Open letter to my white CEO, VC colleagues: “meritocracy” is likely a racist policy

We need to challenge the underlying assumptions behind some of our strongest beliefs.

I mentioned in the last blog post, #BlackLivesMatter, I’m reading a profound book on antiracism by Ibram Kendi (How to Be an Antiracist). Ibram is a professor who has studied thousands of historical pieces on slavery and racism. He posits a few core points (among many others):

• the word “racist” and “racism” has become a pejorative, creating an emotional reaction in most to hearing just the word, when it doesn’t have to be. It can be merely descriptive.
• A racist policy is a policy that creates, continues, upholds or furthers inequality amongst a group of people (most notably people of different races, but he doesn’t really distinguish whether it’s a group categorized by race, religion, sex, creed, etc…).
• we live in an unequal society because of inherently racist policies — possibly many that were well-intentioned but had unintended consequences or were created by unconscious biases.

Reading the early part of the book made me think about affirmative action and what his stance on it would be (I suspected he would call it an antiracist policy). That turns out to be accurate — in this book review with the National Education Foundation and in this conversation he affirms that view. That, essentially, affirmative action recognized inequalities and was a policy designed to rectify those inequalities. Critically, though, he goes further to describe that additional policies need to accompany affirmative action: namely the application of more resources to compensate for the inferior education experienced by a larger percentage of people of color than their white counterparts.

It then occurred to me there’s an equivalent policy we, in business, hold dear: meritocracy.

On the surface, meritocracy seems “color blind” and is often justified as a policy that targets equality based on this notion. Kendi sees it differently. In an article on the subject:

“a person says that they are colorblind, to me that means they are blind to racism, and they’re blind to differences,” (Ibram Kendi, August 21, 2019)

The article also articulates: “Americans are enamored of the idea that you can avoid being racist by attempting to become color blind, or by passively treating everyone equally.”

This is what got me examining more closely many CEOs, Venture Capitalists, Board members (including me) insistence that all jobs should we awarded based on merit alone. When seeking a new Board member — “may the most meritorious win the role [regardless of race, creed, sex or religion]”. When finding or promoting a new executive, ditto. Or when hiring from the outside for any new position.

Meritocracy is based on an unconscious bias of what “equivalent skill” means.

It sounds so simple. Sounds progressive. Sounds equal. “Just hire the best person for the job!”

Great. How do most companies go about determining who the best company for a job is?

1. They write a job description
2. In the job description they post “requirements” for the job.
3. The requirements almost always list a specific level of education, usually a specific type of degree, usually a certain number of years of experience and sometimes a certain level of managerial seniority achieved.
4. They review resumes (even if those resumes have the person’s name, location and other racially-identifying demographics removed) and filter out the resumes that don’t meet the requirements. They filter out people with fewer years of experience or lower-level managerial experience.

In summation: most businesses — whether hiring a new Board member, new executive, new manager or new line worker — rely on the dominantly white status quo equivalent of the standardized test.

Limited assessment of latent talent occurs. Little ability or effort to delve into a candidate’s intelligence, creativity, ability to solve problems, resilience or many other factors that most business leaders know are crucial to outstanding performance occurs. Even if there is some notion of assessing these factors — as opposed to education level, years of experience and, more managers, seniority levels achieved — these evaluations are usually performed by white hiring managers or personnel managers most of the time. And, the hiring process is an inherently “information asymmetric” process — where both employer and employee really need a good month or two of working together to assess talent, skill, intangibles and overall fit.

Twenty-five years ago, at Apple, the corporation recognized the imbalance of the numbers of women and people of color in tech (I was part of the first Diversity Working Group of managers). Twenty-five. This is not a “newly recognized” problem in our industry.

And, yet, we still have the problem of imbalance. Most leaders and personnel execs will complain “the numbers just aren’t present in the talent pool” and most companies end up competing for people of color and women from within that unequivalently constructed pool.

Could it be we suffer from the delusion that meritocracy is an inherently unbiased policy and, in reality, it’s absolutely racist?

What if, instead, we officially and explicitly do all in our power to make the numbers of employees equal rather than the “skill & experience level” equal? What if we focus on latent talent, creativity, resilience and the characteristics required for success rather than education and experience? What if the FAANG companies stop explicitly recruiting just from the “top tier” tech programs and, instead, look for and cultivate the highly talented.

Of Rookies, Yodas and Padawans

Rookies

As many readers of my blog know, I’m a huge fan of football (and sports in general) as a teaching tool for high-performance teamwork in business.

Football purports to have a “purely meritocratic” policy and “only promotes the best based on performance on the field”.

And, yes, football violates this policy every year with rookies. During the draft, talent evaluators have scoured the films, attended games and practices, interviewed the players and those around the players to evaluate latent talent. They don’t draft based on how many years of football the player has played, whether they got a degree in football, whether they rose in the ranks of their college teams, etc… (for the most part). They draft based on how well they believe that latent talent and ability will translate into their business.

They draft rookies.

And, in fact, they play rookies all the time regardless of whether that rookie is the absolute most skilled person on the team at that position? Why? Because they’ve paid a lot of money for the latent talent and they want to apply resources to the development of that rookie by having them play in real live situations. (In fact, the oft-considered Greatest of All Time quarterback, Tom Brady, was not the most qualified person on his team — he only won the job due to a mishap (an injury to Drew Bledsoe) and then demonstrated, on the field, his latent talent.)

