Good signs the tech industry is fixing its diversity problem

When Microsoft’s chief executive, Satya Nadella, commented that women should have faith in the system to give them the raises they deserve, he knew he had misspoken. His words at the Grace Hopper Celebration of Women in Computing, last October, caused immediate outrage. In an e-mail exchange with me after he left the stage, he wrote: “I just gave a wrong and terrible answer to the question today. I blew the context completely and gave general career advice. I take equal pay for equal work — and an environment where women are comfortable to ask for a raise — as a given. The real lesson for me is that as a leader I need to talk/act on this issue vs. general words of encouragement and advice.”

This blunder was deeply transformative for Nadella. It caused him to become acutely aware of the depth of the problem and left him determined to make Microsoft a role model for the tech industry. Gwen Houston, Microsoft’s general manager of global diversity and inclusion, says “It’s been impressive to watch how Satya seized this as a huge learning opportunity. He looked within and broadened the conversation to learn from others and help others learn.”

Houston says that, since the Grace Hopper event, Microsoft has expanded training for all employees to foster an inclusive culture and to ensure accountability. Microsoft base pay among all genders and races in the United States varies by less than 0.5 percent, but monitoring systems have been established to ensure that no salary discrepancies arise. Microsoft has mandated training on issues such as unconscious bias, has focused hard on recruiting more-diverse talent at all levels, and is working on building the availability of talent at the high-school level. Nadella himself has been asking tough questions and reviewing qualitative scorecard data. A question he asks repeatedly is: “What should we do better?” He has given his leadership team several measurable diversity goals and mandated that there must be not only equal pay for equal work but also equal opportunity for equal work.

Facebook has an equal challenge. Thirty percent of its workforce is female; 4 percent Hispanic; 2 percent African-American. Women constitute only 15 percent of its tech workforce.  These numbers are in the same ballpark as Microsoft’s and it too is determined to correct the imbalance.

Even though Mark Zuckerberg’s awakening to these issues wasn’t as traumatic as Nadella’s, he has made diversity a personal focus, according to Maxine Williams, Facebook’s global director of diversity. She says she is working closely with Sheryl Sandberg, who penned a book on this subject, Lean In, as well as with Zuckerberg.

Williams told me that she had spent several months looking at Facebook’s diversity practices after she was brought on board at Facebook in 2013. She worked with the recruiting teams to analyze the entire hiring process in order to enhance sourcing of a broader range of candidates and to make the on boarding processes more welcoming and inclusive. “People quickly grasped how important it is for a company like ours, building products to connect the world, to have as many diverse perspectives in the building as possible,” she says.

Starting with the tenet “Nothing here is someone else’s problem,” Facebook revamped its training on unconscious bias and launched a series of programs to educate all employees on diversity. It is working on improving its talent pipeline by recruiting from diverse colleges such as North Carolina A&T State University, Howard University, Spelman College, and the University of California at Riverside. As well, it is offering internships to minority groups that historically have been underrepresented in tech.

Intel’s diversity numbers aren’t much better than Microsoft and Facebook’s. Its chief executive Brian Krzanich, made big waves at the recent Consumer Electronics Show with an announcement that Intel had set a concrete goal for its workforce — at all levels of the company — to become “fully representative” of the diversity of the country’s available talent by 2020. He backed this with a commitment to spending $300 million on the effort, which includes support for women and people of color to enter the industry.

Rosalind Hudnell, Intel’s chief diversity officer, detailed in an e-mail to me several internal and external efforts that Intel is launching, which she says Krzanich and Intel’s president, Renee James, will oversee personally. She says Krzanich has told managers that their pay will be linked to their success in attaining diversity.

Hudnell says that Intel is focused on educating its employees on the importance of diversity, listening to and addressing concerns, and putting into place tracking mechanisms. She says the company is running forums for the thousands of managers who do the hiring and promotions and create the environment in which Intel employees work. In these, they share and analyze detailed diversity data and discuss what needs to change, determine where the shortfalls are, and set firm goals. The company is planning to create dashboards on which employees can monitor progress. As well, there is a renewed focus on building a more inclusive culture, correcting the sources of unconscious bias, and enhancing mentoring and sponsorship programs.

There are also several efforts to improve inclusion of members of minority groups by tapping into the talent pipeline of employee groups, such as the Women at Intel Network, the Intel Black Leadership Network, and the Intel Hispanic Leadership Network.

The tech industry has surely been guilty of negligence in diversity. But this industry not only tolerates failure, it embraces it — even if it is its own. It has a special word for failure: “pivoting.” And tech is now pivoting. I have little doubt that over the next few years we will see significant change. Said Houston: “It was a proud moment for me at our annual 2014 shareholder meeting, as I watched our CEO Satya Nadella, an Indian man; our CFO, Amy Hood, a woman; and our chairman, John Thompson, an African American man, take the stage.  Their individual and collective presence was a huge indicator of progress.” We can expect to see such indicators in tech become more common.

Vivek Wadhwa is a fellow at Rock Center for Corporate Governance at Stanford University, director of research at Center for Entrepreneurship and Research Commercialization at Duke, and distinguished fellow at Singularity University. His past appointments include Harvard Law School, University of California Berkeley, and Emory University.