No easy assignments

In our list of stocks to follow, we also include public firms led by African-American CEOs who are not primary owners or founders.   We learned in the early 1990s with Success Secrets of Black Executives that a unique set of circumstances had to happen for African-Americans to move into the top job at a major firm.

It was quite rare when Ken Chenault became CEO of American Express two decades ago and a big surprise when Richard Parsons prevailed in the leadership struggle for Time Warner.  What was common was that both firms were in perilous shape beforehand.  We found this expressed in our 1993 book Success Secrets of Black Executives when one leader noted, “I never had an easy assignment.   They always gave me the Mission Impossible.”

A group of researchers at Duke’s Fuqua School of Business recently demonstrated why this phenomenon still persists.   It is not only a barrier to blacks in major corporations but also to black entrepreneurs.   Roy Clay, the godfather of black Silicon Valley and still head of his 25-year-old electronic test equipment company Rod-L Electronics in Menlo Park, tells of sitting in the lobby of clients as the only person and being ignored, because clearly the CEO of such an important firm could not be this black guy sitting there.

I visited Sen. Barbara Boxer’s office in San Francisco yesterday to drop off a letter and the receptionist would not buzz me in. Instead she asked me to push the letter under the door. The office is in a lily-white office park, and the assumption must have been that I was some type of threat.

The Duke researchers found,

Despite decades of progress for minorities in corporate settings,  Americans still expect business leaders to be white, and they judge white leaders as more effective than their minority counterparts. This is according to research published in the July issue of the Journal of Applied Psychology by professors from Duke University, the University of Toronto and Northwestern University.

The research team, led by assistant professor Ashleigh Shelby Rosette of Duke’s Fuqua School of Business, conducted a series of experiments to determine whether race still affects people’s judgments of leader effectiveness and leader potential.

“Over time, people develop implicit beliefs about the traits and behaviors of leaders and this combination of characteristics evolves into a standard called a ‘leader prototype,’” Rosette said. Previous research has shown leaders who are viewed as compatible or consistent with the prototype are evaluated more favorably than leaders who are less compatible with these sets of beliefs, even when the leaders’ performance is identical.

It is interesting that such a study would even be done at Duke, where less than a year ago there was a furor about whether a group of white students would be charged for assaulting a North Carolina Central student.  Not only were they not charged, but the district attorney lost his job for indicting them.

My older brother was one of the first black students at Duke in 1966.  I remember visiting the campus as a junior high student to see openly racist comments in the student newspaper under a song entitled “I’m Dreaming of a White Christmas.”

The tobacco moguls who set up Duke could only have hoped that academe would be so effective in creating the phenomenon that these researchers describe.

What is most interesting as we have tracked it for more than a dozen years is that African-American leaders of public companies actually tend to outperform their white counterparts.  John W. Thompson is regarded as the best manager in the information technology industry at Symantec Corp.   Chenault’s American Express is the one financial powerhouse not suffering from massive losses.   Parsons did what Ted Turner or Gerald Levin couldn’t do, bring a range of media businesses into a coherent business.

That’s why we feel that a good screen for investors is to track the presence of African-Americans in senior management.  They’re generally going to be good with containing expenses.   One of the biggest successes of the Obama campaign is that all his competitors wound up in debt, while he’s been able to take advantage of maintaining cash reserves.  They’re also going to face adversity in a much more level-headed fashion.   As innovators, they take what we call in pedagogy a field-independent approach, coming up with much more practical solutions.

Inventors like Dr. Philip Emeagwali, a developer of the protocols that led to the Internet, or John Henry Thompson, author of Lingo, the main language for interactive software, looked a problems a different way than their counterparts.

Part of how racism works is that decision-makers ignore these obvious facts.  As mentioned in a previous post, the fact that Barack Obama performed so well on the world stage is not sufficient to overcome that ingrained feeling that bumbling, stumbling John McCain “looks presidential.”

When then Sen. L. Douglas Wilder, the third ranking legislator in seniority, ran for lieutenant governor of Virginia in 1985 as a Democrat, the Republicans put up the most unknown, inarticulate candidate from one of the state’s smallest counties, someone who couldn’t hold a candle to Wilder’s experience.  The highlight of the story is that Wilder actually won, the first black to win an executive office in the South, but it was only by less than half a percentage point.

What Wilder shared with some of the executive pioneers we referenced is that he had help from the other side of the fence.  His campaign ads showed him with a burly southside Virginia sheriff from the Fraternal Order of Police.  The bios of some of the others indicate significant help from white mentors.

It is not surprising that Obama is surrounding himself with icons like Paul Volcker and Warren Buffett.  Even once one demonstrates the credentials, it is necessary to have the blessing from one of the “implied” leaders.


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