17 Feb 2016
The Amazing Life of One of America’s Earliest Black, Female Entrepreneurs

Though not everyone may know her name, Madam C.J. Walker helped invent what have become staples of our modern country and economy: national sales forces, corporate social responsibility, and, yes, even basic haircare. Orphaned at age 8, married at 14, and widowed at 20 with a daughter to raise, Walker went on to become a millionaire entrepreneur in the Deep South at the turn of the century, against all odds. Professor Nancy Koehn describes Walker’s inspiring real life story of making good on her own unique American dream.

Brian Kenny: Orphaned at the age of 8, married at 14, and widowed at 20 with a daughter to raise—few would bet on a person facing those obstacles to become a path-breaking millionaire. Now consider that this woman was born in the Deep South in 1867, the first in her family to be born free of the bonds of slavery. How do you like those odds?

Today we'll hear from Professor Nancy Koehn about her case, “Madam C.J. Walker: Entrepreneur, Leader, and Philanthropist.” I'm your host, Brian Kenny, and you're listening to Cold Call. Professor Koehn is a business historian whose research and writing focuses on entrepreneurial leadership. Nancy, welcome.

Nancy Koehn: Thank you. Pleasure to be here.

BK: This is a fabulous case. We timed this to coincide with Black History Month in February. As I read it, I was just astonished at what Madam C.J. Walker was able to accomplish given the context of her time. Could you start by telling us how this case opens?

NK: I think the opening scene is really when she begins in what today we would call middle age, 1906. She's 39, begins her own hair care company. She became a well-known entrepreneur and a social activist, turn of the 20th century, so beginning of the 20th century leader from that platform, from building her own business. It takes her a long, slow burn to get there. It's a burn, as you said in your introduction, that's characterized not only by her social and economic circumstances. She's the first freed child of her family. Her parents were slaves in the Deep South. She's initially illiterate, and she's a single mother by the age of 21. She moves to the north as part of the early stages of the great northern migration, as it would be known, and sets up shop as a washer woman. That long, slow burn is what I like to call in my History of Leadership class her gathering years. Every leader has gathering years when they're absorbing, learning, putting pieces together. Steve Jobs would later call that period his wilderness years and talk about connecting the dots of that experience.

The turning point is really 1906, when she decides after a brief stint as a sales woman for another black entrepreneur's hair care products that she can do this herself. From there on out it is really the story of a hawk that begins to realize its wing span, stretching its wings, taking off from the cliff and riding the currents.

BK: I love that metaphor. Let's go back to Sarah Breedlove. I want to understand a little bit more about her context, the situation into which she's born, the political climate at the time. This is two years post-Civil War. What was it like to be a black person in America at that time?

NK: It was a moment of astounding change, a very great inflection point. The war had ended. Slavery was over. Lincoln had been assassinated, but some of the ground work for what were then for him nebulous reconstruction plans was in place, including the 13th Amendment that abolished slavery, the 14th Amendment that gives all African-Americans citizenship, and then the 15th Amendment, giving black male Americans the right to vote. It's a moment of great possibility.

There are lots and lots of obstacles for black Americans that white Americans of any ilk did not face, but it's still a moment of chance and new beginnings. That lasts for about 12 years. Then through a set of elite political changes, and great resentment, and racism and fear in the south, a lot of doors start closing. A period begins that today historians, black and white, know as the nadir period that lasts approximately 40 years from 1877 well into the 20th century—the closing of all those doors and of what today we think of as institutionalized, if informally so, racism.

This is the beginning of the quick disenfranchisement through all kinds of underhanded means such as limiting ballot access, closing polls, requiring identification, some of the things we're still talking about in our own time. Through a varied set of doors at high levels, and on the street or on the ground, a lot of opportunities were quickly held before black Americans disappeared or were taken away. This is ironically or perhaps most interestingly the moment when Madam Walker is really beginning to think about her life.

Meanwhile, Sarah Breedlove has joined a church. The church, the black church, which many historians and others have held up and understood and analyzed as this incredibly powerful social force, inspirational gas tank, cohesive body, elevating institution becomes an important part of her life. It's where she meets people. It's where she gets a sense of other black women taking opportunity. It's where she gets access to her own power.

