Conversations: Beyond Diversity to Inclusion

Lordan, Pljaskovova, Groot, Taub: Inclusion

Interviewed February 2021

The Work of Fair HQ

I started looking into what has been done in the overall D&I space and how much money was being wasted on things that did not work. How could we better understand how businesses are performing? What does “good” look like when it comes to diversity and inclusion approaches internally in business processes, policies, representations, and the behaviors that are present in the organization? Then pairing that data with scientific evidence and making suggestions as to what companies can do to improve their behaviors, processes, policies, and the outcomes that it has on the different people in those organizations and ultimately, what outcome that has on their business performance. That is what we are trying to do. We connect the data, the recommendations, and create a holistic strategy for businesses that will effectively help them become more successful. We do that very systematically.

The Work of the Inclusion Initiative

The second reason is that I have spent ten years now studying what makes people successful. One of the things that has come through in that research is that it goes beyond their skills, talents, and ability. I have studied discrimination explicitly. I have been looking more recently on the flip side of that and thinking about privilege as something that gets people ahead unjustly. I want to spend the next decade of my life trying to rectify that and making sure that people do get ahead based on their skills, talents, and ability, and we rewrite some of the other things that have been getting people ahead at the moment.

The last thing that I find fascinating is that we roll out a lot of D&I interventions in companies and we never check if they work, and people become fatigued with diversity initiatives. Being able to gather an evidence base that does not just say “this is what works,” but also takes into account context as well, is extraordinarily important. Firms are on different journeys, there is a different distribution of culture; if I am a toxic firm, some things are going to be effective for me that will not be effective in firms that sit further up the culture distribution curve. The honest approach to D&I will say, “We think this is going to work and we are going to evaluate whether it does work. We are going to report back to you whether it works today, in a month, in a year, and be really honest.”

I am really concerned about the fact that there are talented people who are from underprivileged backgrounds who are not getting to where they need to be for reasons that have nothing to do with the skills, time, and talent that they possess.

The Work of Community Fund

My earlier experiences put me on track to thinking: as a businesswoman of color, I want to serve my community, and I see opportunity in founders that the industry overlooks who would otherwise produce outsized returns. I needed to become a check-writer and invest in underestimated founders. I kept working because I needed to pay the bills, but I started thinking about how I could break into venture capital. After my MBA and many hurdles and hoops, I slowly found a foothold in VC: Backstage Capital and the support of Arlan Hamilton came first; being an Indie.VC scout and a NextGen Venture Partner next. Last year, my husband and I launched the Startup-Investor Matching Tool, which connects underestimated founders with investors. Around the same time, Jesse Middleton reached out asking me whether I wanted to co-found a fund that would invest in the best (but underestimated) founders, and here we are.

How Research Leads to Action-Based Policies

There is a body of great research on why these things are important.* We do not yet have very strong evidence on how to make it work, especially because every company is so different, and context has a huge impact on the effectiveness of interventions. We know the threads that we need to start pulling from the research. There is a lot of opportunity here to start embedding change not as these huge culture initiatives; let us just start targeting really specific things inside companies that we know have an effect, such as making sure that people are part of collaborative workgroups, they can access the resources they need, we have meeting formats where minority voices are heard, and it is not just the loudest person in the room talking. Let us start seeing if we can create compound change with small wins.

Outside Pressure Is Helping Drive Change

More and more international firms are asking for D&I evidence from companies and other teams that approach them for business. That is really effective. Monitoring what those diverse teams actually bring when they walk through the doors is really effective. If we think of the different groups of people in society, we do still have this group in society who are loud, who talk about a meritocracy as if the meritocracy is truly measuring merit.

That is why when we make these changes to our supply chain, and we start evaluating what happens when we do have more diverse and inclusive teams serving us as clients, we will really help move the needle on what actually is and is not a meritocracy. I believe that we are not in a meritocracy at the moment; that privilege is what advances people unnecessarily. If we move towards making changes now and evaluating them, and pushing that evidence out into society, what are the effects of having diversity at the table that is included? It will be really powerful, and the firms that do not follow should suffer creative destruction.

