Five business lessons to learn from the father of African-American business management

BY Preta Peace Namasaba January 11, 2024 5:30 PM EDT
business management
Charles Spaulding is regarded as the Father of African-American business management. Photo Credit: Junior Achievement USA

Charles Clinton Spaulding led the North Carolina Mutual Life Insurance Company into becoming America’s largest black-owned business. Dubbed as the father of African American management, he outlined the Four Cardinal Points of Entrepreneurship in his article entitled “Business in Negro Durham”. North Carolina Mutual had more than $40 million in assets under management at the time of his death in 1952.

Spaulding was born on August 1, 1874, on a farm owned by his father in Columbus County, North Carolina. He left his family at the age of 20 to live with his uncle in Durham where he took jobs as a bellhop, dishwasher, and waiter. He earned a high school diploma during his off hours and was hired as manager of a black-owned cooperative grocery store. The owners sold their interests in the store and left Spaulding with $300 in debt following its collapse. He narrowly survived destitution, going on to create one of the greatest African American businesses of the 20th century.

These five lessons from Charles Spaulding will make you a better manager and leader.

1. Teamwork makes the best work
In 1898, Spaulding’s uncle and six other black entrepreneurs founded the North Carolina Mutual and Provident Association, and each invested $50 in the venture. All the founders had successful careers and weren’t in a position to run their new company. They had noticed Spaulding’s managerial gifts while he ran the grocery store and hired him to sell policies. He was the sole employee of the company and was named general manager in 1900. Spaulding built a network of agents across North Carolina and the firm had 100, 000 clients eight years later.

2.Establish authority
Spaulding was promoted to vice president in 1908 and secretary-treasurer in 1919 as the business grew. He utilized his new authority to restructure the company and had it renamed to the North Carolina Mutual Life Insurance Company. He also expanded the firm’s operations into thirteen other states. Although Spaulding was named president in 1923, he had been the company’s de facto leader since 1900. He believed that “There must always be some responsible executive who must pass upon every issue that is fundamental; he must be the final authority from whom there is no appeal except to the entire group in conference.”

3.Create an advertising budget
“When it comes to advertising, a large number of our organizations are depriving themselves of the most effective means of propagation. In travelling about the country I have noted a large number of enterprises engaged in the manufacture of products. Very few of these have an annual appropriation for advertisement,” Spaulding said of the importance of an advertising budget.
He leveraged his sales and marketing expertise to expand into fire insurance, banking and mortgage lines. Spaulding cunningly advertised life insurance policies on medical thermometers and spittoons to market the company’s products. North Carolina Mutual Life Insurance Company went from operating out of rented desk space in the corner of a doctor’s office to a six-story office building.

4. Divide responsibilities
By 1920, North Carolina Mutual had over 1,000 employees and several offices along the East Coast. It continued to grow, and Spaulding established more black-operated subsidiaries. He hired salesmen whose main responsibility was to collect small payments for industrial insurance. Spaulding operated the growing business under division of labor to increase efficiency and effectiveness. This reorganization insured the firm’s survival during the economic depression of the 1930s.

5. Embrace civic leadership
Beyond his lucrative business endeavors, Spaulding was involved in political and educational issues. He helped establish the Durham Committee on Negro Affairs in 1935 and served as its first chairman. He was elected to the New York Chamber of Commerce in 1942 and served as a trustee for Howard University, Shaw University, and North Carolina College at Durham. Spaulding campaigned to secure New Deal jobs for African Americans as national chairman of the Urban League’s Emergency Advisory Council from 1930 to 1939. He consequently assisted the U.S. Government in selling war bonds to African Americans during World War II and heavily invested North Carolina Mutual’s funds in the bonds.