It’s a good time for crooks of all kinds.

Corporate shenanigans are a growth industry. Not since the days of the robber barons has white collar crime enjoyed such freedom.

OVER THE LAST TWO YEARS, nearly every institution of American life has taken on the unmistakable stench of moral rot.

Tax evasion siphons 10,000 times more money out of the U.S. economy every year than bank robberies. SOURCE: FBI; IRS.

And this clubbiness has human costs. Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004.

Tech took a personal hit thanks to Warren Buffet’s partner Charlie Munger and his views on EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. Tech companies love to talk about their “adjusted EBITDA,” because it makes them look profitable — even a financial loser like Uber.

“I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” Munger said at a recent company shareholders meeting. “Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

Tech workers aren’t faring well, either, even at the most hallowed companies.

Silicon Valley has often held itself up as a highly evolved ecosystem that defies the usual capital-labor dichotomy — a place where investors, founders, executives and workers are all far too dependent on one another to make anything so crass as class warfare. The recent developments at Google have thrown that egalitarian story into doubt, showing that even in the most rarefied corners of Silicon Valley, the bosses are willing to close ranks and shut down debate when the stakes are high enough. (…)  Workers weren’t just organizing to save the world from Google. They were also organizing to save themselves from Google, where those who didn’t fit the mold of the straight, white, male techie felt they could be too easily marginalized or dismissed.

The rot isn’t just trickling down, it’s a raging torrent. Student cheating is at an all time high across grades and globally is a billion dollar market.

Philemon is part of the global industry of contract cheating in which students around the world use websites to commission their homework assignments. (…)  Lancaster began studying contract cheating more than a decade ago when he noticed one of his own students posting assignments online. “I found one of my students who was putting up my assignment up for tender on an internet site. So, people were bidding different amounts of money to complete that computer programming assignment.”

Let’s hope the handbasket we’re careening down in is well made, so we can survive our trip to Hell and come out the other side in one piece.

Image credit: Newtown grafitti

Hat tip to KG for sending me the white collar crime article.

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Diversity hiring is focused on women and minorities (we’ll be talking more about this during the week), but there are other categories that are the focus of negative bias.

Obviously, one is age, school bias is still front and center, and, of course, GPAs. As an ex headhunter, i.e., recruiter, I can tell you that GPAs are a total joke when it comes to great candidates. It’s not that good grades are bad, it’s that GPAs don’t tell much of the story — or at least not the parts that really count. Sam’s story below is a good example of what you miss when you focus mainly on GPAs.

Read other Golden Oldies here.

I have a post today at Leadership Turn (a blog I wrote for b5 Media) that focuses on college student’s grade expectations for “trying really hard.” It’s worth clicking over to read because these are the same people you will be hiring over the next few years. Scary thought.

I said at the end that hiring managers might find it of more value to look at grades a bit differently.

Historically, managers and corporations have considered overall GPAs to be a significant factor when recruiting.

But based on current attitudes towards grade inflation, combined with federal, state and local governments’ focus on funding numbers as opposed to learning, perhaps there is a more useful use of grades.

Let me give you a real world example, I’ll call him Sam.

Sam has a 2.7 GPA, but if you look closer you see a different story.

Sam said that when he started college he not only didn’t bother studying he didn’t really know how. He said his grades in high school were mostly Bs and a few As, but that he never really put out much effort. His first semester was totally in the toilet and he almost flunked out when his GPA hit 1.8.

That was a wake-up call.

Sam buckled down. He started by learning how to study and how to learn and really applied himself.

Third semester his GPA was 2.5; junior year GPA was 3.1; senior year isn’t over.  Additionally, the GPA for his major is a solid 3.5.

Sam isn’t getting a lot of interviews; he believes it’s because of that 2.7 GPA and he’s probably right.

But for a manager with an entry level position, Sam is solid gold.

Think about it,

• he knows that he doesn’t know it all;
• he enjoys learning and understands the value of hard work;
• he knows that showing up every day isn’t enough; and
• he realizes that he needs to perform at a high level to have value.

Sure sounds like a valuable employee to me—and one with a lot of potential loyalty to those who can see past the trappings to the real value.

