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“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Ernest Hemingway’s 1926 novel The Sun Also Rises fittingly describes the reality facing most tech companies: Although they may be financially sound, most are unknowingly and swiftly accumulating diversity debt.
Toronto, as the fourth-largest city in North America, is home to a booming tech scene and is named amongst the world’s most innovative and diverse cities. So tech communities like the one in Toronto have every reason to take diversity debt seriously.
What is #DiversityDebt?
Evidence suggests that while some tech companies are working to embrace diversity, most are still struggling. Aspects of diversity debt is captured in the recent wave of diversity reports put out by the likes of Facebook, Apple, Twitter, Google, Square, Lyft, and Uber, detailing company demographics. However, representation is just the start.
Diversity debt is company culture, chock-full of harassment that fails to retain diverse talent and costs the tech industry $16 billion annually. It’s Snapchat featuring filters that turn selfies into Asian caricatures and promoting “digital blackface.” It’s Apple’s glaring oversight to not account for women’s reproductive health. And it’s AI systems misclassifying racialized people and not recognizing particular accents.
#DiversityDebt is the cost of a “get stuff done” mindset
Although financial debt is taken seriously by the tech community, diversity debt has not been thought about in a similar way. Diversity debt begins with a few co-founders, bootstrapping in the early days, with a “get stuff done” mindset. Such a mindset doesn’t typically include a focus on diversity; and when it does, it’s viewed as nice to have rather than essential.
Without an intentional focus on diversity from the beginning, the unconscious bias of even the most competent co-founders will find its way into the thousands of decisions made each day — from product or service design, to marketing and communications strategy, to processes, organizational culture, and hiring.
Add in a round of funding, and start to scale, and new talent is hired quickly. The upshot is that without deliberate effort to hire diverse talent at the outset, it is more likely that co-founders will hire those that look and feel much like themselves (and often those within their existing networks). While there’s nothing fundamentally wrong with this, drawing on the concept of combinatorial explosion helps us to understand why co-founders may suddenly find themselves with a team that lacks diversity — in look, feel, and mindset.
If you have four people on your team, how many one-on-one relationships exist within the group? The answer is six. When you hire four new team members and double your team to eight, now there are twenty-eight one-on-one relationships within the group. According to the concept of combinatorial explosion, when you double your team from four to eight, the number of relationships within the group nearly quintuples.
The problem is that the number of relationships between people grows at a much faster rate than the number of actual people. In this way, diversity debt moves from a gradual accumulation to a sudden accumulation, particularly when a company starts to scale.
Why is this reasoning relevant? Eventually, this growth in relationship complexity makes it difficult to encourage people who look, feel, and think differently to join your team, placing your company at a huge socio-economic disadvantage. Diversity debt can attenuate the very heart and soul of any company because employees’ wisdom and bias indispensably influence a company’s future trajectory.
Canadian tech: It’s time to lead
We need a clear solution to the diversity debt crisis. Much like how financial debt in companies can be restructured or refinanced, how can tech companies learn to build diversity equity? If any industry is poised to come up with radical, innovative solutions to a pressing social issue, it’s tech. And if a country can figure out how to work together and shape a future that benefits everyone, it’s Canada. So, Canada, if you want to become the next epicentre for tech, get on it.
Dr. Sarah Saska is devoted to helping companies navigate through the unmapped territory of diversity and inclusion. Named amongst Women’s Executive Network’s Top 100 Most Powerful Women in Canada, Sarah runs Feminuity, a global consulting firm. Sarah sits on the Advisory Council for The MATCH International Women’s Fund, and she’s an avid gender-lens investor. @sarahsaska