Musings: The Poor. And the Bottom of the Pyramid

About a decade ago, the concept of ‘bottom of the pyramid’ gained traction in the business literature. It focused on how corporations could find significant business opportunities by focusing on the poorest customers. These ultra-poor represented one of the last untapped markets in the world.  I embraced the concept and started teaching it in my strategic management class. I even experienced a sense of smug self-satisfaction – after all, I had grown up in India which was then (and even today) one of the poorest countries in the world.  I had seen poverty all around me. Surely I was a perfect fit for the topic because I understood poverty. Alas, over the years I’ve come to realize how little I understood poverty.

My realization that I didn’t really understand poverty occurred because of guidance from dozens of accidental teachers. For the last eight years I have been taking a group of students to India. And their questions have constantly forced me to focus on images that I would rather ignore, to question assumptions and rationalizations that I didn’t know existed. As a result, I slowly started gaining a slightly better understanding of poverty. I am writing this note on my way back from India where I had travelled with 25 students. Very young students. They saw things that perhaps Americans never see. Of course, they saw the wonders of India – the Taj Mahal and amazing forts, the Himalayas, the IT Hub in Bangalore, ultra-professional corporations – and many of the other things that are exciting investors about India. But the students also saw an orphanage/home for young girls where abandoned and destitute girls are raised. They met young girls whose families were too poor to raise them so handed them to an ashram. They played games with these girls who may never see their parents again. They went to an impoverished district in rural India – where some of them visited a colony of former untouchables, they met with people who did not have adequate water – a village where there was one tap in a common area that had running water for two hours a day. And they saw 3 year old children sifting through trash heaps to find something salvageable to sell — a pattern that would define the rest of these children’s lives. And my students then talked to me. They had seen things that I seemed not to notice. They had felt touched by situations that I thought were normal. They asked me questions that unfroze other images that I had seen as a child. They made me discard coping strategies that had helped me normalize and not be affected by those images. They learnt a lot – but like the students before them, they taught me even more.

When American students visit India on our Study Abroad Trip, it can be an emotional roller coaster. Our trip is hard and we move from locations and activities at breakneck speed. A student can go from an emotional high to a low and then back again all in a matter of an hour. I constantly debrief the students to help them process what they are observing and learning. A surprisingly large number of them seek out additional one on one meetings with me to talk through their thoughts and emotions. We had all of that happen on this trip too. But there is one incident that stands out to me. We were in Jaipur – a city at the edge of the desert. India was going through a major heat wave and on that day the area experienced the highest temperature ever recorded in India (51.6 C or 125 F). All of us had stopped for lunch at a restaurant and we were walking out to our bus. Just outside the restaurant there was a man with a small 5-6 year old girl with him. Both were dressed in the finery of the region – thick embroidered clothes which would have made the heat unbearable. The moment he saw the obviously American students, the man started playing music on an Indian flute and the girl started dancing – in the thick clothes, at 2.00 p.m. on the hottest day ever recorded. All in the hope of a tip. And my immediate thought was, here we go again – another person looking for ways to receive money. All I wanted to do was to hurry the students to the ‘luxury’ of their air conditioned coach and away from the man and his daughter. One of my colleagues asked me a simple question – How can they wear that many clothes in this heat and dance for the possibility of a few rupees? Without a single moment of reflection, I replied – ‘Poverty and desperation for the next meal can make people do all sorts of things.’ She was silent and I thought no more of it. Two days later she spoke to me again – that she had no idea that kind of poverty could exist and how much that statement had hit her. She shared that with other students…and two of them met me privately to talk about it. One of them was in tears himself.

The incident hit me profoundly. It was obviously heartbreaking to see what we saw. While I would still say that it does not make sense to give money in such situations, I can’t figure out how I responded so automatically without empathy or a kind thought for the father and daughter.  And as I thought about it, I realized that I’d seen worse things that did not register. A small naked child fighting a dog for a piece of bread; a starving child in Addis Ababa desperately trying to find the energy to pick up coins thrown to him. Yet over the years I grew numb and the images stopped bothering me. I suspect I am not alone in this – growing up in India in the ‘70s, and then travelling in Africa for work, there was so much poverty that it was a natural defense reaction to ignore it. After all life still had to go on – we had jobs to do, exams to prepare for and obligations to fulfil. And it’s not just the developing world. There is poverty in America – but we avoid seeing it by creating the poor parts of town – and then we avoid going there. This numbing and consequent rationalization allows us to not be affected by poverty and sometimes to not even register it. This does have an upside — It allows us to move on and do what we have to. But I wonder if carried to an extreme it can lead to unforgiveable apathy and insensitivity. Poverty affects us all through its consequences. In Jaipur, the consequences of poverty were downright sad but benign – a Father/daughter sweltering in the heat and dancing in the hope for a few pennies. But the consequences are not always so benign.

Over the last few years, I had stopped teaching “Bottom of the Pyramid” topics in class. As we worked on cases and business models we estimated market size based on how much of a daily wage worker’s low income could be used for buying single use toiletries. We statistically discussed operating margins and inventory at retail outlets that serviced the poor. We talked about microlending practices that allowed the poorest of the poor to buy small refrigerators. My discomfort stemmed from the fact that those cold statistics of market size and profits and income growth among the poor looked sterile on paper. Somehow they did not square with what I had seen when I had been with the poor people. But after the introspection that occurred on this trip, I feel comfortable teaching it in the future – it is a valid business approach. I’ll teach market size estimation, operating margins and the other statistics that depersonalize poverty but allow for rational business decisions to be made. But I’ll also talk about that father/daughter duo performing in the sweltering sun. And I’ll talk about the old woman who broke down in tears last year when 3 of our students visited her hut. She broke down because she could not offer traditional Indian hospitality to these visitors – she was poor and didn’t have food to offer, and she had not been to the communal tap to bring water in that morning – she could not even offer a glass of water. I’ll talk about these incidents so that as we look at sterile statistics when making decisions to cater to the poor people, we don’t forget the human being who forms the bottom of the pyramid. And so that in all the decision making processes that these future business leaders use they don’t ignore a key component: their heart.

PS: I reached back home in time for Father’s Day. To a warm welcome. A movie and a good and special meal in the offing. It’s shaping to be a good day. Happy Father’s day to all the Father’s out there. But let’s spare a thought – that somewhere in the world, there are some fathers who are struggling to feed their kids. Perhaps dancing in the heat to earn their next meal? These Fathers won’t be wished a Happy Father’s Day or provided with a great dinner. But in their own way they are doing the best they can for their kids – the same as all of us.