Just a few months after launching Fair HQ, we started to confirm some of the data from the research that when you have low representation of women in leadership, you also see lower levels of inclusion for women across the business. What about people of color? What impact does representation have on inclusion for them? Meritocracy does not yet exist, even though we want it.

Empathy and the Outsider Perspective in Leadership

I come from a working-class background, in a small city in Ireland, so I have access to some privilege and there are other aspects of privilege that are not there for me. I cannot experience what it is like to go through life as a Black woman. It becomes very important to listen to people who can tell me that story and tell me their experiences and obstacles. Then I can help them, not in the sense that I am a hero, but we all have to start helping each other at this point. We cannot think of an insider versus outsider hypothesis. If you take that to the extreme, the idea of the privileged white man, that we always think as the people who have the most in society, because that is what the statistics tell us, then there is a role for them stopping and listening to people who they see are not getting ahead in the data at the same pace as the average.

Any human being who holds any position in an organization can stop and listen to the obstacles that people are telling them that they are facing, and believe them, which is really important, and not doubt the words that are coming out of their mouth, even if they do not apply to them. Together, we need to think about creative ways to work together towards equity. If I am helping other groups bring down their obstacles, and they are helping me bring down my obstacles, or helping another group, then we advance towards the idea that we are all moving forward based on our skills, talents, and ability, and there is a collective.

One of the questions that I have about the gender revolution in professional work is whether women who actually get through and who get to the top, because they have been outsiders, recognize the need to stop and think about other people who are facing obstacles, learn about those obstacles, and bring those obstacles down. I worry that is not the case. I say that because when I speak at events for women, lots of women turn up. And when I am invited to talk to people about racism, or when I am invited to LGBTQ events, it is not the same people.

Once we remain segregated in this insider-outsider group mentality, we will not get that final convergence. Coming from a working-class background in Cork, when I grew up, I was not aware of it. I lived in a neighborhood where all the kids played together, we were all working class, they did not have lots more than me. Only two of us went to university, I never thought about it all the way through it. It only became salient to me when I went to university. And when I was actually now networking with people who did not have to also work 30 hours a week. At different points in our life, we become aware that we are an outsider, and that we have less in common with the people that surround us. Understanding those experiences of different groups has become extraordinarily important to me. Over the next ten years, it will be the root of my work: going forward and admitting that I cannot understand fully what the person has gone through, but I can listen, learn the obstacles, and hopefully be part of a movement that brings those obstacles down.

We need a different type of manager going forward, and a different type of leader in society across all levels where there is power. We do need active listening and leaders who want to know about each other’s experience. I met a senior manager, who spoke about the fact that he learned for the first time that a very senior managing director in this very big investment bank had been subject to racism when he was driving his car in New York, in Manhattan. He lives just outside New York, has a fantastic house, has fantastic experiences at work, his team love him—absolutely ideal life on the outside, but every time he drove into Manhattan with his children, he was being pulled over, in his Volvo, and how crushing and embarrassing it was for him. For that particular person who never had any experiences like that, it is so important for him to listen and hear that story and know about the experiences that the people on his team are having.

The first step is the obstacles that you can actually bring down. That empathetic ear is going to become much more important for managers, because that connection, particularly at a junior level, to be able to discuss with somebody something that they can not necessarily identify with, I do think it takes the mental health burden off of people in work where they can actually be more productive. Aside from doing the right thing as human beings and showing the person that they are actually cared about, it also has positive effects on productivity.

I do not think it is possible for everybody. There will be people across all types of demographics that will not be good at empathy, and perhaps you can learn it, but if they are not willing to learn maybe managing is not going to be for them and bringing along talent is not going to be for them. As we go forward, the role of the manager who actually leans in and wants to learn about people who come from different backgrounds and have different experiences, and not get uncomfortable with the negativity, is hugely important.

