Breaking Through: The Making of Minority Executives in Corporate America

Introduction
 

 “The  problem of the twentieth century will be  the color line.”
 W.E.B. DuBois (1903)
 

A reflective look at the social history of the United States almost a full century after W.E.B. DuBois made this statement would give hearty support to his prediction.  As we write this book, the country is engaged in a dialogue on race with the nation’s president as chief convenor and facilitator.  Census data and opinion polls continue to document that race is a salient predictor of difference in experience, political affiliation, lifestyle preferences, health status, and economic well-being.  Americans continue to live and worship largely separate from one another.

This reality stands side by side with the fact that for the last half century, the country has also been in the throes of attempting to live out its creed that all people are created equal.  This movement has been largely associated with change efforts in the  political and social arenas of civic life.  In the last quarter century, however, the emphasis has shifted to the economic spheres.  Particularly prominent is the issue of equal opportunity in employment.

Increasingly, the focus on economic participation has moved to what many feel is the ultimate source of power and success in our corporate America, executive jobs.  Commentators in this arena have noted that until Franklin Raine was selected CEO of Fannie Mae in 1998, no African American, Asian American, or native-born Hispanic had ever been CEO of a Fortune 500 corporation.  The symbolism of this fact is not that corporate America is unwilling to hand a million-dollar pay check to a person of color.  We know that it is.  Athletes, entertainers, artists, writers, and even some people of color in business command huge sums, more than many CEOs of Fortune 500 companies.  Instead the critical question is why well trained, highly committed people of color cannot make it into the executive ranks of U.S. corporations.

There is some reason to be optimistic if one reads the business press.  There are now a small number of minorities who have made it to very senior executive jobs.  Often, there is a surprising amount of fascination with these individuals, some of whom become the object of considerable media attention.
Kenneth Chenault, vice chairman of American Express, Barry Rand, executive vice president of Xerox, Tom Jones, vice chairman of Travelers Group, Salomon Trujillo, president of USWest, Ann Fudge, president of Maxwell House, and Rajat Gupta, managing  director  of McKinsey & Company, are all persons of color—African American, Hispanic American, or Asian American—who hold key executive positions at or near the top of major U.S. firms.  Their renown extends well beyond their organizations and industries, much further than most of their white counterparts or predecessors.  The fascination with these individuals is in part related to their embodiment of the tensions and potential resolutions of the combined issues of race, power and the opportunity to lead in corporate America. Like it or not, the probabilities that these individuals would hold these positions is small.  According to recent statistics the chances of a person of color holding an executive position in a Fortune 500 corporation are about 33 to 1 compared to those for whites.   Take away those minorities who are executives in pure staff roles such as human resources, public relations, and general counsels offices, and the odds fall even more dramatically.

The aim of this book is to articulate the processes of development and advancement that produce minority executives.  It represents a six year endeavor to examine both the individual and organizational factors that influence minority advancement.  We believe that our findings and the lessons they render are relevant to three audiences:  Academics interested in careers, race relations in organizations, and the sociology of occupations;  General managers, HR executives and others concerned with the development and advancement of minorities in management; and finally, minority managers and professionals who aspire to executive responsibility in corporate America.

In conducting this study we have made several critical choices.  The first was to make this research comparative; we have studied both minorities and whites, both executives and non-executives—i.e., managers whose careers have plateaued at the middle management level.  The second choice we made was to focus on this phenomenon intensively in three companies.  We selected these companies because they were clearly leaders in their ability to develop people of color from the entry level management to the executive level.  We also chose them because they operated in very different industries and contexts and all three were leaders in market share and reputation.

