Erika James brings diversity, gender equality to male-dominated spheres

Erika H. James [Photo by Lee Seung-hwan]

In February 2020, the Wharton School of the University of Pennsylvania in the United States, one of the world’s most prestigious business schools, received attention from the business community by appointing a dean who was both a woman and a person of color for the first time in its 139-year history, and Erika H. James has led the Wharton School since July of that year.

James achieved a significant milestone within her first year at Wharton in 2021 by achieving gender equality, a first among prominent U.S. business schools. She successfully balanced the gender ratio of incoming students, moving away from the traditionally male-dominated composition.

James previously held a similar title as the first female dean of color at the Goizueta Business School at Emory University, where she worked before joining Wharton in 2020.

During her tenure at Goizueta, she worked to improve diversity within the organization, and under her leadership, the number of female faculty members at the school doubled from the previous year.

Maeil Business Newspaper’s MK Business Story had an exclusive interview with James, who visited South Korea on October 11 to discuss her journey as the first female dean of color at the Wharton School and diversity within educational institutions and companies.

The following is a Q&A with Dean James.

-You were named the Wharton School’s first female dean of color in 2020. Why do you think it took so long for the Wharton School to have its first female dean of color?

▷I had an interesting experience at a gathering before this interview. One of the people I met did not know I was the dean of the Wharton School because I looked too young to be a dean and did not fit the typical image of a dean. This stereotyping of certain roles also happens when making hiring decisions. If a candidate does not look like the incumbent, it is hard to imagine him or her being able to fulfill the role. I wonder if this may have been a factor in the Wharton School’s dean search.

-With that being the case, how did you sell yourself as the right person to be the dean of the Wharton School during the hiring process?

▷I was interviewed over a long period of time. I met with various stakeholders at the University of Pennsylvania, of which the Wharton School is a part, and at the end of the day, what they were looking for was experience and a track record of success. I talked about my accomplishments at the Darden School of Business at the University of Virginia and the Goizueta Business School at Emory University, gave specific examples, and explained how they aligned with the skills needed for the Wharton Dean position.

-Could you name a specific accomplishment you talked about during the interview process.

▷When I was dean of the Goizueta Business School at Emory University, one of my responsibilities was to raise the profile of the school. At the same time, I needed to strengthen the thought leadership of our professors. I decided that the first step was to increase the number of professors, and I succeeded in increasing that number by 25 percent. In the process, I nearly doubled the number of female faculty members.

-What does diversity and inclusion mean at Wharton?

▷It’s important to distinguish between diversity and inclusion. Diversity is about who we are as a community. At Wharton, diversity is a microcosm of the world’s (population) diversity. The Wharton School is a place where people come from different countries, genders, races, religions, experiences, and backgrounds. All institutions, including Wharton, should make individuals feel like they belong to a community. Inclusion is about creating a culture that allows people to belong and thrive in the environment in which they are placed.

-What efforts is the Wharton School making to further strengthen diversity and inclusion for both students and professors?

▷Firstly, for students, there are not as many women choosing business education as there are in other fields of education. The Wharton School became the first elite business school in the United States to achieve gender equality in 2021.

Since I became dean, the gender ratio of men to women in Wharton’s MBA program has been around 50 percent (in July 2021, Wharton announced that nearly 52 percent of the MBA program’s incoming class that fall would be women). This is an achievement that Wharton is very proud of, and we have been successful in achieving gender parity over the past three years.

-What changes have you made in terms of faculty?

▷In terms of faculty, Wharton tries to recruit as broadly as possible for women and underrepresented minorities. We are making progress on that., and since I became dean of the Wharton School, nearly half of our new hires have been women.

-In June, the U.S. Supreme Court ruled that “affirmative action” policies that favor racial minorities in college admissions are unconstitutional. How do you expect the ruling to affect diversity and inclusion strategies in higher education?

▷We do not yet know for sure what the impact of the Supreme Court’s decision will be. If I had to guess, I would say that the number of diverse types of people attending college will decrease, even if institutions of higher education try to create a more diverse and inclusive environment in other ways. This is only speculation.

-Is there an area you want to work on more as a dean in this environment?

▷Higher education institutions try to attract diverse types of students. The Wharton School is no exception. One of the ways the Wharton School reaches out to different types of students is through the Wharton Global Youth Program. This program provides business education to high school students around the world. The idea is simple: bring business content to students who might not otherwise have access to a business education. We do not expect every student who participates in the Wharton Global Youth Program to be admitted to Wharton, but the program helps us build a “talent pipeline” of diverse students.

[Photo by Lee Seung-hwan]

-Is there a difference between how to create a culture of diversity and inclusion in higher education and how to do it in business?

▷Businesses now recognize that they cannot compete without a diverse workforce. Where do they get their talent from? It is very often from higher education institutions, such as MBA programs, which means they are relying on higher education to provide a diverse workforce. As much as companies want to be diverse, higher education institutions need to be diverse to provide the talent they need.

- What is the correlation between diversity and corporate profits?

▷Building teams based on homogeneity prevents the generation and use of ideas and creativity that can contribute to solving problems. People need to be exposed to different experiences to find creative ways to solve problems. Diversity leads to creativity, and creativity leads to better problem solving. The better you can solve (management-related) problems, the better your organization will perform.

-This was your first visit to Korea as dean of the Wharton School. What have you learned about the Korean business world from speaking with Wharton’s Korean alumni?