I noticed one of the flaws people regularly have is that they always want to put themselves in the story and say, “Oh, I identify with that, or I had this.” You need to realize it is okay that somebody had a terrible experience that had nothing to do with you and your role in listening to the story is really to make sure that that does not happen in the future. If they are highlighting obstacles, your role is to be part of enabling them to bring those obstacles down and move forward. How you teach that, I do not know. That is going to become, at the professional level, the most important skill set leaders can have.

How to Engage Leaders Resistant to Change

We need to start creating this conversation in this space where people start listening to each other’s stories. There are some really good techniques for learning how to actually engage with someone else’s story and not making it about yourself, and being curious about someone else’s experience.

It is also a promising idea to turn the conversation about diversity on its head. Instead of setting targets for increasing representation of women, people of color, or other underrepresented minorities, why not set the target for a maximum of 70% homogeneity? Striving for a maximum 70% people of the same gender, ethnicity, cultural background, generation, or educational background makes it less about “fixing the minority.” This way, the traditional majority may feel they can still be part of the conversation. We need to create a conversation where everyone has a voice. Traditional majority men, most of the time, feel that they do not have a space to talk because they feel like they have been the perpetrator of this lack of diversity and inclusion. We need to start from a radically different space.

Unfortunately, unconscious bias training sometimes leads to pointing fingers, saying you are all biased and this is all of these terrible things that you are doing. It is obviously very important to be aware of unconscious biases, but we know from the research that being aware of your biases is not enough to actually change behavior in the long term. Let us avoid having these pointing fingers. Let us create more open conversation for people’s experiences with perspective-taking, empathy, and active listening interventions. There are a lot of training programs and small wins that we can start building into our one-to-ones and our leadership and manager trainings.

Key Practices

We have found that internal leadership is the most important area. If all partners are all white men, it is very likely that the founders invested in are also white men.* The second really important thing is the investment pipeline. VCs are extremely dependent on recommendations from other founders, if your founder base is all privileged white men, a broad and diverse pipeline is unlikely. VCs need to actively reach out to different communities rather than saying there is a pipeline problem. It takes work to do that. What we have seen is in sourcing and analyzing companies, VCs tend to look at the deck, what school founders went to. If we apply a blind process as we do in hiring for firms, and start by looking only at the potential prospects of the business while removing the demographic information on the founder(s) from the process, that is going to be super effective. Research has also shown that women are asked very different questions. Implementing structured conversations with the founders and writing their answers down will help to overcome this issue. Some funds are doing quite good work around this.

Another inclusion practice is ensuring that tasks that are not promotable tasks, such as taking notes, organizing the office party, or organizing a birthday cake for a colleague, are rotated between team members. From the research, we know that women are asked to help out with “non-promotable tasks” much more frequently than men. But not necessarily because they’re simply more helpful: women tend to face backlash when they say “no” to such tasks, while men do not. By rotating some of these non-promotable tasks, or by making some of the tasks important criteria for promotions, you are actually creating more equal spread of the stretch assignments and team tasks that also need to happen.

There is an interesting recommendation [in Inclusion Nudges for Leaders] to also use checklists to define who you are going to assign to a stretch assignment, because managers tend to have their top two or three go-to people that they think of when they have a new, exciting project. By not checking yourself, in that moment, when you are making these decisions, you are creating this self-fulfilling prophecy where the same people get opportunities and then because they have these opportunities, they are able to advance more quickly. There are some very practical tips on how to create checklists, where you make sure that every week you write down in detail: “Who are all of the people who are available for a stretch task? What is the importance of the task? Who are you considering? Is there anyone else that you should consider that could add something to that specific task?” Those are some really practical ideas to make sure that you are considering everyone equally and fairly for access to opportunities.

The same thing applies for promotions and making sure that people have access to the leadership team. There is definitely interesting research on pairing up senior team members with more junior to create these informal social networks, especially as we know that minority candidates or employees have different networking approaches as well. They are slightly less broad networking approaches than for the traditional majority. Let us make sure that we create these opportunities for people who might not have had access or who might not feel much belonging with the organization as their divisional majority counterparts.

