The startup community has a problem. It is rife with a desire to “win at all costs.” Startups are supposed to be cool and innovative, right? That’s what Silicon Valley, arguably the bellwether for the entrepreneurial community, wants us to believe. Yet there are numerous cases of sexual harassment and discrimination that pop up in this community each year.
This arrogance and “win at all costs” attitude is part of what has led to companies, such as Uber, finding themselves embroiled in allegations of harassment and discrimination. Uber has also faced charges of harassing journalists and berating drivers. The truth about these charges is not for me to decide, but it does perfectly illustrate the problem in the startup world of putting the business before the people and trying to win at all costs.
That’s why I want to take the time to examine deeply rooted problems in the startup environment and what we can do to turn things around.
Silicon Valley and, in truth, much of the startup world—particularly the tech sector—have been dealing with their dirty little secrets of harassment and discrimination for years. The recent #MeToo movement brought to light the difficulties faced by women, minorities and people of the LGBT community on a daily basis. Identifying and calling out the problem is a good start to fixing it. But what exactly is that problem?
It’s a problem of attitude. By that I mean a “win at all costs” mentality, which stems from an historically, white male-driven environment. Many young companies thrust like-minded and similar looking executives into positions of power and money and they become blinded by success as their company grows. They hide their skeletons in a closet of innovation and make diversity, inclusion and even HR an afterthought.
When making their business plans, these young executives don’t take the time to consider the human element in the cost of winning. They consider product development, operating costs, revenue and margin-related challenges as key elements of their business plan. However, gender equality and diversity don’t frequently make the cut—nor are they considered a key measurement of success.
This is why many companies are blindsided when they are smacked with a lawsuit related to discrimination or harassment. It’s only then that they run to the board of directors for a plan and start the recovery process. Sometimes the founders and management team even find themselves replaced as a means of solving the problem. For example, Travis Kalanick, former CEO of Uber, was forced out publicly after the most recent series of accusations to hit the company. His replacement, Dara Khosrowshahi, was brought in to clean up the mess and position the company for future growth.
Uber’s dilemma is one that should never have happened in the first place, especially because the solution for prevention is an easy one—make diversity and inclusion part of the business plan.
I recently spoke with Carolyn Lawrence, leader of Gender Diversity & Inclusion for Deloitte Canada, about how startups can rectify current problems with diversity and inclusion—or prevent them in the first place. She said that embedding inclusion into leadership, practices and processes from the beginning stages will help set up companies for better growth. In the #MeToo #TimesUp era, it is essential that companies aspiring for an IPO or M&A embed inclusion in their company culture.
I agree with her. People solve problems in different ways and having employees with different backgrounds, genders, races, etc. helps you achieve better solutions. In the companies I’ve run, I’ve always tried to have a larger representation of women than many other companies and it’s always been beneficial. As a community, I think we need to focus on three key areas to have a long-lasting impact on diversity and inclusion:
1) Startups should make diversity and inclusion part of their business plans—from the beginning. Diversity and inclusion should be just as important as product development. With a rising number of women and minorities in STEM programs, the goals set here should be easily achievable.
2) VCs should also take an active role in adding diversity to their teams—and look for more diverse companies in which to invest. Some VCs have already allocated a portion of their investment for companies led by women and minorities. This is a great start; however, the VCs should more actively diversify their own teams as well.
3) Get the men involved. Let’s face it, we can’t solve the problem without the participation of men. There is a cultural attitude that must be changed and it can’t be done without involving those who carry the greatest proportion of power.
The road to true equality for all people in the startup world is a long one. We should applaud companies that are taking an active step to change current cultural problems and encourage them to keep going until everyone valued in the workplace. Take Salesforce for example. CEO and Chairman Mark Benioff not only hired a Chief Equality Officer, he also ordered a study to examine equal pay across the company. The results of the study caused Salesforce to spend $6 million to equalize pay among men and women, but they now analyze and adjust salaries as needed on an annual basis. This, among other things, has made Salesforce one of the top companies to work for multiple years in a row.
For every Salesforce, though, there is still an Uber. Even though there’s a new chief at the helm, it is going to take a lot to fix the internal problems and reputation of that company. The same can be said for many other companies across Silicon Valley and beyond. Fortunately, we’ve taken a big step by identifying the problem. Now let’s work together to fix it.