5 steps companies can take to boost opportunities for minorities

In 2004, the late scholar C.K. Prahalad published his seminal book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, outlining how companies around the world could create significant value by innovating offerings that meet the unique needs of the poorest billion people in the world. While there are inspiring examples of low-water usage detergents, nonrefrigerated ice cream and smartphone banking platforms being deployed in developing countries, somehow that same level of innovation has not taken root in the most underserved communities in the most developed countries in the world, including the United States. According to the 2018 census, the median net worth of black households was $17,600, compared with $171,000 for white households. Somehow, prosperity is not reaching the bottom of the pyramid in our own backyard.

The recent COVID-19 pandemic has made the disparities even wider. Those who are able to work digitally and thrive in a highly distributed, virtualized society are also those at the higher end of the income pyramid. Those who cannot are not only limited to fewer economic opportunities, they are also at greater risk for contracting the disease because their jobs and living conditions dictate close proximity with others. The digital divide begets an economic divide, which begets a health risk divide — and the downward cycle drives the gap wider and wider.

The African American community stands at the door of a double crisis. First, African Americans make up approximately 21% of the overall fatality rates tied to COVID-19, according to the latest numbers from the Centers for Disease Control and Prevention, while representing only 13% of the nation’s overall population. Second, they are a capital-starved small business community that, as of July 6, received only 1.6% of the $2.2 trillion in CARES Act funding to date based on businesses reporting race on their loan applications. Where did we go wrong? More importantly, how can we turn tragedy into opportunity? How do we make sure we don’t miss the chance to turn this crisis into a springboard for innovation and change, to “flip the pyramid” in the U.S.?

Enterprises of all sizes are sitting on legacy assets such as customer bases, data and insights, brand recognition, technology and market expertise that they harvest to drive value for their shareholders. Meanwhile, most corporate Environmental, Societal, and Governance (ESG) efforts sit in obscure departments and tend to focus more on compliance and reputation management than true innovation. What if these same companies could channel their unique advantages to help tackle some of underlying causes of these stark disparities at the bottom of the pyramid while also creating economic value for their shareholders? What if they could ignite their assets to drive a flywheel of purpose-driven innovation that creates prosperity for black communities, customers and shareholders. What if “doing well by doing good” were more than just words?

Here are some steps companies can take towards this new model of “innovating for impact” and some examples of companies already on the path:

The tragic death of George Floyd on May 25 at the hands of a Minneapolis police officer and the worldwide protests that followed have not only spotlighted the need for long-overdue police reform, they have also opened a deeply emotional and important examination of racial inequality in this country. The COVID-19 pandemic has highlighted how deep these disparities run, but it also creates a unique opportunity for innovation and change. Corporations have an opportunity to leverage their unique assets and scale to join the innovation efforts around some of these daunting challenges and help close the gap through the steps outlined in this article.

There is nowhere to hide. Society will be watching, as will the future employees who will choose to work for you and the future customers who will choose to buy your products based on how your organization reacts to these crises. Now is the time for purpose-driven innovation efforts to take on the significant challenges we face around inequality. It is not only needed but necessary if we are going to propel our society and economy forward and truly “flip the pyramid” for everyone.