First, the force of numbers. There is a human tendency, well documented in research, to associate with and to endorse people who are ‘like you’. Because women are outnumbered at senior levels, the people at the epicentre of influence and power in tech companies and VC firms are predominately male. On average, women and other minorities have fewer and weaker connections to these dominant coalitions. That makes it harder for them to wield influence and effect change.
In a recent post I discussed Sexism in the City. Now Schumpeter at the Economist has provided evidence for a similar problem in Silicon Valley, where there is a clear leadership gap in tech. Half of American’s publicly traded tech companies have all male boards. The number of female partners in venture capital firms has declined from 10% in 1999 to 6% in 2014. Yes, in the very period when activism around gender diversity has gained so much ground, the number of women has dwindled.
According to Schumpeter, venture capital partnerships work best – like the tech startups they back – when they are run by a tight-knit group of partners. When that tight-knit group of partners are all male, it is difficult for females to break in, as Ellen Pao found at Kleiner Perkins. In venture capital, as in fintech, firms face a double bind. They fish for talent at the intersection of two male-dominated worlds: financial services and technology. The number of women in each pool is small enough, so it’s hard to find women who are at home in both.
But shortage of talent is one thing. For women in tech, looking for leadership roles, and for the firms who employ them, there is another. I call this the network gap.
Research shows that, in male-dominated environments, women have weaker connections than men. In other words, women face a network disadvantage. There are three reasons for this.
Second, where they do have connections to powerful people, women are less likely to use them. They do not put themselves forward for promotion as readily as men do, as Google found, and they are less inclined to negotiate on their own behalf.
Third, women fear a backlash if they are seen to be pushy. And that fear is justified. People think that women who assert themselves by talking alot are less suited to leadership than quiet women, whereas the opposite is true for men: pushy men are deemed to be good leadership material.
Taken together, these three factors make it harder for women – in tech, in financial services and in other male-dominated environments – to build a powerful network and use it to advance themselves.
Read more about these arguments here.