Grace Lordan (London School of Economics, The Inclusion Initiative)
Kate Pljaskovova (Fair HQ)
Lolita Taub (Ganas Ventures, Operator Collective)
In this wide-ranging conversation, we bring together people fighting for more inclusion in a variety of ways across the pond. While Grace Lordan, professor at the London School of Economics, sees research and evidence-based interventions as core weapons to raise awareness and best practice, Kate Pljaskovova and Bibi Groot founded and work at Fair HQ, a London-based inclusion consultancy to put research into best practice every day. From the US West Coast, Lolita Taub adds further practical insights from her experiences as a Latinx operator, investor, and newly minted VC.
Interviewed February 2021
The Work of Fair HQ
Erika Brodnock (EB): Kate, can you tell us a little bit about why you started Fair HQ?
Kate Pljaskovova (KP): Prior to Fair HQ I had a previous business targeting the gender pay gap that focused on empowering women to negotiate in the corporate environment. We worked with more than 1,800 women across businesses including Sky, Spotify, Dell, and PwC. In doing so we discovered that by helping businesses to change their negotiation processes in pay and performance reviews, etcetera, they became much more effective in ensuring fair practices, and offering fair rewards to not only women, but anyone that comes from a nontraditional background.
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I started looking into what has been done in the overall D&I space and how much money was being wasted on things that did not work. How could we better understand how businesses are performing? What does “good” look like when it comes to diversity and inclusion approaches internally in business processes, policies, representations, and the behaviors that are present in the organization? Then pairing that data with scientific evidence and making suggestions as to what companies can do to improve their behaviors, processes, policies, and the outcomes that it has on the different people in those organizations and ultimately, what outcome that has on their business performance. That is what we are trying to do. We connect the data, the recommendations, and create a holistic strategy for businesses that will effectively help them become more successful. We do that very systematically.
The Work of the Inclusion Initiative
Johannes Lenhard (JL): Grace, can you tell us about the motivations behind starting the Inclusion Initiative and what it is?
Grace Lordan (GL): I believe that in order to have productive, creative, and innovative teams, we have to have different types of people around the table where ideas collide. That is where we get great outcomes. I say that I hold a belief simply because most of the evidence on inclusion is from lab, experiments, and correlation studies. From an academic perspective, proving that by offering more evidence across all the levels, the macro level, and the individual level, and establishing causality at that level is interesting to me.
The second reason is that I have spent ten years now studying what makes people successful. One of the things that has come through in that research is that it goes beyond their skills, talents, and ability. I have studied discrimination explicitly. I have been looking more recently on the flip side of that and thinking about privilege as something that gets people ahead unjustly. I want to spend the next decade of my life trying to rectify that and making sure that people do get ahead based on their skills, talents, and ability, and we rewrite some of the other things that have been getting people ahead at the moment.
The last thing that I find fascinating is that we roll out a lot of D&I interventions in companies and we never check if they work, and people become fatigued with diversity initiatives. Being able to gather an evidence base that does not just say “this is what works,” but also takes into account context as well, is extraordinarily important. Firms are on different journeys, there is a different distribution of culture; if I am a toxic firm, some things are going to be effective for me that will not be effective in firms that sit further up the culture distribution curve. The honest approach to D&I will say, “We think this is going to work and we are going to evaluate whether it does work. We are going to report back to you whether it works today, in a month, in a year, and be really honest.”
I am really concerned about the fact that there are talented people who are from underprivileged backgrounds who are not getting to where they need to be for reasons that have nothing to do with the skills, time, and talent that they possess.
EB: Lolita, to come full circle here, can you tell us a little bit about how and why you started the Community Fund?
Lolita Taub (LT): I’m an unlikely VC fund manager. Yes, I have 14 years of experience under my belt as an operator and investor, and have produced over $70M in tech sales and made 60+ investments in and out of Silicon Valley. But as a kid, people used to tell me I would not amount to anything because of my socioeconomic condition (poor), gender (female), and ethnic make-up (Latina). Yet, I persevered, for my family and for all those others underestimated in my community. And, in October 2020, I co-founded and launched the Community Fund, a $5M fund investing in early-stage community-driven companies, with my partner Jesse Middleton.
