'Separate Pool' Executive Hiring

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The following quotes from an article from the Wall Street Journal give you a bird's eye view of preferences in action at the very highest levels in Corporate America.

You will notice that Pepsico maintains separate pools by race and sex for recruiting senior executives in its "Designate" program.

This practice is precisely what the Supreme Court supposedly outlawed in the Bakke case. Apparently, corporate America recognizes Bakke for what it is - window dressing by our highest Court to maintain the impression of fairness. Apparently, there were enough winks and nods in that badly split opinion to convince corporate America that they could continue discriminating against European-Americans in any way they please under the Civil Rights Acts.

One thing you will never find is the very top brass resigning to make room for their new-found favorites.

You may also want to take a look at the stock charts for Xerox, Merck and the other star performers in minority executive preference and ask yourselves whether they might be short sale candidates.

Yggdrasil-

Wall Street Journal Nov. 13, 1991 p 1 C1

Room at the Top

PepsiCo's KFC Scouts For Blacks and Women For Its Top Echelons Fried-Chicken Chain Seeks Well-Seasoned Managers Like Lawrence Drake, 37 The $150,000 Onion Breader

By JOAN E. RlGDON

Staff Reporter of THE WALL STREET JOURNAL

When Larry Drake found himself mixing mashed potatoes at a Kentucky Fried Chicken outlet in a suburb of Pittsburgh last winter, he worried that his friends wouldn't understand. Months earlier, Mr. Drake had worn tailored suits and cuff links to his job at Coca-Cola Co., where he managed $100 million of bottler accounts. A 10-year veteran of Coca-Cola, and one of its highest-ranking black executives, Mr. Drake earned more than $100,000 a year, including bonuses. He had just received his master's degree in business and was aiming for a vice presidency.

Then he got an offer he couldn't refuse. The Kentucky Fried Chicken unit of archrival PepsiCo Inc. was looking for senior executives who could run a business. There was just one hitch: No senior position was immediately available. Despite that Kentucky Fried Chicken offered Larry Drake the title of Vice President, annual compensation of more than $150,000 and the promise of an executive position within a year. Meanwhile, he would train in the company's restaurants, learning the business from the kitchen up.

This is the fast track, Kentucky Fried Chicken style. For two years, the fast-food chain has been looking across industries, snapping up other companies' seasoned managers for its so-called Designate program. In addition to attracting fresh thinkers in general, Kentucky Fried Chicken uses the program to try to correct one of corporate America's most intractable problems: attracting and keeping female and minority-group executives. The company makes no bones about its goal. "We want to bring in the best people," says Kyle Craig, president of Kentucky Fried Chicken's U.S. operations. But "if there are two equally qualified people, we'd clearly like to have diversity." The program is achieving noteworthy results: In 1989, none of the company's 17 senior U.S. managers were minority or female; today, seven are.

Slow Climbing

That is a better record than at many American corporations, where, despite widespread efforts, women and members of minority groups have made slow progress climbing the ladder. American companies have tried many strategies for integrating their ranks, including recruiting at minority-group job fairs, hiring diversity consultants and, more recently, retaining search firms owned by women and members of minorities. Gilbert Tweed Associates, a New York executive search firm reports that 14% of this year's searches were dedicated to finding women and minority candidates, double the 7% of 1987. Other companies have proved that however difficult the task of integrating management, it can be done. As of last year, 14% of Xerox Corp.'s managers at the vice president level and above were blacks, up from 3% in 1980. Merck & Co. had 11% minority-group managers by last year, up from 7.2% a decade ago. But these are the exceptions. Among companies with 100 or more employees, whites still account for 90% of managers, with white men outnumbering white women by almost 3-to-1, according to a 1990 study by the Equal Employment Opportunity Commission. Black men account for just 2.9% of managers; black women, 2.1%; Hispanics, less than 3%; and Asians, less than 2%.

Calling Every Week

Companies say slow progress in minority-group hiring and advancement is caused partly by a limited hiring pool. Many minority-group executives fend off calls from companies once a week, says F. Hassan Shariff, a recruiter for the Johnson Group, another New York search firm. "There's not a lot of them out there," he says. Indeed, Kentucky Fried Chicken's Designate program draws on the same small pool of high-ranking minority- group and women managers that would attract many other companies. But KFC points out that it actively promotes women and blacks into its middle-management ranks, and that its Designate executives help train future executives within the company.

Adding to the struggle to integrate America's executive suites is a series of challenges to affirmative action programs and hiring quotas. Supreme Court Justice Clarence Thomas has loudly denounced affirmative action programs. Whites say they are being unfairly deprived of jobs by minority-group candidates who are less qualified. Others says affirmative action stigmatizes people by focusing on race instead of talent. Stephen Carter, a Yale University law professor and author of "Reflections of an Affirmative Action Baby." calls affirmative action "racial justice on the cheap" because it is less costly than broad-based social programs. But for Kentucky Fried Chicken, aggressively recruiting minorities and women makes good business sense. The company, which ranks No. 5 in sales in the U.S. among fast-food concerns, says it is second only to McDonald's Corp. in number of black customers. And of its 161 middle managers,. 31% are members of minorities and 26% are women. Kentucky Fried Chicken finds candidates for its Designate program by retaining search firms owned by minority members and women as well as by white men. Armed with the same criteria, each recruiter is asked to produce a different slate of candidates: all white men, all women (white and minority ) or all black men. One person is hired from each search; Mr. Drake competed for his slot against six other black men. Of the 13 people that have been brought in under the program, two are white women, two black women, three black men and six white men.

* * *

Women and minority members who reach the executive suite are "always on stage and on guard," says Nathaniel "Toby" Thompkins, a diversity consultant at Harbridge House, a Boston-based training firm. For Mr. Drake, that's a tough mandate. "I can't be the standard bearer for the entire race," he says. Coca-Cola made no counteroffers when Mr. Drake left because he told them he wouldn't consider any. he says A CocaCola spokesman says Mr. Drake was a "fast-track" manager who was slated for more responsibility within the bottler operations division, though not necessarily an officership. If Mr. Drake felt frustrated at Coke, he had to fasten his seat belt for his ride at KFC. His promotion started in November 1990 with the unlikely task of breading onion rings in inner-city Pittsburgh restaurants, where he later scrubbed floors beside his colleagues in the middle of the night. Then he managed clusters of restaurants and, by last June. entire markets. By July, five months ahead of schedule, Mr. Drake got what he wanted. Now 37 years old, he is KFC's most senior black executive- a vice president and general manager for the Midwest region. He is responsible for 259 company and 805 franchise restaurants with combined revenues of about $800 million. Mr. Drake reports to Mr. Craig, KFC's U.S. president, and is considered a candidate for senior positions at PepsiCo's other divisions. * * *

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