Updated: Sep 22, 2020
How To Do Diversity for Your Startup The Right Way
Startups have a unique position as a change agent: they are young, they are agile, they are born in the millennial era, they have funding and they have a new product or app that can change the world: they can change the workplace, society and the world we live in.
With great influence comes great responsibility. As a startup founder: how are you going to use your influence for good? What social good are you going to incorporate in your mission? Where will you make a positive impact in the world with your startup?
This goes beyond doing good because ‘it’s the right thing to do’ or because ‘it’s a moral imperative’ or for ‘good PR’. This is about really positively changing the world with your startup in a profound, sustained way. This is about you making a positive impact in this world through your startup.
A good place to start with doing good with your startup is diversity and inclusion. With the recent #metoo movement and #blacklivesmatter protests, people are actively seeking to end sexism, to end racism and to end inequality everywhere including in the workplace. Employees expect employers to have a strategy for diversity and inclusion, consumers expect brands to take a stand on sexism and racism and investors seek startups that have a clear statement on diversity, equity and inclusion (DEI).
So where do you start? Here is a practical guide on diversity and inclusion for startups:
1. Understand why diversity is important to your startup
The first place to start with diversity and inclusion for your startup is to start with the why. Ask yourself why diversity and inclusion is important to your startup. How will diversity and inclusion in your startup help grow and scale your business? What is it about diversity and inclusion that will fundamentally drive all the things you will do with your startup?
Is it because you believe that having a diverse and inclusive workforce will help you better understand your consumers who are also diverse and therefore build better products that your customers will love? Is it because you think that diverse and inclusive teams work better together and are faster at problem solving and will execute better and therefore you will have a competitive advantage? Is it because having a diverse and inclusive workforce will force your startup to think differently, to build more innovative apps and products and to generate more revenue through innovation?
Whatever the reason is for what makes diversity and inclusion an important value for your startup, you must take the time to craft your answer, clearly articulate why that’s important and write it down.
2. Articulate how diversity ties to your mission
Once you have done the work of articulating why DEI is important to your startup, you must work on how DEI ties to your mission. This is your opportunity to revisit or even create from scratch your startup mission statement. Your mission statement defines what your startup is, why it exists and its reason for being. At a minimum, your mission statement should define who your customers are, identify your products and services.
At this stage, you must work on articulating how diversity and inclusion is part of your startup mission statement. When you describe your startup’s reason for being, you must clearly articulate how diversity and inclusion is part of your mission. This is probably the most critical part of setting your startup for success regarding diversity and inclusion so take time to do this. If possible, try to tie in why your startup exists with a diversity and inclusion statement. It may sound like “Our mission is to give free access to education to everyone because we believe that universal education will make the world more inclusive and bring more diversity in the workplace, in public institutions and in academia”. Or even “Our business exists because we believe everyone deserves always-on access to services regardless of their gender, race, socio-economic background, secual orientation, age and any other background.” Write it down in your mission statement and share your new mission statement everywhere: on your website, on your social media, with your employees, in a newsletter to your clients in the news, etc… Print your new mission statement and place it somewhere you and your team can see it every day.
3. Set diversity goals tied to monetary compensation
Only a quarter of start-ups (26%) are actively trying to increase diversity within their leadership teams, according to Silicon Valley Bank. Less than half (43%) of startups have company-wide promotion and hiring goals for diversity, while fewer than one-in-five had these goals for executive positions (the C-suite). Roughly 78% of startup founders have no formal plans or policies in place to promote diversity and inclusion. We could speculate about why that is and whether it is because they expect someone else to take ownership. The point is that nothing will happen unless you set goals, or rather, nothing will happen unless you set goals tied to monetary compensation. Goals drive behaviour. Monetary goals drive behaviour faster. If you are committed to diversity and inclusion, you must set goals for your leadership team that are tied to monetary bonuses. I recommend 30% of the bonus directly linked to the diversity and inclusion goals. Having worked with numerous tech organisations and had countless conversations on diversity and inclusion, I have witnessed that setting diversity goals that are financially rewarded is the only route to success.
