This article opens up the black box of innovation and examines the relationship between functional diversity in software teams and the often neglected dimension of innovation – speed, over the two phases of innovation: creativity

This article opens up the black box of innovation and examines the relationship between functional diversity in software teams and the often neglected dimension of innovation – speed, over the two phases of innovation: creativity and idea implementation. By combining information processing view and social identity theory, the authors hypothesize that when collective team identification is low, functional diversity positively affects the time spent in the creativity phase; however, when collective team identification is high, this relationship is inverted U-shaped. When task cohesion is high, functional diversity negatively affects the time spent in the idea implementation phase; however, when task cohesion is low, this relationship is U-shaped. Results from 96 IT software-teams confirmed the authors' hypotheses. Theoretical and managerial implications are discussed.