- Lisa Lambert is one of the very few Black women in the venture industry.
- Lambert currently heads the venture effort of National Grid, a UK-based utility giant, but she’s had a more than 20 year career in the industry, much of it at Intel.
- Her career has given her an opportunity to understand why the venture, startup, and tech industries are so lacking in diversity; partly, it’s because they value fast decision-making and homogeneity enables that, she told Business Insider.
- She also knows from experience that things can be different; in part, what’s required is leadership, and holding corporate managers accountable for meeting diversity goals, she said.
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You might think of Lisa Lambert as a unicorn, or perhaps something much more rare — a phoenix, say.
Lambert is the chief technology and innovation officer at National Grid, as well as the founder and president of National Grid Partners, the UK-based utility giant’s venture investing arm. Holding those titles would be unusual enough because she’s a woman, as there are relatively few women in either the VC industry or in technology leadership positions.
But she’s also Black, which makes her extraordinarily unusual. A 2018 survey of traditional VC firms by Equal Venture partner Richard Kerby found that black women comprised just 1% of all investors at those firms.
Lambert knows first-hand that the tech and venture industries can be more diverse and are hurting themselves because they’re not.
“If you look at the statistics around under-represented groups — women and ethnic minorities — they are massive market opportunities,” Lambert told Business Insider in a recent interview.
Venture investors’ social networks lack diversity
While she may be a rarity, Lambert isn’t new to the scene. She’s been a venture investor for more than 20 years, much of it with Intel Capital, the investing arm of the chip giant.
She’s also well-practiced at thinking about how to foster diversity in the tech and venture industries. During her last year at Intel, she ran the company’s diversity fund, whose mandate was to invest in startups founded by women and under-represented minorities. Intel created the fund as part of a public commitment by then-CEO Brian Krzanich to promote inclusion and develop a more diverse workforce.
From her long tenure in venture capital, Lambert said she understands why startups and venture firms aren’t diverse and don’t prioritize it.
Venture investors and startup founders on the whole are largely white and male. The people they interact with are largely the same. Many venture capitalists and founders don’t make much of an effort to broaden their networks to include people from different backgrounds or ethnicities. Unfortunately, having such a constrained network shapes who they see as potential partners and founders and the business ideas they think are worthwhile.
“Typically, networks look like the people that are in them,” Lambert said. If “you’re going to continue to recruit out of your network and engage out of your network … it doesn’t create diversity, by definition,” she continued.
Diversity can slow things down
But there’s another factor that’s likely at play, she said. Both venture investors and startup founders pride themselves on making quick decisions. It’s much easier to move fast when you have a homogeneous team, when everyone has the same or similar background.
By contrast, diversity can slow things down, Lambert said.
“It’s very difficult to be quick at making decisions if you’re diverse, because diversity brings different points of view,” Lambert said. “It creates more potential for conflict, frankly, and disagreement.”
Lambert thinks that kind of debate actually leads to better decisions, ones that are better informed and more likely to be broadly accepted. But if the highest priority is being quick, that kind of decision-making will get short-shrift.
And venture investors and startup founders have had little pressure on them to do things differently, she said. Broadly speaking, the venture and startup industries have performed well enough that the investors who underwrite the system — the foundations, pension funds, family offices, and institutional investors who serve as venture firms’ limited partners — haven’t been agitating for change.
And until recently, those investors have had little evidence that they may be losing out because of the venture system’s lack of diversity or that the system’s homogeneity has some significant drawbacks.
“So what’s the incentive for change,” Lambert said, continuing, “that’s always been the hard point.”
The costs of homogeneity are becoming more apparent
But there’s growing evidence of the costs. One need not look any farther than the widespread protests over the killing of George Floyd while he was in police custody. That unrest led to scattered property damage and looting of some businesses. It also shone a harsh light on systemic injustice and discrimination across American society, including within the tech and venture industries.
Many companies have scrambled to react, pledging to diversify their ranks or to invest in organizations that promote racial inclusion.
“We’re in a state in America, and maybe across the world, where there’s a high cost now associated with not being proactive about this,” Lambert said. The people who have been left out of the system are “going to disrupt your world if you don’t consider them, if you don’t include them, if you don’t invite them into your party.”
There’s also growing evidence that investors and companies are losing out financially by failing to be more inclusive.
A study out of Stanford last year indicated that asset managers rate white investors higher than Black ones, even when they have the same strong performance records. The study, which echoed similar findings related to job candidates, suggested that the investment industry is systematically undervaluing Black investors — potentially to the detriment of the industry’s returns. Related studies indicate that diverse teams make better decisions and judgments than homogeneous ones.
What’s more, that very homogeneity leads to blind spots. White male investors and founders often don’t understand the needs or interest or desires of women or people of color. That obliviousness can lead them to miss out on potential business, Lambert said.
For the most part, venture investors “aren’t represented in the markets that women might go after or African-Americans, or Hispanic Americans might go after, and so they have no way of relating, even to judge if an idea is a good idea,” she said. “So you need to have diversity if you want to go after those markets.”
The diversity playbook isn’t complicated
Lambert knows from experience that the venture, startup, and tech industries can be more inclusive. She’s lived it.
Intel gave her an opportunity as an investor. It eventually put her in charge of its diversity fund, where she was directly responsible for finding and investing in a diverse collection of founders.
Despite many claims from within the tech and related industries to the contrary, the reason why they aren’t more diverse has nothing to do with the so-called pipeline of talent, she said. There are plenty of Black college graduates each year who could be hired by venture firms, startups, and tech giants.
Instead, she said, what’s been lacking, in part, is leadership. Those companies leaders have not made diversity a priority. Compounding the problem, the teams making the hiring decisions themselves aren’t diverse. Diverse teams encourage more diversity; homogeneous ones don’t, she said.
“The playbook on how to get change is really not that complicated,” she said. “But the challenge is, do you have leaders that are willing to do what’s necessary to execute the playbook.”
What’s really needed, she said, is for companies to treat diversity goals like other business objectives. Leaders ought to be held accountable for meeting them — and lose compensation or more if they don’t, she said.
Otherwise, companies can keep making statements about how much they value diversity without ever really doing anything about it, she said.
“If you’re not going to put those structural changes in and hold people accountable — they’re not going to get a promotion, they’re not going to get a bonus, they’re not going to get to keep their job if they don’t make the change — then you’re not going to see the change,” Lambert said.
Got a tip about diversity in the tech industry? Contact Troy Wolverton via email at firstname.lastname@example.org, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.
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