My earlier experiences put me on track to thinking: as a businesswoman of color, I want to serve my community, and I see opportunity in founders that the industry overlooks who would otherwise produce outsized returns. I needed to become a check-writer and invest in underestimated founders. I kept working because I needed to pay the bills, but I started thinking about how I could break into venture capital. After my MBA and many hurdles and hoops, I slowly found a foothold in VC: Backstage Capital and the support of Arlan Hamilton came first; being an Indie.VC scout and a NextGen Venture Partner next. Last year, my husband and I launched the Startup-Investor Matching Tool, which connects underestimated founders with investors. Around the same time, Jesse Middleton reached out asking me whether I wanted to co-found a fund that would invest in the best (but underestimated) founders, and here we are.
How Research Leads to Action-Based Policies
EB: Business, entrepreneurship, and technology seem to be concentrated. Power seems to be concentrated in small, homogeneous networks at the moment. How can the power of research be mobilized to create systemic change?
Lolita Taub (LT): Often, status-quo and biased investors tell underestimated founders* that they will not invest because their markets are “niche,” “too small,” and not capable of producing unicorns. That’s just not true. The investors spewing these statements simply don’t see or appreciate the market potential. Research and stats on the market sizes that are represented by underestimated and underrepresented communities are needed ASAP to highlight the money-making opportunity to invest in these markets.
Bibi Groot (BG): That is a great but also very challenging question. The power of research is to start thinking systemically and strategically about what are the small wins and the small changes that we can start implementing in our systems, in our businesses, to create larger scale changes. Culture is a collection of everyday behaviors. If we start by changing and embedding better everyday behavior, you will create systemic change over time, and you will create more diversity in themes. The only way to go about it is to start thinking from the process perspective inside businesses. How can you encourage, for example, younger or more junior employees to have more access to senior leadership teams? How can you encourage them to have a seat at the table? How can you share information better across the business so that everyone gets insight into how decisions are made and that everyone gets a voice in the direction of the company? How can they participate in that decision making?
There is a body of great research on why these things are important.* We do not yet have very strong evidence on how to make it work, especially because every company is so different, and context has a huge impact on the effectiveness of interventions. We know the threads that we need to start pulling from the research. There is a lot of opportunity here to start embedding change not as these huge culture initiatives; let us just start targeting really specific things inside companies that we know have an effect, such as making sure that people are part of collaborative workgroups, they can access the resources they need, we have meeting formats where minority voices are heard, and it is not just the loudest person in the room talking. Let us start seeing if we can create compound change with small wins.
GL: I fully agree that we need to move to action-based policies. Rather than doing research and talking about why inclusion is actually good for business, given that we have the evidence from the lab, we have the evidence from the macro, we should take a risk. I do not like using the word “risk” here, because I do not feel that it is a risk. We should move forwards, make the changes, and take care to evaluate those changes, and then highlight that they actually work for business. That is the first part.
Outside Pressure Is Helping Drive Change
GL: The second part of it is to really show to firms that their image matters for their profit and loss and for their shareholders, that customers are starting to care more. Shareholders are starting to care, coming at it from a different angle will make firms not only take action inside, which at the end of the day is just one firm, but also will make them start managing their supply chain, which is a really powerful mechanism.
More and more international firms are asking for D&I evidence from companies and other teams that approach them for business. That is really effective. Monitoring what those diverse teams actually bring when they walk through the doors is really effective. If we think of the different groups of people in society, we do still have this group in society who are loud, who talk about a meritocracy as if the meritocracy is truly measuring merit.
That is why when we make these changes to our supply chain, and we start evaluating what happens when we do have more diverse and inclusive teams serving us as clients, we will really help move the needle on what actually is and is not a meritocracy. I believe that we are not in a meritocracy at the moment; that privilege is what advances people unnecessarily. If we move towards making changes now and evaluating them, and pushing that evidence out into society, what are the effects of having diversity at the table that is included? It will be really powerful, and the firms that do not follow should suffer creative destruction.