Race and Executive Development

Hundreds of books and thousands of research articles have appeared in the last two decades on executive development and leadership. Yet virtually all of this literature is silent on the issue of race.    The only possible exonerating defense for this omission is that there were so few minority senior managers and executives in the companies where much of this research was undertaken.   In the absence of research on the effects of race on executive development, we do not know if systematic differences exist between the career paths taken by whites and minorities to reach the executive suite, or in the way they experience that climb.
We are not the first researchers to examine issues of race and opportunity.  There is a long tradition of race relations research in the social science disciplines of sociology, psychology and economics.  Unfortunately, little of it has focused on executive leadership in corporations,. or on theory that might be useful to minorities who find themselves trying to succeed in large corporations.  Within the careers literature in the organizational sciences there is a small, but growing, body of empirical studies that has begun to address the linkages between race, development and opportunity in organizations.  This work has been especially useful in shedding light on factors that impede minority advancement in organizations.  These career studies generally start with the observation that there is a paucity of African Americans, Asian Americans and Hispanics in the executive suites of large U.S. corporations.  With this lens the studies examine the experiences  and opportunity structures that limit minority advancement.   As a body of work, it has yielded a sharper and deeper understanding of the barriers to advancement, but not of the experiences and opportunity structures that lead to advancement.  Even in large survey studies of racial dynamics in organizations, the non-white respondent samples are dominated by those who have not reached the executive suite.  Similarly, studies focused on understanding processes such as mentoring and social support have tended to focus on minorities in subordinate positions, such as young protégés and lower-level managers.   The net result is that we know little of the experiences of minorities who do break through the glass ceiling for race.

One way of conceptualizing much of this body of work is that it attempts to understand the phenomenon of the glass ceiling by examining the experiences of those beneath it.  To a large extent, it reflects an empirical reality.  This approach makes sense in light of the fact that the odds are high that people of color will disproportionately end up beneath that ceiling even when one controls for those human capital assets that should affect opportunity, such as education, training, and social class. What these studies do provide, however, is a clear picture of the challenges facing people of color as they attempt to rise up the corporate ladder.  In the next chapter, we discuss these challenges.

The exceptions are benchmark studies of corporations that have done relatively well at creating a diverse workforce.   These studies, have been especially useful in identifying programmatic efforts in companies that produce a diverse and well-managed work force.  But the actual career experiences of individuals moving through the corporations are not addressed.  Even the criteria for choosing these remarkable companies can sometimes be problematic when it comes to understanding the processes that actually produce minority executives.  Typically, best practice companies are chosen on the basis of their overall percentage of managers of color, with almost no attention to what these individuals actually do, what levels they attain or what resources they control.  Such studies illuminate critical factors and practices that effect corporate diversity, but do not speak directly to the processes or experiences that give rise to the development and advancement of minority executives.  As a result, we know little of the experiences—either individual or organizational—that correspond with the cracking, and ultimately the breaking, of the glass ceiling for racial minorities.

Why Focus on Winners?

Perhaps not everyone would agree that the dearth of studies on the experiences of minority executives is a serious deficiency in the existing body of knowledge on race and management development.  Indeed, soon after this project was launched, a colleague asked: “Why are you studying winners?  Isn’t there more to be gained by looking at those who are not succeeding—those who don’t make it to the management level, let alone executive level?”  Another asked, “Is the glass 99% empty or one percent full;  why are you studying the one percent?”  Both questions imply that studying an elite class of minority executives and their development  might gloss over the very real, and sometimes insurmountable, obstacles that a majority of non-whites face in their quest for advancement in corporate America.  Our belief, then and now, is that lessons drawn from success frequently suggest how to identify sources of leverage that can impact advancement and avoid the pitfalls associated with failure.  In a manner of speaking, we believe that the minority executives we have studied are similar to the handful of frontier pioneers who forged a trail over rough and uncharted territory to settle a new land, clearing a path for the many who followed.

Nevertheless, caution is appropriate.  In this era of winner-takes-all super-stardom, it would be a mistake to permit this sort of research to spawn new myths—as some magazine articles have done—about a new breed of heroic, non-white Horatio Algers.  Given the reality, this would do no one a favor.  One need only read recent accounts of minorities’ experiences of racism and discrimination in corporate America to see that institutional barriers to their advancement persist.   There remain companies in which no amount of individual effort preparation or performance is likely to push a person of color into an executive position with the power and responsibility to shape key business decisions.

We are not suggesting that other ways of studying the problem of minority advancement are not useful.  Rather, we believe that a careful, comparative examination of individuals who break through the glass ceiling and of their contexts and careers will help to illuminate some of the issues (and potential sources of leverage) that are salient to eliminating or overcoming barriers.  In this regard, our intention is to complement existing research that focuses explicitly on identifying the specific barriers themselves.

