Wong recently sat down with DiversityInc CEO Luke Visconti during a Q&A session at Wells Fargo to discuss the company’s outreach to the Asian community.

How do you see the demographics of the Asian community that Wells Fargo serves changing?

Nancy Wong: Immigrants actually are very entrepreneurial and many of them are business owners, so the way that Wells Fargo has been serving the Asian community is by really focusing on the financial needs of Asian businesses. We know how important it is for businesses to strive and therefore we develop programs that help the small-business community to strive and provide them access to tools, financial education, resources that can actually help them to really make their business go to the next level. A lot of the businesses have ties with Asian countries and actually have transpacific characteristics, so we offer specific products and services such as treasury management, trade finance and APEC (Asia-Pacific Economic Cooperation) service because we know that these services would help to really meet their needs.

What is Wells Fargo doing to reach a larger footprint with Asian-Americans?

Nancy Wong: The company has a very long history of serving diverse communities and we have developed a lot of marketing assets. We really believe in building out the assets in terms of advertising, in terms of marketing collateral, and what we are able to do when we have a larger footprint is to scale a lot of these assets from the West Coast footprint to the entire footprint. So that’s a lot of efficiency. We have the ATM network, which is already serving multiple Asian languages, so all the language marketing materials, such as financial-education brochures, we are able to use all that for different Asian communities across the entire footprint.

What marketing strategies work particularly well with the various Asian segments and what should be avoided?

Nancy Wong: Being consistent is very important in serving the Asian community, and we show respect to the communities by celebrating Asian heritage on a consistent basis coast-to-coast. During holidays and festivals we also run special promotions to make sure that we are offering a particular celebratory offer to our Asian customers. So being culturally relevant, being in the community and respecting the culture is very important.

What role does Wells Fargo’s Asian Connection resource group play in your efforts?

Nancy Wong: A lot of our resource-group team members of Asian descent, they are not just corresponding with customers on a daily basis but they are actually living in the Asian community. A lot of the insights that they are able to gather from the community help us improve our products and services. The other thing that we do very, very consistently is that we organize a lot of volunteer work. We have a hands-on banking-education seminar and we mobilize all our Asian Connection team members to go out and actually teach financial literacy to the Asian community. We set a goal to reach 2,000 different community groups across the country to make sure that as a financial institution we are offering the right financial-education programs to our communities.

The post Multicultural Marketing Case Study: Wells Fargo’s Asian Outreach appeared first on DiversityInc.

The panel featured several successful diversity-led relationships: Javara Perrilliat, Vice President, Global Supply Management for Owens & Minor, with William “Joe” Reubel, President/Chief Executive Officer, Kerma Medical Products, Inc.; and Keith Connolly, Vice President – Consumer Supply Chain, AT&T Services, Inc., with Jessica Firestone, President & CEO, Tempest Telecom Solutions LLC. Sam Johnson, Ernst & Young LLP’s Northeast Sub-Area Accounts & Business Development Managing Partner, also joined the panel to give his viewpoint on the global organization Ernst & Young’s relationship with Mitchell & Titus, LLP.

Twaronite kicked off the discussion saying, “I really have a front-row seat in seeing how critically important diversity is to our business, but also to our customers.” She shared supporting information from a DiversityInc benchmarking study, noting it found a direct link between high spend with underrepresented communities and higher recruitment, retention, engagement and customer loyalty.

Addressing the audience of entrepreneurs and c-suite executives, Twaronite asked for a show of hands to see how many of them had considered entering into a strategic partnership with a diversity-owned business – and many had. So, what was stopping some of them? Twaronite listed some common concerns about quality, capacity and margins. The panel discussion then started by debunking myths about these concerns by sharing the stories and specifics of several mutually beneficial strategic partnerships.

Diversity opens doors

Corporate initiatives to encourage diversity and inclusiveness have opened the door for many women- and minority-owned businesses, the panelists said, but are not the whole picture. “Diversity gets you into the door,” said Reubel, describing Kerma’s business partnership with Owens & Minor, a major supplier of health care products to hospitals. “But then you have to explain your value-added proposition, and get to know your customer,” he said. “Because if you’re not helping your customer gain additional revenue, then the relationship is not sustainable.” From Owens & Minor’s perspective, the relationship with Kerma enabled them to deepen their relationships with community and nonprofit hospitals.

AT&T’s partnership with Tempest was driven by the company’s mandate to source 21.5% of its equipment from diversity-owned suppliers. The partnership with Tempest blossomed when the woman-owned business helped AT&T build out a mobile network through Tempest’s experience as a supplier in Radio Access Networks.

The give and take of successful partnerships

“AT&T also gave us guidance on what they needed, so we went out and bought a company with experience in Distributed Antenna Systems,” Firestone said.

“The telecommunications industry has been a leader in the diversity space,” she said, “but you still have to provide quality services, be financially strong and prove you can support your customer over the long term. We’ve been very careful about how we’ve built our reputation with our customers.”

The membership of Mitchell & Titus LLP, the largest minority-owned accounting firm in the global Ernst & Young organization, has created similar opportunities on both sides, Johnson explained. “We were able to structure a relationship where they remain a minority firm, but they are also a member firm of Ernst & Young,” he said. “It allows us to first and most importantly help our clients achieve their objectives, it allows us to help M&T build capacity so they can take those services to market to other customers, and then finally it allows us to differentiate ourselves from our competitors.”

The overall message of the panel was clear – diversity and inclusiveness initiatives are vital for diverse-owned businesses to gain a toehold in the supply chain, yet delivering sustainable value is the key to continued success for those organizations.

Tips for supplier success

The panel closed with a lightning round of advice for current and future diverse suppliers. Some of their advice included:

• Be patient and persevere – you want to be a partner, not a vendor.
• Fine tune your value proposition. Understand the business and what its needs are so your value proposition will meet them.
• Think big. Keep in mind that most big companies are always looking for opportunities, so use this to differentiate yourself and create further opportunities in the future.
• You have to be willing to accept change and adapt. And learn about your customer – know what they don’t do well. Use that and find your niche.
• People do business with people. Build those relationships – invest in them.

Watch a video of the panel discussion, including all of the panelists’ tips and advice for current and future suppliers, here.

* This article features contributed content and has not been fact-checked or copy-edited by DiversityInc.

The post Supplier Diversity Success Stories Shine at the Ernst & Young Strategic Growth Forum appeared first on DiversityInc.

DiversityInc CEO Luke Visconti recently interviewed Pamela Eason, president and CEO of the Women’s Business Enterprise National Council (WBENC), and a former Pfizer executive. Here’s her agenda for this important organization, which works with corporations to increase supplier diversity and helps women-owned businesses succeed.

Luke Visconti: WBENC held its National Conference & Business Fair in June. Can you tell us about the event?

Pamela Eason: The event featured a plethora of speakers who were really focused on benefitting the WBEs. It was very engaging, with workshops that addressed WBE skills, WBE needs, as well as corporate and government requirements for doing business. We had about 2,200 women, and total attendance was right about 4,000, so we were very excited.

Visconti: What does your organization help women to do in their business lives?

