Despite a clear business case for diverse teams, US companies still struggle to attract, retain, and promote Black talent into executive roles.
Diverse teams outperform homogeneous ones. Ethnically diverse executive teams are 36% more likely to see top financial performance, according to McKinsey & Company’s analysis of more than 1000 large global companies.1 Similarly, BCG found companies with above-average management team diversity saw innovation-related revenue that was 19 percentage points higher than that of companies with below-average leadership diversity.2 The superior decisions and ideas that diverse teams generate also lead to long-term advantages such as above-average numbers of new products, based on an North Carolina State study of how 3000 companies performed over a decade.3
Despite this overwhelming evidence, US companies still struggle to attract, retain and promote ethnically diverse talent into executive roles. This is particularly acute for Black professionals. Currently, Black employees comprise 12% of entry level positions, but only 6% of executive ones, according to a recent McKinsey study of 3.7 million employees across 24 large companies. White employees, by contrast, hold 59% of entry-level positions and 76% of executive ones.4
This disparity is even more pronounced in certain industries. In the financial services sector, 19% junior-level representation drops to 2.6% at the executive level, a number that declined between 2007 and 2018.5 One outcome of these trends: No more than 1% of Fortune 500 CEOs at any time have been Black.6 The extreme underrepresentation of Black talent in executive roles suggests a broken succession process in which many factors other than merit are at play.
Frustration with this system has prompted a growing number of rising Black leaders to take unconventional and entrepreneurial routes to the top, often starting their own companies or changing employers to fast-track their careers.7
To learn more, we talked to 12 Black founders, CEOs and C-suite leaders who started their careers in traditional roles within corporate America, but ultimately chose to fulfill their leadership potential via paths less traveled. These leaders have attended Ivy League colleges and business schools and worked for Fortune 500 companies and prestigious consulting firms. Nearly half have received backing from venture capital or private equity funders, a quarter are now investors themselves.
As a group, these 12 leaders illuminate the depth of potential among Black professionals that goes untapped by corporate America. They also provide a window into the incentives and opportunities that are currently missing in corporate America for similarly ambitious Black professionals. While the journeys of these Black leaders are each very different, they involve several common themes including:
We also draw lessons from this group about what their former employers could do better. For companies looking to expand Black representation at higher levels, we offer the following recommendations:
- LEVEL: Ensure assessment processes are truly founded on meritocracy and the company is compensating and supporting talent in an equitable manner.
- ACCELERATE: Be intentional in supporting the development of rising Black leaders, with a view toward what additional steps may be necessary to create equity.
- EXPAND: Challenge and redefine notions around what is required for success in a role.
What compels and propels Black talent to seek leadership roles outside the corporate system
No two people have the same experience at work. Yet in our conversations with Black leaders, we heard some striking similarities among their experiences. In our synthesis of these conversations, three predominant themes stood out: focus, worth and purpose.
“I grew up in a household where to be successful, you had to be a doctor or lawyer or go into finance. My dad grew up in south Bronx and was the first in his family to go to college,” said Porter Braswell, CEO and co-founder of Jopwell, a venture-backed technology platform that enables diversity hiring.
Growing up, Braswell was encouraged to focus on careers with recognizable paths to success, particularly at longstanding institutions. In fact, when he approached his parents with the idea to start his own business, they were not supportive. However, after a tragic death in his family, Braswell knew he had to take a risk to make his mark on the world and began to refocus his energies on creating something impactful. “When I realized I was holding back because I was afraid of failing, it was actually a much bigger risk to not take the risk than to take it.”
Other leaders echoed this, describing their career path being a family affair. “Early in my childhood, my mother was a social worker and later an attorney. My father was an engineer. They wanted me to find a profession I would enjoy, and I chose my engineering major based on the fact that it was what one-third of Fortune 500 CEOs chose,” said Rayford Davis, digital innovation lead (US Southeast) for Amazon Web Services.
As they entered the workplace, staying focused increasingly meant managing internal narratives as well as external expectations. Frequently the only person of color on a team or in a room, many have learned to walk a fine line between confidence and humility, refusing to allow others to determine their success.
This inner strength is essential, particularly as more companies look to hire diverse candidates for legal or brand management reasons. “If you come into a role worried about being a token, you’re not winning,” shared one C-level non-profit leader. He advises emerging Black leaders to apply caution in selecting jobs, but to leave their skepticism behind after accepting one. “Insecurity is one of the most damaging emotions for any human being. You may be the only, but if you own the space you’re in, you’re not a token.”