At Misty (and past companies), I’ve hired “rookie executives” all the time. It’s one of my favorite things to do because of how motivated they are and how transformational it can be to a career. Quite often I know the risk I’m subjecting the business to when placing a person into an executive role that they’ve never filled before — but those I have promoted have displayed extraordinary latent talent which I want to promote and nurture. Sadly, though, it took me a very painful lesson of a delayed robot-to-market to learn resources must be applied to those rookies. Sure, I connected each rookie with a variety of external mentors who were greatly experienced executives in those functional areas, imagining I was applying enough resource. Just having mentors an hour every few weeks turned out to be incorrect — I needed to apply more resource to these insanely talented executives (who have gone on to do incredible work). It turned out I needed to insist upon an ego-less, experienced underling to join their team.

Yodas and Padawans

A model pursued in many countries around the world and pursued in our country in “the trades” (plumbers, carpenters, electricians, etc…) is the model of applying resources to latently talented rookies to bring them up to equivalency. By many it’s called the “master / apprentice” model but let’s dispense with that word “master” and call it the “teacher / student” or, evocatively, the “yoda / padawan” model.

At Misty, when we set out to construct our technical team — like our tech compatriots, we knew the numbers of women in tech were vastly under-representative compared to the general gender balance in the overall workforce.

So we applied more resource and brought in one Yoda and three Padawans within our engineering team, initially as contractors. One of only three (at the time) Federally Certified IT Apprentice programs, Techtonic Group, was in business to a) write custom software and b) create tech-talent where none existed before. Starting in at least 2012, Heather Terenzio identified that “it didn’t require a genius to write most software in the modern world; we can teach this stuff!”. She started an apprentice program to take talented, but non-degreed, people of color, ex-convicts, and women and get them into the workforce. Her model is simple and powerful (and growing like a weed!): undertake a software project with a Yoda (or two or three), pair-program between the Yoda and a Padawan (or two or three) and deliver the custom software project to the customer while also delivering the Padawans, should the customer want to continue, as fully-fledged entry-level members of the customer’s technical team.

We did this.

We spent more money than we needed to (custom projects by a third party are inherently more current-cash consumptive than just hiring someone from the existing talent pool). We spent hundreds of hours of our own — with very experienced internal engineers loving the role of Yoda — to continue their education. We took a person who had worked in retail, one who had been in financial services and Scottrade rep and turned all three of them into amazing software engineers. They’ve subsequently gone on to earn more advanced software engineering positions at other firms.

Our focus at the time was on gender equality in tech hiring. There’s absolutely no reason, when we are in growth mode, that equality for people of color can’t and won’t be our focus in the future.

What it took was a) a commitment on our part that meritocracy had to go, b) we had to apply more resources, and c) we had to be thoughtful and conscious about how to educate and create the opportunity for growth and advancement for three under-represented (in tech jobs) people.

So… go look for latent talent

Let’s not be afraid, as an industry, to hire rookie executives or rookie entry-level personnel who lack the “official” or “on paper” qualifications. Let’s look beyond the “standardized test” and find ways to create trial periods and teacher/student models.

Yes, that will be more expensive. Yes, it required more resources. But we’ll turn a racist policy into a set of antiracist policies if enough of us begin this practice.

And to our Venture Capital colleagues, “meritocracy” is alive and well in “risk/reward” profiles

Venture firms have their own form of meritocracy running rampant. Most partners in most firms I know would swear that they look exclusively at “risk and reward”, only funding those entities who have the greatest risk/reward profile.

Sounds “color blind” and “meritocratic” doesn’t it? Let’s dig deeper.

In my experience, venture firms look at four components: product-market fit, business model (can it general profits), market size and team. In fact, many venture firms will either say or put on their websites that it’s actually “team, team and then team” in terms of who they fund.

And how do they evaluate “team”? With things like:

• How many past successes has the leader had?
• How many years of experience did the founder have within the market/industry they’re now starting up in?
• How many years of managerial experience did the founder have? Was the founder an executive at a past startup (that succeeded)?
• Did the founder come from “a top tier tech company”?
• Did the founder come from “a top tier tech university”?

And all of a sudden it looks pretty much like the same unconscious white-biased set of requirements that hiring managers look for in resumes.

There is very little risk-taking on “rookie” founders. Instead, a whole cottage industry called “accelerators” has started up to create opportunity for rookie founders, so they can rise up through the same meritocratic system to receive funding from (mostly-white) venture capitalists. Progressive accelerators like Techstars and Y Combinator consciously and actively look for women-founded and people-of-color-founded businesses but, even they, will put that applicant through the lens of “risk/reward” and comparison to other white-founded applicants.

What’s required by venture capitalists is the same that’s required of businesses: we must find the latent talent and invest more resources into that latent talent.

Who’s to say that one can’t invest 3–6 months of capital into a more risky venture and make sure that “risky” but insanely talented founder has a very experienced, ego-less “Yoda” on their team? We can. It’s just a matter of choice.

Today, if one wanted to, one could double the number of investments made while halving the actual dollars invested and creating the necessary resource infrastructure to help those latently talented founders flourish. You have the networks, you have the Yodas, you have the resources.

Definition of Insanity

the definition of insanity is doing something over and over again and expecting the same result (variously and, incorrectly it turns out, attributed to Einstein, Ben Franklin, Mark Twain, Rita Mae Brown and apparently others)

We’ve tried over and over again, for decades, to bring more women and people of color into tech.

Let’s try something different.

Perhaps it’s time to get rid of the policy of “meritocracy”