Katja Toropainen (Inklusiiv)
We spoke with Katja Toropainen, founder of Inklusiiv and former chief program curator at Europe’s biggest tech conference, Helsinki-based Slush, about tech and VCs embracing inclusion. Katja provides best practices, examples, and case studies for both tech and VCs focusing on diversity and inclusion in company culture. She highlights how embracing continuous learning and development and setting strong targets with good metrics are a key starting point on this journey. This is one of the most applied conversations in the volume—worth diving into for anyone who wants to take inclusion seriously.
Interviewed January 2021
How Tech Inspired a Move to DEI
Johannes Lenhard (JL): Not too long ago, you were running speakers and programs at Slush. Now you are leading a DEI-focused community you founded. How has the tech world that you have been steeped into for the last years treated you so far? What has driven you on?
Katja Toropainen (KT): I started learning more in-depth knowledge about diversity and inclusion (D&I) challenges in tech during the years that I led the curating of speakers and programs at Slush, the biggest startup event in the world. I wanted to learn more about D&I to understand our responsibility as event organizers to showcase diverse content and speakers. Had we not paid attention to D&I, our speaker lineup would have been almost exclusively white and men. I dove straight into the rabbit hole of finding more and more information about the history of diversity in tech, as well as diversity and inclusion best practices. It was devastating to realize how different turning points and decisions in the history of tech had led us to where we are now.
I started Inklusiiv as a non-profit to bring change, first as a movement that in the long run can have a lasting impact. After my years at Slush, I was pondering that I would probably want to leave the tech industry unless the industry got more diverse and inclusive. So, I decided I wanted to be part of the change and I chose to work in the D&I field. We are striving for an industry free of sexism, racism, or other forms of discrimination or harassment, where women and underrepresented founders, operators, and investors feel valued and appreciated.
It’s shocking to discover data and research that reveals the lack of funding for underrepresented founders. These same biases affect what kind of companies we build and what sort of products and services we design. The tech industry is still representing our world from a narrow point of view, with over 90% of funding in Europe going to all-male founding teams* and the whole industry being extremely male-dominated.
My work with Inklusiiv, and being part of the Atomico Angel Programme, has given me more optimism because I’ve found supportive communities involved in building a more inclusive tech industry and got to know so many other people dedicated to advancing diversity, equity, and inclusion (DEI). Important reports such as the State of European Tech by Atomico and Slush and the Nordic Startup Funding Report by Unconventional Ventures bring to light invaluable new knowledge, while communities and networks for angel investors that work towards investing in and supporting more female founders, play a key role. Moreover, I feel very humbled and empowered to be able to work with people and companies committed to driving DEI topics forward.
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Change takes time, but with time and more and more positive results, it starts to happen. I truly believe that in the upcoming years, the tech industry will become more inclusive towards underrepresented groups of people.
Diversity Won’t Last without Inclusion
Erika Brodnock (EB): What is your definition of inclusion and how important would you say it is? Is it something that is still underdeveloped in the tech industry, because everyone is so focused on diversity?
KT: Where diversity focuses on hiring diverse talent, inclusion makes sure that people will want to stay in organizations. Without inclusion, diversity will walk away from the organizations, and in the worst case, even from the whole tech industry.
According to the US-based research by Accenture and Girls Who Code in 2020, 50% of women in tech leave the industry by age 35 and 37% cite the non-inclusive work culture as the primary reason. The percentages are even worse for women of color and women who belong to sexual or gender minorities. The importance of inclusion has been constantly highlighted by various research pieces and reports, for example, in the annual McKinsey report investigating the business case for diversity. In the 2020 report, there is, so far, the strongest argument for inclusion; it’s something that every business needs to commit to truly flourish.
According to Deloitte research, combining diversity with inclusion efforts leads to better business outcomes. They found out that organizations with inclusive cultures are three times as likely to be high-performing, six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.
Inclusion is about creating a sense of belonging. Like other DEI experts, I also agree with the emphasis that inclusion is about taking those daily actions while understanding that you can never be done or ready. Inclusion really is a lifelong journey of learning and developing practices and processes.
In terms of teamwork or organizational environment, we define inclusion as the work environment where everyone is treated fairly and respectfully. Individuals across the company have equal access to opportunities and can really fully contribute to the organization’s success. Inclusion fosters psychological safety and a sense of belonging, welcoming new ideas and making sure that everyone’s voices are being heard. Some barriers of inclusion are, for instance, unconscious biases, lack of representation, and privileges. Building inclusion is also not just a one-person job but requires effort and commitment from everyone in the organization.
Within the tech startup and VC ecosystem, or within any industry, the most important thing to understand is that most of the DEI challenges are structural. In addition to changing our behavior to become more inclusive, we need to change how the systems and structures work. This means figuring out ways to make the systems more fair and inclusive in terms of how we hire people, how we decide on promotions, and how we share responsibilities.
Concrete Steps toward Inclusion in Organizations
JL: Can we go into some concrete ideas for what startups can do to focus on inclusion and where is it particularly important?
KT: In any company or organization, to create tangible change, there needs to be a stringent way of figuring out priorities and setting up measurable goals. Otherwise, change doesn’t last. At the same time, I believe that we still need plenty of awareness-building, learning, and education around the topic of DEI. But in order to do something concrete, we need to move from awareness-building to action.
For instance, while it’s great that unconscious biases are now much more widely acknowledged, acknowledgment by itself does not make a lasting impact. We need to focus on the processes and structures in the organization, such as recruiting or leadership principles, that are affected strongly by unconscious biases. By changing these structures to more inclusive ways, we can truly make a difference.