EB: We are starting to see the sea change coming from lots of organizations; NASDAQ and Goldman Sachs have come out publicly recently that they are going to stop supporting companies and firms unless they have diversity at the table.
KP: We have seen that when a lot of VCs right now are raising funds, LPs are asking them about the diversity numbers of the fund, portfolio, and pipeline. As a result, they are starting to put these measures in place from the outset. The third-party requirement is forcing their hand. This is then trickling down to their portfolio companies. VCs are wondering how they can support portfolio companies as early as just a couple of founders, to ensure that they are building diversity and inclusion into their DNA. It’s an opportunity to get it right from the start.
Just a few months after launching Fair HQ, we started to confirm some of the data from the research that when you have low representation of women in leadership, you also see lower levels of inclusion for women across the business. What about people of color? What impact does representation have on inclusion for them? Meritocracy does not yet exist, even though we want it.
Empathy and the Outsider Perspective in Leadership
JL: How much have your own backgrounds influenced the work on inclusion that you are doing? Do you think it is feasible to expect those in power who are white, male, and from privilege to be able to empathize with what it is like belonging to an out group?
LT: Coming from poverty, being a five-foot, three-quarter-inch-tall Latina, and being consistently underestimated has certainly informed my thoughts and approach to inclusion. As a human with a heart, I don’t want others to be dismissed because they don’t look a certain way or come from particular social circles. As a capitalist, I don’t want to let financial opportunities fall through the cracks. There’s generational wealth to be created in including a myriad of intersectional humans and investing in them. That last bit about generational wealth can have white guys embracing all types of people. Green is green. For money, I do believe that white privileged males can and will work through their bias and become more inclusive.
GL: A lot of diversity and inclusion focuses on gender. When we focus on moving women forward in organizations, or getting women more access to venture capital, we talk about female role models, because the role model needs to be able to identify with the group that they are bringing along. That first wave has really done incredibly well for women, because women are 50% of the population and about 45% of the workforce. There are a lot of voices there. If we rely on our background, in order to be able to identify with the people whose barriers we want to break down, we always end up being in a world that excludes.
I come from a working-class background, in a small city in Ireland, so I have access to some privilege and there are other aspects of privilege that are not there for me. I cannot experience what it is like to go through life as a Black woman. It becomes very important to listen to people who can tell me that story and tell me their experiences and obstacles. Then I can help them, not in the sense that I am a hero, but we all have to start helping each other at this point. We cannot think of an insider versus outsider hypothesis. If you take that to the extreme, the idea of the privileged white man, that we always think as the people who have the most in society, because that is what the statistics tell us, then there is a role for them stopping and listening to people who they see are not getting ahead in the data at the same pace as the average.
Any human being who holds any position in an organization can stop and listen to the obstacles that people are telling them that they are facing, and believe them, which is really important, and not doubt the words that are coming out of their mouth, even if they do not apply to them. Together, we need to think about creative ways to work together towards equity. If I am helping other groups bring down their obstacles, and they are helping me bring down my obstacles, or helping another group, then we advance towards the idea that we are all moving forward based on our skills, talents, and ability, and there is a collective.
One of the questions that I have about the gender revolution in professional work is whether women who actually get through and who get to the top, because they have been outsiders, recognize the need to stop and think about other people who are facing obstacles, learn about those obstacles, and bring those obstacles down. I worry that is not the case. I say that because when I speak at events for women, lots of women turn up. And when I am invited to talk to people about racism, or when I am invited to LGBTQ events, it is not the same people.
