United States - Building new livelihoods in Appalachia
Once known as a state characterized by the coal mining industry, West Virginia has transformed into a place that is increasingly becoming known for its artistry, music, and people. People make up the heart and soul of the Appalachian region and it is these same people that have made it their mission to alleviate some of the challenges West Virginia and the greater Appalachian community are facing.
Census data shows 312,118 West Virginians lived in poverty in 2018, for a total poverty rate of 17.8 percent, the 4th highest in the country. Furthermore, in 2018 West Virginia’s median household income was an estimated $44,097 in 2018, $17,840 below the national average. Unfortunately, West Virginia’s median household income did not increase in the past year, and, adjusting for inflation, has not increased at all since 2007. Ultimately, West Virginia has the lowest median household income among the 50 states. In that, twenty-three percent (23%) of the state’s workforce is employed in low-wage jobs and Forty-four percent (44%) of West Virginia’s workers with less than a high school diploma earn low wages, while the rate of low-wage workers who possess a high school degree or some college is 28 percent (28%).
Some may look at these percentages and feel despondent or a lack of hope, however our Partner, Coalfield Development, saw an opportunity to support its Appalachian neighbors; an opportunity to continue to educate and professionally develop the community.
What was the problem?
Coalfield Development asked the Team to provide both an analysis of a transportation solution to connect goods and products to markets as well as a transportation solution to provide people with access to jobs. Given Coalfield Development’s primary goal of increasing access to opportunities of employment for community members, the team analyzed the data and commenced interviews, identifying additional opportunities for impact. Consequently, focusing on various ways to transport goods and provide access to job opportunities continued to be the lens through which the team approached the problem. However, the final recommendation focused on the fundamental challenges Coalfield Development was facing:
- The lack of access to financial savings, enabling Trainees to financially invest in themselves (providing barriers to employment access)
- The lack of brand recognition and limited distribution of products, (preventing Coalfield from achieving economies of scale)
What did we do?
We began this journey by focusing on the two areas identified by our partner, connecting goods to markets and people to jobs. Our initial research took a deep dive at understanding the social, political, economic, and infrastructural fabric of the area. In an effort to provide the most actionable pathways, we explored four options on the transportation of goods challenge: outsourcing of fulfillment, systemization of existing knowledge, hub approach, and standardized product mix. In reference to the employee transportation challenge, we explored: ride sharing optimization and a savings plan. We performed a series of cost breakdowns, break-even analysis, and customer hotspot analysis during the course of the project.
What was the turning point?
Due to COVID-19 constraints, we were unable to spend time in West Virginia. Nonetheless, through interviews with employees and continued conversations with our partners, we came to understand some of the key barriers to transportation had deeper roots than simple access to a vehicle. One of them being lack of emergency funds for car repair and upkeep. It became apparent that strengthening employees’ financial literacy in conjunction with savings, was a potential avenue to address the people-side of our original problem.
Transporting goods to market was another issue. At its core, Coalfield Development was facing a problem of scale. In order to achieve scale, it was imperative for Coalfield to gain market and customer exposure through established e-commerce platforms.
What was the recommendation?
In the end, our primary recommendations were:
Savings & Financial Literacy Model (SFLM): This model will allow Coalfield Development to take a more active role in promoting a culture of savings and financial literacy with its employees, enabling these employees to be successful and build long term financial security. The SFLM will be composed of 2 different components:
- Savings and matching program to encourage and incentivize employee savings and serve as an emergency fund for employees.
- Financial literacy training that will be incorporated into employee development programming.
E-Commerce & Brand Loyalty: Coalfield Development has a social impact platform and triple-bottom line that appeals to a variety of customers, both B2B and B2C. The challenge for this enterprise was in communicating its value to potential partners and customers and the lack of representation of established e-commerce sites. By analyzing best practices of existing social enterprises and evaluating which e-commerce platforms are most advantageous for our partner, we were able to identify an e-commerce and branding strategy that would best serve our partners. In this, by going back to the fundamentals of “why does this matter”, the team was able to identify ways to communicate Coalfield Development’s value in a way that not only resonated with potential e-commerce platforms and partners, but also to direct consumers.