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New Tools to Tackle the Business Diversity Crisis

Illustration by Hanna Barczyk

Illustration by Hanna Barczyk

(This article originally appeared in the Techonomy print and online magazine.)

For better or worse, we seem to prefer people similar to ourselves. This applies to the people we date and marry, the friends we keep, our neighbors, and the employees we hire. If anything, technology at the moment is making us even more that way, as dating apps, home-searching platforms, recruitment tools, and a range of other aggregation and sorting services help us find and hang out with people more like ourselves. But the consequences for business are terrible—almost every company is embarrassingly uniform in its makeup, even as data increasingly shows that in diversity is strength. Now, finally, software and other tools are emerging that may help reintroduce a more natural human variety to organizations.

Hiring women, minorities, and people who generally don’t look and think like the boss is not just good for society. More diversified workforces help create more profitable and faster-growing companies. Francesca Gino, a Harvard Business School professor, says research indicates workplace diversity boosts employee morale and increases employees’ “desire to work more effectively and efficiently.”

Gino also reiterates what we more or less know intuitively—that workforce diversity can enable a company to solve a greater variety of problems. “New ideas and processes brought into the organization can offer more solutions to customers,” she says. It’s not just her opinion. Research over several years at the MIT Center for Collective Intelligence shows that at least for women, our intuitions are right—workgroups with more women get more done. (That will not be a big surprise for slightly more than half our readers, we presume.)

On stage at the Techonomy 2013 conference, center Director Thomas Malone explained that a workgroup’s collective intelligence was “significantly correlated” with its percentage of women. The more women in the group, the more creative it was, and the faster it could come up with innovative ideas and solve knotty problems. This is a radical message for the existing institutions of business.

Another obvious argument for diverse points of view inside a company is that a vast percentage of customers are female, and the United States is approaching a non-white majority. The argument is even more compelling if a company expects to sell into the vastest markets of all, developing countries.

Intel is one company that already aggressively seeks to hire a wider variety of employees, according to spokesperson Gail Dundas: “Without employees with diverse backgrounds … Intel is ill-equipped to address the needs of a diverse market. Diverse teams and companies create more opportunities for innovation, creativity, and strategic thinking.”

And all of this directly impacts the bottom line. In 2011, a Columbia University and University of Maryland study found that large companies that had women in top management had a considerably higher market value than those that didn’t. And, in 2003, a University of Texas-Dallas study found that banks with higher-than-average racial diversity performed better financially.

But despite the arguments for diversity, big business has failed to foster it. Major corporations are still overwhelmingly run by white men. This is particularly evident in finance, law, and tech. But the tech sector is the most troubling, partly because so many of its companies openly acknowledge the virtues of diversity while failing to achieve it.

It’s impossible not to notice this hypocrisy. Says Angela Benton, founder of NewMe Accelerator, a San Bruno-based incubator for minority-and women-run startups: “Ever since I moved to Silicon Valley, it’s perplexed me how this industry and community can lack diversity. As entrepreneurs, how can we claim to be creating the future when a part of our population is being left out?”

Now tech may be coming to its own rescue, as new human resources software and services aim to help managers overcome unconscious biases and attract and hire diverse candidates. Textio, for example, flags potential bias in the wording of job postings as employers type. Its software will alert you if you write that you seek, for example, a “rock star.” That language alienates many women. Writing “high performer” may sound less sexy, but Textio tells you it has more unisex appeal. Unitive is another tool that aims to neutralize managers’ prejudices while reviewing job applications. It is programmed not to equate engineering with maleness, not to presume men are more capable than women, not to avoid candidates with black- or Latino-sounding names, and not to favor graduates of historically white schools.

In what has become almost a firestorm of apologies, tech companies are publicly acknowledging their severe lack of diversity and pledging to do better. But it is glaringly apparent that awareness alone does not translate into change. The statistics show little progress. Googleits diversity data in May 2014, and updated the numbers in May 2015. Almost nothing had changed in the raw numbers, despite the company spending $115 million on diversity efforts in 2014. Google’s percentage of women globally went from 30% to, well, 30%, and the percentage of blacks and Hispanics in the U.S. remained abysmally stuck at 2% and 3%, respectively. (All that investment, however, may have led to diverse employees occupying more senior positions.)

Many other major tech companies also proclaim their desire to diversify, yet most still do poorly. Since June of last year, LinkedIn has upped its percentage of global female employees from 39 to 42%. But the company still only has 2% black employees. At Facebook, the number of women in its global workforce improved by just 1 percentage point from June 2014 to June 2015, and its ultra-low black workforce percentage remained unchanged. Chief Operating Officer Sheryl Sandberg famously champions working women, but had to admit that the company is struggling. She recently unveiled corporate anti-bias training. “We know we still have a long way to go,” Sandberg said in the announcement. “But by helping people recognize and correct for bias, we can take a step towards equality.”

Possibly more important is aggressively identifying underrepresented talent. Companies can be bolder and more deliberate in how they unearth candidates. Top tech companies have generally been hiring minority computer scientists and computer engineers at only about half the rate that American universities have been graduating them.

Now a growing group of organizations aims to help. Recruitment platform Jopwell connects “underrepresented ethnic minority candidates” with employer partners that include Facebook, McKinsey, Morgan Stanley, and Square. And Paradigm is a diversity strategy firm that helps companies not only hire a diverse workforce but also retain it, by partnering with managers to design and implement comprehensive action plans.

Tech companies are also working to help underrepresented communities by launching their own support programs. Intel’s Diversity Scholar initiative offers internships for minority and female college students. The Google for Entrepreneurs NextWave program teams up with Code2040 to provide one-year entrepreneur-in-residence fellowships to African-American and Latino founders. Meanis while, institutions like the NewMe Accelerator help women and minorities get access to training, mentorship, and funding opportunities.

Almost everybody believes that broader, more equitable access to technology education and resources could be a societal and tech industry game-changer. This would mean less expensive Net connections, more open data, and more extensive STEM education for all Americans. Organizations are emerging to help, including Women Who Code and Black Girls Code.

It’s possible to make a company more diverse. It’s just hard. And the bigger a company is, the more difficult it can be. But Intel, with more than 100,000 employees, shows progress is attainable. The company’s goal, says spokesperson Dundas, Meanis “to make its U.S workforce fully representative of the talent available from which it hires by 2020.” (That’s different than seeking to mirror the entire population.) Dundas says Intel is on its way: “Against a goal of 40% diverse hiring, the company was at 43.3% in early January.” The chip giant ties progress towards these goals to every manager’s annual bonus.
Joelle Emerson, the founder of Paradigm, is impressed. She says Intel’s early success is “a message to all companies that change is possible.” But here’s a measure of how far business and tech still has to go: at progressive Intel, the black workforce remains at just 4%.

Ann Babe writes about tech and travel and is Techonomy’s former editorial coordinator.

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