A Study of Minority Executive Development and Advancement

The focus of our book is on the lessons that can be learned from the career experiences of successful minority executives. The primary data for the book are 20 case studies of minority executives at three major U.S. companies whose identities and names we have disguised as Acme Industries, Gant Electronics, and Advanced Technology. The minority executives included African Americans, Asian Americans and Hispanic Americans. For comparison purposes, we also conducted equally in-depth studies of 34 other white and minority executives and non-executives from the same three companies.

The three companies were selected for a number of reasons.  First, as stated before, all three are leaders in their particular industries in efforts to improve racial diversity in their management ranks.  Second, they represent very different industries with different levels of technological intensity required in their core operations.  Third, our preliminary assessments indicated that the cultures and employment practices of the three companies were quite different from each other.  These differences in their approaches to diversity enabled us to analyze more clearly the influence of corporate context on minority advancement.  The three companies, their products, and their organizations are described in detail in Chapter Two.  Herein we will refer to these companies by their pseudonyms:  Acme Industries, Advanced Technologies and Gant Electronics.

Definitions and Criteria

Who is an executive?  We have used a rather stringent definition of executive.  Our interest was in understanding the development and advancement of minority executives  who either had general management responsibility or had major responsibility for a core business function, such as finance, manufacturing or engineering.  This meant that some persons of color in each firm whose title and compensation category qualified them as an executive were not eligible for our study.  Other studies of minority executives, such as those by Sharon Collins and John Work, suggest that most minority executives today tend to hold high-level staff positions outside of core business areas, largely in corporate staffs such as human resources, community and government relations, and legal.  Such jobs, while important in their own right, seldom lead to the CEO position or other senior operating roles and do not carry authority for setting strategic direction or profit and loss responsibility.

Each of the three companies in the study had its own definition of the level at which executive status was conferred.  For purposes of ensuring comparability across companies we defined an executive as someone who was a corporate officer or a direct report of a corporate officer with responsibility for an integrated business unit (e.g., division president or vice president/general manager); or leadership of a corporate function (e.g., corporate controller or vice president for purchasing).  In all cases, this definition was more restrictive than the definitions used by the companies. The types of jobs occupied by our study participants are among the most coveted by managers of any race, and so far, the most elusive for minorities.

In order to understand fully the experience of minority executive development and advancement, we needed to include both white executives and non-executive, plateaued minority managers in the study.  We studied comparable white executives in order to identify both what was common and what was unique to the experiences and career patterns of minority executives.  Our interest in studying plateaued minority managers was to understand what experiences they had in common with minority executives, and, equally important, how the career experiences, assignment patterns and developmental opportunities differed between the two groups that might have accounted for pleateauing of one group and the advancement of the other.

We chose plateaued minority middle managers as the comparison group because they were  individuals who had achieved a fairly significant level of managerial responsibility (upper middle management), but were not seen by their companies as being likely to make it to the executive level as we defined it.  This insured that the comparison group of plateaued mangers consisted of people who had demonstrated their ability to contribute to the corporation and had been successful enough to reach upper middle management.  We thus avoided the risk of comparing minority executives to minorities whose careers included little advancement beyond individual contributor or first level management.  Five criteria were employed in the selection of the non-executive, plateaued managers:  they were currently in a managerial role that involved supervision of other managers; they were in a core business function and not a support staff department; their tenure at their current level of upper-middle management was longer than the average for that level; they were not currently designated by their organization as having the potential to move to the executive level; and they were deemed an effective performer in their current job.  The individuals who met these criteria were all upper-middle managers whose responsibilities typically involved heading a functional department within a business unit.  Common titles were plant manager, marketing manager, and finance manager.  Plateaued managers in the study most often reported to an executive such as a division vice president/general manager or head of a corporate function.

Selecting the Participants

After gaining approval to conduct our research in each site, we asked our company liaisons to provide us with a list of African Americans, Asian Americans, and Hispanics who met our executive criteria.  We then selected a subset of these individuals and invited them to participate in the study.  Based on the composition of this group of minority executives, we then selected a group of individuals from each of the comparison groups:  white executives, plateaued minority managers, and plateaued white middle managers.  Our attempt was to make these groups comparable to the minority executive group in terms of functional group representation, educational background, tenure in the workforce and gender.    Each was a paired match to one of the minority executives based on these background factors.  The data on the white plateaued managers was used only for comparison purposes in Chapter 3.

