams requires proactive as well as reactive attention to teams' needs in terms of informational versus intergroup processes and adequate management of these processes through task-versus person-focused leadership. LeaD offers new insights into specific competencies and actions that allow leaders to shape the influence of team diversity on team outcomes and, thereby, harvest the potential value in diversity. Organizations can capitalize on this model to promote optimal processes and performance in diverse teams.

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Attaining value from nationality diversity requires active diversity management, which organizations often employ in the form of diversity training programs. Interestingly, however, the previously reported effects of diversity training are often weak and, sometimes, even negative. This situation calls for research on the conditions under which diversity training helps or harms teams. We propose that diversity training can increase team creativity, but only for teams with less positive pretraining diversity beliefs (i.e., teams with a greater need for such training) and that are sufficiently diverse in nationality. Comparing the creativity of teams that attended nationality diversity training versus control training, we found that for teams with less positive diversity beliefs, diversity training increased creative performance when the team's nationality diversity was high, but undermined creativity when the team's nationality diversity was low. Diversity training had less impact on teams with more positive diversity beliefs, and training effects were not contingent upon these teams' diversity. Speaking to the underlying process, we showed that these interactive effects were driven by the experienced team efficacy of the team members. We discuss theoretical and practical implications for nationality diversity management.

Summary Effective leadership requires a leader claiming as well as team members granting the leadership position. Contingent reward and participative leadership may both facilitate this mutual process. However, these behaviors differ in the degree to which they require a leader to have status and be prototypical. Their effectiveness might thus depend on the status‐related characteristics of the leader. In this respect, we propose that younger leaders, by deviating from the leader prototype in terms of age, lack a natural status cue, which will determine the effectiveness of these two leadership behaviors in shaping turnover. Two pilot studies (N = 113 and 121 individuals) confirm that younger leaders are perceived as less prototypical and to have lower status than older leaders. Examining 83 work teams, we show that leader age differently moderates the effects of contingent reward and participative leadership on time‐lagged team turnover. For younger (compared with older) leaders, contingent reward was effective as illustrated by decreased voluntary turnover and increased involuntary turnover, whereas participative leadership, which was associated with increased voluntary turnover and decreased involuntary turnover, was ineffective. These findings point to the importance of incorporating natural status cues of leaders for understanding the effectiveness of different leadership behaviors. Copyright © 2016 John Wiley & Sons, Ltd.