America’s leading institutions have a problem. Many of them made commitments to reckon with systemic racism in the wake of George Floyd’s on-camera murder, but their own diversity data revealed they don’t have the leadership in place to effectively deal with America’s most intractable problem.

It’s not just one company with bad numbers here and another there. The data revealed how surprisingly consistent low Black inclusion is across sectors. The numbers vary a point or two in either direction for individual organizations, but the modal rate of Black participation in leadership, the one that appears most often in the data, was around 4 percent.

A 4 percent Black participation rate in America’s leadership cohort is not diverse enough to successfully tackle systemic racism. Working with entrepreneurs, political leaders and corporate executives for nearly three decades, I’ve learned that putting the right rules in place is important. But having the right rule-makers is critical.

For over 50 years, integration thinking has focused on opening up mainstream institutions to more Black candidates and strengthening that candidate pool for success inside those institutions. There have been some notable successes, but the paltry numbers at the top reveal that strategy hasn’t worked for integrating African-American leaders at scale.

Mainstream institutions need a parallel process of staged integration, partnering with Black-led organizations (BLOs) to source and develop talent. That talent should then laterally transition into mainstream institutions at key junctures, along with culture changes that foster openness and equity to produce more internal leaders.  Down the line, less race-conscious talent sourcing is possible, but we aren’t there yet.

Black inclusion isn’t the only diversity metric that matters, but it matters a lot. The Black/white dynamic is still America’s fundamental fault line and previous efforts to bridge this rift have paid dividends to white women, immigrants, the LGBTQ community and others. Addressing the lack of Black inclusion in mainstream leadership should be no different.

The 4 Percent Phenomenon

Our attraction to narrative storytelling is as old as human culture. We communicate values and prohibitions through fables, myths and cautionary tales of individual achievement and personal excess. Anecdotes inspire individuals, but they can hurt policymaking, causing us to overinterpret successes or undervalue problems.

Miguel M. Unzueta, assistant professor at UCLA’s Anderson School of Business, told me his research reveals that the tendency to downplay deficiencies in representation makes people who might be open to more diversity efforts feel satisfied with minimal progress.

“When you see a picture of eight leaders and one of them happens to be Black, that person probably stands out a lot more,” Unzueta told me in an interview, “and they might look like they are a bigger percentage of the company than what is happening at the company as a whole.”

Take the military for example. Americans still celebrate Colin Powell as the first Black chairman of the Joint Chiefs of Staff and popularly believe the armed services to be a hallmark of egalitarianism, but Powell left that post over 25 years ago. Today, African Americans are about 17 percent of the military. Yet there are only two Black commanders of the 41 most senior officers across all four branches who could even be considered for the Joint Chiefs chair. That’s only 4.9 percent of the military’s most senior leaders.

Recently, U.S. Senator Chuck Schumer recommended Damian Williams as the next U.S. Attorney for the Southern District of New York. If confirmed, he would be the first African American to lead that most prestigious federal prosecutor’s office. Williams is a shining example of individual achievement. But the racial exclusivity of his path is worth examining.

Before government service, Williams worked at Paul, Weiss, Rifkind, Wharton & Garrison, one of the most elite law firms in the country. Only 2.4 percent of partners at firms that size is African American.  Paul Weiss is reported to be a diversity leader among that legal cohort. Last year the firm had only six Black partners out of 144 or 4.2 percent.

Williams was a U.S. Supreme Court clerk, one of the most coveted credentials in law. Larry Smith, managing director of the Randall L. Tobias Center for Leadership Excellence at Indiana University found there were 487 law clerks between 2005 and 2018. Only 20 of them were Black, including Damian Williams, or 4.1 percent of the total.

This racial exclusivity even extended to recently deceased liberal icon Ruth Bader Ginsberg. She hired only one Black law clerk in 25 years.

Williams was educated at Harvard and Yale Universities, two of the most elite schools in America.  As a graduate student at Harvard in the mid-1990s I led a group that challenged the administration on the lack of Black tenured faculty at the Kennedy School. There were none. Twenty-five years later there are two Black tenured professors out of 55 faculty or 3.6 percent. University-wide only 4.5 percent of all Harvard faculty are Black (3.5 percent of them tenured) and 4.4 percent of administrators.

At Yale, only 3.7 percent of tenured faculty are Black. The 4 percent phenomenon holds for tenured Black professors at many of the most high-profile schools in the country, including the University of Virginia (4.3 percent), University of Michigan (4.1 percent) University of Texas at Austin (4 percent), Duke (3.5 percent), University of California, Berkeley (3.5 percent) and M.I.T. (3.2 percent). Blacks were less than 3 percent of tenured faculty at the University of Chicago, Johns Hopkins, and Stanford.

The list goes on; and it isn’t limited to the military, law, or academia. It’s pretty widespread.

Amazon is the second largest employer in the United States. Last year the company elevated Alicia Boler Davis to its 25 most senior executive S-team, raising her profile significantly as the only African American. One leader out of 25 is—yes, 4 percent.

