It’s time for Tone at the Top on Diversity – or Why Uber is Yet Another Wakeup Call for Boards and CEOs in Tech

 Uber is just the latest company caught in the act of discriminating against women in it’s workforce. Sadly for many minorities in tech this is an old story.

As Ellen Pao writes in today’s Time article it is an indication of “tech’s existential rot”. In a world that “started off seemingly harmlessly by white men funding white men with few exceptions. When only white men were given opportunities, only white men were successful. White men went on hiring only white men, because it seemed to be a common trait of successful employees. Then investors who were white men decided only white men could be successful and doubled down on white men. White men who succeeded in the system decided it worked and saw no need for change. Fifty years later investors can’t break out of that pattern.”

But it is time for the pattern to break for many reasons. There is mounting evidence that diverse teams build better products – they are more likely to understand the buying behavior of their customers if they reflect the customer. There is also growing research that companies with diverse boards and management teams produce better returns for investors -so now some investors are encouraging boards to take on diverse board members.

But more importantly it is no longer acceptable for companies to allow employee harassment to continue while HR departments stand by or worse become part of the problem, as Uber is finding out to it’s detriment. The #deleteuber campaign has been due for a while and will hurt. (note, I switched to Lyft a year ago after reading about the leadership culture at Uber.)

So if it is no longer acceptable at the board level, in the executive team, and in the engineering ranks what can we do to make change happen faster?

I have worked in the “bro” culture of tech in Silicon Valley for more than 30 years. I have repeatedly experienced unconscious bias (sometimes not so unconscious ), being underestimated, being dismissed, being propositioned etc. and I have worked hard to over come it as I became a CEO who grew my company through a successful IPO and acquisition. And as I have done so I have been open and public about my wish to be a role model to other women that you can be technical, and be in a leadership role, and have a family in the technology industry. It’s possible to do and be happy.

I was conscious of the challenge I was facing from day one when I was one of only a handful (I think 5) women majoring in math at Cambridge in my year, out of about 300. And so, to be a role model, I have always tried to hold a leadership position in any situation I am in, especially if everyone else in the room is male.

It is so clear to me now that the problem we have in tech is not a pipeline problem. Yes, we need more little girls to like computers, and more little african american boys to believe they can be Mark Zuckerberg, but we have plenty already who enter the tech world. But the women leave in droves within 10 years because the environment is hostile. Our problem is keeping women in an industry that makes life difficult for them.

It is time to set the tone at the top. To insist that boards have at least 2 or 3 women on them (not just none, or the “we have one so we’re done” you see on so many boards). There are now several recruiters who specialize in finding qualified women with the right experience for boards. For example Beth Stewart of Trewstar would tell you there is no shortage of qualified women to serve, but a shortage of boards who think this is an important issue.

It is also time for boards to insist that the CEO builds a diverse leadership team. This takes real work to find diverse, qualified executives but it can be done in most fields. Uber is just one of many examples where a mostly male leadership team is simply deaf and blind to the issues facing their female employees.

“Tone at the top” is an expression used by boards when reviewing the results of the annual audit. They discuss whether the management team is committed to honest, ethical behavior and whether they operate with integrity. The discussion is important to sign off the financials – after all what audit committee chair would want to sign off the financial filings if he did not believe the CEO and CFO had integrity with the numbers?

It’s time for companies to embrace a “tone at the top” discussion around equal opportunity for all employees. It is time for every board to pay attention to the diversity statistics within their companies. How many women are employed at every level, has the company done an audit of pay across gender to check that women are not paid less than men for the same job? Are the percentages of women in leadership growing or shrinking? It is just not hard for HR to run reports and track progress over time – but it takes a serious discussion on the importance of diversity from the board down to build a world class company in the 21st century.

I am hoping this is what Eric Holder and my friend Arianna Huffington will now do for Uber.

Career Advice

Stop Sh****ing on me!

There’s a word in the English language that, when you hear it, is likely
to either make you feel guilty, or make you turn off. Do you say it?
What do you do when you hear it? What’s your reaction when someone says
“you should” to you?

It’s a turnoff, isn’t it? And yet it’s pervasive in the way many people speak in business.