Inclusive organisations are TWICE more likely to exceed financial targets (Deloitte Research); 85% of CEOs whose companies have an inclusiveness strategy said it’s improved their bottom line (PWC CEO Survey); For companies ranking in the top quartile of executive-board diversity, Return On Equity were 53% higher (McKinsey Diversity Study) ; companies with the most women board directors outperformed those with the least on invested capital (ROIC) by 26% (Catalyst’s 2011 study). There are many, many more studies available that demonstrate the return of investment on diversity and inclusion so investing some budget to reward diversity and inclusion will pay back.
4. Appoint a diversity taskforce sponsored by an executive
Once you have done the basics: understand why diversity and inclusion are important to your startup, incorporate diversity and inclusion in your mission statement, setting diversity goals tied to monetary outcomes, you must set-up a process to constantly monitor, adjust and improve your diversity and inclusion practices. Imagine implementing a new program and having the policy in place and just expecting it to work organically. It would be naive to expect this diversity and inclusion initiative without investing more resources to monitor, assess, adjust and improve. This is why I encourage you to appoint a diversity and inclusion taskforce whose mission is to monitor progress, evaluate results and improve the diversity and inclusion initiatives. Your DEI taskforce must be sponsored by an executive in order to be successful. Having an executive leader in this taskforce will give it the budget, authority and access to resources it needs to make an impact. You can choose how many people are part of the taskforce and who will be in it and how often they will meet. What’s important here is that you set-up a taskforce that’s sponsored by an executive and you clarify their goals. This diversity and inclusion taskforce goals should be aligned with your new mission statement and with the diversity and inclusion goals that you previously set. I recommend asking your team who is interested in joining and making it a voluntary role rather than a mandatory one. People who volunteer are more likely to feel personally committed to the success of this taskforce, regardless of their role in your startup.
5. Get real about how diverse and inclusive your startup is or is not
At this point, as you get started with your own diversity and inclusion programmes, a good place to start is your own workforce diversity and inclusion. You should start by measuring how diverse and inclusive your workforce is today so that you can track progress as you start your own diversity and inclusion journey. Here are some considerations you should look at:
Make a list of your startup’s last ten promotions: How diverse do you consider them in terms of gender, ethnicity, and background?
Make a list of your startup’s last ten hires: How diverse do you consider them in terms of gender, ethnicity, and background?
If you haven’t made enough recent promotions or hires to know, think about your last several all-hands meetings and whose efforts you’ve acknowledged and think about the last raises and bonuses you’ve allocated. Are you distributing rewards and recognition in a way that acknowledges a wide-ranging set of contributions?
Think about the last five people to leave your organization. Do you notice any commonality in their circumstances or background?
If you see patterns emerging, this gives you a better sense of your starting point and potential areas to prioritize.
I also recommend running a survey measuring employee engagement to give you a sense of how included they feel. You might ask them to answer anonymously the following questions:
I'm proud to work for [insert startup name] (1 to 10)
I would recommend [insert startup name] as a great place to work (1 to 10)
I rarely think about looking for a job at another company (1 to 10)
I see myself still working at [insert startup name] in two years’ time (1 to 10)
[insert startup name] motivates me to go beyond what I would in a similar role elsewhere (1 to 10)
Finally, I recommend looking at your current workforce composition in terms of gender, race, ethnic background, disability, LGBT+ and age. I recommend looking at your leadership workforce composition as you might see different numbers. Compare your results with the population of the city/country you live in. If you live in the UK where the non-white population is about 20%, you should have about 20% non-white in your startup. In London, about 40% of the population is non-white so you should have about 40% of your startup workforce being non-white if all your employees are in London. This should give you a benchmark to start with.
6. Be a change agent : take accountability personally and hold your leaders accountable
As a startup leader, you must create a diversity and inclusion framework that creates a culture of inclusion and you need to personally buy into it and commit to it. Your support, commitment and accountability are essential elements to the implementation of a systematic process of inclusion at the workplace. In other words, you can’t say “we have a pipeline problem”, “there are not enough diverse candidates out there”, “we need to focus on revenue right now”, “we are too busy right now”. These types of sentences are exactly the opposite of what diversity and inclusion accountability are and why diversity and inclusion efforts fail. Instead, say: "we will find diverse candidates whatever it takes". "we will always prioritise diversity and inclusion even in a challenging economic environment because we know it will help our organization succeed".
