Why race and culture matter in the c-suite.

22 Jan Why race and culture matter in the c-suite.

It was a dream job, the type of assignment that could make or break the career of an ambitious executive with an eye toward the top. “It was my first big promotion,” says Bernard J. Tyson, the 57-year-old CEO of Kaiser Permanente, a health care company with nearly $60 billion in annual revenue. The year was 1992, and Tyson, then in his early thirties, had been named administrator of one of Kaiser’s newest hospitals, in Santa Rosa, Calif.  “Everyone knew this was the hospital to lead,” he says.

His physician partner, an elderly white gentleman named Dr. Richard Stein, was less excited by the news. “It was one of those Guess Who’s Coming to Dinner sort of welcomes,” Tyson recalls. And it went downhill from there. The two men were constantly at odds, unable to collaborate, with most conversations ending in angry standoffs. “He would say something, and I would react,” says Tyson. “It was the most difficult relationship I have ever had.” Failure seemed inevitable.

One day Stein invited Tyson for a walk. “He said, ‘I have to confess something to you, something that might end our relationship,’ ” Tyson recalls. “I have never worked with a black man like this.” He meant as a peer. Stein, it seems, didn’t know what to say, how to act, what to expect. Tyson saw it for the opening it was. “It was at that moment I realized that the majority of the population doesn’t have any sort of mental road map for how to relate to and work with someone different from themselves.”

Tyson credits Stein with the courage to open up about race. It changed the trajectory of their relationship and their work together, helping Tyson fine-tune a philosophy of inclusion that he believes can inspire empathy and courage within the organization he now runs—one that employs 180,000 people in eight states and the District of Columbia.

“I have the opportunity and the obligation to change the narrative around complex conversation like race that help us work together toward common objectives,” Tyson says. “but to do that, we have to tell the truth.”

Let us begin, then, with one cold, hard-numbered truth: For much of corporate America, racial diversity continues to be at best a challenge—and at worst a flat-out fiction—particularly in the executive ranks. There have been only 15 black CEOs in the history of the Fortune 500, of whom five are currently in the role. (Ursula Burns, CEO of Xerox XRX 0.22% , is the only woman; Kaiser Permanente, the organization that Tyson runs, is a nonprofit and therefore ineligible for the Fortune 500.) Nor is it much better outside the corner office. According to a corporate diversity survey released last June by the office of Sen. Bob Menendez, a New Jersey Democrat, black men and women account for a mere 4.7% of executive team members in the Fortune 100 (the top 100 U.S. companies by revenue), a share that hasn’t budged since the survey was first conducted in 2011. Even at smaller companies, African Americans hold an estimated 6.7% of the nation’s 16.2 million “management” jobs, according to the latest figures from the Bureau of Labor Statistics, though they make up twice that share of the population at large.

Numbers, however, don’t capture the frustration that many black executives feel as they try to thrive and compete in a realm where race is often seen as an asterisk on their résumés and an unspoken subtext in conversations about career advancement. Black women, to be sure, face biases related to both gender and race—a double whammy of headwinds in the flight up the company ladder. For black men, though, the challenges of the corporate life are daunting at least in part because they are sometimes hard to pin down—influenced as much by age-old prejudice as by cultural preconceptions, the subtleties of psychology, and the weight of human history (more on that soon).

For this story Fortune focused on the particularity of being black and male in corporate America. We spoke with dozens of black men about their lives and careers, interviewing executives at major companies, as well as researchers, educators, and talent experts. Many were eager to discuss the subject of race and the pressure they sometimes feel from having two “jobs” at the office: an official one, managing a team or division, and the other, “representing” other African Americans who have yet to make it into the room. “If you’re being asked to show up at diversity fairs or be the ‘person of color’ at events unrelated to your job function, it costs you,” says David Thomas, 59, dean of the McDonough School of Business at Georgetown University.