Eason: Overall as an organization, we have a CORE value that we provide: C is for the certification, O is for the opportunities that we provide, R is around the resources and E is engagement. However, for our event specifically, the opportunity aspect is very rich. If women do their research correctly for the great businesses that are coming to our event, they can spend all their time prospecting at this event and not have to spend a lot of money to go around and prospect all year long. That’s a great value.

For our corporate members, being active in our event and meeting these women-owned businesses frees up the number of times they need to have individual meetings.

Visconti: Why should a supplier-diversity chief or other supplier-diversity executive go to this event next year? What experience and knowledge would they gain?

Eason: The supplier-diversity professionals, in particular, will find a plethora of WBEs that are anxious to do business with them. The good news is we’ve been teaching them to target, so they are going after the corporations that they are probably the best solution for and can meet those needs. Marketing individuals would find that the power of women and the buying power of women are a great business-case tie to what that corporation does. A lot of procurement professionals attend because they can learn a lot about how that benefits their company as well as the actual categories in which they’re looking to buy things.

Stop Making Excuses

Visconti: When talking to companies that have procurement that might not be centralized, they tell me that they have difficulty getting MBE and WBE spend through the different divisions. You ran procurement at Pfizer. Why is that an excuse?

Eason: In many cases, it is an excuse. If you think about it, those same companies and the divisions and the people who are saying that they can’t do it, they also have employees in those same areas. Those payroll systems are just as different as those procurement systems, but they’re getting everybody paid and they’re making sure that everything happens like it should.

Is it costly to make sure everything is integrated? Is it difficult to say this is a priority and make sure that that priority occurs? Absolutely. But if you make it a priority and you follow through on it, it will happen.

Visconti: If you’re giving advice to a supplier-diversity person who is telling you, “I just can’t get this done,” what do they need to ask their CEO for? What do they need to ask their vice president of procurement? What kind of authority or accountability is needed?

Eason: If I’m a supplier-diversity professional and I felt like I just couldn’t get it done, I would think that it probably wasn’t being reinforced at the closest levels. I’m a total believer in top-level support for diversity and inclusion, whether it be on the supplier side or the colleague side, but that needs to exist as a basic premise of what happens at a company.

It’s those managers closest to the work who are really key to the success. If I’m being held accountable for certain things occurring, then I’m going to make sure that those occur.

If you address more of what people are concerned about—whether they believe there’s no supplier out there, or they believe the suppliers are not capable, or they believe funding is not available, whatever that is—as you address it, you’re able to show that that in fact is not the case. Or if it is the case, you go and you develop that capability, then it pulls through and it is successful.

The Importance of MWBE Certification

Visconti: I’ve run into both MBE and WBE owners who are not certified, and they don’t think of it as being important. Why is it important?

Eason: It’s important for two very different reasons. The government is making some real efforts to try to ensure that they do more business with women. They seem to be taking it seriously. They want to verify that this business is in fact woman-owned, -operated and -controlled, and not a shell of any sort.

On the private-sector side, with corporations, if you are doing business as a government contractor, then you have some flow-down requirements, and some of those are for diverse and women-owned businesses. So again, if you’re doing business with a certified business, you know they are owned, operated and controlled by a woman.

Visconti: What advice would you give women who are thinking about starting their own business?

Eason: Do your research first. Know what to expect. I had my own business for eight years, a consulting business that dealt with business processes in the area of procurement and finance. What you have to realize is what the sales cycle is like, how you have to behave in your client’s situation, what you are expected to deliver and how that’s different than just going to work from 8 to 5 or anything else that has to be done in a normal, day-to-day job. As an entrepreneur, you’ve got to jump up and be in charge of everything. Be aware of that and plan your time accordingly.

The post How WBENC Helps Companies & Women-Owned Businesses appeared first on DiversityInc.

Read “Cleveland’s Economic Development: Investment in Diversity & Inclusion Pays Dividends” in the DiversityInc digital issue.

* This is an advertorial.

Not many cities can say they’re better off after the recession than they were before. Cleveland is a notable exception, thanks to focused diversity management. Despite the economic turmoil of recent years, the GCP and its members have been taking the economic development to the next level by promoting diversity and inclusion and economic investment in the region’s underserved communities.

The city of Cleveland itself is more than half (53.3 percent) Black and 10 percent Latino. Leveraging this diversity through diversity management is key to Cleveland’s economic success. In 2010, Ohio had the fifth fastest growing economy of any state. And local manufacturing output is expected to grow nearly 30 percent by 2015, outpacing the nation by almost 10 percentage points. It’s clear that the greater Cleveland area is poised for continued economic growth. Recognizing the region’s economic-development potential, the GCP and its Commission on Economic Inclusion are committed to making sure that traditionally underrepresented groups help fuel continued growth.

Along with the more than 100 corporate members—including KeyCorp (one of DiversityInc’s 25 Noteworthy Companies and headed by the first woman CEO of a major bank), Cuyahoga Community College, the Northeast Ohio Regional Sewer District, Cleveland Public Library, MetroHealth, the Cleveland Clinic (one of the DiversityInc Top 5 Hospital Systems), Forest City Enterprises, University Hospitals (one of the DiversityInc Top 5 Hospital Systems), Mercy Health Partners, the Federal Reserve Bank of Cleveland and Cleveland State University—the GCP acts as a community anchor.

Cleveland Economic Development: Community-Focused Healthcare Through Diversity & Inclusion

An impressive array of community-outreach programs focused on health, education and cultural competency is the backbone of these organizations’ strategies forCleveland’s urban renewal and economic development. Community health centers are often the base for outreach programs. The idea is to target Cleveland’s traditionally underserved groups where they live and work.

MetroHealth is catering to the region’s population with 16 specialized Cleveland community health centers, including the Asia Town Clinic, the Pride Clinic (serving the LGBT community), the Latina Clinic and a Senior Health and Wellness Center. The healthcare system also launched Partners in Care, a program that offers comprehensive treatment to the uninsured. Download a PDF of MetroHealth’s diversity report.

Winnell Mason, MetroHealth’s director of diversity, calls this community-based model a “team approach” to healthcare. And it’s working. The program has documented 35 percent fewer hospitalizations for its enrollees, while reducing costs. In 2011, MetroHealth made substantial efforts to better serve Cleveland’s growing Latino population, adding bilingual staff to its call center. To date, nearly 30,000 calls have been fielded in Spanish. The organization also launched a bilingual newsletter and an annual family day with free health screenings for the Latino community.

The Cleveland Clinic is also reducing barriers to healthcare through diversity-and-inclusion management with its Minority Men’s Health Center. Established in 2004, the center provides direct care, education and outreach primarily to Black men suffering from prostate cancer and kidney disease. “It continues to be one of the first and only programs of its kind committed to providing comprehensive, culturally sensitive health access, treatment and education to minority men,” says center director and Cleveland Clinic urologist Dr. Charles Modlin. “It is all about eliminating healthcare disparities.”

Celebrating its 10th anniversary this year, the center’s Minority Men’s Health Fair has provided more than 5,000 health screenings to men in the region. In addition, the clinic sponsors annual health fairs that target Black women and Latinos and has a presence at Cleveland’s cultural events including the Puerto Rican Parade and the Cleveland Asian Festival. Spanish courses for physicians are offered on campus to improve patient relations.