Are you smart enough and confident enough of our interviewing skills to find the Sam hiding in that stack of resumes?

Image credit: flickr

Fortunes 2018 list of 100 Best Places to Work is out and guess who isn’t on it anywhere?

Google.

Why?

Because the criteria was tweaked this year.

But there’s something different about this year’s list, which was based on responses from more than 300,000 employees at large companies that opted into the survey. A change in methodology this year put greater emphasis on feedback from survey respondents who self-identified as women, minorities, or LGBTQ. It is the first time, says Michael Bush, the CEO of Great Place to Work, that the list reflects what he has dubbed a “Great Places to Work For All” mindset.

At first, adding “all” to the pot scared the heck out of many CEOs, but after explaining, most came back.

His clients could see that a “for all” commitment would mean the firm was “maximizing the potential of all employees.” (…) Bush reports that organizations scoring highest under the new “For All” methodology “grew their revenue about 10 percent faster over the same period than the companies that scored best according to [Great Place to Work’s] old methodology.”

Some of the Top 10 may surprise you, but Salesforce in the top slot shouldn’t.

One reason Google didn’t participate in the survey may be found in job site Hired’s 2018 State of Salaries report.

The average worldwide salary for a tech worker in 2017 was $135,000, says Hired, up 5% from the 2016 survey. (…) But the data also showed that a person’s race has what Hired called “a significant impact” on salary in the tech industry. And black tech workers are the ones getting the most shortchanged — Hired found that black tech workers are making $6,000 a year less than their white peers, on average.

Interestingly, the data suggests both a cause and a solution. Black candidates and Hispanic candidates tend to begin their salary negotiations at a lower point than their white counterparts, according to this data.

White candidates tend to ask for the highest salary, $130,000, and get offered $136,000 (+4.6% on their request).

Meanwhile, black and Hispanic candidates using Hired’s platform say their preferred salary is $124,000, on average. But even when an offer beats their initial request, it’s still relative to the lower number. Black workers are being offered $130,000 (+4.8%) on average and Hispanic candidates are offered $131,000 (+5.7%). Asian candidates ask for $127,000 on average and are offered $133,000 (+4.7%).

I guess it’s just simpler to ignore this and similar surveys and ignore the media questions about why you didn’t participate, than it is to fix the problem — and this one is definitely fixable.

No one ever said solving fundamental problems like diversity was easy, especially when it takes more than data and algorithms.

Join  my tomorrow for a look at why most diversity efforts fail, what works, and how diversity programs are being considered trade secrets.

Video credit: Fortune

Sometimes — more like most of the time or at least too often — we all say things without thinking through the full ramifications, especially those gleaned from experiences we’ve never had or opposed to what we think.

Yesterday I mentioned a startup CEO who said he was concerned about hiring more women, “It just seems like such a huge risk as CEO,” which brought the social media house down on him.

Although he apologized, etc., I noted that his words and actions probably didn’t do much to change his mind.

After reading the post a friend from back east wrote me his thoughts as a man-of-color/founder/CEO.

Sadly, everything he says is true and has been for decades — and I say that from first-hand other-side experience.

In the 80s and 90s I was three things that weren’t supposed to align: a successful tech (hdwr and sftwr) recruiter who was female.

Back then it was assumed that, as a woman, I acquired most of my clients in the same way Hollywood starlets got parts — on my back.

But, as I always said, if that were true I wouldn’t have had time to go to the office, let alone recruit anyone.

Here is the email; my only editorial change was to delete the name of the incubator.

Miki,

When I expressed skepticism regarding real change, you said that it’s better because now people are speaking about it. I replied that it will probably be worse for women in general, because now they will be seen as a risk factor. Unfortunately this is my own experience — I am afraid of mentoring women because they will often take it the wrong way, as several have interpreted my well-meaning advances as attempted pickup. It’s just not worth it.

Most recently, I saw a young black woman at an incubator I was visiting and decided to pay attention to her in a purely social way to make her feel welcomed. There were NO black people there, and since I am viewed as somewhat of a star and important, I believed it would be a boost for her. I never had a conversation with her, and the contact stayed on the level of smiles, fist bumps, etc.

