How Madam CJ Walker Built Racial Equity into Her Business – Harvard Business Review
Social entrepreneurs and business leaders who want to promote equity in their workplaces have something to learn from the Black entrepreneur Madam C.J. Walker. Reputed to be America’s first self-made female millionaire, Walker built her venture, the Madam C.J. Walker Manufacturing Company, during the turn-of-the-twentieth century Jim Crow era, in Indianapolis, and used it to lift up Black women amid a system of sexism and racial discrimination. You may have heard of her: She founded an eponymous line of hair-care products that’s still sold today, through Sephora, and she is the inspiration behind the recent Netflix series Self-Made.
One of us, Professor Tyrone McKinley Freeman, has written a new biography of Walker that explores her remarkable achievements. Walker built a socially responsible business, helped develop African American industry, created economic opportunity for women, and integrated the means to change fortunes, lives, and laws into her business model. These practices offer valuable lessons for leaders today.
Empower Employees as Co-Creators
The first lesson for socially minded entrepreneurs lies in the way Walker, a child of Louisiana sharecroppers, built her company (incorporated in 1911) — not with elite capital but by opening up commerce and careers to tens of thousands of Black, working-class women sales agents. A mother and widow by age 20, Walker experienced the difficulties that Black women faced in the Jim Crow economy. She developed her products while struggling to make ends meet as a washerwoman and through other odd jobs. In 1906, she and a new husband, Charles Joseph Walker (C.J.), began selling hair-care products door-to-door in Denver, Colorado, laying the foundation for a business that would serve the cause of uplifting African Americans. She asked questions that can still be asked today by any entrepreneur who cares about racial equity. As we might put them today:
- How will my business model empower employees of color to participate in building the business and rise with its success?
- How can I model advocacy and action to encourage a culture of workplace equity and embolden employees to do the same?
Walker answered these questions by developing a multilevel-marketing model that, in effect, made agents owners. An agent could purchase Walker products wholesale, sell them at retail, and own and grow her own book of business. She could spend and save her profits. She could also give some to her church and community, as modeled by Walker herself. “I am not merely satisfied in making money for myself,” Walker said, “for I am endeavoring to provide employment for hundreds of women of my race.”
Each woman’s economic success paved the way for her political voice and philanthropic power at a time when African American women were fighting not only to obtain the women’s vote and turn back Jim Crow laws, but also for recognition within their own business community. Indeed, Walker modeled self-empowerment in her fight for equity. After Booker T. Washington, the founder and head of the National Negro Business League (NNBL), snubbed her efforts to meet him and gain his endorsement, she took the stage beside him at a Chicago NNBL meeting, unbeckoned, and touted her company and its ideals to applause.
Construct Careers with Economic Mobility
Second, Walker had firsthand knowledge of all the race, gender, and economic barriers in agents’ way and put in place intentional practices to overcome them. She applied the following principles to ensure economic mobility:
- No dead-end jobs: Construct career corridors that allow recruits from communities of color to progress up an economic ladder.
- Use native intelligence: Channel firsthand experience of barriers to economic advancement into policies to reduce them.
- Foster a supportive culture: Don’t just give recruits of color a chance — give them lift-off.
Walker lived these principles by lowering financial barriers to Black women recruits. She reduced or eliminated a training fee of $25 when needed. She incubated startup salons for agents by fully funding or loaning money for their construction or renovation, or by offering affordable installment plans. And she gave Black women more control over their financial futures by providing far fairer wages than they could earn through menial labor, offering 42% retail margins to agents who bought from her factory. One company agent, Maggie Wilson, of Pittsburgh, credited Walker with “opening up a trade for hundreds of our colored women to make an honest and profitable living and where they make as much in one week as a month’s salary would bring from any other position a colored woman can secure.”
A truly supportive culture includes empathy — something Walker offered to multiple agents who struggled, including one who lost all of her personal possessions to a fire. Walker gave her a contract, authorized her to sell on behalf of the company, and directed her business manager to work out a payment plan so she could acquire new products despite her losses.