For the past six years, Mercy’s Health Partners’ Rising Stars Program has worked with the Lorain County Urban League to expose Cleveland’s high-school students from traditionally underrepresented groups to careers in healthcare. “Our goal is to create the next generation of healthcare leaders for our community,” says Sascha Chatman, Mercy’s regional diversity officer. With its Parish Nursing Programs, Mercy teams up with predominantly Black and Latino churches to provide education, outreach and health screenings. They also partner with the Urban League to educate at-risk men about diabetes in a program called Save Our Sons.

Watch: DiversityInc Innovation Fest! Presentation by WellPoint, Empire BlueCross BlueShield: Community Ambassador Program

Educating the Community

Educational programs also offer an important arena for Cleveland’s outreach and diversity management, as well as future economic development. As a community hub, the Cleveland Public Library is a public space for cross-cultural connections. “We share in the vision of a sustainable Cleveland transformed by the collective impact of determined people and organizations working together,” says Madeline Corchado, the library’s director of human resources. “Our role in this transformation is the work we do at the center of the city’s culture of learning.”

That role as an educational center is substantial. The library is on target to reach its goal of doubling the number of computers available to the public in 2012. A state-of-the art computer lab is slated to open at the downtown branch in May, offering access to cutting-edge equipment and a variety of technology classes. The library also encourages small businesses to sponsor and host branch events.

“It’s transforming library programs into networking events where there is a free exchange of practical business information that directly speaks to the needs of our community,” says Corchado. One of the most tangible outreach efforts is the Bookmobile, a 32-foot full-service mobile library that visits all of Cleveland’s neighborhoods year-round. Demand for the program is strong: Participation in the Bookmobile was up 500 percent in 2010.

KeyBank is also dedicated to reaching out to community members where they live and work. Many of the bank’s outreach efforts revolve around financial education through the Underserved Initiative Program. “As a core component of our underserved strategy, this investment assists individuals in becoming better educated about their options to improve their financial capabilities,” says Poppie Parish, Key’s client education manager. “More than 400 KeyBank employees volunteer as financial educators in their communities.”

For example, Super Refund Saturday, a volunteer event in Cleveland, processes low-income residents’ tax refunds without charge. More than 20,000 people have received free financial services and education. These financial-literacy programs empower Cleveland’s traditionally underserved populations to manage money and achieve goals such as homeownership and college education, ultimately, improving the potential for economic growth in the region.

The Federal Reserve Bank of Cleveland is also committed to financial education in the community. Its Learning Center and Money Museum features 30 free interactive exhibits. Modeled on state educational benchmarks, the museum’s programs book seven months in advance. The Cleveland Fed Mentor Program offers educational and networking programs to a predominantly Black high school in East Cleveland. Bank leaders meet with traditionally underserved students to share career advice in the Leadership Dialogue Series. Last spring, the bank inserted a financial-literacy workbook for kids in a regional Black newspaper.

The Cleveland Fed has distributed more than 320,000 copies of the pamphlet, available in both English and Spanish, to families, schools and community groups in the last several years. “We have developed programs to assist students, including those in underserved communities, in building critical-thinking skills, an attribute that complements financial literacy,” says Diana Starks, assistant vice president in the Office of Minority and Women Inclusion.

Read: Rutgers Future Scholars Enhances Talent Pipelines With Corporate-Student Outreach

Cuyahoga Community College (Tri-C) places an emphasis on cultural literacy, offering an array of programs to celebrate its diverse student body. Tri-C is the first community college in the nation to join the Sustained Dialogue Campus Network, a student-led initiative promoting diversity and inclusion on campus through weekly public dialogues.

“Sustained dialogue equips the next generation of leaders with tools to effect change in schools, workplaces and communities,” says Judi McMullen, vice president of human resources at Cuyahoga Community College.

Its Workforce and Economic Development Division also recruits Blacks, Latinos and Asians for fast-track programs, which provide career training, interview skills and job-placement assistance. The Economic Development Division has a goal of placing 80 percent of program graduates with jobs.

Cleveland State University (CSU) sees its diverse student body as an extension of the local community. “The contribution that CSU is making is actually educating the future workforce,” says Dr. Njeri Nuru-Holm, the university’s vice president for institutional diversity. “We know what the demographics are … and we’re going to see even greater diversity” and inclusion.

CSU provides social, cultural and academic support for students from a variety of backgrounds through initiatives such as the African American, Hispanic, Asian and Native American Peer Mentoring Program (AHANA). As a result of programs like this, the university has “significantly boosted minority student retention through aggressive multicultural mentoring,” according to its 2010 Diversity Action Plan.

“So many are first-generation college-goers who have a parent who is pushing them to do better than they achieved,” says Dr. Nuru-Holm. “We are able to motivate students beyond what they can even see.”

First-Generation College-Goers: Cleveland Diversity & Inclusion

Across the university, there are more than 50 scholarships aimed at traditionally underrepresented students. Events including multicultural seminars, an annual diversity conference and the Minority Career Fair, which drew 150 area employers this year, reinforce commitment to an increasingly diverse student body.

With a service area that spans 62 local communities, the Northeast Ohio Regional Sewer District (NEORSD) also sees its future workforce in today’s students.

“Student programs are a huge part of our community outreach,” says Kim Jones, community relations manager at NEORSD. Through a series of scholarships geared toward students from underrepresented groups, NEORSD seeks students that represent the community in order “to stimulate their interest in technical or scientific careers and perhaps an eventual career here at the sewer district.” The district has hired several scholarship recipients and pipeline-program graduates as full-time employees.

Diversity Management: Coordinating the Effort for Cleveland’s Economic Development

None of these community programs would be possible without first reaching out to local businesses to emphasize the importance of diversity management and inclusion in driving economic change. The Greater Cleveland Partnership’s Commission on Economic Inclusion has a number of programs including regular CEO briefings and a conference for diversity professionals to address issues of inclusion in the regional economy.

In an effort to bring corporate leaders to the table and familiarize them with the commission’s work, Cleveland real-estate company Forest City Enterprises partnered with Cleveland-based national law firm Thompson Hine to sponsor a series of Senior Executive Forums. Here, business leaders learn about the commission’s annual Employers Survey on Diversity, and they talk about ways to improve outreach to traditionally underrepresented groups. Three forums have taken place already, with an average of 90 C-level executives attending—and two more are slated for this year.

“It’s exciting because it really has started to build momentum,” says Charmaine Brown, director of diversity and inclusion at Forest City. “It has really touched those folks who truly have to do the work within the organization. It’s operationalizing diversity.”

The Greater Cleveland Partnership sees these forums as a vital exchange of ideas for diversity management and inclusion and a bridge toward cultural understanding. Other initiatives include the Boardroom-to-Boardroom program, co-sponsored by The Presidents’ Council, an association of Black business owners. These sessions bring together CEOs of different backgrounds to discuss the challenges faced by businesses owned by Blacks and Latinos.

“Diverse teams produce greater outcomes,” says Deborah Bridwell, senior director of inclusion initiatives at the Greater Cleveland Partnership. “Practicing cultural competency within our employers directly supports the region’s efforts to stay competitive.”