While I was in SF, I received an invitation to a Y-Combinator invite-only event on women and leadership that I could not attend. I approached the woman and told her about the event and asked if she was interested in going. She said, “Absolutely!” and I said — “Send me your email and I’ll introduce you to the people who are leading this effort within YC.” She wrote her email address on a piece of paper and I made the introduction. 

Unfortunately her email bounced. I tried several different approaches. Then I went to her a few days after the event and said that I tried to make the introduction, and that her email had bounced. She looked at the piece of paper that she’d written her email on and confirmed it was incorrect without correcting it.

It then dawned upon me that she’d purposely provided me with the wrong email address, probably because she interpreted my friendliness as sexual advances. The sad thing is that I subsequently observed her whispering with other women and looking over at me, and that other women were avoiding contact with me. 

I then resolved that it’s just not worth it. I’m never going to make friendly advances to a woman in a work situation in the US again.

I do it all over the world, and have mentored men and women in Europe, Asia, Latin America and the US, but here is the only area where I’ve had negative experiences doing so with women (several). I’ve never had, or been interested in, a sexual relationship with any woman at work, in any country where I’ve worked or lived (except my partner who was my teenage girlfriend). 

The inflamed, sexualized nature of everything regarding female/male relationships in the US work environment does much to damage women’s advancement.

Which men will take the risk of staying late to mentor a woman after everyone has left the office — not me. Which men will take a woman out for drinks to have an informal chat about the politics at work — not me.

Which men will associate informally and socially outside of work with women they work with — not me. The reputational risk is simply too great. 

Who is the loser? Obviously both men and women, since there is greatness among them both.

Culturally it is more difficult to mentor women in the US than in Pakistan. Who would have thought…

The following came as a PS about an hour later.

Sexual advances are something most women, and some men, have to learn to deal with.

This has always been the case, and there have always been successful women. There are more successful women now than ever before.

The worst thing that can happen is to scare away the men that genuinely mean well.

Haven’t you ever asked yourself why women in more misogynistic societies are surpassing US women in societal and professional advancement to an increasing degree?

May it be because there is no cost to supporting women for those men who choose to do so? In fact, there is often great benefit, as they will have access to a more motivated and competent pool of people.

All that said, I am not recommending turning a blind or benign eye to the kind of behavior and toxic cultures that have been making headlines.

Image credit: VEX Robotics

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Do you believe that Silicon Valley is the best (only?) place to start a company? That there is some almost magical ingredient that isn’t duplicated anywhere else?

Many people do and more did back in 2010.

Demis Hassabis, co-founder of high-flying DeepMind didn’t believe the myth.

“I was born in London and I’m a proud born and bred Londoner. I obviously visited Silicon Valley and knew people out there and also I’d been to MIT and Harvard and seen the East Coast. There is this view over there that these kind of deep technology companies can only be created in Silicon Valley. Certainly back in 2010 that was definitely the prevailing view. I felt that that just wasn’t true.”

Investor Peter Thiel was one of the true believers.

“At that time he’d never invested outside of the US, maybe not even outside of the West Coast. He felt the power of Silicon Valley was sort of mythical, that you couldn’t create a successful big technology company anywhere else. Eventually we convinced him that there were good reasons to be in London.”

Hassabis convinced Thiel to invest; Google acquired it for $400 million, and DeepMind is still making AI history.

One of the major reasons Hassabis wanted to stay in London was the availability of incredible talent.

“One of the things was I thought it [staying in London] was going to be a competitive advantage in terms of talent acquisition,” said Hassabis. He went on to claim that there weren’t that many intellectually stimulating jobs for physics PhDs out of Cambridge at the time that didn’t want to work for a hedge fund in the city.

Unlike Silicon Valley which, in addition to its normal talent shortage, suffers a severe talent crunch in whatever tech is hottest.

Silicon Valley may be a great place to start a company if you are connected, but for the majority who aren’t there are plenty of locations that are just as good, if not better.

Of course, that depends on whether your goal is to found a company valued for funds raised, which is best done in Silicon Valley, or to found a company that is valued on actual revenue, which can be done anywhere.

