09/02/2022 14:29
Discovering diversity
Laura started her working career as a lawyer, practising corporate law but soon realised it wasn’t for her. It was a move to global management consultancy, McKinsey & Co, that took her on the path to Diversio.
“A big part of my work there [McKinsey] was diversity and inclusion, working with our enterprise clients, but also with governments to leverage diversity for growth. I worked on a project which clarified the need and opportunity to build a technology solution, which involved us getting feedback from dozens and dozens of CEOs who said that they believe in the business case for diversity, but they don't know how to do it. When it comes to driving long-term change and creating a more inclusive workplace, they wanted to know the process or platform to help them adopt metrics and track the impact of different programs.”
Another hurdle to overcome was how employees were often too nervous to share honest feedback. Laura was keen to make this process better and more effective and identified technology and artificial intelligence playing a key role. Partnering with a product-oriented chief operation officer (COO), and building on the knowledge gained at McKinsey, Diversio was established on International Women’s Day in 2018.
Developing Diversio
To drive adoption, Laura was aware that Diversio needed to bridge the human aspect with data.
“That was one of the biggest perceived problems from CEOs. Culture, belonging and feelings – how do you quantify that? People felt it’s too amorphous, too fluffy: ‘There’s no way we could put metrics around something like inclusion’. And our view is that it’s simply not true. There’s a way to quantify experience and you can use those metrics to identify what problems people in your organisation are facing.”
The solution included two steps. Step one was a scorecard with six metrics including harassment, culture, mentorship, and safe working environment.
“You collect survey data from employees and then you segment those responses by demographic. For example, if you can see that people of colour in your organisation are noting harassment in the workplace but their white counterparts are noting none, that indicates some sort of bias in the company that needs to be unlocked.”
The second step involved partnering with a university to develop a natural language processing (NLP) algorithm that analyses free text from employees, enabling their experience to be quantified.
“We have about 29 ‘inclusion pain points’, such as systemic racism, pay equity, toxic culture, and recourse. We run the algorithm against employee feedback, which keeps it completely anonymous. Then, we show the employer what pain points are being felt within the workplace.”
Learnings
Creating Diversio took Laura on two learning journeys: one as a founder and the nuances of getting a tech startup off the ground, and the other, learning more about culture and belonging.
“The most interesting thing from my perspective is that every client looks at their scorecard and has an aha moment – like a light bulb moment! There’s never been a client who looked at their scorecard and said, 'Okay, I knew exactly what was coming.' Everyone’s surprised. And some of the biggest light bulb moments are often around employees that possibly aren’t in the spotlight, but are struggling and need more support.
“For example, people with disabilities tend to lack mentorship and sponsorship. Seeing that in a scorecard through data changes things for leaders. It sounds simple, but if they see a red box around people with a disability and flexible work options, they understand: 'Okay. We have to deal with systemic racism. Absolutely. We have to deal with sexism. But there’s another cohort of employees that we also need to support. And we can’t just leave them behind.'
Working with companies of all ilks and sizes, Laura has seen how big the problem is and they haven’t yet come across a company that’s fully inclusive. That’s why Diversio’s recommendation engine is a key part of the process. This is customised for every company with recommendations for programs and policies that are most likely to improve employee experience and data.
“Once that dashboard’s been created, one of our specialists takes the client through the story, helping them to co-create an action plan. Then it’s all about implementing and executing new programs and redeploying about six to twelve months later to see what metrics have gone up, what metrics have gone down, what’s working and what’s not.”
Reflecting on commonalities, Laura finds there’s no one consistent problem, namely because different departments develop their own cultures and biases.
“So, setting one diversity and inclusion program across a very large company is doomed to fail. The tone from the top gets set at different levels. You have your sales leader, your IT leader and your HR leader, all at some point coming in and building a team in their image, which perpetuates a culture. Companies are not monolithic, it’s human nature.
“The goal for each department is 10/10 for every demographic on every metric. The idea is for everyone to want all employees of all backgrounds and all genders to feel that there’s enough flexibility to manage their work and their home care obligations. We want that to be true of every department.”
Diversity in VC
Partnering with Diversity VC, Laura and Diversio co-created a certification program for the VC ecosystem.
“We have a lot of data in that space. We do a very light touch audit to understand what they’re currently doing, both internally and externally, for diversity and inclusion. We now have close to 100 VCs that have gone through the program. The findings are more around portfolio diligence and sourcing diverse talent.
“One of my favourite examples is Base10, a venture capital firm in the US, which has taken their ten most promising companies and they’ve donated half of the carry that they have in those companies to scholarships for historically Black colleges and universities. It’s something that makes them super attractive to companies. Imagine you’re a mission-oriented founder and you have your choice of VCs and one of them says to you: 'Hey, half of the profit that I make from this, I’m gonna donate it.' That makes you super attractive in a very hot market right now. So, really great companies are hard to come by.
“We do a lot of work in the investment space and we work with everyone from limited partners (LPs) to big pensions and endowments down to portfolio companies. The layers of influence and the way that it trends is so unexpected sometimes. A lot of VCs who come to us to get certified are saying: 'Look, my LPs are asking me for this data. And I’ve got to step up because that’s where I get my capital from.'
“The pressure is amping up. But equally – and this I didn’t expect – founders are getting vocal. Really great companies are hard to come by and this generation of founders are often very mission-driven and values-oriented and they want to work with investors that share that. We have a lot of VCs telling us that they’re trying to differentiate for founders and that they think this is something that’s going to resonate.”
And how does Diversio apply its own process internally?
“We do our survey and we run it exactly like a client. For example, there’s a wall between the team that runs a survey and the people who look at the results. So, I can’t see the data and the feedback.
“We found there was a need for more mentorship among our team so we rolled out a mentorship program. There was a desire for more clarity around our flexibility guidelines and what that looks like so we created a flexible work policy. At the end of the day, no one is perfect, including people who do this work, but you have to be open and focused on getting it right.
“The other thing that’s so interesting is I knew that we had a valuable product because of the feedback that we got from clients. We have almost zero customer turn and great NPS scores. But it wasn’t until I got the survey back and I saw the scorecard and anonymous quotes that I got it. As a CEO, especially in a knowledge-based company, your talent is everything. People want to work somewhere where they feel engaged. So without those constructive pieces of feedback, you can’t fix what you don’t know!”
See how Newton Venture Program is working on tackling diversity in the venture capital ecosystem.