Ellen Pao leaving court in March. image

Ellen Pao lost her gender discrimination case against her former employer, but the concerns she raises should not be swept aside.

Start-ups need to consider diversity and discrimination in their sphere of influence.

Operating in intimate workplaces, like entrepreneurs often do, there are a lot of complex factors. Managers need to think beyond themselves and what they do; while company policy might not act against diversity, the culture might.

Research from Harvard Business School shows us that men in leadership have a predisposition to belittling female subordinates.

Men who are threatened by women are then more likely to objectify and sexualise her.

This can translate to lower motivation by women and reduced performance. If her contributions aren’t valued, why would she be at her peak? And why would she stay?

Pao, who was gunning for a senior partner role, is asking us to consider the role of group-think. If those who are making decisions are pale, male and stale can gender equity really be achieved? Company direction is not achieved in a vacuum. Organisations can only prosper when stereotypes are challenged.

If anything it seems that Kleiner Perkins has learned almost nothing from this experience, trying to keep Pao quiet. There is huge value in her talking and shedding light on these issues, and helping organisations navigate them themselves.

This is on the mind of investors at the moment – for example, legendary investor Sallie Krawcheck is publicly considering this now.

It is too easy to think that the issues of diversity in the US and the Valley are distant from us in Australia.

For Australian organisations the main issue that Pao raises is workplace conflict. In the competitive and pressure-filled environment of start-ups and investing this can be deeply connected to how we view ourselves. Work is where we source confidence and prestige.

Pao believes she was unfairly passed over. I speak with women from varied industries that have had similar experiences, but none had the confidence to raise it publicly. Current research, including from Bain, shows that men are more likely to be promoted on prospects where women need to shows a record of achievement.

One of the organisations I’m working with at the moment has a male and female founding duo. Their relationship is under strain as she has taken on more executive and operation duties while he is working on strategic thinking.

While both are essential, he is seeking advice from people who are like him. This fails to capitalise on her current on-ground knowledge.

Entrepreneurial women are challenged by a breadth of issues, as innovators and leaders. Expected to juggle organisational success, be feisty but not too aggressive and also somehow balance 60-hour work weeks with a flourishing personal life.

Stereotyping and discrimination like this is not helpful and, although it is less blatant than in the past, it remains a challenge to be overcome and one critical to organisational success.

Division and tension are the seeds of company failure. A culture shift across business is required, but it is start-ups that can achieve this.

Founders and early investors can implore a culture that values a breadth of experiences.

Following the case, Pao has been realistic talking about the complexities of modern womanhood.

Embracing the value and impact of diversity is in the hands of today’s entrepreneurs.

Conrad Liveris is an advocate, adviser and researcher on the politics and economics of diversity.

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