Black Voters Decided the U.S. Election — And They’re Poised to Reshape Business

Black Americans showed up in huge numbers to vote in the 2020 election cycle. Analysts say their massive turnout in major American cities including Philadelphia, Detroit, Milwaukee and Atlanta played a key role in pushing Democratic candidates Joe Biden and Kamala Harris to presumptive victory in the presidential race.

As outlets including the Black Information Network observed, those grateful for a Biden and Harris win can largely credit Black community organizers. The Movement for Black Lives summed it up neatly in an email to supporters on Saturday, "This is a testament to the power of Black people and Black organizing." Due to mounting factors, Black Americans are increasingly poised to reshape the landscape of business, too.

A long-awaited wave of Black corporate executives may be around the corner, but numbers are just the start

In just one example, as racial justice protests spread around the world in response to the murders of Ahmaud Arbery, Breonna Taylor and George Floyd, a growing number of companies put targets in place to increase the number of Black people and people of color in leadership roles.

While many argue (for good reason) that pledges to increase leadership representation over the next five to 10 years pale in comparison to the change that's needed, realizing these goals has the potential to bring hundreds if not thousands of new voices into the top brass of America's largest companies. And as is often said: You can't manage what you don't measure. “Companies that write affirmative-action plans, which set goals, see more progress toward diversity than companies that don’t,” Frank Dobbin, a professor of social sciences at Harvard University, told the Tribune News Service in September. 

Change in this area is sorely needed: Though Black Americans comprise more than 13 percent of the U.S. population, they account for just over 3 percent of executive or senior leadership roles at major companies, according to a 2019 study from the Center for Talent Innovation. 

“Despite many good intentions, companies are falling short of creating equitable workplaces for Black employees," Patricia Fili-Krushel, CEO of the Center for Talent Innovation, said in a statement announcing the findings last year, as quoted by Black Enterprise. "We hope that business leaders will respond to these findings by making a serious assessment of their own workplaces and creating a comprehensive plan of action.” 

It is, frankly, shameful that it took a string of highly publicized murders and a wave of global racial justice demonstrations for many companies to put such action plans into place. But now that they have, some are hopeful change could be coming to the executive suite — which remains, as Jessica Guynn and Brent Schrotenboer of USA Today put it, "one of America’s most exclusive and impenetrable clubs." 

Still, others insist that increasing the number of Black people and people of color in leadership positions is far from the end game. "Corporate diversity shouldn’t be a goal," Travis Montaque, founder and CEO of the messaging technology company Holler, wrote in Fortune. "It should be the outcome of a fundamental shift in the DNA of a company."

In recounting his own experience in a Wall Street diversity program before founding Holler, Montaque said he often felt like the "diversity kid" and was expected to adapt to fit the organization's culture, rather than the culture changing to be more welcoming to everyone. "Executives need to take an honest look at their own corporation’s identity," he continued. "In the process, business leaders should ask themselves how they can make systemic changes at the ground level that will hold everyone in the company accountable for working toward true diversity and equality."

Black small business owners are on the cusp of redefining Main Street — if they can survive the pandemic

Like Montaque, a growing number of Black Americans aren't waiting for the C-suite to welcome them and are founding their own enterprises instead. Black women in particular represent the fastest growing entrepreneurial population in the U.S.: The number of companies owned by Black women has grown by 164 percent since 2007, and they now launch more businesses than any other group. 

Still, Black entrepreneurs are notoriously underfunded. According to 2020 data provided by the Federal Reserve, Black Americans were twice as likely to be rejected for small business loans compared to their white counterparts. In the venture capital world, DigitalUndivided’s Project Diane found that firms owned by Black women received an infinitesimal 0.0006 percent of the total VC funding raised by startups from 2009 to 2017. 

Challenges with funding extended through the coronavirus pandemic, putting businesses owned by Black Americans and other people of color at disproportionate risk of closure. Only 12 percent of Black and Latino business owners received the funds they requested through the Paycheck Protection Program (PPP), the fund established by the federal government to help small businesses weather the economic storm. Of the businesses that chose to identify race in their loan applications, Black-owned businesses received 1.9 percent of PPP loans while white-owned businesses received 83 percent, according to data from the Small Business Association. 

With this in mind, it's not surprising that Black-owned businesses were twice as likely to permanently close in the wake of coronavirus shutdowns, but some say the pandemic also presents an opportunity to create parity among all entrepreneurs, once and for all. Reaching revenue parity between white- and Black-owned U.S. businesses as part of thoughtful and targeted COVID-19 recovery amounts to a $290 billion opportunity to grow overall wealth, according to a new report from McKinsey & Co. But as 3p's Roya Sabri observes, realizing that potential requires intentional action from both the public and private sectors. That's hardly a given in today's environment, but some cities are already getting started. 

The bottom line: Election results show that Black Americans aren't waiting for an invite

We could go on and on listing the ways in which businesses, financial mechanisms and other systems have failed Black Americans throughout history and up until today. But the results of the 2020 election make one thing clear: Black organizers, innovators and leaders aren't waiting for white America to wake up and solve those problems — they're solving them on their own. And given what we know about diversity and financial results, their efforts are poised to — once again — benefit us all.