Financial Investment in Cleveland’s Diversity & Inclusion: Economic Development

Many area businesses have committed to spending dollars locally, providing a much-needed shot in the arm to area firms, many of them minority- and women-owned business enterprises (MBEs and WBEs). Last year marked the grand opening of the Minority Business Center, operated by the Minority Business Development Agency. One of about 30 nationwide, the center came to Cleveland with the help of the GCP and its partners, including the Council of Smaller Enterprises (COSE); JumpStart; the Northeast Ohio Hispanic Chamber of Commerce; the Northern Ohio Minority Supplier Development Council; Team NEO; and the WECO Fund.

The Commission’s Minority Business Accelerator 2.5+ will support the efforts of the new center. Made possible by financial support from the Fund for Our Economic Future, Jones Day and the Cleveland Foundation, the accelerator will focus on growing the size and scale of Black- and Latino-owned enterprises. Since its inception in 2008, the Minority Business Accelerator 2.5+ has brokered a total of 182 deals with Black- and Latino-owned businesses valued at $142 million and creating nearly 400 jobs.

“The Commission focuses on strengthening the regional economy by strengthening all businesses,” says Andrew Jackson, senior vice president and executive director of the Commission on Economic Inclusion. “MBEs hire MBEs, and the growth of minority businesses of all sizes increases competitiveness and attractiveness of the region.” With the help of corporate sponsors KeyBank, PNC Bank and the Cleveland Foundation, the GCP also administers the Working Capital Loan Fund. The fund provides collateral to Black- and Latino-owned businesses in Northeast Ohio to help them secure lines of credit.

Greater Cleveland Partnership’s corporate members are rebuilding Cleveland’s economic development, giving special attention to neighborhoods that have been traditionally ignored. “At Key, the most significant investment we make is in our communities,” says Chairman and CEO Beth Mooney. “Our deep commitments to diversity and community drive our strategy of helping to strengthen lower-income and underserved communities.”

The first of the nation’s largest banks to earn seven consecutive “outstanding” ratings for its lending under the Community Reinvestment Act, KeyBank takes its role as a local lender seriously. The Key Community Development Corporation provides loans for affordable housing, businesses in low-income areas and community services. Currently, KeyBank has more than $2.2 billion invested in underserved communities.

“Our philanthropic efforts follow a strategic plan to provide grants in three areas that foster economic self-sufficiency in the communities we serve,” says Margot Copeland, chair of the KeyBank Foundation. Over the last three years, the foundation has given more than $54 million to nonprofits nationwide to support financial education, economic development, workforce development and workforce diversity and inclusion.

University Hospitals is an active player in downtown Cleveland’s renaissance. As an active participant in the Cleveland Foundation’s Greater University Circle initiative, the healthcare system and its partners have invested $14.5 million in real estate, small-business loans and housing incentives around the University Hospitals Case Medical Center. University Hospitals also gave $1 million to the NewBridge Cleveland Center for the Arts, a nonprofit that prepares adults for careers in healthcare. Ohio’s Latino newspaper, La Prensa, called the center “a shimmering beacon of hope in downtown Cleveland.”

Another major player in the regional economy, the Cleveland Clinic has deep pockets when it comes to supporting residents. Much of the clinic’s community investment is providing care to those who cannot afford it. The clinic spends roughly $350 million in the community annually, including $92 million in charity care, free health screenings and patient education forums.

Forest City Enterprises also has a robust charitable-giving program. Twenty-two percent of the dollars it donates to the United Way go directly to organizations that focus on traditionally underrepresented groups, including LGBT people and people with disabilities. Forest City also actively supports community organizations such as Plexus, Cleveland’s LGBT chamber of commerce.

Cleveland Emphasis on Supplier Diversity for Economic Development 

The members of the Greater Cleveland Partnership share a commitment to supplier diversity. Responding to increases in enrollment, Cuyahoga Community College (Tri-C) is in the midst of a massive, 10-year expansion plan that will grow the college by 30 percent. And the college has committed to spending 15 percent of its construction budget with minority-owned business. Tri-C is on target to reach that goal thanks to a series of networking programs including a Construction Diversity Outreach event.

“Despite the economic downturn, the college has been committed to providing equitable and fair procurement and construction opportunities to a broadly diverse group of suppliers,” says Tri-C’s McMullen. “They bring a variety of backgrounds, styles, perspectives, values, and beliefs as assets to the college’s commitment to serve its community.”

Tri-C also has contracted with Minority Business Solutions to track supplier diversity, recruit new vendors and verify MWBE certifications. And a newly formed Supplier Diversity Advisory Committee is helping the college to tap vendors for advice on how to improve its outreach efforts.

Cleveland State University’s goal is to spend 15 percent of its annual procurement budget with minority-owned businesses. “For the first time,” says Dr. Nuru-Holm, “we have a percentage of our investment portfolio managed by an MBE.” Dr. Nuru-Holm credits this to Stephanie McHenry, the university’s new vice president for business affairs and finance. “As a Black female, she brings a special perspective and voice to the table.”

KeyBank also has worked to diversify its supply chain. The company has met its supplier-diversity goals for six years in a row and has exceeded its goals of 15 percent spent with MWBEs for the last two years. That’s more than twice the amount the average company spends with traditionally underrepresented vendors. As the first female executive at a top-20 bank, Mooney is committed to women’s promotions through the Key4Women program, which offers resources and networking opportunities for women in business.

Since the program began in 2005, Key has lent more than $6 billion to women business owners. Read Diversity Management: When Will There Be More Women CEOs? for more on women in management.

After launching an ambitious supplier-diversity program in 2009, the Federal Reserve Bank of Cleveland increased its annual spend with MWBEs from less than 2 percent to 11 percent in 2011 (8.6 percent with women-owned businesses and 2.4 percent with minority-owned businesses). The bank also changed its procurement policy to require that at least one MWBE be considered for all contracts greater than $10,000. “A lot of growth in the economy comes from small businesses, and minority small businesses are an important part of that fabric,” says Sandra Pianalto, president and CEO at the Cleveland Federal Reserve.

In 2009, the Northeast Ohio Regional Sewer District (NEORSD) spent 12 percent of its regional budget with MWBEs, also more than double the amount spent by its peer organizations, according to the GCP. Its $8-million investment included roughly $30,000 in advertising specifically designed to recruit MWBEs. After investing half a million dollars in a comprehensive disparity study in 2009, the district launched the Business Opportunity Program to make improvements in strategic sourcing. Today, 26 percent of the District’s 827 certified firms are women-owned enterprises and 30 percent are minority-owned enterprises.

NEORSD has steadily increased its spend with such firms over the past few years. The district spent $13.3 million with MBEs last year, up 25 percent from 2010, and $12.2 million with women-owned business enterprises, up 72 percent from 2010. NEORSD’s Jones notes that these suppliers mirror the district’s client base. “The business case is addressed by including the perspectives and opinions of all of our employees so we are better able to communicate with our customers,” she says.

For more on supplier diversity best practices, read DiversityInc Innovation Fest! Presentation by AT&T: Power Up! Training for Suppliers.

Healthcare Industry’s Importance in Cleveland’s Economic Development

Recognizing the impact the healthcare industry has on the local economy, the Greater Cleveland Partnership is working with the Center for Health Affairs, the largest group-purchasing organization in the region. “The commission is currently collaborating on a single-source listing of local and minority vendors to be accessed by all of their hospital members in the region,” says Jackson. MWBEs have a lot to gain from contracts with the area’s healthcare operators. University Hospitals recently completed a $1.2-billion strategic plan with an eye toward boosting the local economy and working with firms that reflect the region’s diverse demographics.

