“Tech has failed in its efforts on diversity,” says Freada Kapor Klein, entrepreneur, diversity activist, cochair of the Kapor Center, and founding partner of Kapor Capital. That direct, no-nonsense approach to a seemingly intransigent problem in Silicon Valley set the tone for an enlightening discussion between Kapor Klein and veteran tech CEO and Fortune 500 board member and author Shellye Archambeau. Moderated by CHM CEO Dan’l Lewin, the session was part of Joint Venture Silicon Valley’s annual State of the Valley conference that took place virtually on February 23, 2021. As Lewin noted, for tech to serve everyone for the benefit of humanity, diversity, inclusion, equity, and access must be core values.
Between 2014 and 2019, women employees jumped from 15% to 23% at Facebook and Google, but during the same time Facebook went from 3% to only 3.8% of Black employees and Twitter from 2% to 6%. This is a huge under-representation in a country where more than 60% of the population is female or non-white, noted Freada Kapor Klein in her opening remarks.
But things are changing among the broader community, customers, and notably among tech employees, who are increasingly looking for purpose and meaning in their work lives and demanding sincere commitments to diversity, inclusion, equity, and access from current and prospective employers. Kapor Klein outlined the trends employers should be prepared for in 2021. Companies ignore these trends at their peril, because social media will quickly become the default complaint channel of choice.
Diversity activist Freada Kapor Klein describes trends toward company accountability in 2021.
Tech has also played a role in the expansion of income inequality, another point of concern for those who care about equity and inclusion. Kapor Klein notes a 38.6% combined increase in US billionaires’ fortunes since mid-March, when COVID restrictions were first put into place. But, real incomes for rank-and-file private-sector employees dropped 1% from mid-March to mid-December.
For many years now, there’s been a debate in the tech industry about why it has had such a hard time achieving diversity and inclusion goals. Kapor Klein argues that there’s no excuse, “Because after all, when tech wants to accomplish something, tech usually exceeds expectations rather than fails.” The endless back-and-forth about whether it’s “a pipeline problem” or a “tech culture problem” is misguided, she says. Research shows that it’s not an either-or issue, and that there’s a set of biases that underlie both problems. There is real pipeline problem in that there’s a lack of access to computer science education for Black and brown kids in public schools. But the culture problem is self-created. Tech companies only look in a few rarified places for talent, places with few Black and brown engineers.
The Tech Leavers Study conducted by the Kapor Center in 2017, provides granular details about who leaves tech companies and why. Kapor Klein described the report’s four major findings and they should serve as a wake-up call to any tech company. It costs more than $16 billion a year to replace talent that walks out the door because of unfair treatment.
Diversity activist Freada Kapor Klein explains who leaves tech companies and why.
But amidst all the bias, bullying, and mistreatment, there are hopeful trends. Kapor Klein describes apprenticeship programs like Twilio’s Hatch that hires engineers straight out of bootcamps, a pathway into tech for many people of color. Geekwise (now Bitwise) Academy’s training program is focused on building tech ecosystems in underdog cities. SMASH, a Summer Math and Science Honors Academy, founded by Kapor Klein, has been on 10 college campuses for 18 years, guiding under-represented, low-income, first generation students through STEM majors. There are also a variety of internship programs for diverse students. Kapor Capital, has achieved top quartile returns, beating Pitchbook and Cambridge Associates with 100% gap-closing tech startups, about 60% of those started by underrepresented entrepreneurs. The secret to that success? Entrepreneurs who turn their lived experience into problem-solving, fast-growing, successful tech companies.
It’s just “Silicon Valley 101,” says Shellye Archambeau. None of the solutions for dealing with equity and inclusion problems are hard. It all comes down to being intentional, to actually wanting to solve the problem. If your company is having trouble attracting and retaining customers, she asks, would you just “sit there and wring your hands and just say 'this is too hard. I can't do this. I don't know what to do'?” No, you would not. You would talk to your customers to understand what they want. You would set objectives, put in place strategy, figure out who the right people are to execute on the strategy and make them accountable, measure outcomes, and fix whatever is not working. Like serving your customers, diversity must be intentionally woven right through the center of company strategy.
Veteran tech CEO Shellye Archambeau describes how to build diversity into company strategy.
The idea that there is a shortage of talent is a myth that companies hide behind, says Archambeau. Talent is everywhere but tech companies won’t find it by sticking with the same old networks. Go fish in a different pond, she urges. As legendary Silicon Valley mentor Bill Campbell used to say, you can always find a woman or a person of color to do a job, it just might take you a little longer. (Read about how Bill Campbell influenced leaders like Eric Schmidt and Susan Wojcicki in this blog article.)
“Silicon Valley has told itself that it’s a meritocracy for a long time,” says Kapor Klein. But if you look at any of the data about who gets hired and whose business plans get heard, you realize that it is really, as Mitch Kapor says, “a mirror-tocracy.” She warns tech companies not to confuse skills with pedigrees. Don’t be lazy and tell hiring managers to “get a Stanford CS graduate who worked at Google.” Instead, do the work to write down the skills needed and you will find that there is an enormous talent pool. One of them is HBCUs, historically Black colleges and universities. Archambeau notes that HBCUs graduate over 60% of STEM grads in the US, but only some companies look in a few of those schools even though there are 100 of them. Leaders must look outside their networks, which in this country are pretty segregated. Make everyone accountable for taking action from a broader perspective.
Diversity activist Freada Kapor Klein recommends making managers accountable for diversity.
Kapor Klein notes that companies take a huge reputational risk if they are not committing to diversity, inclusion, equity, and access. Not only will former employees tell everyone else not to go to work there, but tech companies will lose people who have insights based on lived experience that can be extraordinarily valuable in product design, opening new markets, and reaching new customers.
Startups need to consider diversity from the start because it's very hard to add it in later after you’ve hired 1,000 white male engineers, notes Kapor Klein. “A lot of tech's failure is putting off dealing with diversity so you end up with a denominator problem.” If you have 100K employees, you have to hire an awful lot of people to move the needle a percentage point. “Size is never an excuse for not starting on diversity.” Adds Archambeau, because startups need people for literally everything—marketing, finance, engineering, etc.—so look broadly to fill those roles. Your needs get narrower as you get bigger, she warns, and then it’s even harder to find the perfect candidate.
Employees are seeking out companies that care about diversity and care about them and they are voting with their feet when companies don’t deliver. But it’s not hard to understand how to meet people’s needs and how to help make them successful. As both panelists note, there’s no reason to go it alone. There are many avenues for building a diverse company and many resources available. Listen. And ask for help.
Joint Venture Silicon Valley’s annual State of the Valley conference, February 23, 2021. Credit: Joint Venture Silicon Valley