Some of the people we interviewed, such as Tyson, have made it. Some are just a few levels down from the top of the power pyramid. Others flamed out or opted out entirely. But most share some striking points of view. Many of these men, for example, spoke of having to constantly calibrate their public miens: striving to appear focused at the office but not too aggressive; hungry but not threatening; well dressed but not showy; talented but not too damn talented. Nearly all had experienced conversations shutting down (or being shut out) when matters of race were brought up; nearly all felt a profound sense of concern for the generation of black men to come, fearing that if they did nothing personally to develop the talent pipeline, the share of African Americans in business would only dwindle.

After more than half a century of corporate diversity efforts—the first of these programs evolving in the wake of the Civil Rights Act of 1964—this is where we stand. With the best of intentions, companies have spent untold billions of dollars on minority recruitment, bias training, mentoring, and support groups. One 2003 estimate put the value of the diversity-training business at $8 billion a year—a figure that may well seem conservative given recent initiatives. (Last year, for example, a single company, Intel, announced it was investing $300 million over three years to improve the gender and racial diversity of its workforce and the inclusiveness of its corporate culture.) Ninety percent of Fortune 100 companies now have a chief diversity officer. Nearly every major company has express policies and plans to broaden workplace diversity.

These “best practices,” however, simply aren’t as effective as many believe. To cite one analysis, researchers at the University of California at Berkeley, Harvard, and the University of Minnesota evaluated the diversity programs of 708 U.S. companies from 1971 to 2002 and could find very little evidence of long-term positive impact. Other academic studies have revealed a growing backlash by white employees to diversity programs that many had once supported. A team of psychologists from the University of California at Santa Barbara and the University of Washington, for instance, recently reported that the mere fact that a company has a diversity policy can lead some white employees (even those who had previously considered themselves allies of the diversity cause) to believe they are being treated unfairly.

For many black men in corporate America, this new antagonism over diversity programs has only added to the frustration and sensitivity. It is a strange catch-22: The more that issues of race in the workplace are brought to light, the more prone and isolated some black executives feel. And yet the less often issues of race in the workplace are brought to light, the easier it is for the unsaid to negatively influence careers—and the more prone and isolated some black executives feel.

After the shooting death of Michael Brown in Ferguson, Mo., Bernard Tyson wrote a candid essay on LinkedIn about being a black man in America. “It was the image of an African-American kid, shot down and left in the street,” he says. “Regardless of how it happened, you personalize that.” Then he pauses, leaving unsaid the sentiment that many black men feel: It could have been me. His post, titled “It’s Time to Revolutionize Race Relations,” laid bare his own experiences as a black man and touched a nerve. The essay generated nearly 450,000 views and close to 3,000 comments and more than a thousand Twitter TWTR 0.06% mentions.

While many black executives do their best to separate their professional skin from their human one, there are nearly constant reminders from the outside world that the two are the same. In his recent conversation with Fortune, Tyson ticks off a list of experiences he’d had in the previous few weeks: pulled out of the security line for a public pat-down as he attempted to enter his own luxury box at a football game; a crisp lecture on proper tipping that accompanied the check at an upscale restaurant; a woman clutching her purse tightly as he walked by.

The CEO talks openly about such interactions. When colleagues ask why he “exposes” himself that way, he answers with what has become a familiar refrain: “We have to be able to tell the truth about these things.”

Building a Black Engineer

In 2014 several firms, led by Google GOOG 2.33% , published diversity data that showed how underrepresented African Americans are in tech. Facebook FB 2.73% , Google, LinkedIn LNKD 4.17% , Yahoo, YHOO 0.72% and Twitter TWTR 0.06% all reported that just 1% of their workers were black. Nobody was surprised.

Dr. Freada Kapor Klein, a diversity expert and partner at the Kapor Center for Social Impact, has a theory as to why the tech sector is so seemingly resistant to diversity in its ranks. “There is a deep and shared mythology that it is a perfect meritocracy,” she says—a self-reinforcing vortex of talent drawn from certain schools, with identical credentials, wearing, most likely, similar garb. “Unless that gets dismantled, there is no way to implement effective diversity programs,” says Kapor Klein.

