IT industry's lack of diversity remains key issue in 2021
The first quarter of 2021 saw almost no changes in the composition of IT leadership teams. Here's how channel partners can change the status quo.
Dave Sobel is host of the podcast The Business of Tech and co-host of the podcast Killing IT. In addition, he wrote Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business.
In this video, Sobel provides a 2021 update on Business of Tech's quarterly reporting on the diversity of leadership teams in the IT industry. He also provides advice on how IT solution providers can cultivate greater diversity within their organizations.
Transcript follows below.
This is the third-quarter reporting around the diversity of leadership teams in the IT industry, with a specific [focus] on those serving the IT channel and SMB customers.
The first report was in September of 2020, focused on 100 initial companies and 876 humans, finding 82% were white, 19% women, and just shy of 2% Black. [The report] was expanded to 300 companies, 2,966 humans and more slices of data for December 2020.
[Editor's note: The Business of Tech's company diversity reporting examines the composition of leadership teams in terms of the following categories: Black, white and non-white, and male and female.]
For this report in March of 2021, I've maintained 300 companies. There have been a handful of companies removed due to the fact they stopped publishing their leadership teams on their website, and those have been replaced with new ones.
Overall, we are now measuring slightly more humans. Without fail, the numbers have not moved more than one full percentage point overall. Size does not matter. Nor does looking at the data on vendors versus providers. Nor does it do so on the U.S. versus the rest of the world.
I won't belabor the specific percentages, and I'll highlight them here in the video and in a downloadable format linked in the podcast or from the [Business of Tech] website if you want to see the numbers.
No need, really. The headline didn't change. Nearly identically to December [and] now in March, 84.7% are white, less than 2% Black and 18.82% are women. I will continue to update this data quarterly.
If you would like to report your company into the database to help make sure the data is more accurate and to push for visibility, you can do so. You can visit businessof.tech, and there is an option to reach out. The intention is to highlight success stories, as well as highlight the difference between the average and those who are monitoring their data.
In December, I highlighted how this configuration of leadership teams [is] designed to underperform. Check out that episode.
Review of the industry data
McKinsey has data showing diverse management is 35% more likely to have financial returns above industry mean. The Carlyle Group found 12% more earnings per year for companies with diverse boards at the helm.
My data is not off from the norm. Korn Ferry did an analysis of chief information and technology officers in 2019 and found about 18% were women, and it raises about 1% a year.
I want to highlight Wired's coverage of "diversity theater." Many of the self-reporting can be summed up in these two paragraphs:
Consider the annual ritual of the diversity reports themselves. When companies issue statements after missing diversity goals, the apology usually comes from a chief diversity officer -- often one of the few nonwhite executives at the company in the first place.
'We aren't where we'd like to be,' Facebook's chief diversity officer, Maxine Williams, wrote in 2017. 'We continue to have challenges,' she wrote the next year. In 2018, she was one of only nine Black females among Facebook's top 1,053 executives. 'We must continue our work,' wrote Melonie Parker, Google's head of diversity, in 2019. Google listed only five Black females among its top 357 officers in 2018, the most recent numbers available.
You'll note I'm not spending as much time on my own data this quarter -- not only because it hasn't changed, but also because there isn't much to work with from the space.
NASDAQ submitted a proposal in December requiring companies that list on the exchange to report their board diversity and to have at least one person who identifies as a woman and one person who identifies as an underrepresented minority or LGBTQ person on their board or explain why they don't. Investment companies BlackRock and State Street are asking companies to report the board diversity. And California law requires businesses headquartered there to have at least one board member from an underrepresented community by the end of this year.
And before you think this is a low bar, NASDAQ found that in the six months prior to the diversity proposal, 75% of companies listed on the exchange wouldn't have met the requirements.
What channel companies can do
So, let's look at the practical things that can be done.
First, a reminder: You can expand leadership. Boards and executive teams can just be expanded. Don't wait for someone to leave. Just make more leaders. This is very true for small companies. You can easily make changes.
Second, from a hiring perspective, a simple recommendation: When hiring for any position, do not stop looking at candidates until you have talked to at least one that meets the criteria. This is likely going to be hard to start. You will find your current system may not be presenting enough diverse candidates. Rather than complain, you will change the system. Over time, you will find a system that does bring you more candidates.
Finally, let's talk about the cultures. Ensono's "Speak Up" 2020 report says 59% of women of color and 43% of white women said they experienced discrimination at tech conferences. That's just conferences. At a very minimum, leaders need to be examining their internal culture. Are you building an inclusive environment to retain any talent you do hire? This may seem simple, but the indicators are we aren't retaining enough talent, either.
I'm keeping this very simple. Why? The three things I just discussed are big. These aren't easy. Just addressing them would be a huge amount of work for many -- particularly, small organizations.
And if the data is any indication, we need that. A lot. Small solution providers are not looking very good in the data set.
If this is a multiyear process, starting now helps. And, remember, the data is really strong for those who do invest here.
About the author
Dave Sobel is host of the podcast The Business of Tech, co-host of the podcast Killing IT and authored the book Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business. He owned and operated an IT solution provider and MSP for more than a decade, and he has worked for vendors such as Level Platforms, GFI, LogicNow and SolarWinds, leading community, event, marketing and product strategies, as well as M&A activities. Sobel has received multiple industry recognitions, including CRN Channel Chief, CRN UK A-List, Channel Futures Circle of Excellence winner, Channel Pro's 20/20 Visionaries and MSPmentor 250.