Tuesday, April 1, 2014

Diversity and High Tech

A rather bizarre phenomenon has developed of late in the High Tech world. There are today a number of newly formed investment banking groups making waves in Silicon Valley with an agenda that relegates the pursuit of financial gain or the creation of new technology to a relatively secondary status. The primary motivation of these firms is to employ their financial reserves as leverage to “improve the diversity” of Silicon Valley companies at every level of the organizational hierarchy.

These investment funds champion a particular group based on race, ethnicity or gender under the premise that the particular special interest group is willfully under-represented in High Tech and that the industry needs to begin favoring the group in question. Those companies which do so can expect to receive support for their stock price if the shares are publicly traded, or are offered venture capital if the enterprise is not a public entity.

Such funds believe that High Tech companies will unquestionably benefit from the infusion of the group’s viewpoints and values into the company workforce. The underlying premise is that the ideas, mores and values of the group are currently outside of the company’s prevailing operational framework and that the group's culture and principles are at least as valid as or better than the company's existing functional mindset. In the fund's view, this is not only an unrecognized weakness in the company's culture, but is also intrinsically unfair and unjust.

Investment funds of this sort also believe they serve a greater social purpose and capture this in a mission statement generally along the lines of "passion and principles before profit." It is their firm conviction that society would improve thru social re-engineering to reflect the firms' standards of greater fairness and equitability in economic and social status between groups. Such investment banking firms believe that the High Tech sector is non-compliant to these principles and, as corporate members within that society, need to be part of any such transformation.

In a rather interesting paradox, these "socially conscious" investment banks are right - but for the wrong reasons. Diversity is an extremely beneficial and even vital component of any viable High Tech organization. The definition of diversity employed by these funds is, however, fatally flawed, and its forceful application to the High Tech sector would be counterproductive.

Silicon Valley is,in fact, the most diverse working environment in the history of civilization. There is simply no race, creed, color, gender, sexual orientation, ethnicity or tribe that the author has not worked for as an employee or alongside as a colleague. Compared to Silicon Valley, the UN Plaza in Manhattan looks shamefully insular and parochial.

Supplementing Silicon Valley’s intrinsic diversity has been the absence of any one dominant ethnic group. Though Silicon Valley began as an American phenomenon, the original Fairchild Camera semiconductor team split to form their own companies in the late 60’s and early 70’s, quickly attracting people from across the globe who wanted to be a part of building a better tomorrow. Today, it is a completely routine matter to find an entire organization, from the executive suite all the way to the most junior members of the rank and file, composed of people from just about every continent, country and culture on the face of the earth.

This has been a major causative factor in why Silicon Valley has displayed an instinctive gift for developing novel solutions to extraordinarily complex and multivariate problems. It also explains much of why Japanese chip firms started falling permanently behind in the late 90’s. We will explore these propositions in greater detail below.

The surest defense against Evil is extreme individualism, originality of thinking, whimsicality, even — if you will — eccentricity.  – Joseph Brodsky

Engineers are highly individualistic by nature - it's a profession that holds unique appeal to such types of people.The inate superiority of the individual over any group dynamic can be illustrated by a simple example. Say a newly minted electrical engineer steps off a flight that just arrived at San Francisco International Airport. This engineer could be Sandeep from Bangalore, Chen from Taipei or Elisabetta from Livorno. A socially conscious investment banking firm would only see them from the perspective of their gender and nationalities – in their eyes, Elisabetta is an Italian woman while Sandeep and Chen are Indian and Taiwanese men. This simplistic characterization is insulting, degrading and extraordinarily shallow.

First off: Elisabetta, Sandeep and Chen have all picked up roots from the land of their birth, leaving friends, family and all that which was familiar behind them to start a professional life in Northern California. That takes nerve, folks. It also indicates a strong independent streak in their character. Furthermore, they are all intrinsically a terror to any bureaucratic organization, as they all share the trait, to one extent or another, of being “mavericks.”

Starting from their first day at work, they will find themselves in an environment where no one group – including their own – constitutes a majority in the company. There is no common pool of experiences, behaviors, surroundings, language or cultural norms such as what they had back home in which they can immediately and subconciously submerge themselves. The only source of commonality they have with their coworkers is the engineering, operational and business challenges faced by the company, which they have to deal with together.

Since all three are engineers and mavericks removed from their accustomed cultural environment, their individuality by necessity immediately comes to the fore. Granted, their characters are influenced by their backgrounds. Yet without the familiarity of the surroundings they left behind, any tendencies towards the groupthink of their paternal/maternal culture is not supported by environmental stimuli and is consequently left dormant or stripped away by the exigencies of High Tech business pressures, leaving a core of beliefs, desires, preferences, ambitions , goals and dreams that is unique to that person. Under these circumstances, everything they say, think and do at their Silicon Valley workplace primarily represents all that they are as individuals.

The common characteristics of "groupthink" include: an illusion of invulnerability; an unquestioned belief in the group's inherent morality; collective efforts to discount warnings; stereotyped views of the enemy as evil; self-censorship of deviations from group beliefs; a shared illusion of unanimity; suppression of dissent; and the emergence of self-appointed mind-guards who screen the group from dissidents. - Connie Peck

There is a downside to such individuality, as experienced time and again by Valley veterans who have been part of many memorable debates in staff or program meetings. Nonetheless, it has produced an engine of creativity and innovation the likes of which the world has never before seen.