We decided to focus on a small group of people we could study exhaustively, and to include more minority executives than individuals from the other comparison groups.  It is not uncommon in studies such as this to oversample in the group of theoretical interest, especially if they are a small segment of the population. .  This was also justified because of the ethnic diversity of the minority executive group which includes African Americans, Asian Americans, and Hispanics.
African Americans and men dominated the minority executive populations at each company.  Our study population reflects this fact.  Thirteen of the minority executives are African-American, while four are Asian Americans and three are Hispanic.  Among the minority managers, two are Hispanic and the remainder African American.  Eight of the fifty-four participants are females. We included all the female minority executives at each company who, at the time, met our criteria.  Table 1 provides the distribution of our study participants across the three companies.
 

Table 1
Study Participants

Acme Industries  Advanced Technology
Gant Electronics
 Males Females  Males Females  Males Females
Minority Executives (n=20) 4 1  9   6 1
Minority Managers  (n=13) 4 1  3 1  3 1
White Executives  (n=13) 5   4   3 1
White Managers   (n= 8) 4 1     2 1
Total     =54 17 3  16 1  14 4

Who is a Minority?

Our choices for selecting the study participants raise two important issues. These relate to the race and gender composition of our study participants.  They bear on the limitations of our approach and its potential contribution to knowledge about race relations in organizations and minority executive development.

What Does It Mean to be a Racial Minority?

This question is hotly debated in both policy and academic circles.  As yet, there is no consensus on the right answer.  From the outset, we were interested in the development and advancement of executives who had “racial minority” status, This included people from a diverse group of racio-ethnic backgrounds and phenotypes: those who were visibly identifiable racial minorities and those who could pass for white.  Our operational definition of racial minority, as represented in our study population, was largely determined by the companies’ own definitions of racial minority and the racial composition of their executive groups.  We also found that in each instance the minorities in the study self-identified in the interview as a member of the racial group to which we had assigned them.
That the African American, Asian Americans, and Hispanics in our study felt they were in fact a member of a  minority group does not answer a question that will exist for more than a few readers: are these different minority group memberships equivalent in their likely impact on individuals’ careers?  Research would seem to indicate that while cultural differences between the groups exist, each is underrepresented at the higher levels of management.  We discovered that, indeed, the basic pattern of career configurations and social processes that characterize the advancement and development or these minority executives was similar.  Therefore, what we report here represents the commonalties of the experiences  of racial minorities.

What About the Women?

Just as the career development experiences of racial minorities have been understudied, so too have those of women.  Perhaps even more noticeably lacking are studies of the experiences of women of color.   A clear limitation of our study is the lack of minority female executives and therefore of women in general in the study.  This largely reflects the scant presence of women of color in the kinds of executive jobs that would have made them eligible for our study.
In the chapters that follow, our focus is on the common and disparate patterns of achievement experienced across race and hierarchical levels.  We do not treat gender specifically as a dimension of comparison.  In our attempts to identify its influence, we did not observe ways in which the patterns of succeeding to the executive level or plateauing differed for minority men and women.  This, of course, is not to suggest that the actual experience of moving through the corporation was not differentially influenced by gender identity.  We believe it most likely is.  Our study design and data, however, do not allow us to establish gender effects.
Our hope is that together with other studies that are examining gender and, in particular, minority female experiences that this study can contribute to a richer and more complete understanding of how race and gender influence careers.

The Data

Our data collection had two major objectives.  First was the creation of career biographies for each of the 54 executives and managers selected for the study.  We spent six to fifteen hours interviewing each person on his or her family background, progression of jobs, their development as managers, experience of race and its effects on their career, and the events and relationships they saw as critical to their current level of career attainment.  In addition to interviewing each study participant, we asked them to nominate three people with whom we could speak with to get an independent assessment of them.  We specifically asked that one of these persons be a recent boss and another a subordinate.  We asked these individuals to share their impressions of these individual’s style, strengths, weaknesses and performance as managers or executives over the time they knew them.  In all we interviewed 154 informants in relation to the careers of our 54 study participants.

