Luke Visconti, DiversityInc's CEO: Karma Is Not a Career Strategy

What do you do if you have a Satya Nadella moment You said what you mean, but then have to backpedal because what you believe is completely unpalatable.

If you haven’t seen it yet, Microsoft’s CEO, Satya Nadella, said at a conference celebrating women in engineering, “It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along.” He went on to say that it’s good karma to not ask for a raise. (His full remarks can be found herescroll the video slider to 1:35.) Interestingly, the woman interviewing him, Maria Klawe, President of Harvey Mudd College and Microsoft board member, responded by saying she didn’t agree with him and then went on to talk about two places in her career where she was cheated on pay. (In one of the incidents, she was cheated by another woman, the then President of Princeton University.) Nadella later issued a memo on Microsoft’s website which in part said, “I answered that question completely wrong. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s advice was the right advice. If you think you deserve a raise, you should just ask.” The memo was not an apology.

His problem is this: Microsoft’s own website, which shows that its senior leaders are just 20 percent women. Of the 15 people pictured, there are three women and only three nonwhite peopleapparently no non-majority people in the cultures from which they originated. According to public data released in Microsoft, only 29 percent of Microsoft employees are women, so there’s a 31 percent spread between women employees and women senior executives. A terrible statistic.

So how could Mr. Nadella have avoided and/or recovered from this mistake

1. Know your numbers. It took me only a few minutes to find the Microsoft senior-leaders webpage and the total percentage of Microsoft employees who are women. It’s not a good story and the CEO should know better than to comment off-the-cuff on a subject that you have terrible performance in. It’s not like this is a new subject for Microsoft: A few years ago there was a controversy over Microsoft and other tech companies not releasing their EEO-1 reports; they didn’t want to release them because they’re embarrassing. With only 29 percent women employees at Microsoft, and only 20 percent women senior leaders, it is not an enticing workplace environment for women.

2. Understand how to address the situation and practice for it. Knowing that this is a problem, the CEO should understand the numbers and be able to speak to specific, actionable and accountable measures that he is putting into place to rectify the problem. if you have goals and you are training your current generation of mostly male executives to attract, develop and retain talent without bias (as has not been done in the past), then you can speak without fear and without appearing hypocritical. (“Karma” sure hasn’t worked for women at Microsoft.)

Talking points should focus on the fact that this is about money. If you can’t attract the best and brightest, at least half of who are women, then you are not serving the shareholders. And indeed, over five- and 10-year periods, Microsoft has underperformed the NASDAQ composite (and Apple or Google individually), which means you’d be foolish to invest in Microsoft rather than in an exchange traded fund that would mitigate risk by including more companies in your investment. And as an entrepreneur who has spent more than $100,000 on Microsoft products, I can tell you that I’m not impressed. So it’s not like the current situation with the gender split is defensible from a business standpoint.

That said, I think most women understand that corporate America in general is not a good place for them. This is borne out by the facts: Fewer than 5 percent of Fortune 500 CEOs are women and roughly 17 percent of board seats are held by women. The DiversityInc Top 50 companies do significantly better.

3. If you make a mistake, apologize for it. Issuing a halfhearted memo on your website and some rather pathetic tweets is not a way to get yourself out of a mess. If you have covered points 1 and 2especially 2you’ll have talking points, because you’ll have real diversity management in place and you’ll be holding your subordinates accountable. People in this situation tend to want to avoid goals, but that’s a bad mistake. We all have goals; even the CEO has goals, from the board of directors. If this is about business, then diversity should have goals as well. If you can speak to the goals and the changes you’ve made, you can quickly regain trust, which is something that Mr. Nadella has not done.

4. Don’t be passive. Microsoft has a market capitalization of $363 billion. Its former CEO just bought a basketball team for $2 billion and is close to the top of the Forbes 400 wealthiest people. Hearing passivity from a company this wealthy just incites anger. During the recent publicity crisis around tech companies and their lack of diversity, there has been a passivity that I find to be repulsive. Google’s publicity problems around diversity, for example, seem to have a certain shoulder-shrugging air about them. Google has a similar market capitalization to Microsoft, of $368 billion. It’s preposterous to think a company that can figure out how to read your email can’t figure out how to capture talent and underrepresented groups and funnel them towards majors that will benefit Google.

5. Watch your pronouns, take personal accountability. “We,” “our,” “us” are the words that unite. Speaking about women and their “superpowers” of not asking for a raise destroys trust and credibility. Speaking of credibility, you probably want to can most of the happy-go-lucky stuff currently on the diversity area of your websiteespecially in light of the facts shown on your senior executives page. Replace self-congratulatory nonsense with facts and figures, specific programs, and the accountability you’re going to hold people to. Especially if you’ve made a mistake like this, the word should come from you. Your picture, not pictures of models, should be on the diversity area of your website.

If I were advising Mr. Nadella, I would tell him to come up with a plan that would accelerate recruitment and talent development of womenand I would also advise him to have a plan for pipeline development, as the pipeline of women in engineering is not sufficient to accomplish his goals, which should be 50 percent women (including management and senior-leadership roles). Needless to say, this can’t happen overnight, but underrepresented people understand that already. What we’re all looking for is a refreshing and unflinching assessment of reality and a plan forward to address it.

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