“Steve, give up,” he told the authors in the book Social Entrepreneurship: Theory and Practice what his friends and colleagues would say. “It has always been like that; low-income workers will always drop out, and nothing you do will change that.”
A millionaire and unlikely social entrepreneur, Steve Bigari ran a McDonald’s franchise but was struggling to keep the restaurant afloat amid pressure from the competition with lower cost menus. The restaurant owner of the particular location had asked Bigari to present a plan to overcome this obstacle and upon highlighting a scheme to cut costs by eliminating employee benefits, the owner taught him an important lesson that would stick with him even after the owner had passed away.
“Brent politely asked me to step into the vestibule and he stuck his finger in my face and used a foul word for one of the three times I ever heard one cross his lips,” Bigari told the The New York Times. “He said, ‘You can afford to give up your rizzing-razzing vacation, but they can’t, so I hope you have a better plan than that.’ ”
The message was clear: take care of your employees. That was when Bigari’s journey on the path to social entrepreneurship began. Two major reasons for the restaurant’s struggle were high rates of employee turnover and absenteeism. Bigari had wanted to find a way to remove these financial burdens.
When we talk about the bottom of the pyramid, we talk about the poorest economic group. Just above this group are low-wage workers, like the ones working at Bigari’s restaurant, who are often one crisis away from extreme poverty. Common problems such as a sick child take away their ability to do their jobs. The resulting absenteeism could mean they lose their jobs and are forced to drift between one unskilled job to another. The inability to sustain employment means they are quickly thrown into a cycle of poverty. On the employer side, this also means the costs to rehire and retrain employees accumulate.
Though met with scepticism, Bigari’s plan was to develop a support system – now known as America’s Family – for low-income workers. If, for example, an employee called in to say they could not report to work because of car troubles, the manager would send someone to help fix the problem right away and the employee is taught how to handle the problem in the future. Bigari made deals with car repair shops to get discounts for his employees. In addition, America’s Family took care of a range of employee needs including health care, affordable child care and housing, and education. They partnered with the Community Health Centers (CHC) to create a Healthy Workforce program, which emphasizes the prevention of illness and maintenance of wellness, for employees to access affordable health care. In turn, CHC also gets a surge of new customers.
Bigari successfully created a win-win situation. Employees have steady jobs and their essential needs met, while the restaurant has improved employee retention and productivity. After running America’s Family for a year, profits of the restaurant increased by $300,000.
After the owner passed away, Bigari took over the restaurant and has since expanded his franchise to 12 more restaurants. Today, Bigari focuses on America’s Family full-time.
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