“A first in Northeast Ohio, two of the top positions in construction services at UH were held by African-American female architects,” says Donnie Perkins, vice president for diversity and inclusion at University Hospitals. Roughly 90 percent of the companies that received contracts were based locally and more than 30 percent are minority- or women-owned businesses. “The impact is huge,” says Steven D. Standley, University Hospitals’ chief administrative officer. “Every dollar we spend with a local firm gets spent again and again in Cleveland.”

Last year, 21 percent of the Cleveland Clinic’s construction dollars went to MWBE contractors, and the sourcing department is using a new online system to track and communicate with vendors from various backgrounds. “We recognize that incorporating diversity reinforces our commitment to the community and strengthens our position as a good community citizen,” says Le Joyce Naylor, the clinic’s executive director of diversity and inclusion. “This work is core to Cleveland Clinic’s commitment to the economic vitality of Northeast Ohio.”

Similarly, Mercy Health Partners has committed to spending 10 percent to 15 percent of its annual budget with MWBEs by 2014. They’ve also set a goal to spend 25 percent of their construction budget with women- and minority-owned firms. In April, Humility of Mary Health Partners and Mercy-Lorain Hospital planned to host the Northeast Ohio Healthcare Supplier Diversity Event to reach out to local suppliers and build new partnerships. “Our primary goal is to identify companies that can support our efforts in increasing our diverse spend,” says Mercy’s Chatman. “We believe that being inclusive will lead to more productive partnerships in the community and help grow our local economy.”

These companies aren’t alone in their dedication to supplier diversity. Overall, companies in Northeast Ohio increased their spend with MBEs by 33 percent between 2010 and 2011 (from $339 million to $450 million); nationally, supplier-diversity spend increased by 21 percent during the same period, from $2.23 billion to $2.71 billion. “The inclusion of MWBEs is vital to the future of the region,” says Perkins. “It’s an investment in taking care of the community you serve.”

Read: Roadmap for Hospitals: Culturally Competent Patient Care

Cultivating an Inclusive Workforce With Diversity & Inclusion

Part of championing diversity and inclusion in Cleveland means developing an inclusive workforce by emphasizing cultural competence. “Building cultural-competency skills in business leaders, managers and supervisors directly supports the attraction and retention of diverse talent,” says Bridwell.

Job recruitment is picking up in Cleveland and is stronger than it was pre-recession. In February, the city posted a 16 percent jump in managerial hiring activity, according to the JobSerf Employment Index. And the GCP’s members are working to ensure that their employees reflect the demographics of the community. Blacks, Latinos, Asians and American Indians make up 30 percent of Tri-C’s employees and are 36 percent of the college’s new hires.

Watch: Diversity Web Seminar: Recruitment/Hiring Gaps

“The more diverse the faculty and staff of Tri-C, the more likely all students will be exposed to a wider range of scholarly perspectives drawn from a variety of life experience,” says Andre Burton, the college’s director of diversity and inclusion. “This better prepares students to succeed in an increasingly global marketplace.”

Fifteen percent of Forest City Enterprises’ employees in the region come from traditionally underrepresented groups. The real-estate company worked hard to bring a training program for Black professionals to Cleveland. Beginning this fall, the Real Estate Associate Program (REAP) will present a 13-week curriculum taught by industry leaders. “It’s consistently opening up those doors that quite truthfully have not been as readily available to minority professionals in the commercial real-estate industry,” says Forest City Enterprises’ Brown. She adds that in addition to building skills, the potential for networking and business contacts is promising.

At MetroHealth, 29 percent of the employees and 19 percent of physicians are Black, Latino, Asian or American Indian. Since 2009, MetroHealth has partnered with El Barrio, a workforce-development center run by the West Side Ecumenical Ministry to provide a monthly seminar on healthcare careers. “El Barrio provides a great pipeline of talent at MetroHealth,” says Mason.

Read: Increasing Diversity in Talent Development

A unique series of pipeline programs helps the Cleveland Clinic recruit talent from underrepresented groups. The Charles R. Drew Saturday Academy is a 12-week program designed to empower traditionally underrepresented high-school students to pursue careers in the sciences. In its fifth year, the program provides mentorship, hands-on learning and career advice for Black, Latino and Asian students. Other programs, including the Northeast Ohio Research Education Medicine Alliance and the Young Business Leaders Internship Program, provide similar resources for minorities who may not otherwise have access to healthcare careers.

“The programs offer structured educational enrichment experiences and mentoring designed to foster student achievement in higher education,” says Rosalind Strickland, senior director of the clinic’s Office of Civic Education Initiatives.

At Cleveland State University, diversity is a way of life: 40 percent of students are Black, Latino, Asian or American Indian, nearly 60 percent are female and 20 percent of the faculty is Black, Latino, Asian or American Indian—the largest percentage in the state. The university has been named a top producer of Black master’s graduates by Diverse Issues in Higher Education for 20 consecutive years. Students’ exposure to the university melting pot is an asset in the working world.

“Employers are seeking individuals who can work on and lead a diverse team,” says Dr. Nuru-Holm. “You can’t attend CSU and be successful without engaging with diverse individuals.” Last year, the Federal Reserve Bank (FRB) increased the percentage of Blacks, Asians and Latinos in its summer internship program by 73 percent (from 11 percent in 2010 to 19 percent in 2011).

Overall, 23 percent of the bank’s new hires in 2011 were from traditionally underrepresented groups, up from 18 percent in 2009. In 2011, FRB Cleveland wrapped up a three-year diversity-awareness training for all employees. The same year, the Federal Reserve announced the creation of diversity and inclusion offices in each of its 12 branches.

According to the bank’s annual report to Congress, “the Cleveland Federal Reserve Bank’s Office of Minority and Women Inclusion is poised to develop, implement and monitor standards related to workforce diversity and the inclusion and utilization of minority- and women-owned businesses in FRB Cleveland programs and contracts.”

About 27 percent of employees at the Northeast Ohio Regional Sewer District are Black, Latino or Asian. After an extensive in-house diversity and inclusion survey, the district has established goals to build cultural competency through diversity management. They’ve expanded their nondiscrimination statement to include LGBT people, hosted a series of diversity dialogue sessions, launched resource groups and implemented mandatory diversity training. So far, more than 70 percent of employees have been trained.

Cleveland: Diversity & Inclusion From the Top Down

Companies also are keeping an eye on the makeup of their senior leadership. The Commission on Economic Inclusion teamed up with Business Volunteers Unlimited to create a Board Minority Pipeline Initiative focused on increasing the number of Black, Latino and American Indian professionals on corporate boards.

KeyCorp also has committed to diversity in the C-suite. In 2010, 15 percent of the company’s upper management was Black, Latino or Asian, nearly double the rate of its peer groups. “We actively recruit new employees from historically Black colleges and universities, as well as from schools with highly diverse student populations,” says Johnni Beckel, executive vice president and chief human resources officer at Key. “We also network in our communities to identify diverse new talent.”

