The memo written by a Google employee that went viral earlier this month hit a raw nerve. The tech industry is already beset by accusations of widespread sexism and discrimination, and suddenly here was someone arguing that genetic differences rather than bias alone might explain why there are more men than women in tech jobs.

That assertion led Google CEO Sundar Pichai to fire its author, James Damore. The reason, as Mr. Pichai put it in a companywide memo: “To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK.” But Mr. Pichai’s memo also said it’s not OK for Google employees to feel they can’t safely express their views at work, and that “much of what was in that memo is fair to debate.”

Google has yet to clarify what it thought was debate-worthy, but it’s a good bet that it had something to do with two of Mr. Damore’s admonitions: that Google should be more inclusive of conservatives and their viewpoints, and that it should consider the potential cost of Google’s diversity programs. But this controversy, as often happens with debate over diversity, has obscured the core business issues involved.

Diversity = Dollars

Research has established the business case for diversity. This isn’t an argument about redressing historical inequities or even present-day fairness. More diverse companies have better financial returns, are more innovative and are just plain smarter than their more homogenous competitors.

One reason diversity is good is that it’s hard, says research done by Katherine W. Phillips and others while at Northwestern University’s Kellogg School of Management. Diverse teams tend to have more disagreement but better outcomes, while homogenous ones are more confident in their abilities but perform worse. In a 2009 Kellogg study involving members of fraternities and sororities, a team was more likely to correctly solve a murder mystery if it mixed in (same gender) people from other houses. Tellingly, those same teams were less sure they were right and often felt their interactions were less effective.