Meritocracy Works if You Know the Right People

“Meritocracy works if you know the right people.”

I love the irony of that quote, which was said by Laura Gomez, founder of Vyv and former Google and Twitter employee (although she was quoting Marc Andreessen). Gomez, a Hispanic tech executive, made this comment at an event called “A Conversation on Closing the Racial and Ethnic Diversity Gap in High Tech, which I attended November 6, 2014 with a friend, who is an alumni of the Stanford Law School. I had to pretend to be an alumna, both of Stanford and of Law School, to get in, which was quite a blow to the ego, but the topic was too interesting to pass up.

The event was moderated by the Editor-in-Chief of USA Today and the panelists included the Reverend Jesse Jackson, who has taken this issue up as a cause of late; Stanford law professor Richard Thompson Ford, an expert on civil rights law, Nancy Lee, Chief Diversity Executive at Google; and Maxine Williams, Global Head of Diversity at Facebook, as well as the aforementioned Laura Gomez.

The discussion started out with some statistics:

FYI, Facebook has 2% Black and 4% Hispanic employees; Google and Twitter each have 2% Black and 3% Hispanic employees. Apple, on the other hand, has 11% Hispanic and 7% Black employees. For a bit of context, Bay Area population is 52.5% White, 6.7% African American, and 23.3% 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 some 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 he older White guys, who fill damn near every board seat, executive chair and every other job of note (except diversity recruiting). This statistic, I think, is particularly intriguing from the perspective of pointing out extremes.

There are some pretty thought-provoking maps here that show different aspects of ethnic diversity in Silicon Valley (in context to where people like Mark Zuckerberg and Marissa Meyer live).

I attended this program at Stanford because I have attended many sessions on the gender gap in Silicon Valley, but I was curious about how this plays out in the broader context of race. Frankly, I wasn’t there to learn IF it was a problem—I know it is because it is the extremely rare day that I encounter non-White people in my travels around tech land–but what, if anything Silicon Valley is doing about it. I was struck by a couple of things:

In my opinion, one obvious problem with the program was that here were no White people on the diversity discussion panel (aside from the moderator) and no Silicon Valley CEOs. While the room of about 200 attendees was of pretty diverse gender and ethnicity, the people talking about the issue were the people who experience the problem. On the one hand, I completely understand that people of color would be those most likely to be able to identify other people of color in the quest for tech diversity, but I also think that until the White male crowd gets on board and sincerely so, it’s going to be a pretty long trudge. I know this because I also attend all the women’s discussions on the same topic and it is always the women who are doing the talking, complaining, cajoling, suggesting, acting. But let’s get real: it is the guys in charge who have to come to the party if the story is really going to change. Would it be better or worse if the head of diversity at big companies was White? I don’t really know. I suspect that it would be a comfort to some that those who represent the power position actually are bought in. On the other hand, some would suspect this to be questionable and rather see people who have shared their struggle and skin color out on the forefront. And yet….where is Mark Zuckerberg or Larry Page when it comes to these discussions? Why is it always Sheryl Sandberg or the female HR executives of color? It makes one wonder about how bought in the boys in the board room really are on this issue.

During the event there was an intriguing discussion about how “old line” tech companies do a much better job on diversity than the new guys on the block. By old line, companies like Apple, HP, Cisco were what speakers had in mind.   The belief was that these older companies did better for two reasons: 1), they had longer to work on it (in other words, fix the problem they created to begin with by hiring only White people); and 2), they were so big that they couldn’t just hire through the personal networks of the people at the companies but had to cast a wider net.   Those are both really interesting statements.

In a perfect world, as people start new companies and are, allegedly due to maturation, more open-minded about diversity and culture, it would be nice if they started with a diverse workforce instead of having to be grown up enough to fix the problem they recreated yet again. Certainly there are a few entrepreneurs that take this mission quite seriously and build companies that represent the community far better than others, but that is definitely not the default position. Take a wander around the tech companies in Palo Alto and the racial representation is slim. Women may have it bad, but not worse than the average aspiring Black or Hispanic worker or entrepreneur.

