Meritocracy works if you know the right people

“Meritocracy works if you know the right people.”

I love the irony of that statement, which was made by Laura Gomez, founder of Vyv and former Google and Twitter employee, at a November 6 event called “A Conversation on Closing the Racial and Ethnic Diversity Gap in High Tech.” Besides Gomez, the panelists included the Rev. Jesse Jackson; Stanford civil rights law professor Richard Thompson Ford; Nancy Lee, chief diversity executive at Google; and Maxine Williams, global head of diversity at Facebook.

The discussion started out with some statistics:

Suennen chart

For a bit of context, the Bay Area population is 52.5 percent White, 6.7 percent African American, and 23.3 percent Asian.

Here’s an interesting statistic I found in my research: In the Silicon Valley, in each age group younger than 30, the majority of the population is Latino. Asians are the majority of people in their 30’s. For each age group 40 and older, non-Latino Whites are the majority. So in other words, the young people who many think are the bread and butter of Silicon Valley entrepreneurship are under-represented even more vastly than you might think when it comes to race.

A truly disproportionate share of young white guys make up the tech glitterati in Silicon Valley, get all the venture capital and grow up to be the older White guys, who fill every board seat, executive chair and every other job of note (except diversity recruiting).

Events like this can be a little unsatisfying because they tend to raise awareness among the already aware. I was struck by a couple of things:

There were no White people or Silicon Valley CEOs on the diversity discussion panel. I think that until the guys in charge come to the party, the story isn’t going to change.

The event featured an intriguing discussion about how “old line” tech companies — like Apple, HP and Cisco — do a better job on diversity than newer firms. The offered reasons: One, they have had longer to fix the problem they created to begin with. And, two, they are so big that they can’t hire solely through the personal networks of existing employees and have to cast a wider net.

I believe older tech and healthcare tech companies are better at women and minority hiring because they have become large government contractors. This was briefly mentioned, but I think grossly understated as the reason the large companies are more diverse.  Most U.S. government entities favor diverse workforces in their procurement decisions.

There was a lengthy discussion about how most young startups hire through word of mouth connections to personal networks. Since most people tend to hang out with people like themselves, this leads to perpetuation of the monotone culture. Apparently, companies wake up one day and realize they have run out of friends to hire, and this is when the diversity issue begins to get noticed. How unfortunate, as these hoodie-wearing entrepreneurs have often just emerged from the cocoon of universities like Stanford, UC Berkeley, MIT, and others which have far more diverse cultures.

Take Stanford, which has an underground pipeline directly into venture-backed startups: Stanford self-reports a student population that is 47 percent female, 41 percent White, 8 percent African American, 14 percent Hispanic, 22 percent Asian, and 14 percent other. Why do these same numbers fail to show up in the office buildings that abut Stanford’s campus? “When you look at the Stanford football game, you see minorities, but you don’t see them at the Silicon Valley technology companies,” Jackson said during the panel discussion. “These companies need to figure out how to profit from inclusion and make that known.”

Jackson went on to say the young leaders of tech companies “have the most vision and are the most blind at the same time… They target women and minorities as customers for their businesses and say they don’t know there is an issue in hiring.”

To me, even if you really couldn’t care less about diversity for the sake of it, you should care a lot about knowing your target market. If your business sells largely to women, African Americans, and Hispanics, it’s probably a good idea to work with some of them.

Sadly, there was a paucity of new creative solutions at the meeting. The ideas offered included ensuring a greater recruiting scope by targeting colleges with ethnically diverse populations. Nancy Lee of Google talked about how she is now sending recruiters to traditionally Black universities.

But part of this issue is the deficit of Black and Hispanic students graduating from schools with science, technology, engineering or math (STEM) degrees. (For example, just 4 percent of students who are Black and 6 percent of students who are Hispanic graduate with computer science degrees each year in the United States.) We must encourage kids into STEM when they are young, before they have been steered away by a perceived lack of opportunity or an actual lack of role models.

And then, as usual, there was the recommendation that we need to do a better job educating CEOs that diversity is a positive goal. Education is a nice idea, but most people don’t consider themselves racist and probably aren’t intentionally so. Most people are also pretty blind about the patterns they perpetuate so I’m not sure education can cure denial.

Jackson advocates for laws that require more minority hiring, similar to what Title IX did for women in sports. One audience member said pay-for-performance is the way to go: You can pay hiring managers for creating a more diverse workforce and they will do it. It’s an interesting idea, but also risky, as people will do all kinds of stupid things to raise their current income. Maxine Williams of Facebook said they were experimenting with pay-for-performance around sourcing diverse candidates, rather than hiring targets. That’s an interesting strategy and probably the only one that seemed new and creative.

Panelist Richard Thompson Ford gets the last word: “We can’t do anything to change the unrepentant bigot, but we can get the indifferent to pay attention by creating specific goals and getting them not to just hire the guy from their fraternity.”

Interested in more on this topic? Watch the full panel discussion here on YouTube.

Lisa Suennen is Managing Partner at advisory firm Venture Valkyrie. She blogs at venturevalkyrie.com and tweets at @VentureValkyrie.

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