WHEN YOU NEED TO HIRE DIVERSE CANDIDATES

Dear Founder,

I set out to write a letter on the importance of fostering diversity—and how to do so—and found that with every week, and sometimes every day, this issue became more and more complicated. Since I started this letter to you there were new allegations against venture capitalists and startup companies. Silicon Valley, where I live and work—and a place that I love for its commitment to innovation and support of founders—has been exposed as an environment that could be vastly improved for a large percentage of the working population. There’s room and reason for all of us to become better at building workplaces that support and celebrate diversity.

I’m not an expert on diversity—not at all—so I decided to consult professionals in this area to help offer advice. What I do know is that ignoring this issue is not an option. And the sooner you can address this as a company the better. Please take this seriously.

Understand why diversity matters.

Sure, we all know that it’s the right thing to do. But it’s also the right thing to make your company stronger. The performance of your business will be better if you are more diverse because a diverse company is more representative of society as a whole. It better understands its customers, its community, and its purpose. Don’t just take my word for it: There’s evidence that diverse workplaces perform better. A report from McKinsey & Company indicates that the top racially diverse tech companies are 35% more likely to have financial returns higher than the tech sector’s national median. Companies that are more gender diverse are 15% more likely to outperform others.2

I have had the honor and privilege of working directly with two of the best-known female CEOs in technology: Meg Whitman at eBay, and Marissa Mayer at Yahoo! While they are totally different from one another, I’ve found each of them to be some of the most inspirational, results-oriented leaders with whom I’ve ever worked. When I step back and think about the ways that companies are subconsciously keeping women from the workplace and from leadership roles, I worry that we’re depriving ourselves of a wide pool of potential CEOs in the future. Furthermore, I worry that when my granddaughters see magazine covers of CEOs who look an awful lot like me, they’ll think the world of entrepreneurship just isn’t for them.

I greatly admire companies that don’t ignore this issue because they think it’s “too hard” or “not my problem,” but instead come up with creative ways to solve for it. Marc Benioff has made it a priority to add significant diversity to the Salesforce board. I’ve seen how it makes a difference. We have three women and three African American board members, one of whom was the Secretary of State. We have the former ambassador to Japan and we recently added an EU commissioner. We have always had a good and collaborative board during my tenure, but all this added experience makes the dialogue much richer.

This effort to embrace diversity at Salesforce isn’t just reflected on the board; it spans across the entire company. It started a few years ago when two women executives came to Marc’s office asking if they could take a look at whether the company was paying women less than men. Marc acknowledges that this came as a surprise and even though he was skeptical, he was open-minded and wise enough to commission an internal review. The company leaders looked at the salaries of its global workforce—seventeen thousand employees at the time—and found that although they never intended to pay women less than men, they were. As a result, they added $3 million to the payroll to address the inequities. In 2017, after a year of record growth, they again conducted a pay assessment, increasing the scope of the assessment by evaluating salaries globally, as well as examining both gender and race in the U.S. This resulted in Salesforce spending another $3 million—$6 million total to date—to address any unexplained differences in pay. Marc also created the High-Potential Leadership Program to provide leadership skills to advance women in the workplace. The program has led to an increase in the number of women who were promoted in one year. It also added mandates to make sure that women are being considered for open positions. It didn’t stop with closing the gender gap. It made racial diversity a heightened priority and appointed the company’s first Chief Equality Officer who reports directly to Marc.

Acknowledge that you will have to work hard to make your company more diverse, but that it’s worth it.

Recently I was visiting one of our portfolio companies for our first board meeting. I couldn’t help but notice that every new hire was white, young, and male. I asked why and was told, “We know this is a problem, but there just isn’t enough pipeline to find other good people now.”

The thing is, it is a problem they can fix, and one that they must fix, if they want to ensure the best success for the company. I have to admit, there was a part of me that felt as if I had no business telling the company that they had to focus on diversity. After all, I too am white and male. Yet over the past eight years at WIN, and my forty-year career, we’ve come to see how crucial it is to be deliberate about making your company inclusive—and doing it early is much, much easier.

I know what it takes to build a great business. I also know that there are plenty of smart and capable and diverse candidates ready for these jobs. We are seeing increased enrollment rates for both women and minorities in tech programs. With 50% of our population being female and nearly 50% in the United States (often overlapping) being racially diverse, the issue is not “pipeline,” so that is not a suitable answer. The experts with whom I consulted with said, “lack of pipeline is one of the worst excuses that is used today.”

Quantify your problem.

The first step in improving diversity at your company is to measure the breadth of it. How diverse is your hiring funnel? For your current employees, how are they made up across genders, races, religions, region of origin? How does it vary by department, or job role? Across each of these facets, how have you allocated promotions? How has tenure varied? How does pay?

These questions are likely to be uncomfortable, and it’s likely that even asking them will lead to friction from your team because no one will want to be labeled racist or sexist. Lead through it by acknowledging your own blind spots and by committing to listening and sharing responsibility for the company’s shortcomings to date.

Act now, while you are still relatively small.

Businesses have a moral and a fiduciary obligation to make their companies welcoming to different ages, genders, races, and perspectives. Too often, though, I’ve seen companies kick the can down the road, then try to address the issue when their cultures are already problematic. Masha Sedova, the co-founder of Elevate Security, one of the companies we work with at WIN Labs, helped me further my thinking on when companies have to start thinking about this. She told me diversity was such an important value for her company that she prioritizes diverse hires from the beginning—from the very first hire. “People from different backgrounds solve problems in more interesting ways,” Masha said. “They come up with solutions that people who are like-minded can’t see. The first five hires make a difference.”