There’s the person who thinks they’re a coach and you can benefit from their wisdom. Instead of listening and
carefully reflecting ideas for you to figure out, they listen to what
you’re worried about and then launch into “Well, what you should have done is…” (I hate this response, it’s just not helpful to me).

Then there’s the guy who thinks he’s smarter than everyone else. Born with a sense of superiority, he loves to tell you what you should have said or done. Especially if you criticize him. It’s a quick way to deflect from the substance of what you are saying to how you are saying it.

Then there’s the woman who says it to herself all the time. Told by the world every day that she’s not good enough, she thinks, “I should have done…” – and loses her personal power in her own mind every time she thinks it.

The problem with the word is that it carries a sense of obligation and guilt with it. The word originally comes from the past tense of “shall“, from the days when shall carried the obligation of “I owe/he owes, will have to, ought to, must.” We don’t use shall that way anymore, but should still means “ought to” to many of us.

So it feels like a judgmental word. It’s difficult to take “you should” and turn it into a positive feeling when your first reaction is guilt or shame.

So listen for it. When you hear someone say it around you to someone else, try to help them re-frame their feedback. When you hear someone say it to you, try to check your reaction and listen to the substance, not the delivery. And when you say it to yourself, go find a mirror, look in it, and try saying “stop shoulding on yourself” several times. You’ll hear what you’re really doing to yourself.

Career Advice

Ask the provocative question in a job interview: Do you have kids?

I love to ask the question “do you have children?” in a job interview. What!? you think to yourself – didn’t she go to training on what questions not to ask??? Well there’s a method to my madness…

If you’ve been through interview training then you know there are a set of questions you are told not to ask like are you married? do you have children? are you thinking of having children? how old are you? etc.

You may have been told that it is illegal to ask these questions in a job interview because you might discriminate against a candidate as a result of their answer: their sexual preference, whether they have little kids, whether they might get pregnant, do they like American football etc.

But it’s not true. Asking the question is not illegal. What is illegal is to discriminate based on the answer. A subtle but powerful difference. Your lawyers trained you to keep you and the company out of trouble, not to teach you how to recruit the best and brightest.

It’s actually important to know some of the private life of your candidates because life interferes with people’s ability to do their job in many more ways than you’ve been trained not to ask about, or the law protects, and how your company reacts when it does says a lot about whether the candidate should want to work with you or not.

When your parent gets cancer and slowly dies that presents a huge challenge to staying fully productive. When you have a bad accident and smash a bone into so many pieces that you have to work from home for months, that can certainly make it hard to focus. When you’re trying to adopt a child from the foster care system and you need to spend days in court fighting for your (soon to be) child’s rights, that means you’re working odd hours and in odd places to stay on top of you job. All experiences we’ve shared at FirstRain, and we’ve got more!

When I meet a candidate I want to know if s/he has children,
or has elderly parents, or has an intense hobby, because I want to tell him or her about our
culture and how much we support and adapt around our people’s needs as
life happens to them.

Life just happens. Babies, sick parents, health issues. And the sign of a strong company culture is one that is adaptable and flexible to help the employee stay engaged and work through whatever challenge comes up, or take time off if that’s what’s needed. It’s important to remember that you cannot make assumptions about how your employee is going to react to the challenge, or what course of action they are going to want to take, but instead to put a team-based system in place so everyone can do their best.

It is true that some older men do still discriminate based on whether women in the workforce have young children, or are likely to have young children, so the lawyers are not all wrong. I recently sat
in a discussion (not in FirstRain!) where a pregnant, very senior
employee’s likelihood to come back to work after her pregnancy was
questioned. But those
older generation views are dying out as the old guard retires or their
daughters successfully work and raise children at the same time.

We’re not naive at FirstRain. Being flexible as life challenges our people doesn’t mean an employee can be distracted from their job indefinitely (we are a for-profit, growing company after all and we probably work harder than most because of high growth rate) but it does mean, from time to time, we have to cover for each other.

