A Starbucks coffee cup is seen outside a Starbucks Coffee shop in Washington, DC, April 17, 2018, following the company
A Starbucks coffee cup is seen outside a Starbucks Coffee shop in Washington, DC, April 17, 2018, following the company's announcement that they will close more than 8,000 US stores on May 29 to conduct "racial-bias education" following the arrest of two black men in one of its cafes. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
PHOTO: SAUL LOEB/AFP/AFP/Getty Images
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Biased management, a history of promoting some people based on their achievements and not others, a lack of trust in company authority — correcting these issues can take a Herculean effort, and sometimes even requires a drastic overhaul in leadership.

If left unchecked, such problems can become deeply ingrained in a company’s culture.

Executive Brief

  • Newer, smaller companies can correct problems more quickly than their larger competitors.
  • Women leaders recommend paying close attention to hiring practices, even as a company grows quickly.
  • Sharing data with the workforce — and the customer base — builds accountability right away.

At smaller startups, leaders have an incredible opportunity. They can correct problems more quickly than their larger competitors, but they can also prevent them from happening in the first place.

“When you start a company, you don’t have to change a paradigm that’s already existing,” says Christa Quarles, chief executive officer of OpenTable.

At the 2018 Fortune Most Powerful Women Summit in Laguna Niguel, California, Quarles spoke with women leaders about building an inclusive and diverse business.

“Building a diverse workforce is something you have to think of at the outset of your business,” says Sara Clemens, chief operating officer of Twitch.

Look at your growth

“If you’re not hiring in a diverse way from the outset, it’s gonna show up in the culture, in how decisions are made, in what people walk away with,” says April Underwood, chief product officer at Slack.

Underwood is a member of #Angels, an investing collective advocating for women’s early employment and leadership at startups. A recent study from #Angels revealed that more startup equity goes to male workers, which Underwood attributes to a lack of diverse representation at growing companies.

“In a lot of these companies, the first set of engineers show up — they’re all men,” she says. “They get incredible packages. The people who start at 150 or 100 employees, they only get 10% of that.”

These early gaps in pay and equity shape toxic cultures down the road. But with the right forethought, they can be avoided altogether.

“If you’re a good leader, HR is a critical right hand to you,” says Diane Dietz, CEO and President of Rodan + Fields, a fast-growing beauty company. “You can’t have it in your rearview window.”

For Dietz, that meant thinking carefully about hiring when she joined Rodan & Fields two and a half years ago. As she watched the company grow from 300 employees to 700-plus, she said her leadership team had lots of conversations about how to hire people from both inside and outside the beauty industry.

“If you like to see progress, a small company is fun,” Dietz says. “You’re in a speedboat, not a tanker ship.”

Look at your data

When she started at Twitch eight months ago, Clemens implemented a massive engagement survey, looking to find out more about how workers view the office culture and environment. Employees submitted more than 12,000 comments in response.

Twitch leaders sifted through the flood of comments to pick out specific areas of concern. This is something all companies can do, Clemens says, but new companies often prioritize shipping product over shaping culture.

“You see the importance of capturing that information just ignored, which means you’re completely blind as to what is happening with one of your most important assets: your people,” she says.

Sharing numbers with the workforce — and the customer base — builds accountability right away.

“If you can’t measure it, you can’t fix it,” Clemens says.

Look at your message

We’ve heard it before: Company culture is shaped from the top.

After Quarles declared it her mission to reach gender equity — 50/50 male and female employees — on the OpenTable product team, the company instituted several changes. They anonymized résumé reviews to remove potential bias that filters out women or people of color, they relied on software to comb their job listings for words that may target some people over others, and they required more than one diverse candidate be represented on every interview slate.

“This isn’t a man’s issue or a woman’s issue,” Quarles says. “This is a leadership issue.”