Implementing Inclusive Cultures

Inclusion means including everyone as much as possible. Employees who are included in every aspect of the company culture can contribute more, be more productive, and drive better decisions and results. A company’s processes and teams should allow all employees to realize and contribute to their full potential. Inclusion of employees is equally if not more important than hiring for diversity. A shared, collaborative culture follows employees throughout their time at a company and can improve employee retention and satisfaction.

There is no one-size-fits-all solution. Companies and teams are unique, and inclusion efforts must be tailored to the unique needs of each organization. Implementing an inclusive culture requires planning ahead and adapting so the company can evolve its inclusion policies and practices as teams grow and change.

Build diversity from the top down. While external expertise and tools can augment internal efforts, a good culture requires company-wide involvement across teams and functions and all levels of the organization. Only the CEO can set the vision and prioritize diversity and inclusion so all employees understand its importance, have the difficult conversations, and do the hard work required. The CEO must hold the executive team accountable for the same work, ideally as part of performance goals.

Dedicate resources to design, track, and implement changes  —  and to make sure they are working. Take advantage of technology tools designed to mitigate bias, built by founders who understand the industry’s needs. While many were developed for hiring, they’re often also helpful for inclusion.

Don’t wait. Waiting too long can create problems that are difficult to solve. We have seen engineering teams that try to bring in more diversity after starting with six white men, and it takes a lot more work. Diversity and inclusion is about investing in and accommodating differences today, taking the time to understand and empathize, and ultimately identifying potential problems early to prevent or fix them before they get bigger. D&I is not an afterthought, nor is it about risk mitigation, which is about avoiding knowledge of potential problems, using minimum requirements and a conservative approach.

What are our recommendations

Base your culture on true inclusion and not on avoiding legal risk

Outmoded diversity policies have dominated  —  and failed  —  corporate America, because they are often based on avoiding legal risks, not fixing the problem, and it shows. Employees avoid bringing problems up with HR or their managers, because they are afraid of retaliation and exclusion. As a result, problems fester, and good employees leave or end up with stronger legal claims. Problem employees do not get reprimanded, reformed, or fired.

Tech startups should innovate and come up with better solutions that start with humanity and empathy. That means not using HR and legal as the entry point for resolving conflicts and increasing diversity. Policies requiring employees to report behavior they consider inappropriate, triggering an automatic HR investigation, often exacerbate the problem.

HR is often seen as an enemy, and rigid HR policies, like zero tolerance, can ensure that no one comes forward. These approaches mean that day-to-day exclusionary and offensive practices stay hidden, along with their cumulative effect of driving women, LGBTQA employees, employees of color, and employees from other underrepresented groups out the door in disproportionate numbers.

Employees also don’t come forward when they don’t see evidence that a company is trying to drive change. They may think that nothing will happen, be frustrated by the lack of alternative avenues for reporting, or wonder what to do if there’s no policy precedent for an issue they want to report. Who would file a formal complaint against their manager or an executive for making a sexist or racist comment?

Companies should explore alternative approaches to the HR path, as we discuss here and in resolving conflict, which suggests an ombudsperson alternative. Unless we rethink solutions, companies will continue to perpetuate the pattern of competing interests between HR and the needs of employees.

Use a team to build culture

The CEO needs to lead, and a team can help. As your company grows past 75 employees, you should be forming an inclusive group focused on revising and updating policies that promote your company’s values. Their diverse perspectives will help you build a better culture, and create more buy-in. Broad representation can also help the group avoid implementing norms that feel exclusive.

Staff for building inclusion

Each company needs someone to build culture, set boundaries and expectations of behavior, communicate them clearly, and make sure people follow them. In a small startup, it is usually the CEO or a co-founder. But as your startup grows, you will need someone else to deliver and reinforce these values. Dedicated HR and D&I staff should be an early priority to proactively build inclusivity at your company. Medium-sized companies usually have an HR person or team that is responsible for both recruiting and sometimes retention. HR can reinforce the company’s commitment to D&I, but a separate D&I lead is necessary as you grow. HR must set up fair processes for people ops and hiring, onboarding, promotions and compensation, and performance reviews. It should drive and provide operational transparency. This includes processes like building organization charts, training for both employees and managers, building the code of conduct, and developing and implementing benefits. HR’s job isn’t to run to legal, but to collaboratively solve problems long before they get big enough to hit legal’s radar.

