Startups have a unique position as change agents: they are young, agile, are born in the millennial era, have funding and have a new product or app that can change the world. They can change the workplace, society and the world we live in.
But with great influence comes great responsibility. And as a startup founder, it is not always clear how to use that influence for good? What social good are you going to incorporate in your mission? Where will you make a positive impact in the world?
Diversity and inclusion in startups 101
And what we are talking about here is doing good, not just because ‘it is the right thing to do’ or because ‘it’s a moral imperative’ or ‘good PR’. This is about positively changing the world with your startup in a profound and sustained way.
A good place to start is with diversity and inclusion (D&I). With the recent #metoo movement and #blacklivesmatter protests, people are actively seeking to end sexism, racism and 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 in startups:
1. Understand why diversity is important to your startup
The first place to start with diversity and inclusion for startups is the ‘why’. Ask yourself why D&I is important to your startup. How D&I will help grow and scale your business? What is it about D&I 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 thus give you a competitive advantage? Or, is it because having a diverse and inclusive workforce will force your startup to think differently and to generate more revenue through innovation?
Whatever the reason is for what makes diversity and inclusion an important value for your startup, take the time to clearly articulate your answer and write it down.
2. Articulate how diversity ties to your mission
Once you have done the work of articulating why D&I is important to your startup, you must work on how it ties in with your mission. This is your opportunity to revisit or even create from scratch your startup mission statement., which defines why your startup exists. At a minimum, your mission statement should outline who your customers are, your products and services.
How you go about describing your startup’s reason for being is probably the most critical part of setting your startup for success regarding diversity and inclusion. Take time to do it properly and if possible, demonstrate the purpose of your startup through a diversity and inclusion statement.
For example, “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 academia”. Or even, “Our business exists because we believe everyone deserves always-on access to services regardless of their gender, race, socio-economic background, sexual orientation, age and any other background.”
Include your D&I objectives in your mission statement and share it 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
Let me be brutally honest with you: 90% of startup founders will not implement a diversity and inclusion programme. Period. Research shows that while 70% of startup founders think diversity is important, only 10% of startup founders will implement a diversity programme.
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. Let me rephrase it: nothing will happen unless you set goals tied to monetary compensation.
Goals drive behaviour. Monetary goals drive behaviour faster. If you are serious about 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, if there is one thing I learnt, it is that setting diversity goals that will be financially rewarded is the only route to success. If you are wondering if this is worth the investment, let me share this:
- 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 was 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 a lot.
4. Appoint a diversity task force sponsored by an executive
Once you have done the basics: 1. understand why diversity and inclusion are important to your startup. 2. Incorporate diversity and inclusion in your mission statement, and 3. Set diversity goals tied to monetary outcomes; you must set-up a process to continually monitor, adjust and improve your diversity and inclusion practices.
Imagine implementing a new programme 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 task force whose mission is to monitor progress, evaluate results and improve the diversity and inclusion initiatives.
Your DEI task force must be sponsored by an executive in order to be successful; and to give it a budget, authority and access to the resources it needs to make an impact. It is up to you who, how many and how often the people in the task force will meet. What’s important here is that you set-up a task force that’s sponsored by an executive and you clarify its goals.
The task force’s D&I goals should be aligned with your new mission statement and with the diversity and inclusion goals 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 commit to the success of this task force, 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 10 promotions: How diverse do you consider them in terms of gender, ethnicity, and background?
- Make a list of your startup’s last 10 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 organisation. 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 where you live. 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 from where to start.
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. You also need to personally believe 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 are precisely why diversity and inclusion efforts fail. Trust me, I have been there with many tech companies, and I have heard these sentences over and over again.
Accountability starts with you. You need to feel personally responsible for the success of diversity and inclusion in your startup. Whether you are the CEO, the Head of Marketing, 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 diversify your network
This is one of my favourite tips because it is so simple yet so powerful.
You must make a conscious decision to diversify your network. 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 new ideas and help you with your personal, and your startup’s, diversity and inclusion journey. It will help you fight your unconscious bias and set you up for success.
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 ask if you are welcome to join Employee Resource Groups to learn. Make a conscious effort to network and connect with people who are different from you, at home and 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 training, 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, structured around real-life workplace situations versus science and research. The content should be action-oriented and include 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 being held accountable to proactively fighting unconscious bias at the organisational level.
Unconscious bias training is successful when delivered with the right context that explains why it is important and how it ties in with real business outcomes and to the business mission otherwise, it will fail.
Startups must evaluate the impact of the training before and after. For example, 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.
I recommend that unconscious bias training is made voluntary and not mandatory as if made mandatory, it could backfire and have a counter-productive impact. I also really recommend that unconscious bias training is repeated over time; say every three 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 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. And, 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 (TTC) 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, 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 99% of diversity and inclusion efforts fail to translate intention into actions. You can make a difference by following these simple steps. I shared these tips based on my experience working in tech for over a decade. 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.