Go Back to Basics for Bigger, Better Impact

Ingvild Bjornvold • February 2023

Corporate social responsibility used to be parsley on the plate—delicately placed to make the main dish of core operations look good. But Tynesia (Ty) Boyea-Robinson, CEO of CapEQ, an impact investment and advisory company that works with foundations, private equity and corporate clients, sees doing good as inextricably linked with doing well. Only by integrating an authentic commitment to equitable impact fully into their business models will companies thrive in the long term, she believes. In conversation with Leap Ambassador and support team member Ingvild Bjornvold, Ty explains how a fringe concept when she started her company 15 years ago is now a recipe for success, one she shares in her most recent book: The Social Impact Advantage.

THE CONVERSATION 

Ingvild: You believe that companies that do well by doing good will be the business winners of the future. What does “doing well by doing good” mean, and what makes you confident that it isn’t just a trend that will fade away?

Ty: It’s about every stakeholder in your organization, often referred to as stakeholder capitalism, or, as we call it, the Holy Trinity of capitalism: A business owner creates something of value, a customer pays for that value, and the business hires employees who produce that value in exchange for a livable wage. Post-World War II globalization changed capitalism into making as much money as you can, no matter the cost.

Think about when we were a new country (as I explained in What We Can Learn from Bob’s General Store): People who provided goods and services for a community also lived there. Community members wanted them to thrive. If their businesses thrived, people were hired. If they were hired, they could buy goods like bread and milk. When value was generated at the expense of others, the community would push back and look for a different general store. There was a social contract.

So being accountable to all stakeholders isn’t a new concept; it’s actually going back to basics. I think there’s an appetite for that now because we’ve reached the bounds of what it looks like to extract value at the expense of other stakeholders without having to pay a cost. You’re seeing the cost in environmental crises and abuse of human rights. Business owners suffer if they don’t pay attention to those things, because consumers vote with their feet. Research from Nielsen shows that two-thirds of consumers prefer to buy from companies that create social impact.

Ingvild: Can you talk a bit about growing up, your career trajectory, experiences, and how you’ve come to this work of helping businesses do well by doing good?

Ty: As a high school student, I participated in a summer apprenticeship research program focused on getting women and people of color into STEM (science, technology, engineering, and math) jobs. I had an internship at NASA, which taught me two things that have persisted in my career.

First, I worked on the space station, which was amazing, because my dad was really into Star Trek and we used to watch a lot of sci-fi. It was so strange to be in the halls of this really huge institution where people go “Hey, grab me a cup of coffee while we talk about putting people in space.” It was just a completely different mindset, which I call the moonshot mindset. If we can put people in space, we can solve problems in our backyard.

Second, there was this information kit—a huge binder with acronyms, maps, and detailed processes and procedures—that operationalized what it took to build the space station. You didn’t have to have the answers, but it gave you a process for how to get to the answers. I think that’s how you change how the world does business; you combine the moonshot mindset with really tactical and practical tools, resources, and specifics of how to get there.

Later in my career, I founded the DC chapter of Year Up, an organization that trains and places young people in technology jobs. That showed me how businesses are really well equipped to have a big impact on social problems. We were placing young people in entry-level jobs—with career paths—that businesses were having a hard time filling, and the young people were coming from completely different backgrounds than the businesses were accustomed to recruiting from. They came from low-income areas that people associate with poverty, yet we saw them doing just as well as, if not better than, a lot of their college peers. Not only was their retention better, but the morale of the workforce around them was higher because their colleagues were seeing that just doing their jobs was actually making an impact on people. Marrying different ways of doing business with meeting a real business need scratched the surface of opportunity for me.

Ingvild: In your book, you write that a company fully equipped for the modern business climate is a company fully aligned with equitable impact. What does it look like to embrace equitable impact as the “main dish” rather than the “side dish,” as you put it?

Ty: Equitable impact means that everyone—including women, people of color, people with disabilities—benefits from positive changes. I think of it as the intersection between ESG (environmental, social, and governance) and DEI (diversity, equity, and inclusion). You can only have equitable impact if you’re being authentic, because you have to step back and think about your unique opportunity to contribute. People often think that having equitable impact has to be more expensive, slower, and more cumbersome. But it isn’t—if it’s at the core of what you do. Businesses need to home in on what their best contribution to equitable impact can be by looking at the Venn diagram overlap of their organization’s passion and values, the root cause of the problem that they’re uniquely equipped to solve, and the assets they can bring.

Ingvild: What are some examples of businesses that have successfully made equitable impact their “main dish”?