Great concrete ways to take on this work includes things like measuring employee and leadership demographic diversity and running employee surveys to find out about their engagement and viewpoints. Based on these tangible insights, it’s possible to find priorities for improvement and measure development and success in inclusion practices.
Figuring out the DEI path for any organization can be really challenging as there are a lot of different aspects to focus on. Many companies have good intentions but don’t know what to do or where to start. That’s where DEI experts can provide value in helping them to learn and find ways, in collaboration with their team, to figure out specific priorities and steps forward. At Inklusiiv we prefer to host workshops and trainings, led by our experts, with a limited size of team. We’ve seen how inviting the people in teams to co-create the inclusion processes leads to better results: more tangible goals, and clearer actionable steps.
Case Studies and Research on Inclusion
The positive side of things is that there are plenty of best practices on how to include DEI in every function of an organization, including product management, marketing communications, engineering, and leadership. Where there’s people, there’s a need for inclusivity.
One real-life case example is told by Kjartan Slette, co-founder of a Norwegian growth company Unacast, on the stage at Slush 2017. They were a company of 20 people when their co-founders realized the lack of diversity in their team. In just six months, they did a complete turnaround. The number of women in their team went from 17% to 36%, of which 31% were in engineering. Before that, they had no women in their engineering team. When asked about how they did it, their answer was quite simple: commitment. They realized they had a problem, they wanted to improve on it and worked hard to make the change happen. There are plenty of different actions they took, ranging from internal discussions and changing the hiring process to sharing their story publicly, revising the company’s culture, and many more. Of course, nothing happens in the blink of an eye, but the solution itself is easy—if you want to make it happen, commit to the work.
Another Nordic tech company, Spotify, is well-known for investing in diversity, equity, inclusion, and belonging. They launched their diversity data report in 2018 and are actively publishing new D&I articles and data on their HR blog.
Excitingly, DEI is becoming a necessary leadership competency. Leaders who want to stay relevant during the 21st century need to develop these competencies to be able to continue leading. Some traits of inclusive leaders are, for instance, the awareness of one’s biases, prejudices, and privileges. Inclusive leaders are also committed to diversity and inclusion topics and able to discuss these matters.
Deloitte has been publishing research about inclusive leadership and the conclusions are clear: inclusive leadership has a direct impact on team performance. In any company, the leadership needs to be committed to learning about D&I and driving this culture forward. The research also highlights the importance of curiosity in understanding how different people’s diversity, experiences, and backgrounds could work together in the best possible way.
The Investor Role in Building DEI
EB: Would you say that this also applies to the world of investors, and do you have any best practice examples to share for them?
KT: Investors and VCs have a crucial role in building a more diverse and inclusive technology industry. They have the opportunity to, first of all, affect improving D&I inside their own team and organization. In addition, they hold the power to affect who is building the future companies and getting funding. In addition, as investors and board members, they have the possibility of making sure D&I is prioritized in their portfolio companies and helping them to build these crucial skills that are required to build future successful companies.
Historically, white men have built tech and VC companies for themselves—for other white men. This means that their perspective is deeply anchored in the structures and cultures, making the challenge of inclusivity systemic.
Tech and the VC industry need more people who understand the specific challenges of this ecosystem when it comes to DEI. Our ecosystem needs to be better at listening to underrepresented people and educating ourselves on effective allyship. To become an ally, any investor can be more intentional in embracing DEI by educating themselves and by reading content by women, people of color, and other underrepresented groups. Learning about the structural privileges we have is important. To become an ally means also taking action and actively using one’s own position and power to drive change. For instance, a white investor can educate themselves more about the privilege of being white—free from structural racism—and use that privilege to make the industry more equitable for all. Many investors say that they would love to fund more underrepresented founders or diversify their deal flow. The solution for VCs is pretty simple: hire more women, people of color, and people from underrepresented groups to your investment team—especially as partners and general partners. That’s the solution. The common challenge for investors seems to be commitment. As said before, D&I issues take work and long-term commitment. For instance, it might take efforts to diversify one’s personal networks and learn more about DEI. Like with Unacast, changes in team structures and practices take time and effort. My best advice would be to start this work early enough. If you have built, let’s say, a very homogeneous team of 10 people, you might already have difficulties attracting more diversity in your team. Funds such as Backstage Capital by Arlan Hamilton and Ada Ventures by Check Warner are leading the way, building funds with diversity and inclusion in mind since the beginning.
Improving Inclusion in the Tech World
JL: Looking forward, when it comes to specifically inclusion in the tech world, what is missing? What do people need to focus on next?
KT: What seems to be hindering development is the fear that makes people or companies say that they are already diverse and inclusive, pretending they are there already. We should normalize and acknowledge that no one is there yet, no individual, organization, or even society itself. Acknowledging this will enable us to begin the real work. Understanding the problem and complexity of this also requires a lot of societal knowledge. This is why intersectional knowledge both from business and, let’s see, humanities and sociology is important. Diverse understanding of society is key. In addition, we should be learning more about intersectionality within diversity, our privileges, and allyship.
We humans are imperfect and filled with unconscious biases, stemming from societal structures and biases. We just all need to acknowledge that and commit to this lifelong journey of learning, getting better, and making progress—that’s the solution. There are no easy, quick fixes that solve everything. Or if there were, those would have already been adopted by most organizations.