The History of Black Management Reveals an Overlooked Form of Capitalism

By Lila MacLellan

On June 4, the reverend Al Sharpton appeared at the fi rst public memorial for George Floyd and delivered a stirring eulogy, one that served as a bridge linking the personal grief of the slain man’s family with America’s history of racism and violence against Black people.

He presented a long, devastating account of the ways Black Americans have been metaphorically pinned down—physically, spiritually, and economically—just as Floyd had been suffocated by the Minneapolis police offi cer who kneeled on his neck. “We were smarter than the underfunded schools you put us in, but you had your knee on our neck,” Sharpton said. “We could run corporations and not hustle in the streets,” he also said, “but you had your knee on our neck.”

Leon Prieto and Simone Phipps, two management professors and the authors of African American Management History (Emerald Points, 2019 www.amazon.com/African-American-ManagementHistory-Cooperative/dp/178756662), were watching that afternoon from Atlanta. They found that last statement profound, they later told me, because it pithily encapsulated the reality of running African American businesses in the United States. It also spoke to what Prieto and Phipps see as their role in the Black Lives Matter movement: connecting the dots between the philosophies of historical Black business leaders—whose ideas, values, and traditions have been left out of the management canon—and America’s racial inequities today.

The pair argue that the ideas supported by African American managers during the fi rst few decades of the 20th century, a relative golden age for Black business, hold lessons that are relevant in this century. Discovering the Hidden Figures of Black Management History

Phipps and Prieto, who are married, are both from Trinidad and Tobago. They fi rst met as undergraduate students at Clafl in University, a

Charles Clinton Spaulding, circa 1912. NaƟ onal Archives and Records AdministraƟ on/CreaƟ ve Commons

historically Black college in Orangeburg, South Carolina. There they noticed an oddity that would hold true throughout their academic careers: In the textbooks they read, all of the management gurus that informed their views of organizational culture, fi nancing, strategy, or the purpose of a company, were caucasian, says Phipps, now an associate professor of management at Middle Georgia State University’s School of Business. “[W]e learned a lot about African American history, but when we were reading the management textbooks, I was like, ‘Ok, there are a lot of things that can be here, but they’re not listed.’ I felt that there had to be African Americans who contributed to the fi eld.” The Father of Black Management History

The fi rst fi gure the duo studied extensively was Charles Clinton Spaulding (https://

northcarolinahistory.org/encyclopedia/charlesclinton-spaulding-1874-1952) , who led North Carolina Mutual Life Insurance Company, the largest African American life insurance company of the times, for 50 years until his death in 1952.

Several years ago, reading a book about Black business history, and then checking the bibliography for original sources, Prieto discovered a kind of manifesto Spaulding had written in 1927 for the Pittsburgh Courier, the largest Black newspaper of the era (https://niemanreports.org/articles/theblack-press-past-and-present) , reaching hundreds of thousands of readers. Under the headline “The Administration of Big Business,” Spaulding shared his views on running a major fi rm. To his mind, the eight fundamentals of operations that demanded a leader’s attention were: • cooperating and teamwork; • authority and responsibility; • division of labor; • adequate manpower; • adequate capital; • feasibility analysis; • advertising budget; • and confl ict resolution.

His article, the scholars note, was published 20 years before similar theories about the functions of management by Henri Fayol, a French theorist and textbook mainstay, were translated for American readers. (The podcast Talking About Organizations, which invited Prieto and Phipps to be guests on the show last year, has transcribed Spaulding’s article in full, here. (www.talkingaboutorganizations.com/wpcontent/uploads/2019/06/Administration-of-Big-BusinessSpaulding-1927.pdf))

In one sense, Spaulding’s life story is a classic American tale of success: Born on a farm in rural North Carolina in 1874, only a decade after slavery was abolished, Spaulding, who had to leave school to work at home as a child, went to Durham to fi nish grade school at age 20, not letting the knowledge that he’d be signifi cantly older than the other students deter him. After graduating, he took

A look back into a history that wasn’t widely known.

Teenie Harris Archive/Carnegie Museum of Art odd jobs in Durham, until he was invited to join the insurance company. But where his story differs from other self-made-man fables is in Spaulding’s strong, faithful support for his community as he gained fame and became one of the moguls of Durham’s “Black Wall Street.” (www.ncpedia.org/ anchor/durhams-black-wall-street)

In the writings and speeches in Spaulding’s archives, housed at Duke University (https:// library.duke.edu/rubenstein/findingaids/spauldingcc), Phipps and Prieto discovered an unrelenting call for cooperation and consensus-building within organizations, and an emphasis on the symbiotic relationship between a company and the world outside its doors.