Ty: Our very first client was Walmart, when they were opening stores in DC and realized that their suburban model wouldn’t work in the city. They needed to solve education problems to improve hiring and retention, so they invested in a community workforce development program that trained thousands. They partnered with competitors like Costco and Home Depot, because they recognized that if they were going to increase the education of a retail workforce, they wouldn’t be able to employ every single one of them and they wanted to make sure that everyone got pipelined. They increased their minimum wage, which helped increase the standard of living for their employees, increased Walmart’s retention, and reduced recruitment costs. This program was so successful it was expanded across their entire workforce, nationwide. It’s an example of starting somewhere and then expanding over time to the rest of your business model.

Cotopaxi, a smaller company, has aligned all aspects of their business—how they make their money, how they spend their money, and how they invest in their people. Their clothing is about lifestyle and sustainability, but they also go out of their way to ensure sustainable supplier practices and hire immigrants to support the design and delivery of their clothing.

In one other case, we worked with a document scanning company to support the local community by giving people who have been in challenging situations their first job. When the company makes a pitch to scan documents, a commodified industry, they can leverage the fact that they invest in the local community, which allows them to charge a premium. Their biggest clients are in the public sector, where there’s both a paper-scanning need and a citizen need, so there’s a perception of “Oh, you’re helping me solve two problems at once.”

This process can work on any scale; it’s just a question of making sure you do that Venn diagram to figure out the right entry point.

Ingvild: Do you see progress in the financial sector, where there’s a lot of potential to contribute to more equitable outcomes by changing lending practices to Black people and Black-led businesses, for example?

Ty: Yes, we do. One of the projects we work with is Path to 15|55, a collaborative national effort based on research showing that if just 15% of Black-owned businesses were able to hire one more employee, it would add $55 billion to the American economy. As part of that work, we’re addressing the ecosystem, including capital providers. We have a community of action that is launching a project called Underwriting for Racial Justice in partnership with the Beneficial State Foundation. We’ve worked together to codify equitable lending practices, and the community of action will support several lending institutions to embed those practices and increase credit access. This is possible because dozens of organizations have done it—and done it well—over the last three to five years. Only 1.3% of lending goes to communities of color. More capital needs to land in those communities to drive outcomes.

We’re also working with the Global Impact Investing Network (GIIN) on impact-investing standards to show what “good” looks like in terms of investing in service of driving equitable outcomes. In both cases, there’s appetite, there’s investment, there’s movement. The goal now is to move these practices further upstream into the way business works.

Ingvild: For a traditional company designed to deliver value primarily to shareholders, what does it take to make the switch to one that delivers value to all stakeholders? Are there prerequisites?

Ty: No, there are no prerequisites. It’s really about finding a good starting place by analyzing how you make your money, how you spend your money, and how you invest in your people. Then you think about three things: What should we be accelerating? Where should we be innovating? What should we be decelerating? Getting some quick wins is key. If you cycle through each of those buckets over weeks, months, years—you start to develop the habit.

Ingvild: One can easily imagine scenarios where doing well comes in conflict with doing good. How can companies show consumers that they’re providing value to all stakeholders and aren’t engaging in greenwashing, diversity washing, or washing of any other kind?

Ty: The biggest barrier that arises in this work is the belief that doing it is somehow hurting your business. But fast forward a few years, and short-term skimping for quick profit turns into long-term headaches.

Whatever you do, it has to be authentic. There’s a real tension in the relationship with consumers, because progress isn’t always going to be as fast as you want. So it’s this interesting dance between the authentic commitment and ongoing continuous improvement. Look at the Cleveland Indians’ name change to the Cleveland Guardians. They shared a lot about why they did it, but when you look behind the scenes, there are these moments of uncertainty, moments without buy-in, without support—you’re going to get hit by both sides. That’s why you need to have that grounded compass. You need to know your unique root cause, your unique set of passions and values, and the unique resources you can bring to the table to weather the storm while you’re in the midst of change.

Ingvild: What kind of help does the private sector need from other actors, like government and nonprofits, to realize its potential for contributing to greater equity?

Ty: My first book, Just Change: How to Collaborate for Lasting Impact, was about defining the problem you’re trying to solve at a macro level and then recognizing the private-sector’s role. For example, we worked on a cross-sector project with an education system. The biggest challenges for the young people were the unstable economic conditions of their families and the lack of education prospects and good jobs. The education system needed corporations to come to the table in a different way. Corporations don’t need to learn how to do education, but they do need guidance on how to pipeline in ways that are authentic, supportive, and inclusive in communities they’re not used to working with. The answer isn’t companies as lone actors; it’s companies showing up as good actors in service of change.