Having just raised its Series A to continue innovating in equality, diversity, and inclusion (EDI) using data and AI technology, Diversio is fast becoming a leader in the space.
Lara Pawade sat down with Diversio founder, Laura McGee, to discuss how they use data to solve a human problem, typical scenarios for clients and the shifting balance between VCs and founders.
It would be great to hear about your career journey in your own words.
I started my career as a lawyer. I practised corporate law and quickly realised it wasn’t for me. So, I jumped over into consulting and worked at McKinsey for a few years. A big part of my work there 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 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.
We discovered a lot of problems around preventing this platform being implemented. For example, employees are often nervous to share really honest feedback.
The idea was: could we effectively make that process better and more effective? Technology and artificial intelligence could play a big role here. So, building on what I had learned at McKinsey and then partnering up with my product-oriented chief operation officer (COO), who has a background in products, and we built Diversio.
How long ago was that?
About three-and-a-half years ago. I left McKinsey on International Women’s Day in 2018.
With data-driven diversity and inclusion, how do you consider more difficult concepts? How do you integrate something very human 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.
We took two steps to combat this. Number one: we created a scorecard with six metrics, such as 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.
Our second step: we partnered with a university to develop an NLP (natural language processing) algorithm that analyses free text from employees, which can quantify their experience.
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.
What have been your biggest learnings from Diversio?
There are the learnings around building a company and getting it off the ground. And then there’s learnings around culture and the belonging piece.
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.”
Definitely. When we talk about EDI, the conversation tends to be based on gender and race, but there are so many different types of exclusion. Disabilities, both visible and invisible are so typically overlooked.
Yeah. That’s right.
How does the process work for clients? Are you geared towards a certain sector or are you industry-agnostic?
The short answer is we have clients in every sector of every size: enterprise clients, small businesses, government clients. We have everything from technology to asset management to manufacturing to construction. It’s a big problem to solve and we haven’t come across a company that’s perfectly inclusive.
The process is typically simple. We run a very short survey, around four minutes, where we collect data from employees on their experience.
Typically, it’s from all employees to get the best data set. Once that survey has been deployed and we have enough data, we close it. Then we run our natural language processing (NLP) algorithm, which surfaces those opportunities and generates a client’s dashboard.
That’s the online portal where they can see their results and it takes them through the story. It helps them see what they can do better and what they’re doing wrong.
The most important piece is our recommendation engine. They get their custom recommendations of programs and policies that are most likely to improve their numbers and improve the experience.
Once that dashboard has been created, one of our specialists takes the client through the story, helping them to co-create an action plan. And then it’s all about implementing and executing new programs and then 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.
Is there something in particular that always comes up?
Our product is extremely targeted and every department gets its own action plan. I would say the one thing that I’m always sure of is that there’s no consistent problem across the business. Different departments will develop their own cultures and biases. So, setting one diversity and inclusion program across a very large company is doomed to fail.
Where do you think those differences are coming from?
Much of this is people-dependent. 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.
Is it possible to standardise a culture across a large company?
I think that’s what we’re trying to do. 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.
I know you’ve done so much other stuff outside of Diversio.
Yes, outside of Diversio I’m on the board of Global Citizen, where our vision is to end global poverty and to solve climate change.
Equality and inclusion is a really big part of both of those conversations. What gets me excited about Diversio and Global Citizen is that they’re both unique solutions that you wouldn’t expect, but they’re having a massive impact.
At Global Citizen, for example, it’s all about: how do you excite the population? How do you get people to exercise their voice and reach out to their government leaders, to vote with their wallets, with corporations, and influence the people who run the economy?
Some of the tactics that we use are around ‘One World: Together at Home’, a big online concert that brought together celebrities and government leaders. That was a really interesting solution to what feels like an intractable problem.
On the flip side with Diversio, there’s the issue of how could you possibly quantify inclusion? And are we just doomed to have these biases and organisations? And we thought artificial intelligence could be a lever to solve, again, what feels like an intractable problem.
I love the idea of working on really difficult problems and getting super creative to see if we can maybe do it a bit differently.
With Diversio’s work in venture capital (VC), do you see similar patterns across the entire VC ecosystem?
We have a lot of data in that space. We partnered with Diversity VC to co-create a certification program. 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.
It is [a hot market]. How do you think that the power balance between founders and VC affects the overall EDI space?
You know what? I think this is so fascinating. 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. So small, medium and large. 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.”
So [the pressure] is coming from the LPs?
Absolutely. The pressure is amping up. But equally – and this I didn’t expect – founders are getting vocal. So, to your point, 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.
How does EDI work at Diversio?
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!