Time to Throw in the Towel on Big Companies *Getting It* on Diversity?

Ok, so while we women have been leaning in and knowing our worth and asking for more, diversity in corporate America has been going….sideways. At best. For some time.

Yuck.

I guess we’ll just have to keep at it. Redouble our efforts. Maybe re-triple them.

Or maybe we should all just finally admit that doing what we’re doing – again and again –won’t cut it.

Maybe the better results that come from increased gender diversity just aren’t enough to get the people in charge to change the workplace. Maybe the higher ROEs, lower risk, greater employee engagement, greater customer engagement, greater innovation isn’t enough. Maybe the 63% better returns that First Round Capital calculated it has earned investing in gender-diverse leadership teams just isn’t enough.

Gee, 63% better sounds like a lot better. How can that not be enough to get the venture capitalist to see the value of investing in gender-diverse leadership teams?

Perhaps it’s because we talk about the advancement of women as a macro issue, but it often comes down to the micro: who your boss is. The cold, hard truth is that that matters a lot.

For example, I feel like I’ve been pretty much the same person since I was about 22….and certainly since I was 30. But since then, I've had bosses who supported and promoted me, and I’ve had bosses who have fired / re-org’ed me out. (And, to be clear, my business results were actually better under the bosses who ousted me....by some measure.)

You don’t have to talk to that many professional women before they start to tell stories of the bad boss (or four) they’ve worked for over the course of a career. And it doesn’t even have to be a “bad boss;” it can simply be a boss with a stay-at-home wife. Research shows that those gentlemen tend to view women in the workplace less favorably and are less likely to promote them.

I’ve worked for those types of bosses. I even worked for a boss who wouldn't bring his spouse to social events to which spouses were invited....even in his own apartment. Think he was comfortable with strong women in the workplace?? One might guess not so much.

People often seem surprised when I mention that gender diversity went backwards on Wall Street coming out of the financial crisis….and by good measure. This “the boss matters” micro perspective may demonstrate why: more turmoil, more management turnover, more new bosses lead to more opportunities for women to work for bosses with the implicit (or explicit) gender expectations and biases so many people have. And as an industry contracts and decisions are made about who to let go, those inherent biases can mean that the reversal of progress on gender diversity can be swift; and it is only rebuilt slowly.

Ok, that’s “bad bosses” and industries in turmoil. But I’ve also found that advancing diversity can be tough in stable companies and amongst the most well-meaning and highly attuned and gung-ho-about-diversity individuals. That’s likely because, let’s face it, so many of us are implicitly drawn to working with people like ourselves. (We understand them better: it’s a reason why men tend to be hired on potential – because the male boss can project how the candidate will be successful, from his own experience – and that potential tends to be preferred over women’s track records.) Add to that that, as senior managers, we’ve all been taught to give our management team the elbow room to manage; business schools tell us to build a meritocracy and to judge our executives on their results.

The difficulty of consciously building a diverse team, while simultaneously giving our managers autonomy, was thrown into sharp relief for me a few months ago at Ellevest. Make no mistake: building a diverse team is so important for us that it’s one of our company’s Core Values. The eye-opener occurred when my co-founder informed me of an imminent hire by one of our teams. They had run a rigorous hiring process, and we had ended up with two strong candidates: Candidate A, who was unlike most of the team in any number of ways, beginning with her mohawk. The other was Candidate B, who was much more like the team that we already have in place.

My co-founder relayed to me that the hiring team liked both candidates a great deal; in fact, if they had to put percentages on it, they were 48% for Candidate A and 52% for Candidate B.

My view? At the very least, that’s a rounding error, driven by our greater comfort with Candidate B. (And it might be more than that, or even much more: it could be a strong “buy” signal for Candidate A, given her difference from our team.) So, I said, let’s hire Candidate A and continue to drive greater diversity.

My partner’s view? Gotta let your managers manage. They know how important diversity is to our company; and this was the choice they made with that knowledge. If I / we overruled them, they would feel disempowered; they might not feel that they had as much “skin in the game” if Candidate A failed (“After all, our first choice was Candidate B,” they might say); and they might resent us for overruling them.

My comeback? For my entire career, I worked in “meritocracies,” in which managers were allowed substantial autonomy in how they ran their businesses. That industry was Wall Street, and, rather than the “invisible hand of meritocracy” driving greater diversity (and those 63% better returns!), it was among the least diverse industries. (And it matters: there is some pretty compelling evidence that that lack of diversity drove the groupthink that in turn resulted in the financial crisis.) “Letting managers manage,” particularly when they only hire every once in a while, led to a homogenous industry. 

Let’s put aside that the decision on Candidate A or Candidate B for a moment. Let’s take it as a given that people outside of the majority have to be “better,” in order to have a chance of breaking through. Certainly more than that 63%.

But how much better?

To get to this answer, what if we draw an analogy to how much better a new product has to be to compel consumers to switch? This is a challenge so many of us know from launching new products and new companies. We as individuals tend to be remarkably averse to change, even when a demonstrably better product is available. We get into habits, we get comfortable, it’s just too much effort to change.

As I thought about this switching issue, I remembered an iconic Harvard Business Review article, “Eager Sellers and Stony Buyers: Understanding the Psychology of New Product Adoption” (which I highly recommend for all entrepreneurs and new business executives….and now for all corporate managers). In it, the authors note that “People irrationally overvalue benefits they currently possess relative to those they don’t. The bias leads consumers to value the advantages of products they own more than the benefits of new ones.” The article cites a “status quo bias,” which is so powerful that consumers overvalue the benefits of an existing product by a factor of three; and this preference for the status quo grows over time. The longer you use a product, the more you value it. 

Sound familiar?

So how do you overcome this? Well……for products, Andy Grove (the late founder of Intel) suggested that new products should be 10x better than the product they are replacing.

We’ve all heard that minorities and women have to work harder and have to be better to advance in business. There are certainly times that I’ve felt that. But 10x better is really asking for a lot, don’t you think??

So what is the answer?? To date, most have said it’s more training and more discussion of the issues. And we can certainly double-down on what we’ve been doing. 

The ultimate solution may be driven by two powerful forces: technology and money. Technology – more accurately, tech start-ups – are crowd-sourcing and providing individuals with more information about the cultures and employee policies of the companies at which they may want to work, buy and /or invest. Sunlight, best disinfectant, and women being more than half the workforce….and having a lot of money. Those can be a powerful combination.

In addition, professionals today have an important alternative to gutting it out at a company that doesn’t “get it” that the previous generation didn’t; and that is starting their own businesses. The cost of starting businesses is coming down rapidly, and this has the potential to disproportionately benefit professional women. In fact, according to research by Ellevate Network, the #1 reason women start businesses is to build the company at which they want to work. And you can bet your bottom dollar that that means building a company that values women.

The other benefit of starting your own business? As an entrepreneur, the market decides if you’re successful. Not some guy named Steve.

One last thing: I laid out the difference of opinion on a hire at Ellevest. What would you have done: overrule the team and hire Candidate A? Or let the team to with Candidate B?

(We went with Candidate A….who turned us down because she didn’t see enough people who looked like her at our company. Since then, we’ve redoubled our efforts.)

Sallie Krawcheck is the CEO and Co-Founder of Ellevest, an innovative digital investment platform for women. She is also Chair of the Ellevate Network and the Pax Ellevate Global Women’s Index Fund. She is the best-selling author of Own It: The Power of Women at Work.

An edited version of this article was published on Fortune.com.