How Microsoft Can Solve Its Diversity Problem

By Barbara Frankel

How Microsoft Can Solve Its Diversity ProblemThe most appalling information coming out of Microsoft’s latest forced EEO-1 disclosure isn’t the lack of racial/gender diversity in its workforce and management. It’s the continuing lament from Microsoft—and from Google and Facebook—that the “pipeline problem” (the lack of available talent) is the source of its diversity failure.

There are other tech companies that have dramatically improved their workforce and management demographics by using proven diversity-management strategies, including formal cross-cultural mentoring, employee resource groups for recruitment and talent development, and deep relationships with schools and communities. Those companies, including IBM (No. 23) and Dell (No. 32), are branded as diversity leaders, indicated by their earning positions on the DiversityInc Top 50 list.

More companies in other industries, including MasterCard (No. 6), AT&T (No. 10) and BASF (No. 26), now also consider themselves technology companies and are competing for the same talent from underrepresented groups. That means their reputations as diversity-and-inclusion leaders— and their reliance on evolving diversity-management initiatives—will give them a considerable advantage.

Microsoft’s website has a lot of nice stock art of “diverse” individuals and talks in general terms about the efforts of its employee resource groups and its commitment to inclusion. But the numbers tell a very different story.

Below is the makeup of Microsoft’s workforce, according to the latest EEO-1 numbers the company released under public duress, compared with two Top 50 indexes.

MicrosoftTop 50 AverageTop 50 Tech

Management numbers are no better for Microsoft.

MicrosoftTop 50 AverageTop 50 Tech

The latest EE0-1 numbers show Microsoft isn’t catching up quickly, despite publicly avowed efforts and a push from the Reverend Jesse Jackson. The company reports that Black representation is up only 0.3 percent and Latino representation up only 0.5 percent in the last year.

So what should Microsoft do? Here are some specific practices Top 50 “tech” companies utilize that would help:

• Get your CEO and senior leadership on board—visibly. Microsoft CEO Satya Nadella made the wrong kind of headlines last year when he told women not to ask for raises but to have faith in the system.

There is no apparent quote from Nadella related to diversity on Microsoft’s website, nor are there business-related quotes on the value of diversity from other top executives. By contrast, 92 percent of Top 50 companies have visible quotes from CEOs on the value of corporate diversity on their corporate websites.

Leaders who put diversity first, such as Christi Shaw, President of Novartis Pharmaceuticals Corporation (No. 1 in the Top 50), see dramatic success. About 60% of her direct reports are now women. “D&I is helping to move the needle on key aspects of our business—from new-product development, to clinical-trial diversity, to commercialization and marketing efforts,” she told DiversityInc.

Another example is AT&T Chairman and CEO Randall Stephenson, who created and chairs his company’s executive diversity council and is directly involved in overseeing D&I success. Although AT&T is one of the largest companies in the Top 50, with 232,286 U.S. employees, Stephenson is clear that diversity is crucial to the business future and that means his personal leadership. For example, he talks about employee resource groups often and says they are critical. He also personally attends AT&T’s ERG leadership summit each year, as do his direct reports. AT&T’s resource-group membership grew 39 percent last year and diversity leaders attribute much of that to leadership’s personal involvement.

• Build the pipeline early by working with schools and constantly emphasizing the value of tech jobs to women, Blacks and Latinos, as well as to LGBT students and students with disabilities. For example, BASF brings its Kids Lab program to locations around the country and since 2010 has shown thousands of children how fun and exciting chemistry can be. IBM has several STEM education initiatives, including P-Tech (Pathways in Technology Early College High School), a system of innovative public schools starting in ninth grade and going through two years of college to give students a no-cost associate’s degree in applied science, engineering, computers or related disciplines.

Microsoft, to its credit, discusses several community initiatives on its website, including working with high-school girls and a Minority Student Day. What’s not apparent here at all is the involvement of its senior executives on nonprofit multicultural boards, a critical way for companies to understand underrepresented communities and show real support beyond just writing checks. Almost 25 percent of Top 50 senior executives (CEO and direct reports) sit on the boards of multicultural nonprofits, a percentage that has more than doubled in the past four years. In the Top 50 tech company index, 42 percent of senior execs sit on multicultural nonprofit boards.

• Focus your employee resource groups on recruiting, engaging and promoting STEM talent. At IBM, the women’s employee resource groups keep tech women “focused on their careers, professional and personal development. We help them enable goal setting and we really create a community where IBM women can feel leveraged and networked,” says Lisa Gable, Manager, IBM Technical Programs for Women.

At Dell, Bobbi Dangerfield, Vice President, Commercial Sales Operations and co-chair of the North American chapter of Dell’s Women in Search of Excellence (WISE) employee resource group, notes: “WISE is really about attracting, developing and retaining our women in the company. People like to work with companies where they see people who look like them.”

Microsoft has had employee resource groups and networks for decades and highlights them on its corporate website. The company says these groups provide “career development, support, networking opportunities, mentoring, community participation, product input, and assistance in activities that promote cultural awareness.”

But Top 50 companies are providing more than generic statements—they are increasingly tracking the recruitment, retention, engagement and promotion of their resource-group members and linking the value they bring to the organization to compensation. A total of 38 percent of the Top 50 now measure retention of group members versus non-group members, triple the percentage five years ago. And 58 percent measure engagement of group members, while 34 percent measure promotions of group members, both more than double the percentages five years ago.

• Ensure that people from underrepresented groups have access to technical mentors and sponsors who can address their development. IBM, for example has had significant success with Technologista, a virtual community open to women across the company that connects them with technical mentors and provides links, videos and podcasts to questions about the technology industry.

Microsoft’s website doesn’t highlight its mentoring program. Top 50 companies increasingly focus on cross-cultural mentoring, noting the direct result to increased engagement, retention and promotion of high-potentials, especially from underrepresented groups. Management mentoring participation at Top 50 companies has increased from 27.2 percent to 35.1 percent in the past six years, while participation from the top level (CEO and direct reports) has increased from 74 percent to 92 percent. For more information, see our recent Web Seminar on Cross-Cultural Mentoring.

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