Notice, by contrast, the experience of the Japanese semiconductor industry that rose to prominence in the early and mid 80’s thru manufacturing excellence stemming from an exquisitely refined attention to detail. Despite this cultural competitive advantage, however, the suffocating conformity of Japan’s corporate framework - reflective of paternalistic Japanese society as a whole - began to tell in the early 90’s, as native microelectronics firms found themselves reduced to “fast followers” of Silicon Valley technological innovation, with the gap widening thru the mid 90’s and becoming chronic over time. Today, there’s hardly anything left of a once globally dominant chip sector in Japan. They’ve almost all disappeared in a wave of mergers and acquisitions.

The lesson is clear. Groupthink is anathema to a healthy High Tech industry. The uniquely fragmented social, ethnic and cultural landscape of High Tech in Silicon Valley has been key to ensuring that it remained fungible and adaptable.The success of the Technology sector in Silicon Valley and its ultimate failure in Japan has hinged on diversity and individual expression.

Some would insist that corporations cannot be trusted to promote “diversity” within their ranks and thus must be forced by social & economic pressure along with government decree to meet hiring quotas and impose organizational hierarchies that reflect “fair, just and equitable” standards defined by some sort of social engineering formula. Though appealing to ivory tower academics, utopian idealists and fervently ideological government bureaucracy apparatchiks, the approach again focuses on groups. As clearly demonstrated from the above discussion, group thinking kills the goose that lays the golden egg in High Tech. Initiative, creativity, original thinking and unique perspective are qualities of individuals – not groups. 

Nonetheless, this does not mean that the socially conscious investment banking firms that are trying to establish their presence in Silicon Valley are superfluous. They can indeed fulfill a valuable purpose - but only if they redirect and focus their efforts on a more specific mission.

Though ethnic, racial and cultural diversity is intrinsic to Silicon Valley, there does remain something of a gender gap. More specifically - though women have established a presence for themselves in Silicon Valley with roles in finance, accounting, operations, sales and marketing, there has always been a noticeable lack of women in engineering, both for hardware and software. Though somewhat less so for women from the Far East and southern Asia, the shortage has been particularly acute for women of African, Middle Eastern, European or Latin American ancestry.

Trying to correct this by calling for hiring quotas would be, in a word, stupid. Silicon Valley respects talent in whatever form it takes - its history demonstrates that quite clearly. High Tech is also the most mercilessly competitive industry on the planet. Japan's technology sector did not take sufficient steps to reap the advantages that a highly diversified workforce provides and suffered disastrously as a consequence.

The real problem is that women so infrequently choose electrical engineering or computer science as a profession. Some would say that certain cultures pressure women to select other disciplines of study; others would say that the gender gap in High Tech engineering is self-imposed. Whatever the reason may be, the inescapable fact is that it is a rare sight to see women in a university degree program for electrical engineering or computer science.

Here is where socially conscious investment banking enterprises can redefine themselves and make a tangible difference. As investment bankers, these companies have a responsibility to their investors and shareholders to invest their funds wisely and effectively. Nevertheless, a social-engineering-minded investment fund could take its profits and redirect them towards creating or supporting foundations that provide scholarships to aspiring woman engineers. There are many universities and privately run institutions who would welcome such active support.

In short: the hunger for talent in High Tech is insatiable, and Technology firms don't care about gender, race, ethnicity or any other labels, provided an applicant has the talent they need. The best and most effective initiative that socially conscious investment firms can support with their resources is to help make that talent available.


  1. The objectives of social engineering and free market enterprise don't just magically align, in fact it's usually just the opposite. The free market approach wins over the long haul without the presence of outside influences that compel/mandate the adoption of the socially engineered approach. So other than some mutual fund managers of socially conscious funds, unless these companies are at least performing on par with their truly free market counterparts, I see little interest in holding stock in them. And just the opposite is true as well, for example, most would agree Wallmart is not exactly the poster child for equality and the overall greater good of society, but yet the stock is widely held because the company consistently delivers reliable dividends.

  2. Two hours ago my wife and I, both 1980s graduates in STEM, had lunch with my daughter and her classmate, two women STEM majors at an enormous state university. My daughter is 3rd year, was the Engineering Fraternity President a year ago, uses every resource the school's Women's Engineering Program provides her, and has a great internship starting this summer. Her classmate, a 2nd year, is on a similar successful path.

    When they said the WEP made them feel like they didn't belong in Engineering because it presumed them as unable to succeed without its support, I had to straighten them out.

    I told them such organizations as the WEP, the LGBTQ Alliance, the NAACP, the NRA, etc., etc., got started not so much to promote the success of their various minority groups, but rather to provide a bureaucratic group within an organization of such strength that those who were openly bigoted against each minority, and who openly tried to damage the members of each minority, could be successfully stopped from doing such harm. And then, like Topsy, each just grew into what it is today.

    They thought about it for a while, and my wife pointed out that as a college student in 1980 she had all the benefits of the Women's Movement of the 60s & 70s, without having to face a single professor in her major (2 females, 30+ males in the graduating class of our small college) who had anything but support for females in her chosen major. I told the young ones about the Engineering profs at my 1980s grad school, who flunked about half of each freshman class in the first semester out of Engineering and into other majors, and who specifically targeted female freshman for ridicule in classes, on the basis that they needed to be able to survive such hazing to succeed in their future careers, where males still made passes at coworkers with relative impunity.

    My daughter said that despite the problem of promoting 2nd class citizenship among women by the WEP, she damn sure was taking advantage of every single helpful thing it provided, from dorm choice preferences to career counseling preferences and so on.

    And then her classmate said, "When I go into class, I 'm not a woman engineering student. I'm just another f**king engineering student. The sooner everyone realizes that, the better."

    I think the kids are going to be all right.

    1. That's great news, Mike. Clearly both your daughter and her classmate have a lot of backbone. I wish them great success in their endeavors. :-)


Feel free to comment or critique!