In fact, for the latter, anywhere could even be preferable to Silicon Valley.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

There is much talk these days about ‘values’ and how companies need to base their cultures on them.

Many say that “cultural fit” is used to discriminate against older candidates, people of color, and women.

And that’s likely true if the company doesn’t included diversity and meritocracy as an integral part of their core values.

One recently added core value that isn’t talked about is expediency.

Here’s a great example from Facebook.

On May First, Facebook was accused of sharing information on how/when to reach “emotionally “insecure” and vulnerable teens on its network.” Naturally, the company denied doing it, but just the fact that they can should be very disturbing.

Even if Facebook hasn’t allowed advertisers to target young people based on their emotions, its sharing of related research highlights the kind of data the company collects about its nearly 2 billion users.

Also on May first Facebook announced a new effort to fight fake news — definitely expedient considering how angry people are — better late than never.

Facebook has appointed a veteran from The New York Times to lead its news products division, which is responsible for stopping the spread of fake news and helping publishers make money.

Making money is the number one priority — no matter how often a company says otherwise.

That’s what underlies expediency.

And I doubt it will change any time soon.

Image credit: QuotesEverlasting

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

Money. Everyone’s favorite subject that no one wants to talk about. Especially when it comes to work, as in, “what were you making previously” and “what are you looking for now?”  

Tomorrow’s post focuses on a new law enacted in Philadelphia and New York City that has the potential to change that entire, unwanted conversation, forcing managers/companies to focus on the future, as opposed to history.

Read other Golden Oldies here.

In a post last week I asked for opinions on the ideas presented in a series of articles in Business Week on managing smarter but especially one that claims that “treating top performers the same as weaker ones is ‘strategic suicide’” and said I would add my thoughts in a future post.

Bob Foster left two interesting comments (well worth your time to click over and read). Regarding pay for performance he tells the story of a company where everybody from the CEO down all quit.

“Taking on the task to salvage the company, I hired new people that met unusual qualifications: they had to be qualified for the job they were applying for; they had to be unemployed and available immediately; they had to work at sub-standard wages; they had to work while knowing the company could close at any minute; and they had to work without supervision. The team that came together produced a highly successful company, and it was not because of high pay, or performance bonuses (there were none). The team stayed together, and performed, because of mutual respect, trust, appreciation, and consideration—people were ‘valued.’ To me, this is the truest form of ‘pay for performance.’”

I agree that trust was one of the key ingredients in what Bob accomplished, but it wasn’t the only one—or maybe I should say that it needs to be based on fairness and honesty.

Bob says the pay was ‘sub-standard’, but I assume that it was universally sub-standard relative to position and experience. If he had chosen to pay part of the team, say 10% more than their peers, the team wouldn’t have coalesced.

And that is exactly why I disagree with the idea of paying top performers, AKA stars, big sign-on bonuses or higher salaries than their peers.

• Based on my own experience, 98% of star performers become stars as a function of their management and the ecosystem in which they perform. Change the management, culture or any other parts that comprise that ecosystem and the star may not survive.

• Just as a chain is as strong as its weakest link there is no star in any sport, business, media, etc., who can win with a team that is subject to constant turnover and low morale.

Consider this common example.

Two people are hired at the same time with the same background, same GP0 and similar work experience, but with the one exception. One graduated from a ‘name’ school and the other from a community college. Starting salary is $50K, but the manager adds a 20% premium to the first candidate’s offer on the basis that she must be better to have gone to that school.

Neither candidate lived up to their potential because the manager made poor choices. In doing so he set both up to fail but for different reasons; one thought she had it made and the other that he was low value.

Merit bonuses fairly given for effort above and beyond acceptable performance levels make sense as long as they don’t come at the cost of developing new talent.

But one problem with ‘pay for performance’ is the pay often comes before the performance, but there are others and I’ll discuss them more Thursday. In the meantime, here are links to five posts from 2006 that give more detail on the trouble with stars.

Stars—they’re in your MAP

More about stars and MAP

Rejects or stars?

Star compensation

Retaining Stars

Image credit: sxc.hu

There were several interesting comments on the original post; check them out.