Spaulding’s devotion to a collective style of working and to corporate social responsibility was not an isolated case of the era. Nor did it materialize strictly as a response to the times, the pair assert. Rather, they hypothesize that the cooperative model that was popular among Black businesses then—and which infused the way free-market enterprises operated in the Black Wall Streets of Durham and other American cities like Tulsa, Oklahoma—grew out of a much older African philosophy called Ubuntu, a Nguni Bantu word meaning humanity, derived from an idiom that’s sometimes translated as “I am because we are” or “a person is a person through other persons.” Ubuntu as a world view that stresses our interconnectedness was popularized globally in the 1960s, primarily by Desmond

Tutu, the South African archbishop emeritus and Nobel Peace Prize-winning human rights activist (https://theconversation.com/what-archbishoptutus-ubuntu-credo-teaches-the-world-about-justice-andharmony-84730).

The sense that ubuntu defi nes our human experience is common in several African cultures, Prieto says, and manifests in a range of cooperative fi nancial models that fl ourish across the African diaspora. (For example, he had grown up contributing to sou sou, or a savings club, he tells his students in lectures, and it was a sou sou that allowed him to purchase the plane ticket that brought him the US. (www.essence.com/news/ money-career/what-is-a-sou-sou-savings-club-facts) It may not have been called ubuntu, but that moral code survived as a shared value among Africans enslaved in the US, Prieto and Phipps say.

Writers and educators including W.E.B. Dubois and Booker T. Washington, who infl uenced Black business pioneers, had also championed the cooperative model as a tool for economic independence, according to Prieto and Phipps. “I don’t think people have a sense of how diffi cult it was for Black Americans, after slavery, to fi nd their way in the capitalist system without any capital,” says Prieto.

Spaulding was managing a cooperative grocery store for Black Americans when he was recruited by two of the founders of North Carolina Mutual, John Merrick, a former slave who had become a prominent barber, and Aaron McDuffi e Moore, the fi rst African American doctor in Durham. Too busy with their own jobs to actually run the company, they asked Spaulding to become a salesperson and, in fact, sole employee. Spaulding took the baton and ran a marathon, driven by the insurance company’s social mission. At the time, white-owned insurers would not serve Black customers, Phipps says, which meant that when a Black person died, “the family often had to literally pass the hat around for a collection to cover the funeral and burial costs.”

Spaulding wasn’t named president of the North Carolina Mutual until 1920, but he was its de facto leader until then, anyway. Under his management, the company grew to serve more than 100,000 clients by 1908. He hired hundreds of employees, including women and some white salespeople, and expanded the business to 16 states. He worked tirelessly, never taking a vacation, because he believed that he was doing “god’s work,” says Prieto, “by helping the Black community in Durham, and the United States by extension.” And Spaulding gave back, donating to hospitals, libraries, churches, and newspapers, and publishing his views so they would be instructive to other established or aspiring Black business owners.

“The idea of spirituality is sort of a new concept these days in management, that idea of your work being meaningful and being able to have purpose,” says Phipps. But, a century ago, Spaulding knew that employees needed that larger mission as motivation. “The terminology of ‘spirituality’ is a bit controversial, but the idea was that he was able to link spirituality and the corporation, and that was a common theme in the people we were researching,” says Phipps.

On special retreat-like days he called forums, Spaulding also ran professional-development seminars on oration, communication, and managing. Phipps describes the forums as “an empowering way to get people together and to develop people without having a formal training and development program.” Prieto adds, “It was a way for employees to build some confi dence about themselves, as people of African descent who can come to work, gain some skills and make a difference within the organization and the community as well.”

Spaulding also instinctively understood the value of offi ce luxuries to attract and retain the best talent. As Prieto and Phipps write in their book: “Today, many employees enjoy the idea of working for companies such as Google, and Facebook, which have medical facilities, great dining, and various other perks. At the Mutual, in 1948, on the second fl oor of their building, one could fi nd an ‘elaborately modern clinic’ headed by a graduate of the Harvard Medical School, a printing press, and a ‘model cafeteria,’ where the staff could get a fi rst-class meal at around 17 cents.” Spaulding, a true visionary, “saw the importance

of these ‘perks’ as a way to increase department store called motivation within the Mutual family. the Emporium, a business People typically want what is best for spun off from the Aid their family, and the good old Mutual society to serve African spirit refl ected this convention.” American customers and The Mother of African American Management give African American women jobs demanding skills other than

Though Spaulding’s tale unspools housekeeping and other across the bulk of their book, the forms of manual labor. academics also deconstruct the Evidence to support the managing styles of the aforementioned argument that Walker had Merrick and Alonzo Herndon, former slaves turned infl uential entrepreneurs who were among the fi rst investors in North Carolina Mutual and Atlanta Maggie Lena Walker in 1913. CreaƟ ve Commons this gift as a manager at the society and, later, as a bank president, exists in abundance in Walker’s Life. They also write about two fi ery speeches, many of entrepreneurs in the Black beauty industry, Annie which addressed the role Black women could and Turnbo-Malone and Madame C. J. Walker. should play in business or in any career of their

