Climbing the corporate ladder is one of two ways to financial success – but getting to the top in America is almost impossible for people of color.
Why it matters: The need to overcome blind spots at all levels of the business chain creates a system of barriers that can be difficult for companies to identify, let alone remove.
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How it works: Strokes of fate don’t turn people into CEOs. When it comes to succession planning, there is intent.
Based on a report by Richard L. Zweigenhaft; Diagram: Connor Rothschild / Axios
“The lack of black representation has to do with a system of unconscious prejudice inherent in some individuals and organizations. There are systems that disguise themselves as performance-based that if you dig deeper, they aren’t, ”says Bradlee Benn, who leads the diversity and inclusion practice at executive search firm Russell Reynolds.
People of Color on the way to leadership often confront you with a system that looks like this:
Affinity bias: The propensity to vote for people who are like us is widespread, notes Russell Reynolds’ latest report on black leaders.
Black workers can find it harder to network connections with senior executives in their companies – almost always white – who they sponsor.
“Human nature is to hire people who look and act like you. People naturally look for similarities, ”says Lyndon Taylor, Managing Director at Executive Search Consultant Heidrick & Struggles, about Axios.
Recruitment, compensation and promotion processes that are perceived as objective are not objective if they are not consistently adhered to, adds Benn.
The P&L pipeline: Roles that flow into the C-suite are typically those who oversee the largest customer accounts or key financial profit-and-loss (P&L) responsibilities.
A higher standard: People of Color are often underestimated.
The story goes on
Board barriers: In the past, white and male boards of directors were not known for pushing for diversity in the C-suite.
Data: Deloitte; Diagram: Axios Visuals
And yet, the financial benefits leadership diversity can be important.
McKinsey found that ethnically diverse leadership teams were 36% more likely to achieve financial excellence.
The Boston Consulting Group found that companies with above-average leadership diversity generate innovation-related sales 19 percentage points higher than companies with below-average diversity.
What to see: The COVID pandemic has resulted in job losses, career changes, and mass layoffs – which is an opportunity for some companies to rebuild.
“This is the time when companies that are increasing their workforce can be very focused on attracting diverse and underrepresented talent,” said JT Saunders, chief diversity officer at Korn Ferry.
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