Accountability starts with you. You need to feel personally responsible for the success of diversity and inclusion in your startup, without expecting someone else to do this for you. Whether you are the CEO, the Head of Marketing or the Head of HR. Whatever made you read this guide is probably the same reason you feel personally committed to bringing diversity and inclusion in your startup. You are the change agent. Be accountable. Don’t make excuses. Take responsibility to educate yourself on this topic, seek expert advice, hold your leadership accountable every day.
7. Proactively Diversity Your Network
This is one of my favourite tip because it is so simple yet so powerful. You must make a conscious decision to diversify your network. You must seek the company of people who are different from you: different gender, different race, different age, different sexual orientation, different ability or disability. Proactively seeking to understand different perspectives will open your mind to different perspectives, new ideas and help you in your own personal diversity and inclusion journey. It will help you fight your own unconscious bias. It will set you up for success in your diversity and inclusion journey inside your startup. You can sign-up to events hosted by and run for women, people of colour, disabled people, by asking if you are welcome and focusing on listening rather than talking. You can join Employee Resource Groups and ask if you are welcome to join and learn. Make a conscious effort to network and connect with people who are different from you, at home and at work.
8. Unconscious Bias Training
There is a lot of controversy about unconscious bias training and whether it is effective or not. As a diversity consultant in tech having helped countless startups with diversity trainings, here is my advice. Unconscious bias training works well when it is done in the right way. Unconscious bias training must have the right content. Unconscious bias training should structure the content around real-life workplace situations versus science and research. The content should be action-oriented. Unconscious bias training must have the right audience: leadership. Top leadership including the CEO should attend the training to fully understand what it is, buy-into it and commit to be held accountable to proactively fighting unconscious bias at the organisational level. Unconscious bias training is successful when there is the right context: unconscious bias training must explain why it is important and how it ties to real business outcomes and and to the business mission. Unless it clearly articulates how unconscious bias training ties to a business outcome, it will fail. Startups must evaluate the impact of the training: by measuring employee engagement in strategies mitigating bias before and after, the organisation ensures that the impact of the unconscious bias training goes beyond just the week of the training and is measured and evaluated after. I recommend that unconscious bias training is made voluntary and not mandatory; if made mandatory, it could backfire and have a counter-productive impact. I also really recommend that the unconscious bias training is made repeatable: it should be repeated over time. I recommend every 3 months. Finally, I recommend that you (the diversity champion), strike a balance between limiting defensiveness about unconscious bias, while communicating the importance of managing bias. A common response to unconscious bias training is defensiveness so it is critical that the training is positioned in a way that limits defensiveness and articulates the benefits.
9. Construct a diverse Board of Directors and Advisory Board
If you are serious about diversity and inclusion in your startup, you must hire diverse directors and seek diverse advisory board members. Companies with diverse management teams achieve 19% higher revenue from innovation. This is about moving from intentions to actions. This is about moving from cheap talk and lip service and PR to concrete actions about diversity and inclusion. Diversity starts at the top. If you don’t have diverse boards of directors or advisory board members, your diversity initiatives will fail and look like a PR exercise.
10. Join the Tech Talent Charter
Finally, you should become a Tech Talent Charter signatory. Tech Talent Charter brings together industries and organisations to drive greater inclusion and diversity in tech. The Tech Talent Charter (TTC) is a non-profit organisation leading a movement to address inequality in the UK tech sector and drive inclusion and diversity in a practical and uniquely measurable way. Their ultimate goal is that the UK tech sector becomes truly inclusive and a reflection of the society which it represents. They work at scale, addressing the tech ecosystem as a whole to drive change. They focus on the how, not just the why of inclusion and we bring communities together and support the underrepresented. Signatories of the charter make a number of pledges in relation to their approach to recruitment and retention. Although it is very much an employer-led initiative, the TTC is supported by the UK Government's Digital Strategy.
The fact that you read this guide shows an interest in driving more diversity and inclusion in your startup, which is a good place to start. I want to remind you that 78% of startup founders have no formal plans or policies in place to promote diversity and inclusion because most fail to translate intentions into actions. You can make a difference by following these simple steps. I shared these tips based on my experience working in startups for over a decade and it is my sincere hope that startups will drive a positive change and become a change agent in the tech industry. However it takes a village to change and your efforts to bring more diversity and inclusion in your startup require constant work and commitment. You can find more resources and more advice on my website www.inspired-human.com.