Gender bias is sneaky. It’s often subtle, yet pervasive – and the effects are far reaching.
We’ve heard a lot this summer about outright sexual harassment and discrimination against women in the tech industry. This is certainly disgraceful and I applaud the actions taken to remove the offenders from their positions. Yet, beyond these blatant examples, there is an implicit gender bias that has a cumulative effect in everyday decisions that stacks the deck against women and minorities.
This blog post will look at how we can help budding entrepreneurs to think differently – and how Educational Accelerator programs, like MIT’s delta v, are making changes to identify and root out these implicit biases.
Gender Bias in the Tech Industry
First, let’s look at some examples of gender bias in established tech industry companies. Susan Wojcicki, CEO of YouTube, wrote an exclusive feature for Vanity Fair on “How to Break up the Silicon Valley Boys’ Club.” She says she was “frustrated that an industry so quick to embrace change and the future can’t break free of its regrettable past.”
Wojcicki brings up sometimes subtle forms of bias that even well-intentioned male colleagues or managers may overlook. These include:
being frequently interrupted or talked over;
having decision-makers primarily addressing your male colleagues, even if they’re junior to you;
working harder to receive the same recognition as your male peers;
having your ideas ignored unless they’re rephrased by your male colleagues;
worrying so much about being either “too nice” or “sharp elbowed” that it hurts your ability to be effective;
frequently being asked how you manage your work-life balance; and
not having peers who have been through similar situations to support you during tough times.
Wojcicki states that by employing more women at all levels of a company, it creates a virtuous cycle that has proven to address both explicit and implicit gender discrimination.
So, how can we work with startups to take these biases out of the picture from the very start of a company’s formation?
Small firms and startups are often referred to as the “engine” of the U.S. economy because of their ability to create new jobs. For example, firms with fewer than 500 employees accounted for 63% of net new U.S. jobs created between 1992 and 2013.
Yet despite their importance to the economy, small firms often face difficulties accessing bank financing. These firms are typically opaque — that is, they don’t attract media or analyst attention, or produce lengthy financial reports. As a result, banks cannot rely on public information to assess loan applications from small firms. Instead, the firms must provide the bank with information demonstrating their creditworthiness. This process can be cumbersome and expensive for small firms.
In many cases, a bank can avoid imposing onerous reporting requirements on a firm by relying on its experience lending to similar firms from the industry or community to make loan approval decisions. In theory, this arrangement can make it easier for small firms to get credit.
Yet regulators pressure banks to collect more documentation from their largest exposures — precisely those areas where the bank has the greatest experience — a policy that can work to the disadvantage of small firms.
For example, a bank that has expertise in lending to small manufacturing companies might be the best able to access lending risk, and therefore make the soundest lending decisions on new businesses in this sector. But the bank’s expertise works against it since regulators require banks with heavy concentrations of loans in certain industries to collect even more documentation.
Hal Gregersen, Executive Director of the MIT Leadership Center
Scott Cook, founder and CEO of Intuit INTU-0.43%, didn’t come up with his concept for the popular Quicken money management software sitting behind the desk or spit-balling ideas in a brainstorming session. He first conceived of it while watching his wife grow increasingly frustrated preparing the family’s finances. From a single observation, combined with Cook’s understanding of computers, one of the world’s most successful financial software companies was born.
Consider all of the times you’ve asked yourself: “Why didn’t I think of that?” Indeed, the world’s next pioneering innovation could be sitting in plain view for anyone to discover. But what is it that inspires some people to take the next step on something overlooked by others?
Our research of high-impact leaders shows about one-third of them fall into the camp of observers –carefully observing the world around them with all of their senses, and identifying common threads across often unconnected data to provoke unique business ideas. Observation has transformative power. Yet, in today’s 24/7 culture, many of us operate on autopilot, starving our brain’s creative capacity. Here are three ways to tune this critical discovery skill and increase the odds that your next observation adds up to great innovation.
The most obvious way to become a great observer is to actively observe. Take a page from Cook’s book and watch your spouse or child perform a task. Schedule observation excursions; pick a company to follow, or set aside 10 minutes to observe something intensely. Following observation periods, think about how that might lead to a new strategy, product service or production process.
Jeff Dyer, Horace Beesley Professor of Strategy at the Marriott School of Management at Brigham Young University
Hal Gregersen, Executive Director of the MIT Leadership Center
Most innovation rankings are popularity contests based on past performance or editorial whims. We set out to create something very different with the World’s Most Innovative Companies list, using the wisdom of the crowd. Our method relies on investors’ ability to identify firms they expect to be innovative now and in the future. You can learn more about our research on innovation at The Innovator’s DNA website.
Companies are ranked by their innovation premium: the difference between their market capitalization and the net present value of cash flows from existing businesses (based on a proprietary algorithm from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.
To be included, firms need seven years of public financial data and $10 billion in market cap. (Facebook, for example, would rank high on the list if we used only the data since they went public.) We include only industries that are known to invest in innovation, excluding industries that have no measurable investment in R&D, so banks and other financial services don’t make the list. Nor do energy and mining firms, whose market value is tied more to commodity prices than innovation. Big caveat: Our picks do not correlate with subsequent investor returns. To the extent that today’s share price embeds high-growth expectations, one might even anticipate low returns to investors, as these expectations may be difficult to meet.
We use something called the Innovation Premium to compile our list. It is calculated first by projecting the cash flows a company produces from its existing businesses without any growth and look at the net present value (NPV) of those cash flows. We compare this base value of the existing business with the company’s current total Enterprise Value (EV): Companies with an EV above their base value have an innovation premium built into their stock price. You can read a more detailed explanation of our work around innovative companies and leaders in our book The Innovator’s DNA (Harvard Business Press, 2011), written with Harvard Business School professor Clayton Christensen. The following steps outline this approach in greater detail:
Donald Trump’s executive orders targeting Muslims, immigrants and refugees are moves that pander to the dangerous forces of racism and xenophobia.
These bans will worsen a worldwide humanitarian crisis, isolate us from our friends and allies, and make us even more vulnerable to terror attacks. Moreover, if these foolish actions are enforced, it will result in dire consequences for the economic well-being of our country. Immigrants of all races, creeds and national origins form a vital part of America’s economy as workers, job creators, and entrepreneurs.
I’m an immigrant of Lebanese Muslim descent. I’m also a telecom infrastructure expert, entrepreneur, and the founder and CEO of Capwave Technologies, based out of Asbury Park, New Jersey. Before launching Capwave, I helped restructure and launch several telecom startups and served as a strategic adviser to Fortune 500 companies. I hold a graduate degree in electrical engineering, and am currently enrolled in MIT’s Executive MBA program.
As an immigrant and successful small business owner, I’m living the American dream.