The ongoing collective grief and outrage expressed over the killings of George Floyd, Breonna Taylor and Ahmaud Arbery — and most recently, the police shooting of Jacob Blake — signals a cultural shift of acknowledgement against mistreatment of African Americans. However, such tragedy has replayed time after time, and the status quo won’t change without meaningful steps — especially in corporate America.

In boardrooms and executive suites, time has long passed for action, instead of talk. This is keenly expressed in a recent social media post by consultant, journalist and activist Brickson Diamond: “I appreciate your Black Lives Matter post. Now follow that up with a picture of your senior management team and your board.”

Yes, companies have moved to show solidarity. JPMorgan Chase CEO Jamie Dimon has taken a knee. Amazon.com placed a Black Lives Matter banner on its homepage, and both Amazon and Facebook have committed $10 million to organizations working for racial justice. Despite such symbolism, corporate commitment to expunging racism is rightly questioned — because talk hasn’t supported actions. Look closely at these three companies. Black executives make up just 3 percent of Facebook’s senior leadership, 4 percent of JP Morgan Chase’s, and 0 percent at Amazon

These companies are the norm. In 2018, Black men and women held just 8.6 percent of U.S. corporate board seats in Fortune 500s despite representing 13.4 percent of the U.S. population

Representation is poorer in top management. In all Fortune 500s and S&P 500s in 2019, just 0.7 percent of CEOs and only 1.5 percent of CFOs were Black. This is not attributable to a shortage of candidates. A recent report from Lean In and McKinsey shows significant attrition among men and women of color from entry level to C-suite, with proportions shifting most dramatically in favor of white men as people advance.

This problem can feel overwhelming. But a simple and effective piece of advice for creating change in challenging times comes from a poem — Start close in: Start where you have power to begin the process of change right now.

Corporate leaders: do more than post a Black Lives Matter banner on company social media feeds and homepages. Reckon with the makeup of your boards of directors, top management and managerial teams. Look closely at their faces and backgrounds. If your leadership does not represent the nation’s broader demographics, ask: Why might you be barring perspectives that make for increased creativity and innovation, more provocative discussions, greater resilience? Is there misalignment with our society’s emerging sense of outrage at centuries of racial injustice?

Extensive research has found diversity within groups leads to improved outcomes. Diverse teams consider a broader range of alternative solutions and are better at solving critical thinking tasks. Individuals prepare better when they anticipate working with a diverse group of people. Ethnically diverse juries consider more facts and recall those facts better.

These benefits extend to organizations. Firms engaging in innovative strategies and research and development have higher financial returns when their leadership teams are more diverse. Teams with more varied backgrounds and experiences often drive members to work harder, even creating friction, which is precisely what leads to more innovative outcomes.

Only those in power can create diverse teams, however. A company’s lack of Black leadership typically results from failures at some stage of the employment process, from recruitment to promotion into leadership.

We propose a two-stage series of questions to address these shortcomings: 1) understanding the status quo, and 2) identifying the organizational processes and beliefs that preserve it. These questions are intended to help identify the most expeditious ways to begin.

Capturing the status quo

- Are Black candidates applying to leadership positions? If so, at what rates and why have they not entered leadership?

- Are Black employees rising through the ranks?

- Are Black employees choosing to leave the firm at higher rates than average? If so, when and why

- What are the demographics of new employees?

- Where is the firm recruiting? Do recruiters match the firm’s desired demographics? 

Identifying organizational processes and beliefs that preserve the status quo

- Recruiting and promotion criteria: Which criteria and systems are used for recruiting, hiring, promoting and rewarding? What are the cultural backgrounds of people who are identified, rewarded and promoted with these criteria?

- Project assignments: How are employees identified and designated for high visibility assignments?

- Lived experience of Black employees: How much has been invested in understanding and acting upon the experience of Black employees? Does leadership protect its own comfort at the expense of listening to Black voices?

- Recognizing contributions outside measured metrics: How have you recognized and rewarded contributions important to the organization, such as building relationships, that may fall outside the narrow bounds of performance metrics? How open are you to the idea that there is more than one right way of achieving your mission?

- One way versus multiple ways: Is there only one way of fitting in? Does your corporate culture exclude different ways of thinking?

- Individual versus group performance: Do you reward only individuals for performance that could be better attributed to teams, creating a cutthroat atmosphere and ignoring the contributions of a broader group of people, especially people at entry levels?

- Mentoring and sponsorship: Do Black employees have mentors and support at each level? Do managers and partners mentor and sponsor employees who don’t look like them? 

Answers to these questions can provide information for meaningful change. Many experts have highlighted simple improvements for any company to address discrimination in hiring. These include steps against unconscious bias from decision-making, such as blinding resumes and down-weighting extracurriculars that better fit white candidates and implicitly screen out those with different backgrounds. 

It also is critical to approach diversity targets with the same rigor used to meet financial targets, including incentivizing top managers to achieve them.

This is challenging work. It should, however, be compassionate work. We will stumble and some decisions will be unpopular with certain groups. But to move from talk to action requires effort from all of us.

For our part, we, as authors of this article are white and have never felt the sting of racial discrimination nor the fear of brutality that others live. We have blind spots and our own work to do to become effective anti-racists. Systemic racism exists within universities, too. Our recommendations for corporate America are relevant in academia.

The questions above are not intended to substitute for the personal work that each of us is being called to do right now in identifying privilege and bias. We’re all being called on today to improve. Perhaps the questions above can help us all to “start close in.”

Rachelle Sampson is an Associate Professor of Business and Public Policy at the University of Maryland’s Robert H. Smith School of Business. Nathan Barrymore is a Ph.D. candidate in managerial economics at the Robert H. Smith School of Business.

Published on Sep 03, 2020