Black Business Leaders Series: A Remarkable Legacy of Firsts, Maggie Lena Walker

Growing up in the heart of the Confederacy, Maggie Lena Walker started work as a laundress at age 9. At 16, she was working as a teacher and learning accounting. Eventually she lead the Independent of Order of St. Luke and founded a bank, a newspaper, and a retail store, creating jobs and opportunities for many women and other African Americans. Professor Tony Mayo discusses Walker’s remarkable legacy of firsts.

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This transcript has been edited for clarity and length.

Brian Kenny: Fraternal orders have been around since medieval times, and often were the subject of suspicion and intrigue. In colonial America, they were incubators for revolution, democracy, science, and religion--the Sons of Liberty, the Freemasons, the Ku Klux Klan were well known. Less famous were groups such as the Independent Order of Odd Fellows, the Molly Maguires, and thousands of others that appeared and disappeared in the late nineteenth and early twentieth centuries, the golden age of fraternal orders. At its peak in the 1920s, as much as 40 percent of the adult population held a membership in at least one fraternal order.

Today we'll hear from Professor Tony Mayo about his case entitled Maggie Lena Walker and the Independent Order of St. Luke. I'm your host, Brian Kenny, and you're listening to Cold Call.

Tony Mayo teaches MBA students and executives at Harvard Business School. He's an expert on the subject of leadership, and the director for the School's Leadership Initiative .

Kenny: I loved the way case begins, with a quote by Maggie Lena Walker at the 1901 Independent Order of St. Luke convention:

"We need a savings bank, chartered, officered, and run by the men and women of this Order. ... Let us put our money together; let us use our monies; let us put our money to usury [interest] among ourselves and reap the benefit ourselves. . . . We have the means, the brains; we are simply waiting for the motion to be made, seconded, put and carried, and our Order will take a new lease of life."

Can you put us in that time and place?

Mayo: The quote is from 1901, two years after Maggie Lena Walker has taken over the Independent Order of St. Luke. She'd been involved in it since she was, I don't know, 14 years old. Now she's in her early 30s, the organization is on the brink of collapse, membership is down, and she's trying to rally the organization. She's two years into a turnaround, and she's actually tripled the membership. She's created a juvenile division, she's doubled the number of council. She's ... trying to get council members, fraternity members, excited and motivated to continue this growth.

Kenny: What prompted you to write this case?

Mayo: The case comes from research that (Harvard Business School Dean) Nitin Nohria and I have done over the years looking at great business leaders. About 10 or 12 years ago we actually embarked on this notion of, “should there be a canon of business leadership?” If you think about MBA students, they actually study the functions of business, accounting and finance and marketing, but students of literature, they study the great writers. Students of art study great artists. We thought, “Well, what if we flip that on its head and we treated an MBA like a liberal arts degree, if you will, and say who would be in this canon of leadership?” We developed a database of a thousand leaders. We wanted it to be much broader than just Fortune 500 companies, much broader than public companies. People who broke the mold, people who actually were able to change the way in which people have lived and worked.

The first book we wrote was In Their Time, that looked at contextual intelligence. We took those thousand leaders and put them in the context of the time to try to understand what type of leadership was required for success. Then we had collected all this information about these leaders and we thought, “Is the Horatio Alger myth, is that true or is that a myth, this whole rags-to-riches story that anybody with determination and drive can actually succeed in the United States?” When we looked at our database of a thousand, we saw that there were certain insiders and outsiders, certain people that had access to opportunity and people that didn't have access to opportunity.

This particular case came out of looking at the outsiders. If you think about who was on the outside looking in, in terms of access and opportunity throughout the twentieth century, it was all people of color. It was women. If you created success, it was in your own environment serving your own community, starting small. We tried to get the sense of what was the path to power that insiders took, and what was the path to power that outsiders took, and what could we learn from that?

This particular case was a student project. One of my students, Shandy Smith, who had taken the Great Business Leaders course we eventually created, wanted to write a story about an African American woman in an industry that you don't typically associate African American women with. If you look at our database of great business leaders, every African American woman on the list was either in personal health care or hair care, similar to Madam C. J. Walker, or they were in fashion or something of that nature, women serving businesses for other women. This student wanted to put a case protagonist in a situation that would be quite unique for a woman. As the first female bank president and first black female bank president in the United States, she thought Maggie Lena Walker would be a great story.

Kenny: It's a great case. Let's talk a little bit about Maggie. She was born in, I think it was 1867.

Mayo: Same as Madam C. J. Walker.

Kenny: Oh, no kidding? Tell us, what was life like for her and for black people in general at that time?

Mayo: We have to put this in the context of where she was. She was born in the heart of the Confederacy, in Richmond, Virginia, two years after the end of the Civil War. She was born to a free mother. Her mother had been freed by the family that she worked for, the Van Lew family. She worked in--It was like a hotel type of operation. Her father was a white Irish newspaperman who wrote for the New York Herald.