So back to interviewing. I want to know if candidates are married, or have little kids, or are thinking of getting pregnant, or adopting. I want to know if they have dogs, or horses, or like to travel. I want to know because we are in a competitive hiring environment, and I want the best people in my company possible. So I want an opportunity to tell them about our culture, and what a great place FirstRain is to work when you have major events in your life, and how supportive we are of raising a family here, and that these are reasons to be a part of your decision to chose FirstRain over any other job you may have today or be considering.

Career Advice

Employee Ranking is an Innovation Killer in Tech

You’ve been in that meeting. HR’s leading the annual performance review process and you’re being asked to rank your team members with their peers. In larger companies you’re probably being asked to force your team into a bell curve of the top 20%, middle 60% and bottom 20%, or your HR person is talking about “the lifeboat test” (what order would you throw your employees out of the boat), or if you work for Intel maybe you’re being asked to do a literal forced ranking.

It’s a tried and tested HR process. Rank your employees, make sure they fit a bell curve, assign bonuses and merit increases accordingly, fit the merit increase budget that’s been approved at the top. And you’ll be told you’re a bad manager if you think half your team is truly excellent.

Makes sense right? People fit on a bell curve of performance don’t they?

The answer is no, especially not in technology. And as the recent Vanity Fair article about Microsoft points out, this approach to employees is an innovation killer. Kurt Eichenwald’s excellent article about the Microsoft “lost decade” points the finger at many of the reasons Microsoft lost it’s innovation mojo, and one is the adherence to stack ranking. “Every current and former Microsoft employee I interviewed—every one—cited
stack ranking as the most destructive process inside of Microsoft,
something that drove out untold numbers of employees,” Eichenwald
writes. “If you were on a team of 10 people, you walked in the first day
knowing that, no matter how good everyone was, 2 people were going to
get a great review, 7 were going to get mediocre reviews, and 1 was
going to get a terrible review,” says a former software developer. “It
leads to employees focusing on competing with each other rather than
competing with other companies.”

So this case is extreme, clearly. But I’ve seen it. I’ve been in the room, cringing.

Ranking has a role to play and can be useful, but as a CEO, or team leader, you have to be thoughtful about why you are doing it.

Where the process can be very helpful is to make sure you identify your top performers. Who are the people that really make a difference again and again? If  you get your managers in a room and debate that question it’s great to see leaders advocating for their people: why they are great, why they are one of our best, what their impact is on the company and it’s growth. This discussion should lead to a list of people you, as the leader, want to pay close attention to. Are they well taken care of? do they have plenty of stock options? are they paid well relative to the market? do you spend enough time with them? is their manager working with them on their career path and training? would they benefit from a mentor? All good questions that you should know the answers to for your top performers. They are your innovation engine.

It’s also good to force the discussion of the bottom performers. Not to hold a witch hunt, but to make sure your managers are not being lazy and keeping someone in the organization who should not be there. If an employee is not performing everyone around them knows it, it’s probably because they are in the wrong job, and it’s weighing down everyone around them. Forcing the conversation of who the bottom 10% are can illuminate who should be moved on, or who maybe needs some extra help, or moved into a different job within your company.

Forcing a stack rank through the whole population leads to politics without having any business benefit. HR loves it because it’s a clean process that helps them manage the budget, but as deeply technical companies (like Rambus where I chair the compensation committee of the board) know: if you have a world class technical team a great deal more than 20% of them are excellent.

When your goal is to innovate you want to build a team where more than half of them are truly spectacular in their field, and where you demand excellence from everyone. In innovative R&D teams you need a zero tolerance policy for low quality work – and yet at the same time you need to tolerate some failure. Innovation takes risk, risk means some failure. When you are developing new products the concept of stack ranking your team into a mediocre group in the middle is the kiss of death! You simply cannot afford mediocre.

The one team where a stack rank can be useful is sales. Sales is the ultimate measurable job – everyone sees the score card every month. I know a CEO who ran a large CAD company in the 90s and he would fire the bottom 10% of his sales team each quarter on principle. The company was wildly successful, but it had a brutal sales culture. But when you live by the numbers you die by the numbers and so firing the bottom 10% each quarter created the focus on results that CEO wanted.