All companies need to avoid copping out on this big issue. I know it is hard to do, but we need to prioritize making our companies diverse and we must attempt to solve it from the beginning. Experts say diversity must be inculcated into a company early—after fifty people it may be too late.

I have consulted with experts, including Lori Nishiura Mackenzie, executive director of the Clayman Institute for Gender Research at Stanford University; Laura Mather, CEO of Talent Sonar for HR solutions; Masha Sedova, co-founder of Elevate Security; Beth Axelrod, VP of Employee Experience at Airbnb; and legal and HR professionals at eBay, Salesforce, and Visa for advice on how to create a diverse workplace. There are clear steps you should start taking now.

• Make inclusion and diversity part of your corporate culture. People will hire based on “fit”—and that often means people like us. Instead, if you build a culture where fit means people who expand who we are, then diversity will be germane to your future success.

• Think about the company you want to build—not just the one or two spots that are now open. What matters in the long run? We often get caught in the short-term need to add someone with a functional skill, like project management. We need to also consider how each person adds to the overall diversity of approaches and experiences that will help guide the team through growth and challenges.

• Prioritize the skills you are looking for before you interview. Don’t use a laundry list. Agree to criteria in advance of seeing candidates, which helps you fairly and effectively evaluate job seekers with different but equal experiences.

• Disregard unnecessary criteria that can promote bias. Get rid of anything that may be filtering out quality people—examples might include rigorous expectations of number of years of experience, coming from a set of high-profile universities, or taking a certain curriculum that may not have been available. For example, as I learned from a presentation Lori delivered, Carnegie Mellon decided high school computer science was not a requirement and increased the percentage of woman from 7 to 42 in five years. You can also add to every job description a disclaimer that explicitly encourages people not precisely matching the job spec to apply anyway.

• Remove subconscious biases from the hiring process. Write a job spec and test it out to make sure it doesn’t only appeal to one group of people, such as men. If we want a talented workforce, we need to look at the whole population not just half! Think about the words you use. “Dominant” and “competitive” are seen as positive traits for men, but as negative attributes for women. Similarly, “competitive,” “best of the best,” and “fast-paced” appeal more to men and self-select women out. “Ninja” is another one as Japanese ninjas were historically men.3 Words like “extreme culture” or “exclusive” alienate many people and discourage them from applying. Other words such as “loyalty,” “passion,” and “collaboration” have been shown to appeal more to women, experts say. It’s not that you can’t ever use any of these words, but it matters how you use them—make sure that your spec is well-balanced and appeals to all genders equally. Masha used an app called Textio in order to remove gender bias and attract more candidates. Initially she says the req was more male heavy, but they changed the language to make the job requirements more gender neutral and equally attractive to men and women.

• Look for talent in unlikely or overlooked places. Masha was looking for ways to reengage moms who were excellent developers but who had left the workforce to raise their kids. She knew there was a talent pool there that desired flexibility beyond what a traditional corporate job could provide, and that this was something she could offer. “I don’t see too many parent-friendly examples,” she said. “So I decided to build one.” She posted job opportunities in daycare centers as a way to target people who had a lot to offer as well as to demonstrate she understood their circumstances and that she could accommodate them. At LiveOps, I found many of our best performing agents to be professional women who valued flexibility, and who had been overlooked by traditional corporate America.

• Employ a diverse set of interviewers. Women are much more likely to join a company when they can interact with women who are already there and can testify to a company’s commitment to diversity. In fact, one of the biggest deciding factors on whether or not a female candidate accepts a job is if there was a woman on the interview panel. That’s because a woman on the interview panel is signaling that the woman candidate can be successful in the workplace, explains Lori. And that woman is more likely to stay if she believes she is aligned with the cultural indicators of success, not just if she has the technical abilities to succeed. Additionally, as a best practice, you should track your interviewers’ performances: Who did new hires enjoy engaging with? Who helped to spot people who lasted and succeeded in your company?

• Reconsider how you define diversity. Have your eyes open to the many ways we can think about what diversity means. Gender and racial and ethnic diversity may be visible, but ensuring other kinds of diversity such as educational background, geography, economics, family status, disability, sexual preference, gender expression/identity, political inclination, religious affiliation, age, and neurodiversity (people who may connect the dots differently) is also important. Amy Weaver, general counsel at Salesforce, told me, “Having viewpoints from employees with varied backgrounds reflects the communities we serve and helps us make better decisions.”

• Learn how to value the journey. We often value recognizable indicators of past success, such as elite schools, or work experience in leading companies. We are less skilled at recognizing unique talent, or those whose journey is possibly longer and less traditional; in many cases, those candidates can demonstrate exemplary grit, resiliency, and creative problem-solving.

• Use data and facts, not personal preferences, to evaluate candidates the same way. One study found that white candidates receive 50% more callbacks than black candidates with the exact same resume. Create a standard evaluation system and metrics and use them the same way. Some companies remove names and photos before reviewing them so that they are not aware of race or gender.

It’s time to change the thinking on diversity from “a problem” to “an opportunity.” By 2022 the workforce is expected to be comprised of 47% women and 40% minorities. If we find a way to appeal to everyone and become a magnet for openness and diversity and inclusion, we will have a stronger company and future.

All the best,

Maynard