Mercy Health Partners has more than doubled the percentage of Blacks, Latinos and Asians on its senior leadership team (from 4.2 percent to 9.3 percent) in the last year. In an effort to promote diversity management in senior leadership, Mercy’s goal is to have a candidate from a traditionally underrepresented group in at least 60 percent of its executive searches. This year marked the launch of the Mercy Minority Mentoring Program, which offers access to training and networking opportunities for employees to move ahead in the company. “We firmly believe that we need to grow our own people in order to continue to retain them,” says Chatman.

Read: Mentoring Roundtable: How Mentoring Improves Retention, Engagement & Promotions

When companies support diversity financially and through their hiring practices and corporate culture, the results reverberate throughout the regional economy. Women- and minority-owned enterprises are an important part of the community, and their economic vitality contributes to Cleveland’s impressive turnaround. It’s a matter of seeing the region’s changing demographics as an asset and a tool for economic renewal.

“Leveraging the power of our differences serves as a catalyst for delivering value and quality in all we do,” says Cleveland Public Library’s Corchado. “Leveraging our differences is our way of doing business.” And business is booming, thanks to diversity management and the efforts of the Greater Cleveland Partnership and its members to include all groups in the region’s revitalization.

“Whether it’s healthcare or higher education, the objective is to have an environment that leverages all of the organization’s talents,” says Perkins of University Hospitals. “It promotes innovation, creativity and equity for everyone, particularly those that have been underrepresented for so long.”

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Q. Why are companies making an effort to track suppliers owned by LGBT people or people with disabilities? Is supplier diversity really innovative or is it just politically correct?

A. Over the last two years, DiversityInc has seen more than a 10 percent increase in the percentage of spend with LGBT-owned businesses, and more than a 25 percent increase of spend with businesses owned by people with disabilities.

Innovative companies know that in order to be competitive and relevant in the marketplace, they must understand and solicit emerging-market customers such as LGBT people and people with disabilities, as well as allies to these groups. In order to do this, they are seeking more partnerships with these suppliers.

Companies want their customer bases to equal their supply bases. We know that the demographics of our country and global reach are changing and a corporation’s supply base is increasingly diverse. The LGBT population has been estimated by many sources to be about 10 percent of the total population, but its reach, through relatives and friends who are supportive, is considerably greater. In the United States, about 12 percent of the population has an ADA-defined disability. As the population ages, this figure is expected to increase.

Supplier diversity is not a social issue but an emerging-market demographic that will add to the corporate bottom line. Businesses seeking to enhance their supplier-diversity programs through partnerships with LGBT-owned businesses or businesses owned by people with disabilities should consider becoming members of either the US Business Leadership Network (USBLN) or the National Gay & Lesbian Chamber of Commerce (NGLCC). Both groups certify small businesses and allow larger corporations to interact with these suppliers.

–Amber Aboshihata, Director of Data Analysis, and Adriene Bruce, Vice President of Consulting

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Although the rest of the country may be slow to recognize it, the Twin Cities of Minneapolis and St. Paul are no cultural backwater. Changing demographics and economic prosperity are putting the region in the same league as the nation’s top cultural centers. Two area companies—lender Wells Fargo and law firm Faegre Baker Daniels—are among those leading the charge to ensure the area’s long-term prosperity by making diversity a priority in everything they do. The results are encouraging.

Minnesota is already home to 20 Fortune 500 companies—more per capita than any other state—and Minneapolis/St. Paul is the fastest-growing metro area in the Midwest. Boasting a healthy job market, lower-than-average unemployment and high wage growth, the Twin Cities’ growth is unlikely to slow down. The Metropolitan Council forecasts that by 2040, employment will grow 37 percent and the region’s gross metro product will reach a staggering $400 billion. “That would represent 1.5 percent of the U.S. gross domestic product,” according to Twin Cities Business magazine. “A significant portion considering the Twin Cities is home to less than 1 percent of the national population.”

Such growth is shifting the demographics of a predominantly white state. Between 2000 and 2010, Minnesota’s Latino, Black and Asian population grew by 55 percent and is projected to more than double over the next 30 years. And the vast majority of this non-white population will be concentrated in the Twin Cities. If the area is to succeed, it will need to transform this economic and cultural wealth into an inclusive community that continues to thrive, says Lisa Tabor, executive director of the St. Paul–based CultureBrokers Foundation. “In an intercultural city, residents and organizations creatively harness their diversity and use it as a tool to build a more prosperous future for all,” Tabor writes in a recent editorial. Corporations are banking on the idea that the key to success lies in maintaining a diverse workforce, championing the causes of underrepresented groups and reaching out to traditionally underserved communities.

A Diverse Workforce

As one of the 100 largest law firms in the United States and the largest in Minnesota, Minneapolis-based Faegre Baker Daniels sees diversity as a partnership with the wider community. According to their diversity policy, “Diversity and inclusion is not something that any one individual—or firm—achieves on their own.” With collaboration in mind, Faegre was a founding member of Diversity in Practice, an association of 28 law firms and 12 corporate legal departments that work to “attract, recruit, advance and retain attorneys of color in the Twin Cities legal community.” The association offers professional development, networking opportunities and summer clerkships for Black, Latino and Asian first-year law students. The firm has hired 28 summer associates as a result of these clerkships; after the summer, more than 90 percent of students receive offers to return to the firm for a second year.

These initiatives are helping to recruit bright law students from diverse backgrounds to the city. “We’re not New York; we’re not D.C. We don’t have the critical mass in population,” says Kristine McKinney, director of Diversity & Inclusion at Faegre Baker Daniels. “But we’ve created that through Diversity in Practice.” And the effort is working: 36 percent of the firm’s partners, attorneys and associates are women, and nearly 11 percent are Latino, Black, Native Hawaiian, Asian, American Indian, openly LGBT or a person with a disability.

Wells Fargo also prides itself on maintaining a diverse workforce. Nationally, 59 percent of the bank’s employees are women and 36 percent are Asian, Black, Latino, American Indian or Native Hawaiian. Employees will often recruit from within their communities, says David Kvamme, Minnesota Great Lakes regional president at Wells Fargo. The bank also makes promotion and advancement a priority for employees from different cultural backgrounds and has invested in programs to ensure their success. Since 2009, Wells Fargo has contracted with English Proficiency Systems, a woman-owned business.

Efforts are also being made to promote and recognize the achievements of women. In 2012, Faegre was one of 50 U.S. law firms to receive Gold Standard Certification by the Women in Law Empowerment Forum in recognition of the firm’s number of women in top leadership roles. “Women participate in every level of leadership at the firm—as members of the firm’s executive committee, management board, practice group leaders, office managers and chief executives,” says McKinney. Faegre ensures retention through groups like the Women’s Forum for Achievement, which promotes networking, leadership development and ties to professional associations.

Advocacy & Outreach

Faegre’s volunteer and pro bono efforts demonstrate a commitment to advocacy on behalf of traditionally underrepresented groups. In 2010, the Southern Poverty Law Center asked a team of Faegre lawyers to partner in an investigation into anti-gay policies and harassment in Minnesota’s largest school district. A settlement was reached in 2012 that granted new protections for LGBT students and provided a national blueprint for future advocacy. “The decision to go forward was consistent with the firm’s longstanding pro bono priorities, which include public-policy advocacy to effect systemic change, and protection of individual civil rights,” says McKinney.