Kenny: How common was that back then? Probably not very.

Mayo: Not very common, and certainly not allowed for her mother to marry a white man. In fact, if you look at the laws of the state of Virginia, interracial marriage wasn't allowed until 1967, a full hundred years later. It was not a bad life in terms of the context of Richmond. Her mother had been freed and her father had a stable job, she had a stable job. That was fine until Maggie Lena Walker was about 9 years old. Then her father was mysteriously murdered. Well, they say it's murder. It's never been solved. He left for work one day, he never came home. At that particular point, when Maggie's 9, she has to go into business with her mother to survive. Her father was mostly the breadwinner, her mother was doing laundry on the side. Maggie decides that she has to work with her mother and so she becomes a laundress or washerwoman.

Kenny: At some point, education becomes a very important part of her life. What was the influence that education had? I find it curious that the city of Richmond was progressive enough to recognize that they needed to educate this new upcoming generation of recently freed black people to support the economy.

Mayo: Yes. Richmond, Virginia was fairly progressive. In fact, they had the best schools in the south for both whites and blacks for a number of years, up until the turn of the twentieth century, and then things changed. When you look at the first 10 years post-Civil War, it was a period of reconstruction. There was lots of opportunity. The Fourteenth Amendment passed, the Fifteenth Amendment passed granting citizenship, granting the right to vote for black men, there are opportunities for education. And even though Maggie's mother needs her help and needs the money from her laundry work, she tells Maggie: "You're going to go to school. You're going to get an education." A new segregated school had just opened in Richmond and she sent her there. Maggie thrived in that school. She graduated high school when she was 16. At that time, she was asked to become a teacher, one of the few professions open to women at the time.

Kenny: This is about the time also where St. Luke's becomes an importation aspect of her life.

Mayo: She joined the first African Baptist Church in Richmond when she was about 11. That was a fairly progressive church. At one time it allowed both white and black parishioners ... but by the time she joined it's a black church that's black-run, and there's a black pastor. That's a formative experience in her life. When she's 14, she's encouraged by her Sunday school teacher, her mother, and the pastor of the church--the three key influences in her life--to say, "You should join the Independent Order of the Sons and Daughters of St. Luke." It was also one of the few fraternal organizations that allowed both men and women, or boys and girls, to join.

Kenny: Most were all male.

Mayo: Most were all male, yes. She decides to join, with the explicit mission that they're going to do community service, do projects. From a juvenile division perspective, that was work to help in the community. The broader mission (of the Order) was really to provide death benefits, and to provide health care benefits to the black community. There were no other services, no other insurance companies, no white-owned insurance companies. No other fraternal organizations would provide those services. You saw this huge growth of fraternal organizations designed principally to focus on insurance. That goes back to the Great Business Leaders database that Nitin and I have worked on. The second largest business for African Americans is insurance and finance. It was mostly focused on creating this opportunity to have a decent burial, and to have some semblance of health care in an emergency.

Kenny: This is where some of her leadership skills start to emerge. What kind of a leader was she?

Mayo: We see a little bit of a glimpse of her leadership style in high school, and it parallels with being named a national delegate to the national convention of the Order of St. Luke. When she was a senior in what we would consider high school, she petitioned the city of Richmond to be able to allow their high school to graduate at the Richmond Theatre. That's where the white schools had their high school graduations. The black schools were told to have their high school graduations in their church. They fought, they went to the community and they said, "Look, our parents are paying taxes, we're paying taxes. The whites' parents are paying taxes, they're allowed to use these resources of the community. We as an institution should be able to use the same facilities." They were denied, but they were the first, and it turns out the only class for 25 years, that was allowed to graduate in a place other than a church. They got to graduate in the auditorium of their school, which may not seem like a big win.

Kenny: But that probably took a lot of courage for her to do that.

Mayo: Yes, certainly, to be able to do that. If you think about what were the opportunities for leadership for blacks and for black women at that time—pretty limited. That's where the importance of the church and these fraternal organizations come into play, because that was one of the few areas where you could exercise your voice. She was a very persuasive orator and could convince a crowd. You see these foreshadowings of the quote that you asked me about at the beginning, where she's trying to rally the troops about the Order of St. Luke. There she's 16, graduating from high school, and she's trying to take on this white community, which is the heart of the Confederacy.

Kenny: Let's fast forward a little bit, back to when she made the quote. Was that the point at which St. Luke's had about $31 in funds?

Mayo: Yes. When she takes over in 1899, the organization has $31 in assets and $400 in debt, and had about a thousand members and about 57 councils. Many individuals felt like it had served its useful life, this is the end of this particular organization. She felt differently. She felt like, "No, I think that we can do more for the community, and we have to be creative about what this organization is. Maybe it can't just be about insurance and death benefits, but maybe it has to have something else for the community.” In 1899, when she takes over, she consolidates the operation. If you think about this from a broader business perspective, this is the turnaround.