Toropainen: Inclusion Best Practices

Interviewed January 2021

How Tech Inspired a Move to DEI

I started Inklusiiv as a non-profit to bring change, first as a movement that in the long run can have a lasting impact. After my years at Slush, I was pondering that I would probably want to leave the tech industry unless the industry got more diverse and inclusive. So, I decided I wanted to be part of the change and I chose to work in the D&I field. We are striving for an industry free of sexism, racism, or other forms of discrimination or harassment, where women and underrepresented founders, operators, and investors feel valued and appreciated.

It’s shocking to discover data and research that reveals the lack of funding for underrepresented founders. These same biases affect what kind of companies we build and what sort of products and services we design. The tech industry is still representing our world from a narrow point of view, with over 90% of funding in Europe going to all-male founding teams* and the whole industry being extremely male-dominated.

My work with Inklusiiv, and being part of the Atomico Angel Programme, has given me more optimism because I’ve found supportive communities involved in building a more inclusive tech industry and got to know so many other people dedicated to advancing diversity, equity, and inclusion (DEI). Important reports such as the State of European Tech by Atomico and Slush and the Nordic Startup Funding Report by Unconventional Ventures bring to light invaluable new knowledge, while communities and networks for angel investors that work towards investing in and supporting more female founders, play a key role. Moreover, I feel very humbled and empowered to be able to work with people and companies committed to driving DEI topics forward.

Change takes time, but with time and more and more positive results, it starts to happen. I truly believe that in the upcoming years, the tech industry will become more inclusive towards underrepresented groups of people.

Diversity Won’t Last without Inclusion

According to the US-based research by Accenture and Girls Who Code in 2020, 50% of women in tech leave the industry by age 35 and 37% cite the non-inclusive work culture as the primary reason. The percentages are even worse for women of color and women who belong to sexual or gender minorities. The importance of inclusion has been constantly highlighted by various research pieces and reports, for example, in the annual McKinsey report investigating the business case for diversity. In the 2020 report, there is, so far, the strongest argument for inclusion; it’s something that every business needs to commit to truly flourish.

According to Deloitte research, combining diversity with inclusion efforts leads to better business outcomes. They found out that organizations with inclusive cultures are three times as likely to be high-performing, six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.

Inclusion is about creating a sense of belonging. Like other DEI experts, I also agree with the emphasis that inclusion is about taking those daily actions while understanding that you can never be done or ready. Inclusion really is a lifelong journey of learning and developing practices and processes.

In terms of teamwork or organizational environment, we define inclusion as the work environment where everyone is treated fairly and respectfully. Individuals across the company have equal access to opportunities and can really fully contribute to the organization’s success. Inclusion fosters psychological safety and a sense of belonging, welcoming new ideas and making sure that everyone’s voices are being heard. Some barriers of inclusion are, for instance, unconscious biases, lack of representation, and privileges. Building inclusion is also not just a one-person job but requires effort and commitment from everyone in the organization.

Within the tech startup and VC ecosystem, or within any industry, the most important thing to understand is that most of the DEI challenges are structural. In addition to changing our behavior to become more inclusive, we need to change how the systems and structures work. This means figuring out ways to make the systems more fair and inclusive in terms of how we hire people, how we decide on promotions, and how we share responsibilities.

Concrete Steps toward Inclusion in Organizations

For instance, while it’s great that unconscious biases are now much more widely acknowledged, acknowledgment by itself does not make a lasting impact. We need to focus on the processes and structures in the organization, such as recruiting or leadership principles, that are affected strongly by unconscious biases. By changing these structures to more inclusive ways, we can truly make a difference.

Great concrete ways to take on this work includes things like measuring employee and leadership demographic diversity and running employee surveys to find out about their engagement and viewpoints. Based on these tangible insights, it’s possible to find priorities for improvement and measure development and success in inclusion practices.