Entrepreneurship often becomes appealing because it is a way to avoid the feeling of “otherness” that goes with being part of many large established organizations. “In most of my roles, I was the only woman, almost always the only Black woman,” said one entrepreneur who started her business after making partner at a professional services firm and then becoming a C-suite executive for an international company. “At a certain point, I was just tired of dealing with people who were all different from me. My plan was to play the game, win the game and then leave the game.”
Yet, as others noted, becoming your own boss is not always the panacea it might seem to be. While Braswell is proud of the impact Jopwell has made under his leadership, he acknowledges the long road ahead for professionals of color in America. “The experience of being a Black person in this country doesn’t go away just because you start your own company,” said the diversity hiring platform co- founder. “This job is no harder than navigating life in this country. But it doesn’t prevent me from moving forward.”
“My impact on the businesses I had run was directly quantifiable. I had led major turnarounds, launched multi-million dollar businesses, and propelled brands from stagnant to acceleration. But I had little to show for it relative to what was being delivered,” said one executive who recently became CEO of a private-equity backed company after climbing the corporate ladder in the consumer goods space.
Finding a company where she could rise to the top quickly and have “more skin in the game” only made sense to her. “I had a significant track record and I knew I could replicate it, so why wouldn’t I want to make returns for myself relative to what I was winning for the business?”
For many of those we interviewed, life in corporate America was marked by disappointment. While few mention racism as an overt factor that held them back from the promotions they desired, it was frequently a question lingering in the background. Was it racism – or was it age, or the more nebulous “culture fit”? For many, it was hard to tell, especially as the only Black person in their firm or at their level.
Anecdotally, many of these leaders spoke of facing a higher bar for promotions than their white peers, a phenomenon Russell Reynolds Associates recently documented in its study of Fortune 500 general counsel appointments in 2020. Ethnically diverse GCs were 50% more likely than white ones to have an Ivy League degree and twice as likely to have gone to a top 10 law school – yet despite being overqualified, they were 25% less likely to be chosen as a first-time GC.
Against this backdrop, it is not surprising that many Black employees feel they are not getting their due. Only 38% of Black employees agree that employees are rewarded in line with their contributions to the company, compared with 51% of white employees, McKinsey’s recent survey of 25,000 employees found.
Calling out these barriers can help explain why Black professionals tend to change jobs more frequently than others, an observation supported by our recent analysis of the career paths of more than 1000 Fortune 500 board directors, including approximately 320 Black directors. To an employer, a hint of “jumpiness” might raise a red flag. In our experience with successful Black executives, however, these moves are often the product of highly ambitious professionals sensing obstacles to their career growth and looking for clearer paths to advancement.
Whether or not racism is at play in any given situation, it is a constant distraction – which carries a cost in and of itself. Few organizations acknowledge the toll Black executives face in having to regularly reassess whether they will be accepted in a new group, or the burden of loneliness that comes with being part of an underrepresented group.
“I was a product of diversity recruiting efforts, but there weren’t enough people that ‘looked’ like me. So, in 2014, when companies were citing a lack of diverse talent, I realized I was uniquely qualified to solve the problem and created Jopwell,” said Braswell.
Jopwell’s technology platform allows organizations across the US to authentically engage and connect with students and professionals of color for career opportunities. Since its founding, Jopwell has placed thousands of members at companies they may not have had access to otherwise.
“At Jopwell, we practice what we preach. I am proud to say we are the most diverse tech company that I know: We are majority women, the largest ethnicity is African American, and we have created a culture that encourages the team to come as your authentic self,” said Braswell.
While not every Black-led business is directly tied to social purpose, Black leaders nearly universally found ways to give back to their communities through their work. “It’s always been about making the biggest impact I possibly could,” said the CEO of a diversity-focused non-profit foundation who previously worked for large technology and consumer companies. “I went into technology not because I love technology, but because I saw how it could improve people’s lives. Work for me is not just doing what you’re asked to do, but figuring out the ‘what else?’”
Still others offer mentoring, connections or funding to those who are on their way up, taking cold calls to pay forward the support they received when they were starting out. One venture-backed founder who is now an angel investor makes a point to fund “the unicorns and the little guys” in her portfolio.
“In venture capital, you’re always being vetted, but it goes beyond traditional vetting when you’re African American,” she said. “I have had VCs who asked if I would be willing to step down before they wrote a check.”
