The tech and startup world is filled with innovators who want to solve really tough problems. Investors are pouring billions of dollars into fintech, health tech, education tech, artificial intelligence, virtual reality and many other verticals to realize these entrepreneurs’ dreams. Yet, we can’t seem to make a dent in addressing the lack of diversity in tech companies and startups. Worse, the sexism and harassment being reported in Silicon Valley have historically only been discussed behind closed doors, until now.

In tech, we aspire to meritocracy. But the thing is, we aren’t a meritocracy. We’re still a “mirror-tocracy,” the phenomenon where people like to work with and fund people who look like them.

Women (who represent 57% of the U.S. labor force) fill just over a quarter (26.5%) of tech jobs at the top U.S. tech firms, down from 35% in 1990. Women in tech earn, on average, just 85% of what their male counterparts do. The investor world shows similar patterns. At the top 100 venture capitalist firms, only 7% of managing partners are women. And only 7% of investor money in the U.S. goes to women-led startups. The stats are worse for black women founders. According to digitalundivided, an organization that provides an incubation program for tech startups led by women of color, a mere 0.2% of ventures deals from 2012 to 2014 went to black women founders.

Mirror
Tech companies are filled with innovators. Yet, tech is is still a "mirror-tocracy," the phenomenon where people like to work with and fund people who look like them. Adobe Stock

It is the responsibility of everyone in the tech industry, and especially those in positions of power, to create a more inclusive space for women and people of color to achieve success. It is important that men, who are so often in leadership positions, take real action to create an equitable work environment in the tech industry while forging new opportunities for women and minorities. The traditional “cures” for solving these problems haven’t been working.

As Mary Hodder, tech entrepreneur said during her Women Who Tech Telesummit keynote:

“The fix isn't just a ‘slap a solution onto a symptom’ like speaker trainings, or companies hiring more non-defaults, or ensuring that more speakers at conferences are women, or lean in / lean out, or STEM training for every non-default out there, or...any other tactical salve that might appear at first to save us from the culture of work we've all created.”

In order to break through this mirror-tocracy, and continue the ardent process of smashing it, the tech and startup worlds need to be intentional about their unconscious biases that shut the door on women and people of color. For example, when you think of a web developer, are you inclined to use “he” or “him” pronouns? Are you prioritizing recruits from certain universities like Ivy League schools where many graduates typically come from a more privileged background?

See the most recent Most Powerful Women rankings:

Once we recognize our own biases, we can then begin to work toward a new normal in tech that’s inclusive, not exclusive. To begin the dissolution of our biases, we need to step outside of our comfort zones. This means expanding our networks: talking with, investing in and hiring people who have different experiences and worldviews than we do. But that is just the start to fixing an age-old problem.

Recently, The Kapor Center for Social Impact conducted a study on how companies can become more intentional about retaining more women and other underrepresented groups in tech. The report recommended three ideas we fully support:

1. Implement comprehensive diversity and inclusion strategies: Develop and implement a diversity and inclusion strategy that starts with unequivocal leadership from the CEO and executive team. In other words, you’ll need to have buy-in on any diversity and inclusion trainings, initiatives and programs from the top down. If the C-suite isn’t on board, a company’s initiative is not going to get very far. And once you do implement something, make sure you test it and update it as needed. Nothing is perfect the first time around.

2. Create inclusive cultures: Identify a set of core values, develop a code of conduct, and strive to create and continuously evaluate and improve the culture. Conduct employee surveys at regular intervals, examine data by each demographic group, provide transparency about culture issues and act upon the findings, addressing areas of concern. These surveys should really get to the root of the employees’ experiences: the good, the bad and the ugly. If people aren’t sharing their real experiences, nothing is going to change. One way to solicit transparent responses is to make the surveys anonymous.

3. Develop effective and fair management processes: Audit performance management and compensation practices for potential biases and implement management training and bias-mitigating strategies in all stages of the employment lifecycle.

Ultimately, diverse teams build better products because the teams have a more comprehensive understanding of the market. We know that the financial returns of gender-diverse companies are 15% more likely to exceed those of their respective national industry median, while ethnically diverse companies are 35% more likely to exceed expectations, according to a McKinsey study on diversity.

The bottom line? Diversity matters if tech companies really want to scale and innovate.

This post is part of an ongoing series examining diversity issues in the banking industry. See previous posts by Maria Vullo, Malin Malmström, and Eric Arthrell, and visit American Banker's Women in Banking page.

Allyson Kapin

Allyson Kapin

Allyson Kapin is founder of Women Who Tech and Rad Campaign.

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BankThink is American Banker's platform for informed opinion about the ideas, trends and events reshaping financial services. View our detailed submission criteria and instructions.
Craig Newmark

Craig Newmark

Craig Newmark is founder of craigslist and The Craig Newmark Foundation.

BankThink submission guidelines

BankThink is American Banker's platform for informed opinion about the ideas, trends and events reshaping financial services. View our detailed submission criteria and instructions.