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The Business Case for Diversity by Christopher Mims

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Published by Niche Marketing & Planet Mogul, 2017-08-16 05:59:06

The Business Case for Diversity by Christopher Mims

The Business Case for Diversity by Christopher Mims

Keywords: diversity,business case

What the Google Controversy
Misses: The Business Case for
Diversity

Google memo assumes Silicon Valley is already a meritocracy, but true
meritocracies require diversity

By
Christopher Mims

The memo written by a Google employee that went viral earlier this month
hit a raw nerve. The tech industry is already beset by accusations of
widespread sexism and discrimination, and suddenly here was someone
arguing that genetic differences rather than bias alone might explain why
there are more men than women in tech jobs.

That assertion led Google CEO Sundar Pichai to fire its author, James
Damore. The reason, as Mr. Pichai put it in a companywide memo: “To
suggest a group of our colleagues have traits that make them less
biologically suited to that work is offensive and not OK.” But Mr. Pichai’s
memo also said it’s not OK for Google employees to feel they can’t safely
express their views at work, and that “much of what was in that memo is
fair to debate.”

Google has yet to clarify what it thought was debate-worthy, but it’s a good
bet that it had something to do with two of Mr. Damore’s admonitions: that
Google should be more inclusive of conservatives and their viewpoints, and
that it should consider the potential cost of Google’s diversity programs.
But this controversy, as often happens with debate over diversity, has
obscured the core business issues involved.

Diversity = Dollars

Research has established the business case for diversity. This isn’t an
argument about redressing historical inequities or even present-day
fairness. More diverse companies have better financial returns, are more
innovative and are just plain smarter than their more homogenous
competitors.
One reason diversity is good is that it’s hard, says research done by
Katherine W. Phillips and others while at Northwestern University’s Kellogg
School of Management. Diverse teams tend to have more disagreement
but better outcomes, while homogenous ones are more confident in their
abilities but perform worse. In a 2009 Kellogg study involving members of
fraternities and sororities, a team was more likely to correctly solve a
murder mystery if it mixed in (same gender) people from other houses.
Tellingly, those same teams were less sure they were right and often felt
their interactions were less effective.
Female Flight

Growth in the number of women in math and computer science isn’t
keeping pace with the industry overall.

Note: Only occupations with more than one million employed are charted.
Source: Bureau of Labor Statistics via the National Science Foundation

Overall, women represent only 11% of engineers in the U.S., according to
the Society of Women Engineers. At Google, women are 31% of the overall
workforce but 20% of technical staff.

Company cultures that are unfriendly or even hostile to women and
minorities not only lead to less diverse workforces, but they also harm the
performance of the women and minority employees they do have, says
Aubrey Blanche, head of diversity and inclusion at enterprise software
company Atlassian . This happens for a number of reasons, notably

the “stereotype threat,” where humans live up—or down—to others’
expectations of them.
The No. 1 reason women leave tech isn’t a life transition like starting a
family, but the fact that they didn’t feel welcome or included at their
companies, in their teams or within the industry as a whole. This is
according to many studies, from researchers at MIT and the University of
Wisconsin-Milwaukee, as well as professional societies and private
foundations.
The Meritocracy Paradox

When faced with the business case for diversity, many managers—
particularly in Silicon Valley—have countered with the meritocracy
argument: A business where reward is proportional to effort and ability
alone should be immune from the need to promote diversity or reduce bias
in hiring, promotion and bonuses.

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The trouble with this idea is that true meritocracies don’t exist. Indeed, a
study of individuals with managerial experience found that they were more
likely to favor men in a simulated compensation scenario when the
instructions emphasized meritocratic values, according to an oft-cited 2010
study from researchers at MIT Sloan School of Management and Indiana
University Bloomington.
In a more recent project, Emilio Castilla, one of the 2010 study’s co-authors,
examined promotions and bonuses within a company after controlling for
every other significant variable, including job title, education, experience,
skills and performance. He found that demographics influenced rewards in
this company (which he can’t name because of a confidentiality agreement).

Subsequently, the company created a system of transparency and
accountability to address the disparities, and his follow-up research found it
eliminated pay and promotion gaps that were the result of bias based on
someone’s gender, race or national origin.

One thing that both defenders and detractors of diversity initiatives seem
to overlook is that these arguments apply beyond gender and ethnicity. Dr.
Castilla has also demonstrated that managers tend to more favorably
review employees who are like them.
This means those wishing for “ideological diversity,” at Google or
elsewhere, could potentially benefit from the same diversity and inclusion
best practices aimed at eliminating other biases.

How to Move Forward
To become a place where merit is truly rewarded, a tech company must
commit to an ongoing and systematic evaluation of its corporate culture,
says Atlassian’s Ms. Blanche. It’s easier for companies not to undertake the
hard work of transparency, accountability and organizational change
required. But in the long run, failing to do so can make them less
competitive.

“Diversity is not the goal in itself,” says Ms. Blanche. “Strengthening your
process begets diversity and leads to better collaboration and teamwork.”

There are a wide and growing array of tools for accomplishing this,
including structured behavioral interviews, where all candidates are asked
the same set of questions, agreed upon in advance. This eliminates the part
of interviews—”What do you like to do on the weekend?”—where
homophily creeps in.

Being systematic, transparent and accountable for how important
workplace decisions are made removes opportunities for conscious and
unconscious bias.

Google is apparently working on it: It spent a total of $264 million on
diversity and inclusion in 2014 and 2015. But the company is also being
sued by the Labor Department, which is investigating gender-pay gaps at
the company.
Google hasn’t responded to a request for comment. For an issue that
affects so many people, at least the vociferous public discussion that is
following Mr. Damore’s memo might be viewed as a form of progress.

When I spoke to Jonna Gerken, president of the Society of Women
Engineers and a manufacturing engineering manager at Pratt & Whitney,
she said, “If it promotes more discussion about organizational climate, I
think that’s a good thing.”

Write to Christopher Mims at [email protected]
Appeared in the August 14, 2017, print edition as 'Making a Business Case for
Diversity.'


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