So what do I do? I run a process, once a year, with my FirstRain leadership team to discuss who the top performers are. Which team members are doing really great work – innovating, delivering excellent technology, winning major accounts – who’s making the difference? It’s always a lively debate. Some of the same names are (of course) on the list every year. It’s exciting to see some  new employees join the list quickly, or existing employees move up because they’re growing and their excellence is emerging. It’s a fun discussion and we use it to make sure we are taking care of the people who are making all the difference building the company. And I challenge managers on the non-performers. Beyond that, I think stack ranking is a bureaucracy we don’t need.

Career Advice

Should you tell the whole truth on your resume?

I interviewed a sales candidate yesterday who presented me with an interesting question – about whether he should have put an aspect of his life on his resume.

The “aspect” in question is that he is a nationally ranked triathlete. If this was you – would you have put it on your resume?

This came up in the interview when the candidate and I were discussing the culture at FirstRain and what it’s like to work here. We work hard, but we also play hard and some of us like to find events to compete in together … and the candidate had read this blog so he drew my attention to his interest in triathlons.

But at the same time he shared that he had had advice from friends not to put his interest on his resume – because a prospective employer might think the training would take up too much time and distract him from his work.

In the FirstRain case, being a traithlete can’t hurt – and frankly I think winning in sales takes focus, discipline and mental toughness – some of the very same characteristics it takes to complete an ironman or a marathon so it’s a positive to me.

And in the general case candidate’s outside activities rarely hurt their chances with me. You can learn a lot about someone when you understand their passions and what drives them to perform – whether it is coaching their kids soccer team, rebuilding old cars, or running up the side of mountains. So I like to know color about a candidate if s/he is willing to share because it helps me assess character and individual’s strengths and weaknesses.

Within reason of course. There are some things I also don’t want to know…

Career Advice

How to write a performance review

We are in the final stages of our annual performance review process here at FirstRain and it’s a great time to visit what really matters when writing a performance review.

My first principle is that everyone deserves a performance review – it’s a benefit and a right. I believe we owe it to every employee to listen to how they see their own performance, listen to their ambitions and what they want to learn next, and share our observations, advice and encouragement at least once a year. In reality it is something I like to do on an ongoing basis but at least having a formal review process ensures the conversation happens at least once a year.

So to the content of the review. We use SuccessFactors which (while not perfect!) structures an easy to use process to move the performance review documentation through the process.

The structure of our reviews is
section 1: assessment of the employee against our 5 core values
section 2: assessment of the employee against specific job skills (only 1 or 2 per job)
section 3: summary and overview assessment

It is the managers responsibility to communicate to the employee that the review time is here and what the steps are going to be so the process is clear.

First the employee writes their self assessment. How do they rate themselves against the values and job skills (on a scale of 1 to 5 and a brief description for each category)? What’s going well and what isn’t. Where would they like to improve, what help do they want from their manager or the company.

Next the manager talks with the employees peers and senior management. What is their observation of what’s going well? What behaviors should be praised and reinforced? Where are there opportunities for improvement. This is a 360 process of getting input around the individual to be able to give them useful and grounded advice.

The manager then writes up their assessment. Rating each category and writing up what is great about the employees performance, what could be improved, and advice. I find myself writing the phrase “I encourage you to…” many times. I manage senior people – there is very little I would ever “tell” someone to do because how they perform is their choice. I try to encourage and advise but it’s up to them what they do with that advice.

The step of the conversation about the employees performance is the most important step. This is where absolute honesty and integrity makes all the difference to whether the review is a positive or negative – useful or destructive experience. I believe it is very important to be straightforward, kind, use humor and above all else be direct but non judgmental. If you are direct you have a much higher chance of being heard and understood, rather than the employee shutting you out. This is a process that really should be going on continuously. I feel I have failed if there is a major surprise in the conversation – although this does sometimes happen.

Finally the employee has a final step of being able to edit their review, or comment on your comments, so the complete conversation is documented. And then you both sign.

I had 10 reviews to write this year. In each one I was able to give positive feedback on the many things that are going well and the great progress and growth we have made this year. And in each case I thought carefully about the one or two areas of advice I would give to help each person grow in the coming year. It’s the least I can do for a team that is working as hard and being as creative as my team is being.