Figuring out the DEI path for any organization can be really challenging as there are a lot of different aspects to focus on. Many companies have good intentions but don’t know what to do or where to start. That’s where DEI experts can provide value in helping them to learn and find ways, in collaboration with their team, to figure out specific priorities and steps forward. At Inklusiiv we prefer to host workshops and trainings, led by our experts, with a limited size of team. We’ve seen how inviting the people in teams to co-create the inclusion processes leads to better results: more tangible goals, and clearer actionable steps.

Case Studies and Research on Inclusion

The positive side of things is that there are plenty of best practices on how to include DEI in every function of an organization, including product management, marketing communications, engineering, and leadership. Where there’s people, there’s a need for inclusivity.

One real-life case example is told by Kjartan Slette, co-founder of a Norwegian growth company Unacast, on the stage at Slush 2017. They were a company of 20 people when their co-founders realized the lack of diversity in their team. In just six months, they did a complete turnaround. The number of women in their team went from 17% to 36%, of which 31% were in engineering. Before that, they had no women in their engineering team. When asked about how they did it, their answer was quite simple: commitment. They realized they had a problem, they wanted to improve on it and worked hard to make the change happen. There are plenty of different actions they took, ranging from internal discussions and changing the hiring process to sharing their story publicly, revising the company’s culture, and many more. Of course, nothing happens in the blink of an eye, but the solution itself is easy—if you want to make it happen, commit to the work.

Another Nordic tech company, Spotify, is well-known for investing in diversity, equity, inclusion, and belonging. They launched their diversity data report in 2018 and are actively publishing new D&I articles and data on their HR blog.

Excitingly, DEI is becoming a necessary leadership competency. Leaders who want to stay relevant during the 21st century need to develop these competencies to be able to continue leading. Some traits of inclusive leaders are, for instance, the awareness of one’s biases, prejudices, and privileges. Inclusive leaders are also committed to diversity and inclusion topics and able to discuss these matters.

Deloitte has been publishing research about inclusive leadership and the conclusions are clear: inclusive leadership has a direct impact on team performance. In any company, the leadership needs to be committed to learning about D&I and driving this culture forward. The research also highlights the importance of curiosity in understanding how different people’s diversity, experiences, and backgrounds could work together in the best possible way.

The Investor Role in Building DEI

Historically, white men have built tech and VC companies for themselves—for other white men. This means that their perspective is deeply anchored in the structures and cultures, making the challenge of inclusivity systemic.

Tech and the VC industry need more people who understand the specific challenges of this ecosystem when it comes to DEI. Our ecosystem needs to be better at listening to underrepresented people and educating ourselves on effective allyship. To become an ally, any investor can be more intentional in embracing DEI by educating themselves and by reading content by women, people of color, and other underrepresented groups. Learning about the structural privileges we have is important. To become an ally means also taking action and actively using one’s own position and power to drive change. For instance, a white investor can educate themselves more about the privilege of being white—free from structural racism—and use that privilege to make the industry more equitable for all. Many investors say that they would love to fund more underrepresented founders or diversify their deal flow. The solution for VCs is pretty simple: hire more women, people of color, and people from underrepresented groups to your investment team—especially as partners and general partners. That’s the solution. The common challenge for investors seems to be commitment. As said before, D&I issues take work and long-term commitment. For instance, it might take efforts to diversify one’s personal networks and learn more about DEI. Like with Unacast, changes in team structures and practices take time and effort. My best advice would be to start this work early enough. If you have built, let’s say, a very homogeneous team of 10 people, you might already have difficulties attracting more diversity in your team. Funds such as Backstage Capital by Arlan Hamilton and Ada Ventures by Check Warner are leading the way, building funds with diversity and inclusion in mind since the beginning.

Improving Inclusion in the Tech World

We humans are imperfect and filled with unconscious biases, stemming from societal structures and biases. We just all need to acknowledge that and commit to this lifelong journey of learning, getting better, and making progress—that’s the solution. There are no easy, quick fixes that solve everything. Or if there were, those would have already been adopted by most organizations.