Tracy Isacke has been promoting diversity and inclusion (D&I) before it became one of the top priorities for the innovation ecosystem, she tells Global Corporate Venturing.
Having spent nearly 17 years at document technology company Xerox, where Isacke was the first woman on the UK board, she has witnessed an increase of women appointments in leadership positions in the corporate world.
After spending almost three years at Telefónica Digital, an innovation arm of Spain-headquartered telecommunications firm Telefónica, Isacke joined financial services firm Silicon Valley Bank in 2014 where she has been managing director of its corporate venturing subsidiary, SVB Ventures.
Regarding the work she has carried out at SVB to improve female representation in startups, Isacke said: “[SVB] sponsored a competition with [software producer] Microsoft last year for female founders.
“We put up two prizes of $500,000, to invest in female-founded companies with [Microsoft’s corporate venturing unit] M12, we were judges on the panel and thought about how to attract female founders.
“Statistics prove that the more diverse a team is, the more they succeed. With the diversity of opinions and a candid understanding of different creeds, the idea will more likely be successful.”
Investing in female-founded companies brings higher revenues than the market average, according to multiple studies conducted by organisations such as Kauffman Foundation, MSCI ESG Research and Boston Consulting Group.
Peggy Johnson, executive vice-president of business development at Microsoft, said at the time of launching the Female Founders Competition: “We formed M12 to make smart bets on innovative people and their ideas, and [the competition] is an extension of that mandate.
“This is not about checking a box; it is an opportunity to remind the VC community that investing in women is more than just good values, it is good business.”
Isacke also stressed the importance of including all competent candidates in a competitive job market such as Silicon Valley, adding: “Women are 51% of the population; there is no reason why they should be a minority in most of the business areas.”
Isacke also noted “inclusion goes beyond women”, and to attract diverse candidates, clear policies must be in place. “We certainly look at interview policies and make sure that we have a balanced portfolio of people to interview,” she said, with both SVB and SVB Ventures’ portfolio companies in mind.
This year’s SVB Startup Outlook survey found 56% of startups based in the US, UK, China and Canada have at least one female executive, while 40% have at least one woman on the board of directors.
Although 59% of startups have implemented a D&I-friendly scheme to boost the number of female leaders, the founding members’ gender still reflects that of the executives, the survey said.
Isacke reiterated that though more women are pursuing tech careers and more progress is being made, it takes time and participation from everyone to achieve true gender parity.
D&I is crucial to success
James Mawson, editor-in-chief
James Mawson (JM): Why do you feel D&I is crucial to investment teams and portfolio companies’ success?
Sue Siegel (SS), recently chief innovation officer of industrial conglomerate General Electric and chief executive of its corporate venturing unit, GE Ventures: Diversity of thought, perspective and experience are important to any team or activity. Teams benefit from these and they come with diversity of gender, age, race, disabilities, to name but a few. We felt lucky to have such diversity among our investment leadership team at GE Venture, with over 60% representing diverse backgrounds. What was most important to me was that they weren’t just diverse, but they were world-class at what they did! Their diversity added even more depth and dimension to how they worked with GE Ventures portfolio companies.
JM: What led you to initiate D&I practices within your corporation?
SS: I can’t speak for GE any more, but it was already focused on D&I, having been one of the first companies to have a chief diversity officer dedicated to these efforts across the company, worldwide. It had over 100,000 women in the very active worldwide Women’s Network. Over the last few years, it launched ‘Balance the Equation’, which focused on increasing women in STEM-based roles with active recruiting for scientists and engineers. It was natural that this extended to the investing arena.
Growing up and throughout my career, being a diversity player myself (I can be categorised under woman, Asian or short), I was always keenly aware of diversity perceptions and being inclusive. I urge the men and women who might have never experienced being in the minority, to be extra mindful for those that are. They might not want to call attention to their diversity. I certainly didn’t as I always wanted to perform and be measured based on my talent versus my diversity status. Understanding that can be so helpful to the individual, to have champions.
JM: What milestones do you have in place for measuring D&I success?
SS: The types of measures that one could typically make are:
- a number of diverse candidates in the candidate slate and striving to always have a diverse pool
- percentage diversity in leadership, within investors and staff
- percentage of companies considered for investment and those invested in
- percentage of diverse board of directors members
- portfolio company diversity in leadership and the types of D&I efforts they have put in place
JM: In what areas have you garnered results?
SS: A leadership team that was over 60% diversity leaders, created companies that had women co-founders or CEOs and boards had multiple women.
Don’t leave out potential talent
Liwen-Edison Fu, reporter
Karen Kerr, formerly executive managing director of advanced manufacturing for GE Ventures, the corporate venturing division of industrial product and appliance manufacturer General Electric, has emphasised that the unit was very purposeful about diversity and inclusion (D&I) initiatives.
“Returns matter in corporate venture capital,” Kerr said, “we want to invest in companies that will be successful and will be partners for our parent companies.
“There are a lot of data and studies that suggest diverse teams lead to better financial outcomes. One reason to [pursue D&I] is because we are investors – we are looking for better financial outcomes.”
She added that most large corporations have goals around ESG (environmental, social and corporate governance) and D&I, and GE was the same. “Certainly, we had our initiatives around women in engineering, and it is important for all of the activities of a corporation to reflect those larger goals.
“We were proud to do that on the venture side. As it relates to the portfolio companies, I would go back to where I started – data suggest that it drives better financial performance for the companies, so it has to be a motivation for companies.
“Another thing that we observed, particularly in our portfolio companies that were based in places like the Bay Area with a competitive market for talent, to attract and retain the best people, you really have to be casting a really wide net; otherwise, you shoot yourself in the foot – you are leaving out potential sources of talent.
“That is a huge reason why the portfolio companies themselves need to be concerned with this issue,” Kerr noted.
When Kerr joined GE Ventures, she was pleasantly surprised by the number of women leading the investment team and the overall activity; however, she would soon learn that the portfolio companies’ situation was quite different.
“We conducted an analysis of our portfolio, and I was incredibly disappointed to find out that we were not doing much better than the national average in terms of women in the senior leadership teams of these companies.
“What struck me was that we, the corporate investor, were largely doing follow-on deals behind the venture capital community, so it was not surprising that we would mirror the norm, the average – that was what led us to start thinking about doing a D&I initiative.”
She said earlier this year, GE Ventures partnered Ideo CoLab, the collaborative impact arm of design consultancy Ideo, to begin a content portal called Flux in a bid to promote D&I in portfolio companies. The platform provided crowdsourced resources to help portfolio companies achieve an inclusive workplace.
“The areas that you get talent for your firms are from successful entrepreneurs. And as we are helping to build our portfolio companies’ staff in a diverse and inclusive way, some of them are going to run new companies, while some others will go on and become VCs or corporate VCs.
“We have an important role to play in helping the ecosystem if we just really focus on our portfolio companies and making them as diverse and inclusive as possible,” Kerr concluded.