Kenny: You can describe what she does, but I'd also like to understand where did she get that acumen? Where did those ideas come from?

Mayo: I think that it probably came from her affiliation with the Independent Order of St. Luke for those number of years. By the time she takes it on in 1899, she's been a member for about 15 years and she's taken on successive leadership roles. She is the individual who decided they should have a juvenile division. All the women volunteers are associated. She built her leadership chops throughout the organization through her life. Certainly as a teacher; she was a teacher in the Richmond public school system from the age of 16 to 19.

She got married at 19, and Richmond law at the time was once you're married you were no longer allowed to teach… She took the skills of being a teacher and the development she had from her work in the school system, and brought that to the order of St. Luke. She used that platform to educate women about the opportunity that they could pursue within the Independent Order, and that they should be able to have these opportunities.

Kenny: She probably had far greater impact and far greater reach than she would have had as a teacher.

Mayo: Interesting, that's probably true. If you think about African American women in Richmond at the turn of the twentieth century, 85 percent were in menial labor jobs. They were domestics. If they were doing anything that was outside of that realm, it was probably in education. Here she comes along, and she's creating these new businesses, these new entities, and she's staffing them with women and women managers, which was very unusual at that time.

Kenny: What were some of the things she did with the Order of St. Luke?

Mayo: For the turnaround, she did two things simultaneously. She's focusing on the top line and the bottom line. On the bottom line, she's looking at cost management. She reduces her salary by two-thirds, she consolidates operations, she skinnies down the staff. The real big push was the need to increase membership. She goes on the road and uses her skills as an orator, a teacher, an educator, to get people excited about the organization. She realizes there is more that can be done. She says, "There are a couple of mutually reinforcing businesses." She probably didn't say mutually reinforcing, but when I look back, I say, "Wow, this is pretty clever." She creates a newspaper, she creates a bank, and she creates a store, an emporium.

You see the benefit of the St. Luke Herald, which was the newspaper. It was a platform, yes, for making announcements about the Order of St. Luke and what they were doing. But it was also a platform to advocate for rights for women, or rights for blacks, for talking about the oppressive environment of the Jim Crow south and the whole life of separate-but-equal, trying to take that on. That's a platform to speak to the cause for African Americans. It's also a platform that also helps the Independent Order of St. Luke, because she gets people motivated and excited.

Then the bank. At the time, I think the case talks about 400 fraternal organizations in and around Richmond. One of the other major ones was the True Reformers. They had created a bank a couple years before, in 1899. She looks at her bylaws and she decides that there's an opportunity here. “We could do the same thing. If we just change our bylaws a little bit, we can create a bank and get individuals” to make deposits. People like her mother. That's why it was called originally the St. Luke's Penny Savings Bank. Bring your pennies, literally your pennies, to the bank and to create deposits into this community that will serve the black community.

She creates and charters the St. Luke Penny Savings Bank in 1903 with the advice of John Branch. He was a white banker in Virginia, and he became a mentor for her. He took her under his wing, taught her about banking. She'd gone to night school, taking some courses in what we would call accounting today (back then it was probably bookkeeping). She was trying to educate herself, and Branch took her under his wing. Interestingly enough, there were four black-owned banks in Richmond at the time, and he nominated her to be part of the Virginia Bankers Association. She was the only one he asked, and so she served in that capacity. The bank became a big part of creating a resource for the community and enabled people to, yes, join St. Luke.

The third entity she created was the St. Luke Emporium. This is where she got the ire of the white Richmond business community. With the first two businesses, the newspaper and the bank, many in the white community felt like, “Okay, she's flying under the radar ... she's serving a constituency we don't see a whole lot of promise in." When she creates the St. Luke Emporium, that's a big deal. Then she's creating this department store with 15 employees, all women, women managers running the different counters. That's taking money from the white retailers, and so she's offered $10,000 to not even open. She's doing construction and turns that down. Then they decide that they're going to do these secret inspections to make sure she's complying with Virginia law--she passes all those inspections. It's seven years of trial and tribulation, and eventually the white retailers win by convincing the suppliers of the material that she's selling that they should no longer sell to her, that if they want to be able to sell the same sorts of garments and other material in the white-owned stores, that they had to stop selling to her. Her pipeline of supplies and material dried up, and so she eventually had to close. That's the one business entity where she ... got on the radar of the community and was shot down, which was all too typical of the time.

Kenny: All of this was done in a climate where racism was being institutionalized.

Mayo: Yes.

Kenny: You talk in the case about the laws that were being passed.