Last year two black executives from Twitter abandoned their separate quests to dismantle the meritocracy trap. Leslie Miley, the highest-ranking black engineer (he won’t give his age), and Mark Luckie, 32, the second-highest-ranking black employee, both quit. Loudly. Then, in separate posts on Medium, they went public with personal treatises on their experiences inside a company that they claim failed to recruit, hire, and develop black talent in any meaningful way. Miley’s attempt to introduce more diverse engineering candidates into the hiring process who didn’t have typical Silicon Valley educations or résumés triggered a laundry list of objections from colleagues, he says. When he proposed a new job to focus on onboarding and welcoming minority tech talent into the firm, he got an earful. After a particularly tense conversation with his boss about recruitment tactics, Miley claims he was told, “Diversity is fine, but we don’t want to lower the bar.”

David Thomas, Georgetown’s McDonough School dean, says such arguments reveal a bias called attribution error. “People are more likely to trust performance data—that someone, for example, is an outstanding performer—if they’re white,” he says. If you’re not expecting positive performance from a particular group, such as black men, you may attribute their success to external factors, like affirmative action or luck. Translation: If you hired a black programmer, there’s a good chance you “lowered the bar” to do so.

Such ingrained attitudes make it harder, Thomas says, for black employees to find sponsors who believe in them—to create a market for them inside the company and out as they progress in their careers. His own research has found that it takes people of color longer than their white counterparts to transition into their first managerial job. Bias in the form of attribution error is probably a factor.

Back at Twitter, Luckie, who was the company’s manager of journalism and media, tackled the diversity issue from the New York office. Where were the black people? he wondered. And why weren’t they being promoted? “There was no buy-in from leadership,” Luckie says today. “It’s such a horizontal company, and there isn’t a lot of room to grow. People who were promoted looked just like their manager.” (A Twitter spokesperson says the company is committed to “making Twitter more diverse and inclusive” and is “making substantive progress.”)

Both Luckie and Miley were active participants in the BlackBirds, the black employee affinity group at Twitter. But the collective had very little impact as a development or advancement mechanism, they say. In an attempt to break down barriers, Luckie even launched an informal “Ask a black guy” initiative. “The sales teams asked … how to get Twitter involved in things like the Essence Festival or to get black influencers to support product launches—but there were some Beyoncé and twerking questions,” he says with a sigh.

The relative lack of minority employees at Twitter was particularly galling, say Luckie and Miley, because the platform had become such an important tool for the global black community, through a vibrant and dedicated subset of users known as Black Twitter—who speak to one another about the reality of blackness in America and who often contribute original reporting, spreading news through ad hoc hashtag communities like #BlackLivesMatter. “Black Twitter is one of the best-use cases for Twitter itself,” says Miley. “Yet instead of figuring out what we could learn from powerful groups like this, we were losing ground to Instagram.”

Miley and Luckie felt as if they were living a case study in corporate frustration—and when both men quit, they left without a job. Luckie wrote a novel called DO U, about men at a fictional black college, and now runs a site called Today in Black Twitter. Miley, who says he “became the angry black guy” before he left, had a bumpier exit. When he made his decision to leave the company, he waved off a severance package in order to be legally able to share his story. He is now the director of engineering at Entelo, a private company that builds—wait for it—recruiting software. But the job search was nerve-racking. “My Medium post has come up in every interview,” he says. “I make people nervous.”

The Power of Networks

David Sutphen’s black father and white mother fell in love at their jobs at the Social Security Administration, in Kansas City, Mo.  They got hitched during their lunch hour, rushing across the state line to Kansas, where it was not prohibited for mixed-race couples to marry. Their lives were lives of ever-present risk, says Sutphen, managing partner at the Brunswick Group, an advisory and consulting firm based in Washington, D.C.  The racism they faced was front and center.

