This study investigates the impact of group demography on the performance of new product development teams in five high-technology companies. Using data from 409 individuals across 45 teams, the research examines the direct and indirect effects of functional and tenure diversity on team performance through internal processes and external communication. Key findings include: 1. **Functional Diversity**: Influences external communication, which in turn affects managerial ratings of innovation and overall performance. 2. **Tenure Diversity**: Influences internal processes, which affect team ratings of performance. 3. **Complex Relationships**: While diversity facilitates performance through improved communication and processes, it also has direct negative impacts on performance. 4. **Group Process and Communication**: Both internal processes and external communication mediate the relationship between demography and performance. 5. **Modeling Demography-Performance Relationships**: The study uses path analysis to decompose the relationships between demography, process, and performance, revealing that while indirect effects are significant, direct effects often dominate and can be in opposite directions. The study highlights the importance of understanding how group demography influences performance, suggesting that diverse teams can both enhance and impede performance depending on the context and specific processes involved.This study investigates the impact of group demography on the performance of new product development teams in five high-technology companies. Using data from 409 individuals across 45 teams, the research examines the direct and indirect effects of functional and tenure diversity on team performance through internal processes and external communication. Key findings include: 1. **Functional Diversity**: Influences external communication, which in turn affects managerial ratings of innovation and overall performance. 2. **Tenure Diversity**: Influences internal processes, which affect team ratings of performance. 3. **Complex Relationships**: While diversity facilitates performance through improved communication and processes, it also has direct negative impacts on performance. 4. **Group Process and Communication**: Both internal processes and external communication mediate the relationship between demography and performance. 5. **Modeling Demography-Performance Relationships**: The study uses path analysis to decompose the relationships between demography, process, and performance, revealing that while indirect effects are significant, direct effects often dominate and can be in opposite directions. The study highlights the importance of understanding how group demography influences performance, suggesting that diverse teams can both enhance and impede performance depending on the context and specific processes involved.