There was a lengthy discussion about how most young startups hire through word of mouth and connections to personal networks. Since most people tend to hang out with people like themselves, this leads to perpetuation of the monotone culture. Apparently, these companies wake up one day and realize they have run out of network to hire from and this is when the diversity issue begins to get noticed. How unfortunate of a situation that really is, as I know for a fact that these hoodie-wearing entrepreneurs have just emerged from the cocoon of universities like Stanford, UC Berkeley, MIT, and others which have a far more diverse culture. For one thing, these university student populations tend to be around half female. Stanford, which appears to have dug an underground pipeline directly into venture-backed start-ups, self-reports that its student population is 47% female, 41% White, 8% African American, 14% Hispanic, 22% Asian, 14% other. So why do these same numbers fail to show up in the office buildings that abut Stanford’s campus? At the Stanford event, Jesse Jackson said, “When you look at the Stanford football game, you see minorities, but you don’t see them at the Silicon Valley technology companies. These companies need to figure out how to profit from inclusion and make that known.” I think it’s great that Facebook and Google and no doubt others are paying attention to the diversity issue, but it would be so refreshing to see more startups fail to perpetuate the problem so fixing it isn’t necessary.

I think that one of the reasons that the big, long-standing tech and healthcare tech companies have less of a problem with women and minority hiring is that they have become big enough to be large government contractors. This was briefly mentioned in passing, but I think grossly understated as the reason that the large companies are more diverse; most governments require and/or favor diverse workforces in their procurement decisions and give purchasing preference to companies with significant women/minority ownership.  Since Facebook and Twitter, despite being big, are not big government contractors, they have not been forced to face the challenge head on.

Another provocative thing said by Reverend Jackson was this (and I digress, but my favorite thing I ever heard from Jesse Jackson was his reading of Green Eggs and Ham on Saturday Night Live in memorial of Dr. Seuss’s passing), “Women and minorities are over-indexed as consumers and under-indexed as employees.” He went on to say that 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 a an issue in hiring. They are astute business people and they are smart. They are judged by profits, not by social justice but they have the capacity to look like America.”

To me this is the most obviously compelling business reason to ensure that one’s workforce is diverse. If you really couldn’t care less about diversity for the sake of it, you should care a lot about knowing your target market so you can be more profitable. I have written before about this issue as it pertains to women (see post titled, “Your CEO May Be a Man, But Your Customer is a Woman”), and am doubling-down here as it pertains to minorities. If your business, whether it be pure technology or healthcare technology or music technology or whatever, sells largely to women, African Americans, Hispanics, don’t you think you should hire some of them so you target correctly? I don’t think that a few focus groups is going to cut it. I have sat in many a board room being informed by my male colleagues about “how women think” as if it women are one homogeneous market and as if some of these guys are universally effective at communicating with their own wives, much less the marketplace. Some are born marketers, others not so much.

A disappointment from this meeting, at least for me, was the paucity of new creative solutions to address the problem. The ideas offered include ensuring a greater recruiting scope by targeting colleges that have high ethnically diverse populations. Nancy Lee of Google talked about how she is now sending recruiters to traditionally Black universities and not just to the top 10 universities. She pointed out that half the time the students at these universities don’t even realize opportunities exist in the tech sector because the recruiters aren’t there looking.

On the other hand, there is as much of a deficit of Black and Hispanic people graduating from schools with Science, Technology, Engineering, Math (STEM) degrees as there is among women (e.g.,4% Black, 6% Hispanic graduates with computer science degrees each year in the US). Thus we must create programs that encourage kids to have interest in 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, of course, there was the recommendation that we need to do a better job educating the people in charge that diversity matters and is a positive goal. I’m not so sure about this one. Even in the face of huge amounts of data that companies led by women tend to fare financially better, the lot of women entrepreneurs hasn’t improved much. 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 and denial is a beautiful and effective thing.

Jackson, not surprisingly, advocates for laws that require more minority hiring, similar to what Title IX did for women in sports. He feels that voluntary measures don’t work (pretty evident that this is true), but the audience had very strong negative reactions to this. Perhaps because we were at Stanford and so the probably large population of Republicans in the room (of all races) are anti-government, anti-regulation? Maybe anti-Jackson? Who knows? One audience member said that 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 could also lead to hiring of sub-standard candidates since people will do all kinds of stupid things to raise their current income. Maxine Williams of Facebook said that they were experimenting with pay-for-performance around sourcing diverse candidates, rather than hiring them, and that further raised awareness and future candidate pipelines to everyone’s benefit. An interesting strategy and probably the only one that seemed new and creative from the discussion.

These discussions always feel a little unsatisfying to me because they raise awareness among the already aware (not aforementioned point that the room was not filled with tech CEOs) and talk more about the problem than the solution. But I suppose it is good to start somewhere and when high profile companies are in the discussion, it gets notice (and a page 1 section B story in USA Today, so at least read by business-traveling CEOs in the bathroom of fine hotels across America).

I’ll let the Stanford Law School panelist, Richard Thompson Ford, have the last word, as it would make the basis for a perfect human resources guideline, “ 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.”