In the same spirit, Wells Fargo believes that a successful company recognizes the needs of all members of the population. “We are working to bring a sharper focus to finding solutions to the social, economic and environmental issues faced in the communities we serve, and our diversity and inclusion efforts are an important component of this work,” says Jon Campbell, executive vice president of Wells Fargo’s Social Responsibility Group. Banking services like bilingual phone operators, a multi-language Internet site and the first-ever Hmong-language ATMs provide special outreach to the Twin Cities’ diverse demographic. “In some of our stores here in the Twin Cities metro area, there are five or more languages spoken,” says Kvamme, “which helps us ensure that customers feel welcome.”

Community Giving

Employees also play an important role in corporate giving. The bank has contributed at least $10 million annually to Minnesota nonprofit organizations, local schools and community events for the past six years. Fifty Twin Cities–based employees volunteer to sit on the bank’s Community Funding Council for three-year terms. They evaluate grant applications from nonprofit organizations centered on local issues including English-language learning programs for job seekers, violence-prevention programs for at-risk teens and kindergarten-readiness programs for children of low-income working families.

Faegre promotes a robust community-service ethic including a volunteer mentorship program with Lincoln International High School and the International Education Center, which serve the cities’ large immigrant and refugee populations. But these efforts are not handouts, says McKinney. “We believe that diversity makes us a better place to work. As a result of the firm’s community-service programs, firm employees often have a heightened awareness of community needs, an increased opportunity to interact with diverse groups and individuals and a greater understanding of how they can be more involved in our community.”

Wells Fargo has been involved in community programs as a partner in the Midtown Greenway project, which revitalizes low-income and traditionally underserved parts of the city. “The success of diverse neighborhoods and business owners contributes to the vitality and vibrancy of the entire community,” says Kvamme. It’s also creating a marketplace for minority- and women-owned enterprises. Located in the Midtown Exchange Building, the Midtown Global Market currently hosts 64 MWBEs.

As the regional economy continues to grow and demographics begin to shift, the Twin Cities have the opportunity to become a model in multiculturalism and urban renewal. It’s clear that area companies like Wells Fargo and Faegre Baker Daniels are committed to making sure that no group is left behind. They believe that inclusion makes not only their companies but the whole community stronger. “Make no mistake, interculturalism takes hard work and clear vision,” writes Tabor. “But the return on that investment of time and labor is profound.”

The post In the Twin Cities, Diversity & Economic Growth Go Hand in Hand appeared first on DiversityInc.

A diverse supply chain not only adds different solutions and a variety to goods and services but it also can reinvigorate communities. Doing business with small- to medium-sized MBEs and WBEs fuels economic growth and gives local customers more disposable income to spend, resulting in greater revenue potential.

In the 1,405-word article The Business Case for Supplier Diversity, supplier-diversity leaders from four companies that excel in this area discuss how they make the business case for supplier diversity. The heads of supplier diversity at Ameren, Toyota, Cox Communications and Walmart spoke with DiversityInc’s Luke Visconti, CEO, and Barbara Frankel, senior vice president and executive editor, in a roundtable.

Readers will learn:

• Why Cox Communications views supplier diversity as an investment for long-term growth
• How Toyota uses its diverse chain of suppliers to drive innovation for its products and increase business advantage
• Why Walmart started an investment fund to help grow its MBEs and WBEs
• How Ameren expanded its supplier-diversity initiatives to include Tier II suppliers

Read The Business Case for Supplier Diversity on DiversityIncBestPractices.com.

For more on supplier diversity, read A Win-Win: Companies Thrive, Communities Get a Boost With Supplier Diversity and The 2012 DiversityInc Top 10 Companies for Supplier Diversity.

The post Supplier Diversity: How Can You Make the Business Case? appeared first on DiversityInc.

Toyota Motor North America is No. 41 on The 2012 DiversityInc Top 50 Companies for Diversity list.

The post Maintaining and Growing Diverse Suppliers (VIDEO) appeared first on DiversityInc.

“Small businesses are the backbone of our economy. They are central to our identity as a nation. They are going to lead this recovery.”

–President Barack Obama

It was the perfect match. Marriott International was in the market for unique in-room products to offer guests traveling with small children; entrepreneurs Allison Costa and Amy Feldman were seeking clients for their newly patented Coverplay, a stylish slipcover that fits over a child’s play yard. But it wasn’t until last year, when several executives at Marriott hotels brought Coverplay to the attention of leadership, that the business connection was made and a deal struck. Today, Costa and Feldman’s Coverplay products are available at 2,500 Marriott-owned hotels, and the California-based women-certified enterprise has grown more than 300 percent over the past year.

“It was a win-win-win,” says Feldman, “and every step of the way, Marriott was right there helping us.”

Fostering business growth isn’t new to Marriott International and the other corporations that earned a spot on The 2012 DiversityInc Top 10 Companies for Supplier Diversity. Started 83 years ago as a root-beer stand in Washington, D.C., Marriott has been transformed by its leadership into a global hospitality giant that currently spends 15 percent of its annual procurement budget with companies owned by veterans, LGBT people, women, Blacks, Latinos, Asians and other businesses owned by traditionally underrepresented groups. Marriott is No. 21 on The DiversityInc Top 50 Companies for Diversity list and No. 1 on The DiversityInc Top 10 Companies for Supplier Diversity.

“We really want to move our supplier-diversity program to the next level,” says Stéphane Masson, Marriott’s recently named vice president of global procurement. Having spent $2.3 billion with diverse suppliers in the United States alone over the past five years, “we now want to leverage our [North American and global supplier-diversity] efforts as one and show our commitment to the vendor community,” he says.

Best Practice No. 1: Have Top-Down Commitment

Key to supplier-diversity success is unwavering leadership commitment. Among The DiversityInc Top 10 Companies for Supplier Diversity, all:

• Have CEOs who personally sign off on supplier-diversity goals and metrics, compared with 86 percent of the DiversityInc Top 50 companies 
• Audit their supplier-diversity numbers
• Mandate that supplier-diversity metrics be included in every request for proposal (RFP)

These leaders also spend an average of 13 percent of their Tier I (direct contractor) spend with minority-owned business enterprises (MBEs) and 11 percent with women-owned business enterprises (WBEs).

The reason: MWBE procurement has a direct and positive economic impact on the communities where corporations do business, as diverse suppliers tend to hire more Black, Latino and other underrepresented employees than their white, male counterparts.

For locally driven companies, such as service provider Cox Communications, “having a diverse vendor base in the communities we serve has tremendous value for us,” says George Richter, vice president of supply-chain management. Cox Communications is No. 25 in the 2012 DiversityInc Top 50 and No. 8 in The 2010 DiversityInc Top 10 Companies for Supplier Diversity.

California-based utility PG&E concurs. “We very much see ourselves as part of the economic community,” says Supplier Diversity Director Joan Kerr. PG&E, No. 7 in The DiversityInc Top 10 Companies for Supplier Diversity, spends 25.6 percent of its total annual procurement dollars, or nearly $1 billion, with Tier I and II MWBEs, up from 23.9 percent in 2009. 