Mayo: If you look at what happened after the backlash of Reconstruction, there was this big debate. It was a railroad case, and whether blacks could sit in the same railroad cars as whites. This was the original separate-but-equal case, and was brought to the Supreme Court. It came to a Supreme Court case in 1896 in Plessy v. Ferguson, where the court essentially legitimized this practice of separate-but-equal. That stayed in place until 1954, until Brown v. Board of Education of Topeka overturned Plessy because there wasn't really equal access, there wasn't really equal opportunity. It was always inferior. (Before then), This was essentially the law of the land, that you could put this shroud on it and say, "Oh, it's equal, everybody's being treated the same, but don't mix together. You should have your own community, you should live in your own place, you should have your own churches, but never the two shall meet." Maggie Lena Walker used the St. Luke Herald and her speeches to rail against that.

She wanted to put it out to the black community to support other black businesses. She kept pushing them, saying, "Why are you putting your money in a white bank? Why are you supporting the white retailer? We have black businesses, we have black insurance, we have all of these opportunities. You should be supporting our particular community. You should stop feeding this lion of prejudice." While that wasn't entirely successful--certainly she was pushed out of the retail business--she felt this was her cause and her desire, to try to create this opportunity for self-sufficiency, for governance. If it's going to be separate-but-equal, let's try to make it as equal as possible for us.

Kenny: Again, very courageous in a climate where people are being lynched. What kind of reactions do you get when you teach this case in class?

Mayo: It's interesting. It's hard sometimes for students to put themselves in the context of 1867. The first time I taught the case, I'd say, "On a scale of 1 to 10, how challenging was the situation for her?" A few students were saying, "Oh, maybe a 3 or 4." Are you kidding me? This is going to be 10 or higher! I think that's sort of the beauty of history, trying to put yourself in that context.... In doing research for the case, I was reading Booker T. Washington's book on the negro businessman. He has a chapter about the negro banker, and Maggie Lena Walker was in it. He tended not to have a lot of stories about female entrepreneurs, but she was in there.

Kenny: Wow.

Mayo: There was a quote in there from the Richmond community that basically the predecessor to the St. Luke Penny Savings Bank was the True Reformers Bank. The Virginia board that approved that particular bank did it in a humorous way. They thought it would be funny to see how the black community could create this bank—that it would never get off the ground, it would not be successful. They thought it was a joke, so they approved it, thinking that it was going to be a big failure. Interestingly enough that True Reformers Bank, that was the first bank, did fail in 1910, and Maggie consolidated it. She bought that into her organization, which was a pattern that she followed again later in life, to consolidate black banks in the Richmond community.

Kenny: She had great success in her efforts to revive St. Luke's and to organize. She even maintained her activist stance. One of the things that I thought was remarkable was that she anonymously supported the Urban League in Richmond for three years. Really, by all accounts, a pretty remarkable woman and a great exemplar for people today.

Mayo: Yes. When we looked at our research about outsiders, there were four ways in which insiders and outsiders approached the context that they had. We looked at place, we looked at professional credentials, we looked at perseverance, and we looked at personal networks.

What we mean by place, it's really like where did you create your opportunity? For most insiders, they could create their opportunity within the context in which they lived, and they could establish their businesses in their home environments. If you were an outsider, you traditionally left because the opportunities were closed to you. If you're an African American woman in the south, your opportunities to leave are pretty limited. What is your place? Your place is creating a business for your community, starting small.

The second is this personal network, the ability to have a mentor, to be able to have somebody work with you. She had a number of those. She had her mother, she had the pastor of her church, and she certainly had John Branch, the white banker who helped her. Taking advantage of these opportunities to build this network.

Professional credentials is about education, and really thinking about using that as a lever. Certainly, being a teacher and being educated, if you look at our database of a thousand leaders, the ultimate outsiders were far more educated than the insiders. That was a path that you could take. If you couldn't get in one way, maybe you could get in through education, and we see a big change. If you think about post-World War II, the GI Bill and the access and the opportunity, that creates those opportunities.

It's sort of interesting to note that one of the inside paths, if you think about who is the prototypical great business leader at the early part of the twentieth century, it was a white man from the northeast, and he was probably a Presbyterian or Episcopalian. One of the things that we looked at was religion as a social marker of success, and the concentration of Episcopalians or Presbyterians in terms of great business leaders, they represented about 30 percent of great business leaders. If you look at the percent in the population of the US, that's about 7 percent. It's way over-represented. Now, whether that's a marker of whether they were spiritual or religious, I don't know, but it was a marker of social status. Education sort of supplants religion in the mid part of the twentieth century as an access and opportunity to being an outsider, and to have this chance at a new opportunity. Maggie benefited from Richmond's progressive approach to education for that short period of time. And so she had those professional credentials.

Then the final area we talk about is perseverance, which is entrepreneurship and drive and determination and all of that. If you think about an outsider, you often had to be a founder. Of the thousand people we have in our database there are only 40 women, and of those 40 women, 90 percent are founders, and all of the African American women on the list are founders.