Hire an experienced HR person

Your first HR hire should be an experienced HR professional who will be able to handle the difficult issues that come up in any company. The most important part of the job will be to exercise good judgment. The markers of good judgment include:

• Diversity and inclusion experience
• Commitment to diversity and inclusion
• Creative problem solving
• The ability to roll up sleeves, have hard conversations, and think long-term
• Tech experience, preferably startup experience, for credibility with your employees and needed skills for driving HR initiatives

It may not be easy to hire a strong candidate with these characteristics internally. Rather than compromising, a better option is to hire a more junior HR coordinator and bring on an advisor or contractor with that background to provide advice and judgment, especially around culture. Make sure they will be available on short notice to help navigate problems as they arise.

Hire and empower a D&I lead to execute the CEO’s vision for inclusivity

Research shows the biggest gains in managerial diversity and effective diversity programming happen where clear responsibility has been established. ¹ The CEO, working with inclusive teams, needs to designate an experienced D&I person to monitor implementation and evaluate effectiveness of diversity and inclusion policies. This person works at every level of the company and plays an active role in developing and enforcing policy.

The CEO needs to designate a person within the organization to monitor implementation of policies and evaluate their effectiveness. However, responsibility can also be assigned through the creation of a committee. Ensure that person, or committee, has the power to take action and make tough decisions where required. Ideally, those tasked with this work should have some level of expertise related to diversity and inclusion, and be allowed to focus on inclusivity on a full time basis. Some companies hire a Head of Diversity and Inclusion to do this work.

The D&I lead for this role should be full-time and internal, focused on preventing, identifying and solving problems. When possible, others should be responsible for the company’s sponsorships of external events and recruiting efforts.

Today, the D&I function tends to sit in HR, legal, or finance, and is often focused on recruiting and hiring without responsibilities for inclusive internal policies. It also often lacks authority to drive change. It may focus on a subset of underrepresented groups rather than full inclusion. D&I should cover company-wide internal goals as an operational role. The goal should be growing people, not just hiring them, and should be tied to metrics of the company across all managers and programs.

Unfortunately, D&I often serve as a marketing function, with some D&I hires even reporting to Corporate Social Responsibility (CSR) leads. Instead, D&I should not be a PR statement; it has an important role internally and externally, and external announcements should match the internal reality or a company risks exacerbating problems.

D&I leads should report directly to the CEO or COO for maximum efficacy. The D&I lead needs to have the support of someone who can fix the problems identified from a high level — someone who has responsibility for processes and people. CEOs should always think about and prioritize diversity and inclusion; when there is a COO who cares about diversity, their role in people operations can make them an appropriate manager and owner of D&I  —  as a proxy for the CEO. The D&I lead should serve as the CEO or COO’s deputy initially as an advocate, and eventually as a full-time dedicated leader at the VP level in the company.

The D&I role should be internally focused on building D&I into the culture, into every team, into every function, and into the company as a whole. External initiatives around hiring and PR may be a small part of the role as well. Team members who reflect the diversity of the company should be involved in the process of choosing the D&I lead. If you do not have any, consider having an outsider vet candidates.

It may seem early to add a D&I specialist at 75 employees, but in our experience, problems can start even earlier and are hard to fix later.

Encourage and support employee resource groups

Many companies have affinity groups or employee resource groups for connecting underrepresented people within their companies so they can build relationships and feel less alone. Most large corporations have a group for women, for example. These groups are typically voluntary and are seen as a core part of diversity and inclusion initiatives.

Employee resource groups can be helpful for building camaraderie and belonging for employees who participate. They can also be educational for people who may not be part of the group but are open to learning. ERGs are an example of bottom-up, employee-led and driven diversity initiatives that can promote buy-in, strengthen networks, and generate valuable feedback for D&I leads.

For example, at Twilio, people started forming their own Employee Resource Groups organically. Twilio set up clear guidelines for company funding for ERGs: (1) group fits in an EEOC category (with an exception for its LGBTQA ERG); (2) includes at least four active members; (3) is open to all; and (4) holds one event (sponsored or internal) per quarter. They funded events, starting with lunchtime discussions.