And then there’s Maggie Lena Walker, the choosing. At a talk in 1912, for example, Walker historical leader whose writings left the professors proclaimed, “Let woman choose her own vocation, most awestruck and electrifi ed. just as a man does his. Let her go into business, let her

Born in 1864 to a former slave in Richmond, make money, let her become independent, if possible, of Virginia, Walker grew up in poverty, but she man: let her marry, bringing into the partnership, if not would become the fi rst woman in the United money, a trade or business—something else besides the States to start a bank, the St. Luke Penny Savings mere clothes upon her body.” Bank, in 1903. This feat followed her ascension She had a real love for her people, says Phipps, to the head of the Independent Order of St. and it comes through in her rallying cries for Luke, a mutual-aid society she ran for 35 years. African Americans to boycott white businesses Along with 22 other women, she also launched a and start their own instead, to starve “the lion of prejudice” that sought to prevent Black Americans from accumulating wealth and self-suffi ciency. Walker’s ideas and progressive speeches were, for decades, temporarily lost to history. Today, there is a renewed interest in her life story; two years ago, her hometown erected a statue of her in an overdue tribute.

RevisiƟ ng history: management professors Simone Phipps and Leon Prieto.

Slowly Lifting the Knee off Black Entrepreneurs

In Walker and Spaulding’s time, Black businesses that were run as cooperatives or operated in that spirit thrived. But they also were attacked by white mobs in sometimes deadly violence, as in the Tulsa massacre of 1921 (https://daily.jstor.org/thedevastation-of-black-wall-street) and elsewhere. Racist competitors waged a psychological war against

Black cooperatives, too, says Prieto, by calling them communist and anti-American.

“White supremacists, anytime they had an opportunity to label Black citizens un-American, they took it,” he says.

A full century later, Black entrepreneurs in the US are still wrestling the lion of prejudice, long before they can even hang a shingle. Citing recent data from the Federal Reserve, the Guardian reports that between 2012 and 2017, 47% of companies with Black owners that applied for loans were approved, compared to 75% of those with white owners (www.theguardian.com/business/2020/jan/16/ black-owned-firms-are-twice-as-likely-to-be-rejected-forloans-is-this-discrimination). When banks do grant African American applicants access to capital, Phipps also notes, they tend to attach interest rates that are much higher than those offered to white customers.

Arguably, some of the responsibility to correct contemporary biases sits with the country’s business schools, which have been struggling to diversify their student populations and faculty (https://thriveglobal.com/stories/how-to-address-the-lackof-diversity-inour-nationsbusinessschools).

Un-erasing History Like Rogers, Prieto and Phipps want to change the environment for Black A m e r i c a n s in corporate life, beginning with what they read and absorb as college students, and can therefore imagine for themselves.

Happily, Prieto and Phipps can claim some early success: At least fi ve textbook authors have updated their books to include Spaulding and his eight fundamentals of business administration, citing the duo’s research.

For some people, says Phipps, this topic is controversial. “They’d rather not look at it,” she says.

For her part, Phipps says she didn’t truly understand the experiences of African Americans before she moved to South Carolina. Even then, she felt compelled to read about Black American history and ask her own questions, in the process developing a specifi c lens on injustices as they persist today.

The fi rst textbook author to update his work to add Spaulding’s story was Chuck Williams, author of MGMT (Cengage Learning www.cengage.com/c/ mgmt-11e-williams/9781337407465PF), which Prieto was using in his classes.

Now Prieto and Phipps are hoping that future edits will introduce other fi gures, particularly Maggie Lena Walker. “We think she could be considered the mother of African American management,” says Prieto. “C.C. Spaulding is recognized as the father of African American management. She deserves her place as well.” Reclaiming the Future

Ultimately, Prieto and Phipps want to see more than just an acknowledgment of the proven, compassionate form of capitalism detailed in their research. They also want to see African Americans launch businesses and build wealth by adopting it.

“There is a term from the Akan people of Ghana known as Sankofa, which means, ‘go back and get it.’ It embodies the importance of refl ecting on African philosophies from the past in order to reclaim the future,” Prieto and Phipps write in the introduction to their book.

This could be exactly the right moment for that appeal. Scholars have found that African American cooperatives surged in numbers during periods of political momentum, fi rst after slavery in the US ended and again in the 1970s, in the decade after the passage of the US Civil Rights Act (www. policylink.org/blog/collective-courage).

Could today’s Black Lives Matter movement give rise to a new wave of cooperatives and a shift in the culture of Black business? “You know,” says Prieto, “it just might.”

Edited by DAWN staff. The full article is available at: https://qz.com/work/1868106/black-businesshistory-reveals-potent-management-lessons Image credit: www.amazon.com

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