Fund and Promote Formal Education
A third element of building racial equity is funding and promoting educational opportunities for employees (a frequently underused company perk). Walker’s use of education was a key part of building the African American beauty products industry and was a response to the larger problems of Jim Crow, whose laws constructed a racial caste system that denied Black people entry to schools, colleges, and universities. She grew employee talent through formal skills-building and credentialing that honored the crisis-forged caution and constraints of most of her agents. Walker asked:
- How can I best offer and promote training and education opportunities to employees who have faced discrimination and racism?
- What training programs should I build in-house and in-community to grow diverse talent?
- What high-quality institutional partners will be accessible and welcoming to diverse talent?
Walker’s beauty schools, courses, and partnerships with Black colleges became a way to both deliver education and build the global talent market for beauty care. Walker offered a convenient correspondence course to train and certify agents — whose numbers reportedly grew to about 20,000 by 1919 — and she also had schools in Indiana, St. Louis, Dallas, Chicago, Kansas City, Pittsburgh, and Harlem. She also offered her curriculum to African American technical institutes across the United States, which taught hair-care skills and professional comportment. Receiving a graduation certificate from a Walker school helped women gain economic independence and freedom from the shackles of menial labor.
Walker’s partnership with southern Black colleges and technical institutes also gave lift to the institutions themselves, by providing money to create lab space to teach the program. This mutually beneficial approach to philanthropy helped embed her industry’s reputation in formal education, and it built the workforce for beauty culture and helped Black women develop their resumes. Walker, who imbued her work with philanthropy from her poorest days, donated to many other Black schools, particularly those run by Black women, and viewed them as being essential to uplifting the race.
In a virtuous cycle, when social enterprise educates and lifts up workers as mutual players in a company’s success, it fosters skill and will for workers to lower their own barriers to opportunity. Walker’s model inspired her agents to challenge Jim Crow discrimination by addressing two fundamental and evergreen questions:
- What laws and norms fly in the face of economic mobility and racial justice for the people the company hires and the customers it serves?
- What needs to change structurally in capital flows and asset ownership to give entrepreneurs of color equal opportunity?
Walker created a corporate norm of giving back by organizing her sales agents into local clubs under a national umbrella association (The National Beauty Culturists’ and Benevolent Association of Madam C.J. Walker Agents, Inc.), which served to legitimize beauty culture as a profession, strengthen relationships between agents, and enlist them in doing charity and advocacy work in their communities. Walker believed that social impact would create a legacy beyond business, and indeed it created rites of passage that galvanized her agents to fundraise and donate money to Black schools and other organizations uplifting the race, organizing community programs, and caring for the vulnerable.
Together, Walker and her agents lobbied for legal advances by sending a resolution to President Woodrow Wilson demanding legislative action against lynching and aligning with the NAACP’s anti-lynching efforts to push for new laws. The movement continued for decades after Walker’s death, in 1919. But her support of the NAACP — including a donation of $5,000 to the 1919 campaign, at that time the nonprofit’s single largest — was critical to its long-term survival and eventual role as the backbone of the Civil Rights Movement of the 1950s and 60s, during which it scored many legislative wins.
Walker’s Lasting Legacy
Walker’s bet on legacy paid off: A century after her death, her brand and values live on. The Black-led beauty company Sundial Brands acquired Madam C.J. Walker’s product lines in 2013 (32 years after Walker’s heirs originally sold the company) and launched their distribution at Sephora. Sundial’s business practices in 2015 earned it B-Corporation certification, making Sundial and the Walker brand part of a business community working to reduce inequality and poverty and build stronger communities.
Moreover, the sale of Sundial to Unilever in 2017 gave birth to the New Voices Foundation and its fund to support Black women entrepreneurs, with plans to transform Walker’s former Hudson River estate into a training center for New Voices fellows, who can, in their turn, advance equity through workplace practice.