Once we remain segregated in this insider-outsider group mentality, we will not get that final convergence. Coming from a working-class background in Cork, when I grew up, I was not aware of it. I lived in a neighborhood where all the kids played together, we were all working class, they did not have lots more than me. Only two of us went to university, I never thought about it all the way through it. It only became salient to me when I went to university. And when I was actually now networking with people who did not have to also work 30 hours a week. At different points in our life, we become aware that we are an outsider, and that we have less in common with the people that surround us. Understanding those experiences of different groups has become extraordinarily important to me. Over the next ten years, it will be the root of my work: going forward and admitting that I cannot understand fully what the person has gone through, but I can listen, learn the obstacles, and hopefully be part of a movement that brings those obstacles down.
EB: Grace, do you feel that your background as a working-class woman enables you to empathize a little bit more, because when you have had one type of disadvantage or outsider experience, you then realize how other people are feeling? If that has impacted the way that you are able to behave, how might people who have never had an outsider experience be able to gather that empathy for people in the circumstances that they are not in?
GL: The answer is definitely yes. At the same time, when I talk to people, and they tell me about an experience, I will say to them, that has never happened to me, but if I was in that situation, I would have hated it. I get it. We do not know the counterfactual if I had been born incredibly wealthy, but I might have bigger blinkers than I have now.
We need a different type of manager going forward, and a different type of leader in society across all levels where there is power. We do need active listening and leaders who want to know about each other’s experience. I met a senior manager, who spoke about the fact that he learned for the first time that a very senior managing director in this very big investment bank had been subject to racism when he was driving his car in New York, in Manhattan. He lives just outside New York, has a fantastic house, has fantastic experiences at work, his team love him—absolutely ideal life on the outside, but every time he drove into Manhattan with his children, he was being pulled over, in his Volvo, and how crushing and embarrassing it was for him. For that particular person who never had any experiences like that, it is so important for him to listen and hear that story and know about the experiences that the people on his team are having.
The first step is the obstacles that you can actually bring down. That empathetic ear is going to become much more important for managers, because that connection, particularly at a junior level, to be able to discuss with somebody something that they can not necessarily identify with, I do think it takes the mental health burden off of people in work where they can actually be more productive. Aside from doing the right thing as human beings and showing the person that they are actually cared about, it also has positive effects on productivity.
I do not think it is possible for everybody. There will be people across all types of demographics that will not be good at empathy, and perhaps you can learn it, but if they are not willing to learn maybe managing is not going to be for them and bringing along talent is not going to be for them. As we go forward, the role of the manager who actually leans in and wants to learn about people who come from different backgrounds and have different experiences, and not get uncomfortable with the negativity, is hugely important.
I noticed one of the flaws people regularly have is that they always want to put themselves in the story and say, “Oh, I identify with that, or I had this.” You need to realize it is okay that somebody had a terrible experience that had nothing to do with you and your role in listening to the story is really to make sure that that does not happen in the future. If they are highlighting obstacles, your role is to be part of enabling them to bring those obstacles down and move forward. How you teach that, I do not know. That is going to become, at the professional level, the most important skill set leaders can have.
How to Engage Leaders Resistant to Change
BG: We have been looking into how to overcome diversity resistance and how to engage majority men. It is more anecdotal, more qualitative research. Some of the ways that you can engage people who have been in positions of power quite comfortably is to encourage perspective-taking.*
We need to start creating this conversation in this space where people start listening to each other’s stories. There are some really good techniques for learning how to actually engage with someone else’s story and not making it about yourself, and being curious about someone else’s experience.
It is also a promising idea to turn the conversation about diversity on its head. Instead of setting targets for increasing representation of women, people of color, or other underrepresented minorities, why not set the target for a maximum of 70% homogeneity? Striving for a maximum 70% people of the same gender, ethnicity, cultural background, generation, or educational background makes it less about “fixing the minority.” This way, the traditional majority may feel they can still be part of the conversation. We need to create a conversation where everyone has a voice. Traditional majority men, most of the time, feel that they do not have a space to talk because they feel like they have been the perpetrator of this lack of diversity and inclusion. We need to start from a radically different space.