▷Korea has similar challenges to the United States. One of them is the change in work caused by artificial intelligence (AI). I also learned about the changes in the labor force that will result from Korea’s declining birthrate. The demographic change due to the low birthrate will create a future crisis. In the next 10 to 20 years, there will be far fewer young people working, and they will not be able to keep up with the current workload and creativity.

-What other changes have you noticed?

▷We should also note that generations are getting shorter. In the past, a generation was about 25 years, but now it is about 10 to 12 years. With the shorter generational span, there are now four or five generations of people in a company. Each generation has different perspectives and expectations, making it increasingly difficult for organizations to respond. It is important for companies to identify commonalities that all generations can agree on and build on them.

-With regard to board diversity, Korean companies often have one or two female members on their boards. Can this be considered diversity?

▷Research shows that 30 percent of a group needs to be represented for diversity to occur. If there are 10 board members and only one or two women, the female member may feel that her inclusion is a formality. She may feel unable to make her case or contribute her own ideas and could try to conform to the opinions of the other eight or nine board members.

-Would things be different if there were three or four board members?

▷If there are three or four women on the board, they will feel more comfortable voicing their opinions. This increases the likelihood that their opinions will influence board decisions, but I still believe that for diversity to be visible, at least 30 to 35 percent of an organization’s members must represent a specific type of diversity.

-You are also a member of the Morgan Stanley board. Does Morgan Stanley have a diverse board?

▷Leading U.S. conglomerates have long been committed to board diversity. Approximately 40 percent of Morgan Stanley’s current board members are women. This level of board representation is now considered the norm for companies of Morgan Stanley’s size. But it is the result of years of work to increase board diversity and did not happen overnight. There is a generalized recognition that boards are stronger and more effective when they are diverse.

- You are also a crisis leadership expert who has been conducting crisis-related research for a long time. How do you define a crisis?

▷A crisis is an event or situation that could pose a threat to an organization’s reputation, financial stability, or the legitimacy of its operations.

-You co-authored ‘The Prepared Leader: Emerge from Any Crisis More Resilient Than Before’ with Lynn Perry Wooten, president of Simmons University in the United States. In the book, you argue that “people can become prepared leaders.” What have you done to become a prepared leader?

▷I focused on what was happening. For example, when ‘A’ happened, I did not assume that A was a one-off and meaningless event. I wondered what would happen if A became more serious.

-If you could introduce an example.

▷Let’s take the Covid-19 pandemic as an example. In the early days, it looked like a crisis in China from a U.S. perspective. But then I started to think about the threats to my school if the crisis affected not just China, but the United States as well, and how to deal with them. I started thinking about this even before the crisis hit the United States. I also looked at other people’s strategies for dealing with the crisis and thought about how to create a strategy for my organization.

-What competencies help you lead people in a crisis?

▷As I wrote in the book, there are nine competencies, which are interpreting risk signals, taking multiple perspectives, influencing, enabling organizations to act with agility, creativity, communicating effectively, taking risks, building organizational resilience, and seizing opportunities for individual and collective learning. Building the nine competencies is one way for individuals to become ready leaders. It is unlikely that a ready leader will have all the nine competencies, but they can bring others to the team with skills they lack to help them navigate a crisis.

-A leader’s ability to communicate is critical in a crisis. How can leaders strengthen their communication skills before a crisis occurs?

By writing public speeches, statements, and social media posts as much as possible and writing them as many times as possible. This means practicing your communication skills in relatively calm situations. In a crisis, leaders are unlikely to be at their best and strengthening one’s communication skills under these conditions is challenging.

-Of the nine skills, which is your strongest?

▷I think it would be interpreting risk signals. I read the signals in the given environment and keep in mind how certain signals could affect Wharton. I also encourage others to think about what could happen with a certain signal so that we can be prepared for what it might bring.

-What is the most difficult process for business leaders when managing a crisis?

▷As I explained in the book, there are five steps to crisis management. The first is identifying early warning signs. In most cases, a crisis comes after a red flag has been raised. However, our biases and our tendency to focus on the present can prevent us from recognizing early warning signs.

The second step is to prepare for and prevent a crisis. Once you have identified the signals that predict a crisis, you need to figure out how to prevent it, or at least prepare for it. You cannot prevent all crises, but you can prepare for them before they happen by creating rules to follow in case of a crisis and creating a crisis response team.

The third step is to minimize the damage after a crisis, including financial damage, to your organization.

The next step is recovery. This is the process of recovering resources, revenue, and other things that were lost during the crisis. The final step is learning and reflection. The final process involves digging into the factors within the organization that caused the crisis and examining how to change the internal system.

-Is there a stage that leaders typically struggle with?

▷There are two processes that business leaders struggle with, identifying early warning signs and learning and reflecting. Let’s talk about the latter in more detail. In general, leaders are used to being problem solvers. So, when a crisis happens, they go into “response mode” and try to solve the problem. They think that after the crisis is over, they can shake off the pain and get back to business as usual. Effective leaders, however, reflect and learn after the crisis has passed. It is this time of learning and reflection that prepares them for the next crisis.

-Is there a new crisis management process that needs to be added in the ‘post-Covid’ era?

▷Once things calm down after a crisis, we are in a fundamentally new world. It is useless to work in the same way as before. For this reason, innovation is a new crisis management process that should be added to the post-crisis era. It should be placed after the last of the five stages, ‘learning and reflection.’ During the learning and reflection process, we need to identify and incorporate new opportunities into the innovation process.