Apple is the world’s most valuable publicly traded company.  Only 3 percentof its executives are Black. At Facebook, it’s 3 percent and only 2.6 percent at Google.

Only 3.2 percent of all Fortune 500 c-suite executives are Black.

Four percent of publishing executives are Black.

Four percent of venture capital firm employees were Black in 2018.

Four percent of corporate board members are Black.

It’s as if someone put sticky tar on the road to African American inclusion in institutional leadership that slows progress to a crawl midway between zero and 10 percent.

It’s Not an Accident

The 4 percent phenomenon is likely not a coincidence.

In their article “Diversity Thresholds: How Social norms, Visibility, and Scrutiny Relate to Group Composition,” University of Pennsylvania professors Edward Chang and Katherine Milkman and New York University’s Dolly Chugh and Columbia University’s Modupe Akinola found that decision-makers “imitated” their relevant peers on gender and racial diversity metrics to avoid “negative scrutiny.” Once they escaped that scrutiny, basically, they stopped trying. The authors predicted “(t)his behavior would lead to improbably homogeneous diversity levels.”

UCLA’s Unzueta and Professor Felix Danbold, then of New York University, found similarly that “when looking at minimum Black representation, White participants set a consistently lower threshold than Black participants…(and) participants’ perceptions of when sufficient diversity had been achieved were highly correlated with perceptions of when diversity initiatives were no longer needed.”

Like the level of a diversity a community reaches that sparks white flight, perhaps this 4 percent threshold functions as an unconscious tipping point whites avoid passing for fear of what it means for an organizations’ culture, objectives or power dynamics.

The Pipeline Two-Step

Professor Danbold, now at University College London School of Management, told me that the people in charge of institutions view their experience, schooling and cultural demeanor as the prototypical standard for institutional success.

“A lot of this resistance to diversity in organizations has to do with trying to keep this prototype…and increasing diversity is just seen as a threat to that,” Danbold says. 

That prototypicality threat plays a role in “the pipeline problem.” Tech companies point to the dearth of Black candidates at elite institutions to explain their diversity problems but expecting Black candidates to look just like their white counterparts on paper is a set up for recruitment failure. Data collected by Collegefactual, reveals the problem with this approach in stark relief. The top five feeder schools to the tech industry (University of Washington, UC Berkeley, Stanford, UT Austin and the University of Southern California) had a total of 24 Black graduates receive bachelor’s degrees in computer science in 2019.  Twenty-four.

Meanwhile, the highly regarded University of Maryland Baltimore County, led by Freeman Hrabowski, singularly awarded 82 computer science degrees to Black students. A Deloitte study put it plainly, “The game won’t change if the rules don’t change.”

Focusing on the downstream candidate pool without changing the leadership cohort is a dodge anyway. Structural bias in the plumbing starts with entry-level “qualifications” and extends to promotions and compensation. Korn Ferry found that nearly 60 percent of Black executives with P&L responsibility at Fortune 500 companies felt their advancement depended on repeatedly performing well on tougher assignments while their colleagues were “judged on potential.”

Exceptional individuals will emerge anywhere, but betting on a limited number of wunderkinds to survive a playing field tilted against them has been a societal change loser. It’s time to do something different.

Diversifying Leadership Through Staged Integration

Black leaders are adept at finding and developing Black talent. They provide role models to emulate, more opportunities to succeed, and often, more chances to try again after making mistakes. Those are keys to developing the confidence required for leadership. Too many mainstream institutions with white leaders tend to overlook, under-reward or over-punish Black people. Whether its school suspensions, police harassment, or professional misfires, those punitive interactions can weed out promising candidates or encourage the kind of caution that stimies ambition.

Staged integration accepts the efficacy of Black-led talent development and capitalizes on it by laterally transitioning leaders into mainstream organizations at key junctures. Boston Consulting Group found that corporate leadership teams with above average diversity had significantly higher revenue from “boosted innovation” than those with below average diversity. Creating more openness and participative leadership structures helps too. BCG defined diversity more broadly and included bringing in “externally hired managers with a different career path.”

While Black-led organizations often play critical roles in the infrastructure of communities and have their own growth strategies, too many are under-resourced. Adding talent sourcing and development could be a promising source of additional revenue and technical assistance that doesn’t interfere with their core mission. They’re developing talent anyway. Currently that talent is often cherry-picked away without compensation and leaves the BLO struggling to find replacements. Planning for these staff transitions could ultimately leave those BLOs stronger than the current system that jeopardizes the very pipelines America needs to keep flowing.

Jotaka Eaddy, former legal counsel to the president of the NAACP, recommends taking the finders fees usually paid to headhunters and spending that money with Black organizations instead. Mainstream organizations struggle to find Black talent, but every summer national Black organizations can book six-person panels of experts to speak at their conventions on any topic and fill rooms with people from that field looking to network for new opportunities.