Unfortunately, unconscious bias training sometimes leads to pointing fingers, saying you are all biased and this is all of these terrible things that you are doing. It is obviously very important to be aware of unconscious biases, but we know from the research that being aware of your biases is not enough to actually change behavior in the long term. Let us avoid having these pointing fingers. Let us create more open conversation for people’s experiences with perspective-taking, empathy, and active listening interventions. There are a lot of training programs and small wins that we can start building into our one-to-ones and our leadership and manager trainings.
LT: Would you ever ask your money manager to irresponsibly put all your eggs in one basket? No, you wouldn’t. You’d want to ask for a diversified portfolio to optimize returns. Well, the same applies in the world of GPs and LPs. Diversification in fund portfolio investments and team makeup are key to achieving outsized returns. Fund managers need to keep this in mind and hire their teams and wire money to startups accordingly. I recommend that funds pick the best founders and the best investors, not based on homogeneity and comfort, but on what will increase the chances of honoring our fiduciary duties to our limited partners (of making them the most money we can). Because let’s be clear: optimizing for outsized returns is not possible in a portfolio of homogenous companies, founders, and investors.
KP: Strategically, a fund has three areas they need to focus on. First is internally. What is the makeup of their team? And how do the different demographic groups in that team feel about the opportunities and decision-making they have access to? The second is the diversity in their pipeline, developing an understanding of how they are sourcing companies they invest in. How are they measuring their funnel? The third is how they are supporting their portfolio companies to be inclusive and diverse.
We have found that internal leadership is the most important area. If all partners are all white men, it is very likely that the founders invested in are also white men.* The second really important thing is the investment pipeline. VCs are extremely dependent on recommendations from other founders, if your founder base is all privileged white men, a broad and diverse pipeline is unlikely. VCs need to actively reach out to different communities rather than saying there is a pipeline problem. It takes work to do that. What we have seen is in sourcing and analyzing companies, VCs tend to look at the deck, what school founders went to. If we apply a blind process as we do in hiring for firms, and start by looking only at the potential prospects of the business while removing the demographic information on the founder(s) from the process, that is going to be super effective. Research has also shown that women are asked very different questions. Implementing structured conversations with the founders and writing their answers down will help to overcome this issue. Some funds are doing quite good work around this.
BG: In terms of inclusion when it comes to access to information and decision-making, from our perspective of the day-to-day behaviors, some really easy practices are making sure that your meeting times reflect different people’s availability during the day, that you record all of your meeting notes, and that there is a shared knowledge base that people can access.
Another inclusion practice is ensuring that tasks that are not promotable tasks, such as taking notes, organizing the office party, or organizing a birthday cake for a colleague, are rotated between team members. From the research, we know that women are asked to help out with “non-promotable tasks” much more frequently than men. But not necessarily because they’re simply more helpful: women tend to face backlash when they say “no” to such tasks, while men do not. By rotating some of these non-promotable tasks, or by making some of the tasks important criteria for promotions, you are actually creating more equal spread of the stretch assignments and team tasks that also need to happen.
There is an interesting recommendation [in Inclusion Nudges for Leaders] to also use checklists to define who you are going to assign to a stretch assignment, because managers tend to have their top two or three go-to people that they think of when they have a new, exciting project. By not checking yourself, in that moment, when you are making these decisions, you are creating this self-fulfilling prophecy where the same people get opportunities and then because they have these opportunities, they are able to advance more quickly. There are some very practical tips on how to create checklists, where you make sure that every week you write down in detail: “Who are all of the people who are available for a stretch task? What is the importance of the task? Who are you considering? Is there anyone else that you should consider that could add something to that specific task?” Those are some really practical ideas to make sure that you are considering everyone equally and fairly for access to opportunities.
The same thing applies for promotions and making sure that people have access to the leadership team. There is definitely interesting research on pairing up senior team members with more junior to create these informal social networks, especially as we know that minority candidates or employees have different networking approaches as well. They are slightly less broad networking approaches than for the traditional majority. Let us make sure that we create these opportunities for people who might not have had access or who might not feel much belonging with the organization as their divisional majority counterparts.