Facebook really stuck its foot deep in the doo doo pile when it claimed its racial diversity numbers, which are even worse than its gender diversity stats, are the result of a lack of qualified candidates.

What is really going on is the very real human desire to hire “people like me,” but using “cultural fit” as an excuse for their bias.

In a post shared widely on social media, the computer science student and iOS developer took Facebook and its Silicon Valley peers to task for focusing on whether potential employees are a “culture fit” — an ambiguous gauge often used to defend discrimination.

But that, of course, depends on what is meant by culture.

Culture is a reflection of the founder’s/company’s actual values — values equaling stuff such as how customers are treated and whether politics will rule over merit.

Culture is not a function of perks — or it shouldn’t be.

“Most of tech recruiting is currently not built to look for great talent,” wrote Thomas in her post.

“I’m not interested in ping-pong, beer, or whatever other gimmick used to attract new grads. The fact that I don’t like those things shouldn’t mean I’m not a ‘culture fit’. I don’t want to work in tech to fool around, I want to create amazing things and learn from other smart people. That is the culture fit you should be looking for.”

You wouldn’t necessarily expect tech, with its penchant for data-based decisions, to cherry-pick the stats, but Facebook is an amalgamate of human beings and their biases, so it’s not that surprising.

Then, of course, there’s the data — which you’d think a company like Facebook, reliant as it is on algorithms, would’ve parsed before blaming education for its diversity ills. There simply isn’t a pipeline problem as long as there are twice as many black and Hispanic computer science graduates as there are actual hires from these minority groups.

So, once again, the old programming saying ‘garbage in/garbage out’ proves true.

A perfect summing up of Facebook’s, and tech-in-general’s, “no pipeline” excuse.

Flickr image credit: gorfor

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Since Spring the media has been sharing stories and statistics about the rampant sexism, ageism and general bigotry in tech, its self-proclaimed “meritocracy” and the amazing male hyperopia (farsightedness) that seems almost incapable of recognizing bigotry in themselves or those close to them.

Y Combinator President Sam Altman and founder Paul Graham are a good example.

Last month Altman posted the importance of eliminating the gender bias in tech and Silicon Valley in particular, and that people need to stop pretending.

“One of the most insidious things happening in the debate is people claiming versions of ‘other industries may have problems with sexism, but our industry doesn’t.'”

He cited Y Combinator’s track record of accepting women founders into the incubator as proof that it isn’t sexist.

He did not, however, explain Graham’s statements in May that he doesn’t fund founders with strong accents or women who have/want kids.

Altman thinks HR can be a solution.

“Our sense is that many will benefit by doing it [human resources infrastructure] earlier. Traditionally, startups have thought of HR as a drag on moving fast and openness, but a well-running team is one of the best assets a company can ever have.”

However, the dozens of women who work for established companies with plenty of human resource infrastructure and have shared horrific stories on platforms from Whisper to Fortune are proof that rules don’t work.

The real solution in any company, from startup to Fortune 50 is a founder/CEO who backs a culture that is blind to gender, age and color and, most importantly, walks the talk, both professionally and personally.

This puts you, as a founder, in a position to truly change the working world.

Image credit: HikingArtist

The recent conversation I had with a group of managers was both eye-opening and depressing.

The managers were from a variety of companies, from startups to enterprise, most at mid-to-senior level.

They ranged from late twenties through fifties and, although not intentional, all were white.

The subject was diversity/inclusiveness.

Without exception, they claimed that their organization really was a meritocracy and that the media stories of gender/racial prejudice, especially in tech, were overblown or untrue.

Several commented that there was no real research that proved bias.

I pointed out a recent rigorous study that showed that the prejudice started long before careers.

Our analyses, which we reported recently in a second paper, revealed that the response rates did indeed depend on students’ race and gender identity.

I almost laughed when several held the tech startup world up as an example of how meritocracy worked, since nothing could be further from the truth.

The sad part is that they are good managers whose organizations are meritorious—at least in comparison to most.

I’m not sure if it’s naiveté, ignorance, wishful thinking or secret agreement, but when the people doing it right assume everyone else is, too, nothing will change.

Flickr image credit: Geordie Hagan