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Markkula Center for Applied Ethics

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Kleiner Perkins case shows tech should adopt basic HR practices

This article, by Center Leadership Ethics Director Ann Skeet, appeared originally in the San Francisco Chronicle.

Anyone with eyes on Silicon Valley has had them wide open after the recent Kleiner Perkins-Ellen Pao discrimination case. Yet women who could have supported Pao might have been put off because she was a problematic plaintiff with baggage of her own. Fair enough. But it will be a missed moment if we can’t identify some unethical actions in this case and suggest some basic moves for the venture capital industry, a part of the tech world where the currency is ideas, and thus women who want to succeed must work diligently to get credit and support of their own.

I happened to be with a group of high-powered Silicon Valley women on the eve of the case’s verdict delivery. The discussion about gender discrimination was lively, and the room was full of competent, qualified women. As someone who is not in the tech industry and has never been engaged with all things computer — as are a disproportionate number of Silicon Valley residents — listening to the exchanges among these women over their chardonnay and sushi reinforced for me one reason there is a dearth of women in high tech: Not enough qualified women want to be in the industry.

And let me assure you, there were plenty of qualified women in the room. But as the conversation turned to this case, it was clear these tech veterans have been shaped by their time in the valley’s trenches. The women in the venture capital business seemed to know that Pao would not prevail.

Unfortunately, what female venture capitalists now expect is not that the situation will improve, as some of we Pollyanna types outside the industry hope (and has been broadly reported). Nope — they are pretty sure it’s going to get worse.

As one venture woman said to me, “Oh, they will let us go and start our own women’s funds as long as they can keep their own. It’s like we’ve gone back to drinking out of two different water fountains.” It was a sad prediction that I hope is not fulfilled.

Equally chilling, the women most likely to offer insight and suggest changes are unwilling to sacrifice their careers to make the point. I could fault them as lacking leadership, but the several I spoke with could all recount moments when their valiant efforts were rebuked. To them, it is clear that if they want to have a fund or receive funding for their startup, speaking out against the establishment is not the thing to do. Could this explain why no other Kleiner Perkins woman joined Pao beyond subpoenaed Trae Vassallo?

So here are a few pointers for the industry:

If two people have an affair in the workplace, consensual or not, they should no longer be involved in each other’s performance evaluation. Removing personal bias in this situation is challenging, but employees have a right to receive both fair process and useful feedback. Evaluation received through the lens of a recently terminated relationship — even a healthy, normal one — will be flawed.

Next, subjective criteria for awarding opportunity or compensation allow for the introduction of favoritism grounded in something other than performance.

There is enough in this realm that is subtle and hard to identify. It is not subtle to tell an employee that he or she will not receive a role or compensation owed to them because someone else in the firm “needs a win.” It suggests that only cronyism is at work and that nothing more objective matters — like returns on investment.

Finally, employees who hit on other employees regularly are a distraction to the business goals of the enterprise. Whether in consensual relationships or not, office Romeos and Juliets create a lot of noise and often require employees working with them to double down to stay focused, sapping energy that would otherwise go to the business at hand.

So hear ye, VCs: Sometimes the new way is not the better way. Basic human-resources policies, as boring and non-new as they might be, serve organizations well. Adopt some. Then execute them as consistently and effectively as you expect your startups to perform. The returns on your investment will be strong. Ann Skeet is the director of leadership ethics at Santa Clara University’s Markkula Center for Applied Ethics.

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