Today Sutphen, 46, sees executive men of color managing a different kind of racial challenge—a balancing act. Black executives, he says, often have to play the role of “happy warrior,” mastering the art of being exceptional but not frightening. Groups of black men can be … intimidating, he says—then laughs: “There’s not going to be a Most Powerful Men of Color conference [at Fortune]. But we could use one.”

For many black men, that double standard starts very young. A striking 2014 study by UCLA professor Phillip Atiba Goff and colleagues and published by the American Psychological Association found that black boys as young as 10 years old were viewed as older than—and not as “innocent” as—white boys the same age. (Children 9 years and younger were seen as equally innocent, regardless of race.) Other studies show that black boys are more likely than white boys to be disciplined and sent to remedial programs for the same acting-out behaviors. And many people Fortune spoke with for this story say that many of the challenges that black men face in corporate hallways begin here—in childhood. In elementary school hallways.

Too many of them get lost there. “We know that if a boy can’t read by third grade, he’s four times less likely to graduate from high school,” says Jim Shelton, 48, a former deputy secretary of education who now runs the online education company 2U. “And it gets worse from there.” A kid who has been suspended once by ninth grade is twice as likely to drop out, and black boys are four times as likely to be suspended. In 2014, Shelton was tasked with setting up My Brother’s Keeper, a corporate- and foundation-backed nonprofit initiative launched by President Obama to address the “opportunity gaps” and “achievement gaps” faced in particular by boys and young men of color.

As high-profile and as high-minded as My Brother’s Keeper is, though, it is also sprawling in scope, from early-childhood health screenings to reading programs to efforts to reduce community violence. What matters most, though, is that MBK itself is a mechanism to connect boys with a network of successful adults. In the same vein, what often counts most for professional men is the intimacy of a social network. Relationships, in short, matter.

After Obama was elected, Sutphen reached out to his childhood pal Jon McBride, who had earned a post in the Obama White House in the Presidential Personnel Office. The two began to plan informal networking dinners in D.C. to get a handle on the new administration. But what started as a few dinners with friends and new acquaintances turned into a regular series of events that became increasingly more structured. Lots of industries were represented. “It became a convening platform, with special guests, to talk about issues that matter to us, like education,” Sutphen says. But it quickly turned into a place where people could get the kind of high-level coaching that should have been coming from sponsors inside their firms. “ ‘I’ve got a chance to head to Europe, should I take it?’ ‘Got any intel on this company?’—that type of stuff.”

Like Sutphen, Charles Phillips, the 56-year-old CEO of Infor, a $2.8 billion enterprise software firm, has an informal network of his own—a supper club of two dozen business leaders and professionals, most of whom prefer to remain anonymous, who have raised millions of dollars for causes they care about. But he also routinely meets with young black tech executives coming out of Facebook, Google, and other Valley companies, and offers counsel where he can. “I started at Wall Street and made my career at Oracle,” says Phillips, who was a former co-president at the software giant. “I didn’t work with any black people for most of my career.” Now he relishes the chance to provide feedback on matters of due diligence and arrange meetings with prospective partners for the young entrepreneurs, or even facilitate direct investment in their startup ideas if it makes sense.

From the high perch of CEO, Phillips has also been able to transform Infor—making the decision at the top of the company to change the way it recruits at the bottom. To find entry-level employees, he set up a central talent pool, filled with interns drawn from a diverse selection of colleges, designed to eliminate the cronyism that typically accompanies hiring. The company has started to collaborate with certain colleges with curriculum support and certification programs, specifically to create more work-ready candidates. “We recruit, train, and place interns in divisions. Managers don’t know who they’re going to get. And it comes out of my budget, not theirs.” He says leaders are happy because they get unique talent that they don’t have to pay for. Phillips also incentivizes company recruiters to focus on retention. “We want people to stay past a year, and that takes mentorship and coaching.”