BK: Let's pause there for a second. It's in these circles that she starts to take notice of the appearance of the people around her. She starts to recognize that people who are going to be successful, they do have a certain demeanor and a certain appearance about them. You note in the case that women, because of the health conditions, because of the situation they were in, their hair just becomes brittle and breaks. This triggers an idea for her.

NK: She looks around, not unlike Estee Lauder a generation later looking around at New York and all the women pouring into stenography pools and into department stores as clerks and thinking, “Women that are going to work want to take extra special care in their appearance often or take a different kind of care in their appearance and are willing to spend for it.” She looks around and says, "I think I can help these women." Madam Walker, Sarah Breedlove at the time, looks around and says, "I can do this better."

With some ideas from other products including a woman named Annie Turnbo, who was a pioneer in this field as well a few years before Sarah Breedlove (later Madam Walker), she concocts, what she calls her miracle hair grower and starts selling it door to door. Before long, 1906 becomes 1907, and she's beginning to gain traction.

BK: What I found really fascinating about this, she's gaining traction. She has really bought into this notion that this is not about—it's about appearance, but it's about something much bigger than that. It's about elevating one’s self in a significant way. You mentioned the tension that existed in society at that time, particularly among blacks about trying to become white. Talk a little about the tensions around those things.

NK: Very interestingly, not all hair care products are universally embraced by the African-American black community at the time. Booker T. Washington, who many of our listeners will know, and W.E.B. Du Bois—activists, educators, spokespeople for the black race at the time—were 2 vocal opponents of particularly hair bleach on the grounds that black people should not be pursuing any kind of tools or means that make them appear more white. There was a wonderful quote in the case from a well-known black spokeswoman who said, "If black women would spend half as much time trying to elevate their race as they do trying to look white, things would proceed apace."

The market for hair care products is in some ways a politically charged one, at least in some contexts or in some spheres. Madam Walker enters that market fully conscious of this. She was completely knowledgeable of what was going on in black political circles. That is another very interesting thing about this person. The importance of leaders pulling information, self-educating no matter what their field, is (in my experience as a scholar of leadership) universal and extremely significant to their later impact in their careers. She realizes, “I'm not going to do hair bleach, and I'm not going to spend a lot of time on straightening. My product is designed to give women beautiful, healthy heads of hair.”

P.S.—lots and lots of women at the turn of the century, white and black, suffered from hair loss. Part of what she's trying to do is give women great hair. That is her pitch. That is her value proposition. But your point, Brian, about the self-empowerment here is perhaps the most significant or most critical of all. What she realized as she began her own career as an entrepreneur was that she was really investing in herself and discovering her own power. She was discovering the higher road she should travel. The product was the means to something better for the self. For Madam Walker, it was, “I can help you be a better version of yourself. I can help you rise.”

You see her, as she gets going here, selling her consumers, her customers on the idea of rising and being better and obtaining your dreams. Then you see it really powerfully with her growing sales force.

BK: Which was really interesting as well because she set some precedents with her sales force and her model for scaling this business that are still in practice today.

NK: Absolutely. Just to remind our listeners, the birth of what today we would call a sales force, a national sales force was really just happening at the time that Madam Walker is getting going, so Singer sewing machines, Duke cigarettes, Sears & Roebuck, IBM, Smith & Wesson. All kinds of business were trying to distribute their products, and asking: how do we get our products out across a nation where communication and transportation is still not completely consistent and completely reliable? We use a sales force, so we have to train our sales force. We have to figure out how to hire them. We have to figure out how to motivate with them. We have to figure out how to pay them. She is on the cutting edge of that kind of work.

I think of all the people I've studied she is one of the most progressive and imaginative. Just to give you a few high points, she decides she's going to look for her aspiring salespeople, her representatives in places like black churches, where she herself had discovered empowerment. Later she will also go to black training and vocational schools and secondary schools. Her value proposition to them, her internal value proposition or, if you will, social contract is, “Join me. We're going to give you a livelihood of your own.” It becomes very appealing to a lot of women. By the time she dies in 1919, suddenly, abruptly of kidney failure, she has 40,000 people working for her all over the country and in a few cases in Cuba and other parts of what today we would call Central America.