Now, when she is looking at investment opportunities, “I am focused specifically on CEOs who are people of color and minority-owned businesses. I want to level the playing field for other people like me.”
How current C-suite leaders can elevate rising Black talent
What can current C-suite leaders learn from these conversations?
For many companies, retaining Black leaders for even one more role would be powerful, considering the ripple effects it could have on other current and future leaders. Even better would be supporting them over a longer-term path to a C-suite role.
To improve talent management processes for diverse talent, it is essential to start at the beginning, with a fresh understanding of how equity and inclusion might be lacking in basic areas such as compensation, sponsorship and development. From there, organizations can start to branch out to expand the definition of who qualifies to lead, and to support similar efforts in their local and national communities.
Many companies approach diversity with great passion but fail to consider how well they are performing on standard employment criteria. Getting the right metrics in place is a key first step to defining a meaningful set of goals. For Black professionals, the reality of systemic social inequities means that the playing field within the organization is likely not a level one from the moment they are hired.8 Focused support programs, networking opportunities, and additional resources to develop underrepresented minorities are required to truly drive equity. They are not a perk or special treatment, but simply a mechanism of ensuring that all employees are running a fair race from the start.
Defining demographics: Before any goals can be set, companies need to understand where they stand today on diversity in hiring and promoting. In doing so, it is critical to avoid using umbrella classifications such as “people of color,” which can mask lagging Black mobility behind the increase of other populations, but rather track Black, LatinX, East Asian, South Asian, and other races and ethnicities individually to the extent legally possible.
Retention metrics for diverse talent: Although organizations may attract Black professionals, they need to understand when and why they choose to leave, with the goal of avoiding the revolving door of disappointment (or the reputational fallout of a social media scandal).
Promotion and compensation practices: Take a fresh look at promotion and compensation practices and assess them for systemic biases. Identify opportunities to promote based on merit (over relationship and/or hierarchy) and to equalize pay.
Continuous learning: To further improve, partner with the organization’s diverse leaders—or diverse leaders outside of the organization if necessary—to identify bias and create opportunities for diverse employees to have their voices heard. It is important to do this in a way that protects the privacy of those who feel that they need it. The most valuable feedback on issues of racial inequity is naturally going to come from the people that it impacts the most. (For more insight on how leading companies approach creating DE&I functions and metrics, see our recent paper; Is There a Fast Track to DE&I Maturity?)
Questions for leaders to ask:
- How does the representation of Black employees in our organizations compare at the entry levels to the senior management levels?
- Are there systemic differences in compensation among different demographic groups of employees? What is the root cause? What measures – including workforce reskilling – could help right the imbalance?
- Are the outcomes that we have defined as the metrics of success in our organization equally attainable by all employees, including those from diverse demographic backgrounds?
- How often are we basing executive selection on hierarchy and relationships rather than performance and a transparent evaluation process?
- What would the incremental impact of diversity at higher level positions be if we started internal development programs earlier?
- Are we using a feedback mechanism of employee engagement and growth to guide our strategy?
When standard compensation, support and feedback systems are aligned with strategic diversity goals, organizations can build upon them with programs for developing prepared leaders. These programs will increase executive career success and improve returns for the business.
Create a dedicated, visible task force with the stated purpose of accelerating development for Black professionals. Task force leaders should be members of the executive team who exemplify inclusive leadership, bring a reputable business track record, and have a passion for sponsorship and mentorship. This task force would not be responsible for every facet of the organization’s diversity, equity, and inclusion initiatives, but rather to create innovative opportunities that help rising Black professionals “fast track” their careers within the organization. Such opportunities could include:
- Accelerator programs for high-performing Black executives that provide the requisite management and leadership skills required to succeed in the C-suite.
- Rotational programs that provide high performers with exposure to a variety of business units.
- “Fast track” assignments such as driving market expansion, leading a new product/service line or spearheading a strategic initiative such as sustainability, diversity, digital, or customer activation.
- Increased role responsibility that is meaningful, visible and well-supported by other senior leaders.
Bolster support systems. These efforts should include both formal sponsorship and informal mentoring programs.
- Sponsorship programs serve to connect Black professionals to senior leaders with whom they may not otherwise The sponsor’s role is to champion their sponsee’s work and accomplishments to other senior stakeholders, open doors to relationships with other executives and provide an inside view into top team corporate culture. These programs must be well structured by the organization, with guidance for the sponsor (who may be passionate about making a difference but unsure about how to be effective).