Ed Welburn, 65, knows the power of that. As a kid he fell in love with a Cadillac concept car, he says. When he was 11, he wrote a letter to a GM GM -0.54% executive saying he hoped to work there one day. “I got an answer,” he said: Keep sketching, and get yourself to Howard University.

Welburn did just that, entering the fine-arts program at the venerable Washington, D.C., institution—one of the nation’s historically black colleges and universities, or HBCUs. As it turned out, says Welburn, “the professors had such a deep relationship with GM, they were able to fine-tune my curriculum to help me prepare for a career there.” When he got his dream job in 1971, he was the company’s first black designer. Welburn, GM’s vice president of global design, now runs all 10 of GM’s design centers and sits on its executive-leadership team.

The symbiotic partnership between U.S. automakers and HBCUs, indeed, has helped prepare young black engineers for technical careers in auto manufacturing for at least two generations. By hiring at all levels, the automakers played a significant role in helping people transition from servant class to middle class.

The lesson isn’t lost on David Drummond. “The relationship between the HBCUs and the automakers is historically really important,” says Drummond, a senior vice president at Alphabet and chairman of Google Capital. “And we’re trying to do the same thing now.” In 2015, Google doubled the number of schools where it recruits and started embedding engineers at a handful of HBCUs, including Howard, to teach and demystify the process of applying for jobs in Silicon Valley. “It’s part of a broad plan the company has launched to change diversity numbers,” he says. “We’re taking a long look at who is getting promoted and why talent may not have been as recognized in the way that it should.”

The Lost Generation

For a generation of business-hungry black men in their twenties and thirties, there is another question to answer—and that’s whether it’s too late. The question, though, has a twist: Is it too late for corporate America?

Darian Wigfall, 34; Damon Davis, 30; William Porter, 35; and Ross Gibson, 29, are huddling in a corner bar called Whiskey Ring on Cherokee Street in St. Louis. It’s an artsy street: “Kind of like our Brooklyn,” offers Porter. They are all college educated—“Well, I only went to college for a hot minute,” says Porter, and Gibson had to postpone the last few credits on his master’s in behavioral neuroscience when a family member got sick. All four men are keen observers of the race dynamics around them. We are 11 miles from where Michael Brown died. “The movement took off here,” Wigfall says of #BlackLivesMatter, sounding determined. The troubles that all the men had witnessed growing up were blown up into a global debate in and about their own backyards.

Over craft beers and premium whisky, they explain why they are convinced that corporate life isn’t for them. “There’s just no way,” says Wigfall. Wigfall and Davis tick through an almost comical list of roles they play—artist, filmmaker, DJ, web designer, author, music industry mogul. They’ve co-owned a record label called FarFetched for five years. They all believe that they have access to the tools they need to succeed on their own terms and a network of friends and community that sees them. They see no need to invest in a corporate career that isn’t designed to invest in them.

“My grandmother had a barbershop for years, right over there,” says Porter, pointing to a shuttered storefront. “I can build a community business, be part of things.” He opened his own place up the block, MasterPieza, offering gourmet pizzas. How did he learn to make pizza? “YouTube,” he says with a laugh. “I learn everything there.” If his business ideas are workable, he can scale them on his own.

Corporate America, it seems, is missing out.

That said, Gibson is missing something too: He could use some cash. He has arrived at our meeting with a thick textbook on venture capital and is planning to raise a round of funding for his newest project, Ardefact, a luxury shopping site that has a crowdsourced procurement element baked into the mix. “I’m learning how to structure deals,” he says, patting the book. He is also a real estate scion of sorts. “My grandmother was big in rural Arkansas real estate,” he says with a laugh. He co-owns some property, including the building on Cherokee Street that houses the venue where FarFetched holds release parties. He waves off talk of Silicon Valley and says has never heard of Sand Hill Road or venture titans like Marc Andreessen. But his face lights up when I mention former Twitter engineer Leslie Miley. “That dude!” he says with admiration. “Do you think he’d take my call?”

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