Start in the Ponds with the Most Fish

Damian Williams, the U.S. Attorney candidate in New York, was one of 58 Black men to graduate from Harvard College in 2002. In contrast, the alma mater I share with former Homeland Security Secretary Jeh Johnson and recently elected U.S. Senator Raphael Warnock, Morehouse College, graduates around 400 Black men each year.

Rosalind Brewer, the new CEO of Walgreens Boots Alliance and one of only two Black women leading a Fortune 500 company, is a graduate of Spelman College. In 2019, Spelman graduated 450 Black women. Sixty-eight Black women graduated from Harvard.

Howard University, Vice President Kamala Harris’s alma mater, awarded 1,100 bachelor’s degrees to Black students in 2019. Georgetown University, across town, handed out 104.

Overall size doesn’t seem to matter either. The University of Michigan had 31,000 undergrads on campus in 2019 and graduated just 303 Black students.

In fact, Morehouse, Spelman and Howard University together graduate more Black students than nine of the top ten public universities with the largest student bodies – combined.

All of this is to say, there is no current way to get to scale with qualified Black talent without Historically Black Colleges and Universities. Investing in these schools to ensure those students are world class and ready for success is the right strategy.

Michael Bloomberg’s $100 million gift to alleviate medical school debt for students at four historically Black medicals schools sets the right precedent. Historically, 80 percent of Black doctors and dentists graduated from Howard University and Meharry Medical College and the four schools still produce nearly 20 percent of Black doctors. This investment helps the current crop of students and enables the schools to keep the pipeline flowing.

Finding Specialized Talent

To boost tech diversity, companies like Google (a former client), should bring together their commitments to invest $5 million in Black founders and to increase the presence of underrepresented groups in leadership by 2030. Those Black founders will likely find coders, designers and executive talent Google would overlook. If the startup doesn’t become a unicorn, team members could laterally transition into Google with real-world experience that translates.

In Democratic politics, advertising and polling consulting firms notoriously lack diversity. These larger, mainstream firms should hire Black partners with the explicit (and compensated) understanding they will build diverse teams or partner with Black-led firms, invest in them, share resources, and clients.

The arts aren’t immune either. None of the 41 theaters “on Broadway” are owned by any people of color and getting diverse talent hired in offstage roles has been a struggle. In response, many theater professionals want to make Harlem’s Apollo Theater a Broadway house. Shows there would qualify for Tony awards and Black directors, stage managers, set designers and other off-stage professionals would gain cachet to take to other organizations.

Formalizing Lateral Leadership Transitions

There are high-profile examples of lateral transitions at the top. Mellody Hobson spread her wings at Black-owned Ariel Investments before she became Board Chair at Starbucks. Darren Walker was Chief Operating Officer at the Abyssinian Development Corporation in Harlem before he became president of the Ford Foundation. Ruth Simmons was provost at Spelman College before she led Smith College and Brown University. It’s time to formalize this pipeline. Organizations training non-traditional Black executives for board membership and executive roles can help with matchmaking.

Some Black-led organizations already sit inside mainstream institutions. Reverend Al Sharpton and Melissa Harris Perry were the first two African American opinion hosts on MSNBC. In interviews, both confirmed prioritizing booking Black pundits and hiring Black producers who have since moved into the broader media ecosystem. After Harris Perry left the network, MSNBC elevated Joy-Ann Reid to host a weekend show. Reid gave early airtime to Tiffany Cross and Jonathan Capehart, who replaced her when she moved to primetime. An equitable system would have rewarded Harris Perry, Sharpton and Reid for their talent sourcing roles.

Goodwill Won’t Fix This

Despite public commitments to wrangle with this most lingering of American issues, do executives really want more Black leaders at the table?

Probably not.

The fear of changing cultural norms and existing power dynamics is real, but as BCG found, culture change is exactly what many organizations will need to succeed in a diversifying society and evermore interdependent world.

Assistance is coming from unlikely sources. Institutional investors such as Larry Fink at Blackrock and the Securities and Exchange Commission now require companies to divulge human capital management (HCM) data including information on diversity, pay equity, company culture and climate change initiatives.

Dr. Marsha Ershaghi Hames advises corporate leaders at Tapestry Networks. She says institutional investors are interested in these “non-financial metrics” for a mix of purpose-driven and pragmatic reasons, including the operational and reputational risks to future financial performance.

That data will help outside stakeholders set higher and more explicit diversity goals and then levy more negative consequences on institutions that don’t reach them. As John Rice of Management Leadership for Tomorrow wrote recently, we have to “increase the cost of (discriminatory) behavior.”

It’s difficult to see more Black inclusion happening without tying compensation to achieving it and applying continued pressure to organizations that fall short.

Conclusion

America can’t win the twenty-first century without equipping the most pivotal organizations to manage the most tumultuous challenges with the best talent. A 4 percent Black leadership cohort isn’t diverse enough and clearly mainstream institutions can’t develop this talent on their own. Staged integration through rethinking recruitment, formalizing and compensating talent sourcing networks and lateral leadership transitions will kickstart the process.

We don’t have another 50 years to wait.