HR & Culture
6 min read

Founders & CEOs need to be proactive about diversity and inclusion. Here’s how.

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Project Include, the non-profit I co-founded, helps companies build cultures that are diverse and inclusive. Through our Startup Include and VC Include programs, we work with select founders to collect anonymized feedback and recommend specific actions for improving their companies. We share our learnings and over 80 recommendations with the ecosystem through our website and Medium publication.

Here are a few of our recommendations that are often overlooked or missed, but can make a huge difference.


1. Don’t let exceptions undermine your values

I see the same situation over and over again: A key engineer will do something really inappropriate — a clear violation of company values or expectations, putting the company in what seems like a tough spot. Do you keep the employee and ship product on time, or do you instead adhere to the company’s values and penalize or even fire the employee?

I’ve seen this situation many times, and companies that keep the engineer typically grow to regret it. If you allow them to stay until you ship the product, you’re saying that shipping is more important than company values and coworkers. You’re normalizing and encouraging the behavior, which will make this problem explode with a lot more really bad behavior.

Companies need to understand that if they allow “rockstar” engineers to get away with inappropriate things or treating people poorly, others in the company will copy that behavior because they’re so highly respected and admired.

A lot of companies have had this experience and realization, and the consensus is clear: Optimizing for short-term needs creates a long-term problem. Sweeping diversity issues under the rug does not make sense.


2. Get ahead of issues before they explode

Even when you’re proactive about building a healthy culture, issues will arise. You may be tempted to sweep a problem under the rug, but especially when inclusion is involved, it’s important to address the problems head-on and as early as possible.

In some cases, people are finally realizing that behaviors that they accepted without question two or three years ago actually have a negative impact on others and are not appropriate at work. And many situations pose subtle questions, such as:

  • Can you ask out somebody on your team?
  • Can you use certain words?
  • Can you host or fund a work event that allows employees and their guests to get drunk?

If you’re a founder, these issues often seem small and limited. You may wish they would just go away, or you may want to delegate and have others manage these issues. While CEOs and founders may think some of these problems seem trivial or too minor for them to handle, they can break apart your culture and your team: see for example, SoFi, Uber, Magic Leap, Intel, BetterWorks.

Almost all sexual harassment issues in tech companies can be traced back to the CEO’s failure to directly address them. I recommend addressing problems as soon as possible because the longer you wait, the more likely they are to proliferate.

It’s important to stand for values and to give employees comfortable ways of reporting violations. You should create many pathways: your manager, other managers, HR, executives, even directly to the CEO. It’s important that CEOs set the standard because their behavior sets the tone for the rest of the company.


3. Invest in diversity now

Many founders have blinders on when it comes to some of their current practices, and sometimes they wait too long to hire outside of their networks. There are a few common practices that can be initiated (or removed) to promote a culture of inclusivity and to bring diversity to the core of your team so it can grow.

Have a diversity vision

Set targets for the long term, and build a timeline to reach them. I’m really impressed by Patreon’s approach. Their vision is for their team to match projected US demographics, and they’ve set targets to be 50% women and NB employees and 50% employees of color by 2020.

It’s quite a statement, and most companies won’t be this progressive with goals or aggressive with timelines. The underlying idea, however, is something all founders should value across the board: Get all the qualified and capable candidates that reflect the workforce and your customer base, and recognize that it requires a diverse and inclusive team today. Then figure out how to time it.

Invest in diversity as early as possible

I think of early diversity at a company as “building the muscles” for recruiting outside of your immediate circle of friends. These muscles will come in handy because companies that don’t learn to look beyond their immediate friend group are setting themselves up for failure.

When you develop this early on, it becomes a flywheel that propels itself over time as employees from diverse backgrounds attract and recruit new hires from diverse backgrounds more readily — and recruiting becomes easier, not harder, over time.

CEOs and founders often worry that hiring for diversity will slow down their growth and progress. They want diversity, but they don’t always realize that they are blocking it by waiting to fix processes and tools that are flawed.

When it comes to creating diverse teams, the sooner the better. As a team keeps growing, it becomes more difficult for people who are not part of the homogenous group to join, because they’re likely to look at the team and feel like the odd one out.