We recommend keeping ERG activities open to encourage learning, build trust, and dissipate potential fear of others. However, there is a tradeoff in openness of discussions when there may be some topics that are uncomfortable to discuss with outsiders or when there are outsiders who may unintentionally disrupt or sidetrack conversations.

In early tech startups, there often aren’t enough people in a particular group to form an ERG. When you have only one Black engineer or two women engineers, what should you do? Are the earliest members of underrepresented groups hired expected to spend time thinking through these issues and setting up these groups? If so, are you going to compensate them (either with additional pay or by decreasing other work obligations)?

In those situations, you may find it helpful to take advantage of external resources to support underrepresented groups when there are not enough people to form an ERG. In addition to peer support, you can implement a sponsorship framework to consciously develop underrepresented employees.

Develop effective codes of conduct

Workplace codes of conduct govern behavior and ethics of employees in a professional environment. In addition to a broad statement of principles, a code of conduct can include policies concerning dress code, attendance policy, use of company property, and appropriate workplace behavior. Ultimately, a company’s code of conduct codifies and communicates company values and expected behavior of its employees.

Well-designed codes of conduct serve as critical tools for building workplace culture, and can be instrumental in the creation of an open, respectful environment. Leadership can use codes of conduct to communicate their commitment to diversity and inclusivity with employees as well as users, clients, and vendors. The specific policies contained within these documents can clearly articulate the ways employees uphold their organization’s commitment to inclusivity in their everyday interactions and behaviors. Moreover, codes of conduct can create a default expectation of safety and accountability when standards are breached.

Codes of conduct need to be clear, referenceable, and shared with every employee. They should be monitored for effectiveness and compliance, and they should be included in the employee handbook, where they will be easy to find and reference. [guide button]

Develop effective, integrated policies

Codes of conduct, anti-discrimination, and anti-harassment policies are crucial components of any inclusivity initiative, and they must be clear, communicated, and enforced.

The code of conduct sets behavioral standards: The policy demonstrates how they will be implemented and enforced. As you develop policies rooted in your code of conduct, you should consider including:

• Power dynamics, both in and outside a workplace, that may contribute to unequal status
• The performance and culture benefits of the policy for majority and minority groups, prioritized over legal risks
• Principles of inclusivity, rather than singling out behaviors
• A zero tolerance stance for violations of inclusive values, not a zero tolerance rule for specific actions, which can be too rigid and may inadvertently suppress diversity
• Explicitly making policies apply to everyone at the company and ensuring that upper management and executives model company values

Be thoughtful and oversee the effort. Poorly crafted diversity policies can do more harm than good; studies show they can lead high status individuals within organizations to discount claims of unfair treatment, even when such claims are justified, ² and they can result in a decrease in diversity. ³ Ones that are not enforced are ineffective, and employees figure that out quickly.

Develop an effective employee handbook

An employee handbook sets out policies and practices as well as benefits, and can be an important tool for diversity and inclusion. A company should be transparent about what it expects from the employee (behavior, norms, work product) and what the employee can expect from it (culture, benefits, promotions and feedback, process for when others don’t meet expectations). The employee handbook sets initial expectations, as it should be part of onboarding when employees start. Employees should use it as a guide for information and for handling difficult situations, ranging from when they need to figure out benefits to how to address harassment or discrimination. An effective handbook should be a comprehensive and definitive resource for information on policies and on what employees can expect and can be expected to do. It should include the code of conduct and should link the values and culture of the company to the policies and specific behaviors the organization wants to encourage and discourage.

Resources

We share these helpful references as starting points and encourage you to continue exploring.

• Case Study: Clef
• Case Study: Twilio
• Example employee handbook
• FaunaDB Job Descriptions
• Strategic Culture Change
• How to Create Successful Organizational Culture
• Research Projects: How Stereotypes Shape Women’s Career Opportunities
• Four Organizational Culture Types
• Argument Cultures and Unregulated Aggression
• How One Startup Baked Diversity Into Its Culture
• My White Boss Talked About Race in America and This is What Happened
• On Making Black Lives Matter
• @chescaleigh 5 tips on how to be an ally
• Unconscious Bias FAQs

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