- Mentorship programs are informal, but no less They are meant to give Black executives support in navigating the cultural aspects of their corporate experience, providing a safe space to discuss challenges including diversity, belonging, and authenticity. Mentor relationships are less structured, but likely based on a more personal commonality like race, ethnicity, or origin. Organizations can support their Black professionals by facilitating mentorship relationships within the organization through employee resource groups and outside of the organization through encouraging and providing time for industry networking.
Champion external opportunities: Organizations should incentivize Black executives to pursue external leadership opportunities such as serving on mission-oriented boards, engaging in professional networks and mentorships, collaborating with institutions and think tanks and/or developing intellectual property. These resume-building experiences are often sought after when evaluating candidates for leadership and governance roles.
Questions for leaders to ask:
- How are we measuring the success of existing sponsorship and development opportunities? Do these measurements take feedback from participants into account? What gaps within these programs need to be addressed?
- How do we create partnerships outside of our organization to adequately connect Black talent with diverse mentors who can provide support for navigating corporate systems from a shared point of view?
- Do we have a diversity council today and does it include executive team leaders who could form a task force on accelerating the careers of high-achieving Black talent? How would a “fast track” work within our organization?
When it comes time to fill an executive position, boards, search committees and C-suite leaders often fall prey to a number of unconscious biases. Highly prevalent is the affinity bias, or the inclination to choose people who are similar to ourselves. This leads to practices such as sourcing only within established networks, misconstruing “culture fit” with “sameness,” and choosing candidates with similar backgrounds to existing leaders. While the newly- selected executives feel like safe choices, they may not bring a distinctive edge to the role or help the organization outperform.
Organizations can change the way that they consider readiness for leadership roles in several ways:
Start succession planning efforts earlier. Across race lines, only 38% of executives believe their leadership team has a successful succession planning process in place, RRA’s recent Global Leadership Monitor study found.
Beginning the process earlier allows both the organization and candidates to understand the scope, responsibilities, and future priorities for an executive role, and to engage in wide-ranging sourcing that goes beyond the standard networks.
Focus on competencies in assessing candidates, looking at their proven ability to be strategic, execute for results, lead teams, and build relationships and influence. These are true indicators of whether a candidate will be successful in the new role, much more so than their educational pedigree or industry experience.
Align around organizational values to avoid the “culture fit” trap. A conversation around values helps bring to life the purpose and approach of the organization and how a candidate would support these, rather than passing judgment on their background or personal experience.
Questions for leaders to ask:
- Are we looking at sufficiently broad and diverse slates of applicants and candidates when it comes to hiring? How could we broaden our networks to ensure that we connect opportunities at our organization with a broader, but still high quality, talent pool?
- Do we have a diverse set of decision makers for key hires? Who else in the organization can we include in the decision making to represent a more diverse point of view?
- Which job specifications could flex to broaden the pool of qualified candidates? For example, is industry experience or a certain tenure experience a requirement if the candidate brings strengths in other relevant areas?
- How are we evaluating the candidates for the core leadership competencies of setting strategy, executing for results, leading teams, and building relationships?
The road ahead
This is a pivotal moment for leaders and organizations. Those who are successful in attracting, retaining and promoting Black leaders will see a direct impact on growth, innovation, and culture, and ripple effects on future leaders. Those who are not will fall behind and lose status with both employees and customers.
Organizations can begin to form diverse and innovative executive teams of the future by redesigning talent management to be more equitable, building and accelerating development and expanding the definition of leadership. It is important to note that these steps must be taken in order. Without a strong internal foundation built on equitable and transparent practices, organizations will run the risk of forever addressing only the external symptoms and not the root cause.
- Bradlee Benn co-leads Russell Reynolds Associates’ Diversity, Equity and Inclusion practice in the Americas and is a member of the firm’s Financial Services and Fintech practices. He is based in New York.
- Jemi Crookes is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in Washington, DC.
- Danielle Lafhaj is a member of Russell Reynolds Associates’ Healthcare Services practice. She is based in Washington, DC.
- Alpha Mengistu is a member of Russell Reynolds Associates’ Leadership & Succession and Diversity, Equity and Inclusion practices. She is based in Boston.
- Alix Stuart is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in Boston.
- Joy Tan is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in New York.
With special thanks to Jenna Fisher, Cecyl Hobbs, Damien Hoopes, Tuck Rickards, Evan Sharp, Lauren Smykle for their collaboration on this project.
We also thank our contributors: Porter Braswell, Rayford Davis, Juanita Lott and other executives who requested anonymity.
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