Blacks & Whites in Leadership: An Observation

In today's rapidly evolving and interconnected economies, the lack of diversity in senior leadership has emerged as a prevailing concern. While many companies promote diversity, equity, and inclusion today, they struggle with the representation, participation, and engagement of marginalized groups in key decision-making roles. In large part, this is due to a lack of prioritization of diversity as part of a long-term business strategy.

The scarcity is most prominent for Blacks in leadership roles in the U.S. private sector. Based on a 2021 McKinsey study, while the representation of Blacks in entry-level positions is at parity with their overall population percentage, matching that of Whites in similar positions at 12% & 59% respectively, the gap between Black & White presentation widens exponentially at senior management and higher positions. Using 12% as a benchmark for Black representation and 59% for White representation, as employees move into senior manager positions and above, Black representation drops to 4% of leadership at the highest levels (a 67% decline). In comparison, White representation increases to 77% of leadership positions (a 30% upsurge). According to the study, it will take 95 years for Blacks to reach talent parity across all levels of the private sector at the current pace.

Since advancement in leadership positions has less to do with skills and more to do with relationships the challenges can be examined using the Attraction-Selection-Attrition (ASA) model, developed by B. Schneider and other scholars. The model describes the homogeneity perpetuated in leadership positions that have been reinforced since the advent of modern industry. Based on the model, individuals are attracted to organizations that align with their characteristics and values (Attraction). This can result in leadership pools that restrict inclusion. The selection process favors candidates who fit existing leadership traits and cultural norms, further exacerbating the lack of diversity (Selection). Attrition highlights how individuals who do not conform to prevailing norms may be more likely to leave their company, contributing to persistent underrepresentation (Attrition). By understanding the cognitive biases that the ASA model highlights, organizations can actively foster inclusive environments that embrace diverse perspectives and talents, leading to more effective leadership structures and improving competitive advantages. 

While this review is not intended to offer solutions for the challenges of diversity in senior leadership, by exposing these issues, it highlights where opportunities exist to improve organizations across the board. The culture and values of a firm influence its organizational structure. Although any structure can successfully encourage diversity, more often than not centralized structures are deemed less favorable because their top-down arrangement limits collaboration cross-functionally. Conversely, a more decentralized bottom-up organizational structure, guided by a strong vision, encourages team members to discover innovative ways to meet their goals. This allows groups to experiment and eventually arrive at optimal decisions for the organization more easily.