BK: She started this, by the way, at the age of the 36. That's when she first started to spread her wings, as you have described it. How long was it between then and when she died?

NK: She dies in 1919 in her early 50s. The real ramping up of her business begins really in 1907, 1908, 1909. It's really about 11, 12 years of really taking this thing up steeply and growing it very rapidly that the kind of impact that she exercises occurs. It's a short time. You wonder how much of the steepness of that growth, and of that possibility and of that impact, is related to all the wilderness years. It's almost as if she had a lot of time to figure this out, think about it, but when she got there, she was ready to go.

The circumstances, as you point out, were right. That's a critically important part of any entrepreneurial venture succeeding, but the most important thing in the early years of any business is the entrepreneur's relationship, the leader's relationship with him or herself. Can I do this? What do I do with doubt? What do I do with setbacks? What's really clear to me, thinking back again on this woman, is that when she discovered hair care and what she might do with it, she understood herself well enough and had the tools of emotional awareness and management that she could stretch those wings and get right into the currents.

BK: Now let's also focus a little bit on the other word in the title, philanthropist. This was critically important to her to be able to give back. This is corporate social responsibility at the turn of the century in the 1900s.

NK: Absolutely. It's interesting. Her philanthropy, to use a fancy word for what was pennies scraped together in the early years, begins before she's really grown a successful business. Even as a washer woman, and piecing together income, she is giving money to causes that she deems important from within her church. This sense that, “I want to contribute to society,” is part of the gas tank of her motivation and her character. With every chance she gets, she gives back. In a very eerie forerunner of Oprah's Angel network, she establishes something called The Benevolent Association for her salespeople, designed to aid women that are in need or have medical issues. Then as she grows in stature on the public stage she will make gifts to war relief victims in World War I. She will make gifts to other black causes. She will make gifts to black universities.

She is, you know what, a real social activist and benefactress, as well as an entrepreneur, and a motivator and a leader. You get this strong sense from what she left in the way of writings from her great, great granddaughter, a woman named Lelia Bundles, who has written about her—you get the sense from Lelia, who knows the family lore well, that this was just a woman who was a force of nature. She was beautiful, she was spirited. She loved to drive her model T Ford fast and often. She was a great cook. She loved to entertain. She took her place, if you will, and yet through all of that her humanity, her sense of obligation to others, her commitment to making a social, progressive impact remained completely undaunted.

BK: She never lost her sense of being part of the African-American community. She didn't do this by becoming white, so to speak.

NK: Not at all. Her social life and most of her life was completely and deeply embedded in the African-American community, and yet she was part of a group of people, black and white, that went to the White House to lobby Woodrow Wilson for certain kinds of war relief toward the end of World War I. She lived comfortably. She could move comfortably in white society, and yet her roots and her identity were African-American.

BK: When you discuss this in class, how do students react to it?

NK: I'm always surprised by how quickly students embrace her. Every year I'm reminded anew of the power of this story with students in several respects. First, most white students have not heard of her regardless of what country they're from. All of my African-American students have heard of her. Second thing, the women in the class regardless of nationality or of ethnic origin just are astounded by her, astounded by a woman who had so much zip, and drive, and goodness, and kindness, and humanity, and fashion sensibility and just street smarts married to serious leadership savvy. They're just astounded by her.

I think the most interesting and surprising thing—again, I'm reminded of this anew every year is the social impact piece. People think as you implied, Brian, that corporate social responsibility is a relatively new phenomenon or commitment. It's not. Here she is more than 100 years ago blazing a trail in this respect. I think the students are inspired, impressed and engaged by that.

BK: Count me among those who were really inspired by this story. Nancy Koehn, thank you for joining us.

NK: Real pleasure. Thank you.

BK: You can find this and many more cases in the HBS case collection at HBR.org. I'm Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.

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