Kenny: You can find the Maggie Lena Walker case, along with thousands of others, in the HBR case collection at hbr.org. I'm your host, Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.

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This transcript has been edited for clarity and length.

Brian Kenny: Fraternal orders have been around since medieval times, and often were the subject of suspicion and intrigue. In colonial America, they were incubators for revolution, democracy, science, and religion--the Sons of Liberty, the Freemasons, the Ku Klux Klan were well known. Less famous were groups such as the Independent Order of Odd Fellows, the Molly Maguires, and thousands of others that appeared and disappeared in the late nineteenth and early twentieth centuries, the golden age of fraternal orders. At its peak in the 1920s, as much as 40 percent of the adult population held a membership in at least one fraternal order.

Today we'll hear from Professor Tony Mayo about his case entitled Maggie Lena Walker and the Independent Order of St. Luke. I'm your host, Brian Kenny, and you're listening to Cold Call.

Tony Mayo teaches MBA students and executives at Harvard Business School. He's an expert on the subject of leadership, and the director for the School's Leadership Initiative .

Kenny: I loved the way case begins, with a quote by Maggie Lena Walker at the 1901 Independent Order of St. Luke convention:

"We need a savings bank, chartered, officered, and run by the men and women of this Order. ... Let us put our money together; let us use our monies; let us put our money to usury [interest] among ourselves and reap the benefit ourselves. . . . We have the means, the brains; we are simply waiting for the motion to be made, seconded, put and carried, and our Order will take a new lease of life."

Can you put us in that time and place?

Mayo: The quote is from 1901, two years after Maggie Lena Walker has taken over the Independent Order of St. Luke. She'd been involved in it since she was, I don't know, 14 years old. Now she's in her early 30s, the organization is on the brink of collapse, membership is down, and she's trying to rally the organization. She's two years into a turnaround, and she's actually tripled the membership. She's created a juvenile division, she's doubled the number of council. She's ... trying to get council members, fraternity members, excited and motivated to continue this growth.

Kenny: What prompted you to write this case?

Mayo: The case comes from research that (Harvard Business School Dean) Nitin Nohria and I have done over the years looking at great business leaders. About 10 or 12 years ago we actually embarked on this notion of, “should there be a canon of business leadership?” If you think about MBA students, they actually study the functions of business, accounting and finance and marketing, but students of literature, they study the great writers. Students of art study great artists. We thought, “Well, what if we flip that on its head and we treated an MBA like a liberal arts degree, if you will, and say who would be in this canon of leadership?” We developed a database of a thousand leaders. We wanted it to be much broader than just Fortune 500 companies, much broader than public companies. People who broke the mold, people who actually were able to change the way in which people have lived and worked.

The first book we wrote was In Their Time, that looked at contextual intelligence. We took those thousand leaders and put them in the context of the time to try to understand what type of leadership was required for success. Then we had collected all this information about these leaders and we thought, “Is the Horatio Alger myth, is that true or is that a myth, this whole rags-to-riches story that anybody with determination and drive can actually succeed in the United States?” When we looked at our database of a thousand, we saw that there were certain insiders and outsiders, certain people that had access to opportunity and people that didn't have access to opportunity.

This particular case came out of looking at the outsiders. If you think about who was on the outside looking in, in terms of access and opportunity throughout the twentieth century, it was all people of color. It was women. If you created success, it was in your own environment serving your own community, starting small. We tried to get the sense of what was the path to power that insiders took, and what was the path to power that outsiders took, and what could we learn from that?

This particular case was a student project. One of my students, Shandy Smith, who had taken the Great Business Leaders course we eventually created, wanted to write a story about an African American woman in an industry that you don't typically associate African American women with. If you look at our database of great business leaders, every African American woman on the list was either in personal health care or hair care, similar to Madam C. J. Walker, or they were in fashion or something of that nature, women serving businesses for other women. This student wanted to put a case protagonist in a situation that would be quite unique for a woman. As the first female bank president and first black female bank president in the United States, she thought Maggie Lena Walker would be a great story.

Kenny: It's a great case. Let's talk a little bit about Maggie. She was born in, I think it was 1867.

Mayo: Same as Madam C. J. Walker.

Kenny: Oh, no kidding? Tell us, what was life like for her and for black people in general at that time?

Mayo: We have to put this in the context of where she was. She was born in the heart of the Confederacy, in Richmond, Virginia, two years after the end of the Civil War. She was born to a free mother. Her mother had been freed by the family that she worked for, the Van Lew family. She worked in--It was like a hotel type of operation. Her father was a white Irish newspaperman who wrote for the New York Herald.

Kenny: How common was that back then? Probably not very.