In addition to the interviews with the study participants, we reviewed company human resource records on each of the 54 individuals.  These records provided a check on the interviewee’s recollection of his or her career progression and whether a move constituted a promotion, lateral or demotion.
The second objective of our research process was to develop an understanding of the three organizations, in particular, their cultures, orientations toward executive development, and approach to promoting racial diversity in management.  We gained significant insight into this from our study participants and the interviews conducted with their bosses, subordinates, and peers.  In addition, we interviewed several people at each company whose current positions or involvement with the companies diversity efforts made them valuable sources of information.  Indispensable in this process was the review of internal company documents and publicly-available published material on the companies.

The field work for this project spanned three years during which we interviewed nearly 250 people, accumulating thousands of pages of transcripts.  In addition to the  personnel records of the executives and managers in the study we were also given access to the promotion records of 554 Acme managers and executives.  The conclusions drawn in this book are the result of our analysis of these data.

Career Stages and the Comparative Analysis

To aid us in comparing the career experiences of these individuals, we created a career stage typology that corresponds to their advancement up the managerial hierarchy.  Each individuals’ career was divided into three sequential stages that spanned a specific period of the career that was marked by a significant increase in managerial responsibility.

Stage I begins at the start of a person’s professional career and ends when he or she reaches middle management.  This is roughly the point at which the manager becomes responsible for supervising a complete work unit, with a group of first-line managers (such as front line production supervisors) or highly-skilled professionals (such as senior design engineers) reporting directly to him or her.

Stage II is the period from middle management to upper-middle management. Upper-middle managers oversee direct reports who are themselves middle managers.  Generally, upper-middle managers reported to a divisional vice president and general manager (VPGM) responsible for an entire business unit or to a senior executive in charge of a function, such as VP of Manufacturing.  Frequently encountered upper-middle  management titles included director of marketing, branch manager, and plant manager.  Upper-middle management was the highest level attained by plateaued managers in our study.

Stage III covers the period from upper-middle management to executive.  As described earlier, we defined executive as a general manager who is either a corporate officer or a general manager who reports to one, or the leader of a core business function.  All of the executives we studied were either line general managers responsible for the running of a major business unit, or corporate functional leaders reporting directly to the chief executive officer or to one of his direct reports.  The most frequently held title by members of this group was vice president and general manager (VPGM).

Although our total study population included four groups, minority executives, white executives, plateaued minority managers and plateaued white managers,  the focus of our comparative analysis is only on the first three groups - minority executives, white executives and plateaued minority managers.  This was the case from the outset of the study and was reinforced by our initial examination of results..  Therefore, data for white plateaued managers are presented and discussed only in Chapter 3, the analysis of career configurations.

The Organization of This Book

Part I sets the study in context by providing a picture of the processes by which minority executives are produced and an understanding of the social and corporate contexts that shaped these processes.  Chapter 1 looks at the challenges that confront people of color as they compete for executive jobs in mainstream corporate America.  It also provides an overview of what we discovered as critical to overcoming these challenges.  Chapter 2 describes the three companies and the evolution of their diversity strategies in the social and historical context of the 1960s, 1970s, and 1980s.

Part II examines the career experiences of minority executives and contrasts them with those of both white executives and minorities who plateaued in middle management.  Chapter 3 looks at the structure of competition and the paths minority executives took to reach their positions and how their trajectories differed from those of white executives.  Personal background factors and the developmental experiences of Career Stage 1 are examined in Chapters 4 and 5, while the process and experience of breaking through to the executive level is described in Chapter 6.

Part III addresses the role of organizational processes in bringing about a corporate culture that allowed for more than token representation of people of color in the executive suite.  Together, Chapters 7 and 8 detail the unique diversity strategies that guided each company’s efforts and the factors that sustained them over  an extended  period of time.

Part IV, Chapters 9 and 10, review the implications of this study for corporate leaders who want to develop minority executives more effectively, and for people of color who aspire to successful careers in the corporate mainstream.