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Why Diversity and Inclusion Needs to Start with Tech Leadership

Silicon Valley and the tech industry on a whole have a long-standing problem with diversity and inclusion. It’s an issue that’s often swept under the rug with many tech leaders simply claiming they hire the best, and if they happen to be male and white, that’s just how it is. Ironically, when the HBO show, Silicon Valley, cast a nearly all-male, mostly white cast it caused outrage. Surely the diversity problem in the real Silicon Valley is not that bad? Turns out, it’s worse. “The first season, we got a lot of flack — some of it deservedly so — about how male and white the makeup of the show was, but we’re also satirizing a real world,” says Executive Producer Alex Berg.  “That real world, the people who do what our guys do, are 87% male. Venture capitalists at the partner level are 96% male and white, so the world we’re depicting is every bit as off-kilter as our show is.”

When asked whether the show should incorporate more women and minorities, Berg was unsure. He noted “that is an ongoing discussion; the world we’re depicting is f—ed up, but do we have the responsibility to make the gender and racial balance on our show ideal when the world we’re depicting isn’t?”

The show’s producers also received extreme criticism for depicting tech events with background audiences that weren’t considered realistic due to lack of diversity. Berg described a conversation with a female friend who had an issue with some of the shots in the show – like scenes from TechCrunch Disrupt. “She called me and said, ‘Let me tell you what’s wrong with your show: Those crowd shots were absurd, you didn’t put any women in there.’ And I had to tell her those are real shots from the real place and we didn’t frame women out.”

HBO might have been going the satire route when they greenlit a show about Silicon Valley, called “Silicon Valley,” but the visual depiction of a growing issue in the tech industry has struck a cord and has resulted in tech founders and leaders realizing they need to be the ones to come up with real solutions to how to bring diversity and inclusion to the tech industry.

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Adam Pisoni, founder of Abl Schools and Yammer, believes that diversity and inclusion needs to start with tech leadership at early-seed startups. He gives three reasons for starting diversity early on: breaking dynastic privilege, the founding team sets the culture, and diverse teams attract diverse groups of people.

Dynastic privilege isn’t just a tech industry concept, it happens in every industry, and basically gives privilege to people who have been involved in successful ventures. If you wanted to open a restaurant and already have been a co-founder of a wildly successful food truck, it would be a lot easier for you to convince investors to back your next project. It’s also the reason many of those involved in the film industry have friends or family in the film industry.

I believe dynastic privilege is one of the major contributors to the lack of diversity in tech. For example, I am a product of the “PayPal Mafia” dynasty. I co-founded Yammer with one of the original PayPal mafia members. Yammer had an easier time raising capital because of our PayPal connection. Because Yammer had a successful exit, I had an easier time raising capital for Abl. Other early Yammer employees were also able to use the story of Yammer’s success to convince investors to back their post-Yammer ventures. Employee 5 at Yammer had a much easier time raising capital than employee 50,” says Pisoni.

Since many tech founders are white males with professional networks of mostly other white males, it’s no surprise that early hires are lacking in the diversity department. Pisoni admits this is a challenge since it’s recommended to hire people you trust from your network vs strangers, however, if diversity doesn’t start from the founding team, it makes it more and more difficult to build a non-homogenous company culture down the line. Which brings up Pisoni’s next point: the founding team sets the culture.

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Company culture is a big reason for employee turnover. In fact, it’s the number 4 reason for employee dissatisfaction as indicated by our yearly surveys. Although companies can try to artificially create company culture through activities, game rooms, and cool perks, the fact is that a homogenous founding team will create a culture ideal for those in that same bracket.

“That culture won’t be as self-aware of the lack of inclusion in the culture, but it will feel inclusive for everyone within the tight knit founding team. As new employees with different backgrounds join, they will be more likely to reject or be rejected from the culture than to add to it. While you may be celebrating how strong a culture and tight a team you have, you may also be unaware of the ways you’re actually reminding that new employee that they don’t belong,” says Pisoni.

Diversity and inclusion isn’t just about policies and hiring practices. When it comes down to it, it’s about every new hire feeling welcomed and included by their peers. This requires making sure that every employee in your company is equipped to be inclusive of peers from different backgrounds. It’s also about ensuring work and work-related activities don’t actively counteract any attempts at being inclusive. Saying you’re inclusive, then having weekly happy hours at the smoky bar down the street when several employees don’t drink, actively destroys any progress towards inclusion. Instead, having an after work happy hour at the bistro that serves snacks and a mix of alcoholic and non-alcoholic beverages backs up words of inclusion with action.

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Being able to make people from all backgrounds feel welcome and supported will help companies continue to hire and retain other diverse talent. Pisoni makes the final point that diverse teams attract diverse groups of people. If you have a team of all white men, it’s going to be very hard to convince a woman or minority to join your company when there is no evidence of inclusion.

Pisoni adds that “this becomes a self-perpetuating problem: the longer companies wait to retrofit, the more difficult it becomes. Even if it is more difficult to hire a diverse team to begin with, the long-term benefits outweigh any short-term costs.”

What are the long-term benefits of a diverse team? McKinsey research indicates that public companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above national industry medians.

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According to the report “More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing return. This in turn suggests that other kinds of diversity—for example, in age, sexual orientation, and experience (such as a global mind-set and cultural fluency)—are also likely to bring some level of competitive advantage for companies that can attract and retain such diverse talent.”

It’s never too late for companies to embrace diversity and inclusion, and it’s clear the benefits outweigh any costs. With the higher returns that diversity is expected (and proving) to bring, the more tech leaders invest now in diversity and inclusion, the further they’ll pull ahead of their non-diverse competitors.

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Elizabeth is the Marketing Manager at PROTECH. Comments and feedback can be directed to her at elizabethb@protechfl.com.