Measure diversity across the entire process

Many startups unknowingly use biased hiring processes, partially because that’s just how the tech industry was built and it’s what they know. Often one or two people can undermine the whole process by blocking hires.

How can you find these biased processes and stop them?

  1. Step back and look at how you’re hiring.
  2. Make the process fairer across every stage of hiring.
  3. Track diversity levels at all stages of the process (initial pool, interviewees, callbacks, final candidates, offer recipients, new employees) and in attrition.
  4. Counter biases with technology tools, training, and reminders.

If it’s not representative, it can be helpful to see where things are getting stuck by tracking the demographics of every stage and seeing where the numbers stagnate.

Is there a specific hiring manager or group that’s a consistent obstacle? If so, is that person just a bad interviewer, or are they problematically unfair? Are they unfair in other ways, too?

Analyzing your hiring process often uncovers hidden problems in a company; typically, problems the founders would much rather find and solve sooner than later.


4. Include everyone.

That means avoiding team activities that may alienate people. Many companies have activities that they don’t even realize are contributing to the problem.

Activities centered around drinking, for example, are often alienating and ultimately counterproductive for team bonding. I worked with one startup that promoted beer pong. There were, however, teammates who weren’t interested in drinking for religious or personal reasons. For some applicants, seeing that as a core part of the company was a turn off because it wasn’t part of what they wanted to do.

At reddit, we had a large drinking culture in certain teams, which led to employees doing things that made them feel embarrassed. They’d come back to work and not want to talk to anybody.Instead of bonding employees, drinking-related “bonding activities” often drive wedges between them. When employees get drunk, they often lose self-control and behave inappropriately — which can cause massive cultural issues long after.

Do you want to be the one who cleans up the messes they leave? Do you think it is good team bonding if people are too embarrassed to look each other in the eye the next day?

I suggest executives add new activities that will appeal to employees not interested in the current options. The goal is team bonding and connection, so it’s important to notice the impact of company activities rather than just the intent behind them.


5. Hold everyone accountable

Holding people accountable made reddit stronger. When I joined reddit, we were small and didn’t have a code of conduct or, for that matter, any clearly communicated expectations around behavior. There was a whole lot of bad behavior, largely because those who started doing it never got punished and didn’t know what was appropriate or not. They either didn’t know what the rules were or assumed the behavior was okay because they saw someone else (sometimes an executive) doing it.

Some employees even pointed to behavior on the site itself as justification for inappropriate behavior. But once we started educating people on expectations and holding employees accountable to them, we saw a significant change.

We started by having a discussion about culture, diversity & inclusion, and on discrimination & bias. As soon as we opened the conversation, several employees reported their prior experiences of inappropriate behavior.

We gave perpetrators a chance to understand: “These are the norms of behavior. What you did before is outside these norms. If you violate them again, you’re out.”

Obviously, some types of behavior shouldn’t get a second chance, but in our case, we gave our employees the opportunity to understand we actually have standards of behavior. Then they started learning and complying with clear boundaries, which led to a massive improvement.

The CEO has to take the lead on holding people accountable, and founders need to recognize they’re also accountable. Even when the board fails to hold founders and CEOs accountable, employees and the public will. We’ve all read the lawsuits, news articles and Medium posts by employees, including myself, describing bad behavior. Post-#MeToo, the only solution is not doing the behavior.

Fortunately there are many people and resources here to help employees change. For specific tactics and strategies, Val Aurora of Frame Shift Consulting has a whole video on her ally skills workshop. Employees and founders can also find all sorts of valuable structures and strategies on the Project Include website.

If the last two years taught us anything, it’s how CEOs who wait to incorporate diversity and inclusion in their cultures will inevitably suffer.

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Ellen K. Pao is cofounder and CEO of the diversity and inclusion non-profit Project Include, a tech investor, the former CEO of reddit, and author of "Reset: My Fight for Inclusion and Lasting Change." Her writing has appeared in The New York Times, The Washington Post, TIME, Lenny, Recode, and WIRED. She has earned an electrical engineering degree from Princeton and law and business degrees from Harvard.

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