Mayo: Not very common, and certainly not allowed for her mother to marry a white man. In fact, if you look at the laws of the state of Virginia, interracial marriage wasn't allowed until 1967, a full hundred years later. It was not a bad life in terms of the context of Richmond. Her mother had been freed and her father had a stable job, she had a stable job. That was fine until Maggie Lena Walker was about 9 years old. Then her father was mysteriously murdered. Well, they say it's murder. It's never been solved. He left for work one day, he never came home. At that particular point, when Maggie's 9, she has to go into business with her mother to survive. Her father was mostly the breadwinner, her mother was doing laundry on the side. Maggie decides that she has to work with her mother and so she becomes a laundress or washerwoman.

Kenny: At some point, education becomes a very important part of her life. What was the influence that education had? I find it curious that the city of Richmond was progressive enough to recognize that they needed to educate this new upcoming generation of recently freed black people to support the economy.

Mayo: Yes. Richmond, Virginia was fairly progressive. In fact, they had the best schools in the south for both whites and blacks for a number of years, up until the turn of the twentieth century, and then things changed. When you look at the first 10 years post-Civil War, it was a period of reconstruction. There was lots of opportunity. The Fourteenth Amendment passed, the Fifteenth Amendment passed granting citizenship, granting the right to vote for black men, there are opportunities for education. And even though Maggie's mother needs her help and needs the money from her laundry work, she tells Maggie: "You're going to go to school. You're going to get an education." A new segregated school had just opened in Richmond and she sent her there. Maggie thrived in that school. She graduated high school when she was 16. At that time, she was asked to become a teacher, one of the few professions open to women at the time.

Kenny: This is about the time also where St. Luke's becomes an importation aspect of her life.

Mayo: She joined the first African Baptist Church in Richmond when she was about 11. That was a fairly progressive church. At one time it allowed both white and black parishioners ... but by the time she joined it's a black church that's black-run, and there's a black pastor. That's a formative experience in her life. When she's 14, she's encouraged by her Sunday school teacher, her mother, and the pastor of the church--the three key influences in her life--to say, "You should join the Independent Order of the Sons and Daughters of St. Luke." It was also one of the few fraternal organizations that allowed both men and women, or boys and girls, to join.

Kenny: Most were all male.

Mayo: Most were all male, yes. She decides to join, with the explicit mission that they're going to do community service, do projects. From a juvenile division perspective, that was work to help in the community. The broader mission (of the Order) was really to provide death benefits, and to provide health care benefits to the black community. There were no other services, no other insurance companies, no white-owned insurance companies. No other fraternal organizations would provide those services. You saw this huge growth of fraternal organizations designed principally to focus on insurance. That goes back to the Great Business Leaders database that Nitin and I have worked on. The second largest business for African Americans is insurance and finance. It was mostly focused on creating this opportunity to have a decent burial, and to have some semblance of health care in an emergency.

Kenny: This is where some of her leadership skills start to emerge. What kind of a leader was she?

Mayo: We see a little bit of a glimpse of her leadership style in high school, and it parallels with being named a national delegate to the national convention of the Order of St. Luke. When she was a senior in what we would consider high school, she petitioned the city of Richmond to be able to allow their high school to graduate at the Richmond Theatre. That's where the white schools had their high school graduations. The black schools were told to have their high school graduations in their church. They fought, they went to the community and they said, "Look, our parents are paying taxes, we're paying taxes. The whites' parents are paying taxes, they're allowed to use these resources of the community. We as an institution should be able to use the same facilities." They were denied, but they were the first, and it turns out the only class for 25 years, that was allowed to graduate in a place other than a church. They got to graduate in the auditorium of their school, which may not seem like a big win.

Kenny: But that probably took a lot of courage for her to do that.

Mayo: Yes, certainly, to be able to do that. If you think about what were the opportunities for leadership for blacks and for black women at that time—pretty limited. That's where the importance of the church and these fraternal organizations come into play, because that was one of the few areas where you could exercise your voice. She was a very persuasive orator and could convince a crowd. You see these foreshadowings of the quote that you asked me about at the beginning, where she's trying to rally the troops about the Order of St. Luke. There she's 16, graduating from high school, and she's trying to take on this white community, which is the heart of the Confederacy.

Kenny: Let's fast forward a little bit, back to when she made the quote. Was that the point at which St. Luke's had about $31 in funds?

Mayo: Yes. When she takes over in 1899, the organization has $31 in assets and $400 in debt, and had about a thousand members and about 57 councils. Many individuals felt like it had served its useful life, this is the end of this particular organization. She felt differently. She felt like, "No, I think that we can do more for the community, and we have to be creative about what this organization is. Maybe it can't just be about insurance and death benefits, but maybe it has to have something else for the community.” In 1899, when she takes over, she consolidates the operation. If you think about this from a broader business perspective, this is the turnaround.

