Who Rises to Power in American Business?

"Who achieves success and power in the United States? In the twentieth century, the easiest path to power was available to certain individuals—mainly men, mainly white—who were otherwise favored with the right religious, family, geographic, and educational ties. But a significant number of "outsiders" created their own road to success, overcoming significant odds."

Here is a summary of a recent Q&A with Anthony Mayo of Harvard Business School and author of Paths to Power: How Insiders and Outsiders Shaped American Business Leadership:

Q: Your research suggests that for the first three quarters of the past century access to positions of power and leadership in America was not available to all equally. Who was favored during that time?

A: What is often overlooked or forgotten in the Alger stories is that the individuals who "came up from their bootstraps" did so with the assistance of an important and influential benefactor...the benefactor helped to channel that energy into an opportunity with potential. In a sense, this personal network or connection helped to facilitate access to others in positions of influence which in turn provided opportunities for advancement.

In Paths to Power, we trace seven factors that either provided easy access to an insider track to power or functioned as obstacles to success. These include birthplace, nationality, religion, education, social class, gender, and race. Those from privileged families have always had an easier path to traditional power. Those on the outside—foreigners, women, African-Americans, non-Protestant religious affiliations—often pursued other paths to power. When doors were closed, outsiders created their own paths.

Q: How has that situation changed today? Do paths to power mirror trends and values in society at large?

A: There has been a gradual opening of access. In our research, we saw education supplanting religion, birthplace, and nationality as a more important factor for success by the late 1950s. The MBA as a prerequisite for success in the top tiers of business became increasingly important from the 1970s through the end of the century, and as a result, we have seen a massive proliferation of MBA programs. At the elite graduate institutions, there may be less access—in essence, a closing of the funnel.

Q: In what areas do paths to power still appear to be closed today? Who is being excluded?

A: The three areas that are still part of the outsider path are social class, gender, and race. The most intractable issue is probably social class. The composition of leaders who overcame poverty to achieve the pinnacle of success in business changed very little over the course of the twentieth century.

Q: What does your research suggest about American business leadership in the future?

A: Businesses that will succeed in the twenty-first century will be those that embrace the diversity of their workforce, that can compete in a global, competitive landscape. Education is far more important today. Going forward, a global perspective will be increasingly vital.

Q: What do you think is the single most important finding from the research that went into the book?

A: At first glance, the composition of CEOs in America seems to have changed little in 100 years—it's mostly comprised of white men. But digging deeper, it is apparent that the composition has changed in some dramatic ways. There are more foreign-born CEOs today, religion is no longer a barrier to entrance, education has helped to level the playing field for some from less advantaged backgrounds, etc.

Link to Who Rises to Power in American Business? [HBS Working Knowledge - Anthony Mayo]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing