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Diversity in Tech Ep. 4/8 | How Diversity Affects the Bottom-Line

Try Catch Essentials
Diversity in Tech Ep. 4/8 | How Diversity Affects the Bottom-Line
By Kerry from Try Catch • Issue #6 • View online
Morning, Thursday.
Welcome back to the Try Catch Essentials Newsletter.
Each month we curate a selection of must-reads concerning an important topic.
The November topic of Try Catch Essentials is Diversity in Tech.
Try Catch Essentials are:
  • For HR leaders, recruiters, founders and hiring managers
  • Handpicked essential reading on important topics in HR and Tech
  • Sent to you in 8 easily-digestible issues per month
  • A Monthly e-book collection for future reference
The Try Catch Essentials Newsletter is sent to your inbox 8x per month with a new episode following a sub-topic of the month’s theme.
In ep. 4 of 8, we’re looking at How Diversity Affects the Bottom-Line  - following logic, diversification helps avoid putting all the eggs in one basket.
This week’s Essential Read is as essential as one can get, an exemplary article exploring the Harvard Business School’s research on how diversity impacts financial performance.
If this series strikes a chord with you, we’d ♥ it if you’d share or forward this newsletter to someone who would also like it.

How Diversity Affects the Bottom-Line
There have been many reports (see Additional Reading below) about how diverse groups are better at collective problem-solving accuracy, innovation, and analytical thinking - but the hard financial benefit claims of organization diversity was lacking until Harvard Business School Economist, Paul Gompers, applied his analysis toward the publicly available data of endowed (gender, ethnicity) and acquired (education, work history) traits.
To him, the evidence is clear:
Diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns.
According to his findings, Gompers suggests that candidates with the maximum likelihood of securing VC funding are those resembling the VC investors themselves - white males are disproportionately over-represented.
Only 8% of the investors are women. Racial minorities are also underrepresented—about 2% of VC investors are Hispanic, and fewer than 1% are black. Those groups have seen significantly increased representation in other fields…, but not in the VC industry.
This result is then counterproductive to what Gompers’s findings: businesses and VC investors are missing opportunities (and frankly, more money) by “keeping it in the clubhouse.”
He states that VC investors are susceptible to what scholars refer to as homophily - a tendency to associate with people resembling one’s defining characteristics such as ethnicity, education, and gender.
Read the full article below to learn more about the profit-limitations built-in to homogeneity in business and the authors’ evidence-based recommendation for managers.
The Essential Read
The Other Diversity Dividend
The Additional Reads
The Business Case for More Diversity
How and Where Diversity Drives Financial Performance
The Business Case for Diversity is Now Overwhelming
Who to Follow
Melinda Briana Epler is CEO & Co-Founder of Change Catalyst and Tech Inclusion alongside Wayne Sutton, who we featured in ep. 2 of this series. Melinda currently works with the tech industry to solve diversity and inclusion collaboratively. Having a background in storytelling and large-scale culture change, she is a strategic advisor for tech companies, tech hubs and governments around the world. You can follow Melinda on linkedin, twitter and medium.
Next Up
We’ll be in your inbox again, this time Monday morning at 9:10 discussing Women in the Workplace.
We’ll be looking at the recently released five-year study on the topic and its associated reports.
Stay Connected
Feedback is incredibly important to us, hit reply or email with any comments, suggestions, or to share your suggestions for groovy mezcalerias in Oaxaca.
See you Monday!
Did you enjoy this issue?
Kerry from Try Catch

Try Catch Essentials:

- For HR leaders, recruiters, founders and hiring managers
- Handpicked essential reading on important topics in HR and Tech
- Sent to you in 4 easily-digestible issues per month

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