Kenny: You can describe what she does, but I'd also like to understand where did she get that acumen? Where did those ideas come from?

Mayo: I think that it probably came from her affiliation with the Independent Order of St. Luke for those number of years. By the time she takes it on in 1899, she's been a member for about 15 years and she's taken on successive leadership roles. She is the individual who decided they should have a juvenile division. All the women volunteers are associated. She built her leadership chops throughout the organization through her life. Certainly as a teacher; she was a teacher in the Richmond public school system from the age of 16 to 19.

She got married at 19, and Richmond law at the time was once you're married you were no longer allowed to teach… She took the skills of being a teacher and the development she had from her work in the school system, and brought that to the order of St. Luke. She used that platform to educate women about the opportunity that they could pursue within the Independent Order, and that they should be able to have these opportunities.

Kenny: She probably had far greater impact and far greater reach than she would have had as a teacher.

Mayo: Interesting, that's probably true. If you think about African American women in Richmond at the turn of the twentieth century, 85 percent were in menial labor jobs. They were domestics. If they were doing anything that was outside of that realm, it was probably in education. Here she comes along, and she's creating these new businesses, these new entities, and she's staffing them with women and women managers, which was very unusual at that time.

Kenny: What were some of the things she did with the Order of St. Luke?

Mayo: For the turnaround, she did two things simultaneously. She's focusing on the top line and the bottom line. On the bottom line, she's looking at cost management. She reduces her salary by two-thirds, she consolidates operations, she skinnies down the staff. The real big push was the need to increase membership. She goes on the road and uses her skills as an orator, a teacher, an educator, to get people excited about the organization. She realizes there is more that can be done. She says, "There are a couple of mutually reinforcing businesses." She probably didn't say mutually reinforcing, but when I look back, I say, "Wow, this is pretty clever." She creates a newspaper, she creates a bank, and she creates a store, an emporium.

You see the benefit of the St. Luke Herald, which was the newspaper. It was a platform, yes, for making announcements about the Order of St. Luke and what they were doing. But it was also a platform to advocate for rights for women, or rights for blacks, for talking about the oppressive environment of the Jim Crow south and the whole life of separate-but-equal, trying to take that on. That's a platform to speak to the cause for African Americans. It's also a platform that also helps the Independent Order of St. Luke, because she gets people motivated and excited.

Then the bank. At the time, I think the case talks about 400 fraternal organizations in and around Richmond. One of the other major ones was the True Reformers. They had created a bank a couple years before, in 1899. She looks at her bylaws and she decides that there's an opportunity here. “We could do the same thing. If we just change our bylaws a little bit, we can create a bank and get individuals” to make deposits. People like her mother. That's why it was called originally the St. Luke's Penny Savings Bank. Bring your pennies, literally your pennies, to the bank and to create deposits into this community that will serve the black community.

She creates and charters the St. Luke Penny Savings Bank in 1903 with the advice of John Branch. He was a white banker in Virginia, and he became a mentor for her. He took her under his wing, taught her about banking. She'd gone to night school, taking some courses in what we would call accounting today (back then it was probably bookkeeping). She was trying to educate herself, and Branch took her under his wing. Interestingly enough, there were four black-owned banks in Richmond at the time, and he nominated her to be part of the Virginia Bankers Association. She was the only one he asked, and so she served in that capacity. The bank became a big part of creating a resource for the community and enabled people to, yes, join St. Luke.

The third entity she created was the St. Luke Emporium. This is where she got the ire of the white Richmond business community. With the first two businesses, the newspaper and the bank, many in the white community felt like, “Okay, she's flying under the radar ... she's serving a constituency we don't see a whole lot of promise in." When she creates the St. Luke Emporium, that's a big deal. Then she's creating this department store with 15 employees, all women, women managers running the different counters. That's taking money from the white retailers, and so she's offered $10,000 to not even open. She's doing construction and turns that down. Then they decide that they're going to do these secret inspections to make sure she's complying with Virginia law--she passes all those inspections. It's seven years of trial and tribulation, and eventually the white retailers win by convincing the suppliers of the material that she's selling that they should no longer sell to her, that if they want to be able to sell the same sorts of garments and other material in the white-owned stores, that they had to stop selling to her. Her pipeline of supplies and material dried up, and so she eventually had to close. That's the one business entity where she ... got on the radar of the community and was shot down, which was all too typical of the time.

Kenny: All of this was done in a climate where racism was being institutionalized.

Mayo: Yes.

Kenny: You talk in the case about the laws that were being passed.

Mayo: If you look at what happened after the backlash of Reconstruction, there was this big debate. It was a railroad case, and whether blacks could sit in the same railroad cars as whites. This was the original separate-but-equal case, and was brought to the Supreme Court. It came to a Supreme Court case in 1896 in Plessy v. Ferguson, where the court essentially legitimized this practice of separate-but-equal. That stayed in place until 1954, until Brown v. Board of Education of Topeka overturned Plessy because there wasn't really equal access, there wasn't really equal opportunity. It was always inferior. (Before then), This was essentially the law of the land, that you could put this shroud on it and say, "Oh, it's equal, everybody's being treated the same, but don't mix together. You should have your own community, you should live in your own place, you should have your own churches, but never the two shall meet." Maggie Lena Walker used the St. Luke Herald and her speeches to rail against that.

She wanted to put it out to the black community to support other black businesses. She kept pushing them, saying, "Why are you putting your money in a white bank? Why are you supporting the white retailer? We have black businesses, we have black insurance, we have all of these opportunities. You should be supporting our particular community. You should stop feeding this lion of prejudice." While that wasn't entirely successful--certainly she was pushed out of the retail business--she felt this was her cause and her desire, to try to create this opportunity for self-sufficiency, for governance. If it's going to be separate-but-equal, let's try to make it as equal as possible for us.

Kenny: Again, very courageous in a climate where people are being lynched. What kind of reactions do you get when you teach this case in class?

Mayo: It's interesting. It's hard sometimes for students to put themselves in the context of 1867. The first time I taught the case, I'd say, "On a scale of 1 to 10, how challenging was the situation for her?" A few students were saying, "Oh, maybe a 3 or 4." Are you kidding me? This is going to be 10 or higher! I think that's sort of the beauty of history, trying to put yourself in that context.... In doing research for the case, I was reading Booker T. Washington's book on the negro businessman. He has a chapter about the negro banker, and Maggie Lena Walker was in it. He tended not to have a lot of stories about female entrepreneurs, but she was in there.

Kenny: Wow.

Mayo: There was a quote in there from the Richmond community that basically the predecessor to the St. Luke Penny Savings Bank was the True Reformers Bank. The Virginia board that approved that particular bank did it in a humorous way. They thought it would be funny to see how the black community could create this bank—that it would never get off the ground, it would not be successful. They thought it was a joke, so they approved it, thinking that it was going to be a big failure. Interestingly enough that True Reformers Bank, that was the first bank, did fail in 1910, and Maggie consolidated it. She bought that into her organization, which was a pattern that she followed again later in life, to consolidate black banks in the Richmond community.

Kenny: She had great success in her efforts to revive St. Luke's and to organize. She even maintained her activist stance. One of the things that I thought was remarkable was that she anonymously supported the Urban League in Richmond for three years. Really, by all accounts, a pretty remarkable woman and a great exemplar for people today.

Mayo: Yes. When we looked at our research about outsiders, there were four ways in which insiders and outsiders approached the context that they had. We looked at place, we looked at professional credentials, we looked at perseverance, and we looked at personal networks.

What we mean by place, it's really like where did you create your opportunity? For most insiders, they could create their opportunity within the context in which they lived, and they could establish their businesses in their home environments. If you were an outsider, you traditionally left because the opportunities were closed to you. If you're an African American woman in the south, your opportunities to leave are pretty limited. What is your place? Your place is creating a business for your community, starting small.

The second is this personal network, the ability to have a mentor, to be able to have somebody work with you. She had a number of those. She had her mother, she had the pastor of her church, and she certainly had John Branch, the white banker who helped her. Taking advantage of these opportunities to build this network.

Professional credentials is about education, and really thinking about using that as a lever. Certainly, being a teacher and being educated, if you look at our database of a thousand leaders, the ultimate outsiders were far more educated than the insiders. That was a path that you could take. If you couldn't get in one way, maybe you could get in through education, and we see a big change. If you think about post-World War II, the GI Bill and the access and the opportunity, that creates those opportunities.

It's sort of interesting to note that one of the inside paths, if you think about who is the prototypical great business leader at the early part of the twentieth century, it was a white man from the northeast, and he was probably a Presbyterian or Episcopalian. One of the things that we looked at was religion as a social marker of success, and the concentration of Episcopalians or Presbyterians in terms of great business leaders, they represented about 30 percent of great business leaders. If you look at the percent in the population of the US, that's about 7 percent. It's way over-represented. Now, whether that's a marker of whether they were spiritual or religious, I don't know, but it was a marker of social status. Education sort of supplants religion in the mid part of the twentieth century as an access and opportunity to being an outsider, and to have this chance at a new opportunity. Maggie benefited from Richmond's progressive approach to education for that short period of time. And so she had those professional credentials.

Then the final area we talk about is perseverance, which is entrepreneurship and drive and determination and all of that. If you think about an outsider, you often had to be a founder. Of the thousand people we have in our database there are only 40 women, and of those 40 women, 90 percent are founders, and all of the African American women on the list are founders.

Kenny: You can find the Maggie Lena Walker case, along with thousands of others, in the HBR case collection at hbr.org. I'm your host, Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.

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