DiversityInc’s Top 10 Companies for Supplier Diversity also realize that business opportunity is a two-way street, with MWBEs helping corporations build brand loyalty. With women making about 85 percent of all household purchasing decisions (Adweek) and the buying power of Blacks alone expected to hit the trillion-dollar mark next year (Selig Center for Economic Growth), “it’s our responsibility to show that we value them,” says Pamela Prince-Eason, vice president of worldwide procurement at Pfizer (one of DiversityInc’s 25 Noteworthy Companies) and board chair at the women-certification organization Women’s Business Enterprise National Council (WBENC).

As a result, the number of minority- and women-owned businesses—and the number of people they employ—is steadily rising. The U.S. Census Bureau’s recently released report found that minority-owned businesses jumped 45.6 percent to 5.8 million between 2002 and 2007—more than twice the national growth rate of all businesses. Their annual receipts increased 55.6 percent over the same five-year period with receipts of $864.2 billion in 2007. And the 768,147 minority-owned companies with paid workers in 2007 employed nearly 6 million people. In contrast, the number of white-owned businesses rose by just 13.6 percent, to 22.6 million, with annual receipts of $9.4 trillion in 2007.

In 2007, for the first time in history, the Census Bureau began collecting data on veteran-owned businesses. A formidable force, they accounted for 2.4 million companies and had receipts totaling $1.1 trillion in 2007, with the largest percentage of businesses in the professional, scientific and technical-services and construction sectors.

The number of women-owned businesses increased as well, up 20.1 percent since 2002 to 7.8 million in 2007. Women-led companies “significantly contribute to our tax base and to employment,” explains Dr. Marsha Firestone, president and founder of the WBE-certification group Women Presidents’ Educational Organization. In 2007, there were 911,285 women-owned employer firms, employing 7.6 million people with a total payroll of $218.1 billion.

In the latest Women Presidents’ Organization survey of the 50 fastest-growing women-led companies in North America (those whose annual revenue grew by $30 million between 2005 and 2009), researchers found women business owners are innovative, nurturing and tend to:

• Recruit top talent—78 percent say “hiring the right people” contributed to their company’s expansion
• Be growth driven—71 percent agree or strongly agree that their goal from the start has been to build a large company
• Inspire others—64 percent report that their “ability to motivate employees” is a key characteristic for success
• Be adaptable—More than half (61 percent) say they weathered the economic downturn by shifting business strategies

In addition, “it has been our experience that diverse suppliers are very creative,” explains a company spokesperson for Eastman Kodak Co. “[They] have a different perspective of how to get things done.”

Given the current economic climate, how else can corporations open contract-bidding opportunities to vendors from all backgrounds?

Best Practice No. 2: Set Metrics to Ensure Accountability

Among The DiversityInc Top 10 Companies for Supplier Diversity, all audit their supplier-diversity numbers and have the head of supplier diversity report to the chief of procurement to ensure accountability. At Marriott International, for example, targets are set for diversity metrics and measurements are reported quarterly to a board-level committee.  

To avoid the cookie-cutter approach, Cox Communications sets individual goals that differ for each of its business systems based on size. “Then we incent [through performance bonuses] against those supplier-diversity targets, which are reported monthly and quarterly,” says Richter, noting that the supplier-diversity department, which he oversees, shares the report with the diversity council that President Pat Esser sits on. Beyond mandating that supplier diversity be part of the competitive-bidding process, Cox has created a sophisticated scorecard that “makes sure we’re putting the appropriate weighting as it relates to … diverse vendors … to measure the benefits of selecting them,” he says.

Best Practice No. 3: Integrate Supplier Diversity Throughout the Organization

This is standard operating procedure for all of The DiversityInc Top 10 Companies for Supplier Diversity. Take PG&E’s “line-of-business champion” program: After each business-unit leader establishes realistic annual goals that are signed off by senior executive leaders, an internal champion for each unit ensures that supplier diversity is integrated throughout the team. This way, “we have an entire officer corps with supplier-diversity commitments,” says Kerr.

In addition to working hand in hand with the sourcing team, Indianapolis-based WellPoint’s supplier-diversity department works closely with sales and marketing throughout the RFP process. Also, WellPoint (No. 34) has begun identifying enterprise-wide commodity champions “who will serve as the eyes and ears of supplier diversity,” says Supplier Diversity Director Brenda Burke. “They will keep their finger on the pulse of opportunities, serve as liaisons between [the supplier-diversity department] and their commodity stakeholders and assist with diverse spend targets for those areas.”

To raise awareness and understanding, Eastman Kodak Co. provides internal employee supplier-diversity training; all individuals who are involved in making purchasing decisions go through the program. WellPoint, which has set annual supplier-diversity spending goals of 10 percent in 2010, 12 percent in 2011 and 14 percent in 2012, plans to roll out a “supplier diversity 101″ program for all associates that will answer basic questions such as “What is the value of supplier diversity? What’s the business case? Why is it important to WellPoint?” explains Burke.

Some companies are tapping resource groups to help integrate supplier diversity. To begin sourcing products/services from LGBT-owned businesses, PepsiCo’s global procurement and supplier-diversity teams partnered with EQUAL@PepsiCo to jointly sponsor a supplier-diversity roundtable in Chicago produced by the LGBT-certifying organization National Gay & Lesbian Chamber of Commerce.

“We want to make sure our supply base is as diverse as our internal talent,” says PepsiCo’s Supplier Diversity Director Chris Knox. “And when supplier diversity is integrated into the strategic-sourcing process, it makes it much more sustainable.” In 2009, PepsiCo’s annual supplier-diversity spend was $1.3 billion (Tier I and Tier II), up 4 percent from the previous year.

Best Practice No. 4: Invest in MWBE Education/Training

PG&E is strengthening its investment in its suppliers and helping them gain a competitive edge by educating MWBEs about sustainability. The utility includes MWBEs in not only new green-building project opportunities but also in sharing information about green trade shows and providing online and in-person environmental courses to reduce their carbon footprints. “These are the kinds of requirements that corporations are putting in their RFPs and scorecards,” says Kerr. “PG&E has set an internal goal for 75 percent of RFPs to have a green component.” PG&E sees this as an investment to make sure MWBEs “aren’t getting left behind,” says Kerr. “Sustainability is a global trend … and it will very soon become a table stake.”

Companies often sponsor select suppliers to attend executive-education programs, available at Dartmouth’s Tuck School of Business or Northwestern University’s Kellogg School of Management, or Lean Six Sigma seminars. After PepsiCo invested $4,000 to send two suppliers through Sigma Six, the companies have seen a benefit of $1.2 million in savings by eliminating inefficiencies in their operations.

Best Practice No. 5: Share In-House Expertise With MWBEs

Kodak’s suppliers have free access to the know-how of its quality engineers, who will review vendors’ processes and make money-saving recommendations. Cox experts, working through the Georgia Minority Supplier Development Council, offer member vendors workshops on, say, the best ways to respond to RFPs or what to know about legal contracts. Chicago-based Health Care Service Corp. (HCSC) (No. 19) began providing marketing and procurement-software training to its suppliers. “One of the challenges … they were having was providing the right feedback when they were bidding for a particular job,” says Director of Supplier Diversity Malinda Burden. Since initiating the program, seven new MWBEs have been awarded contracts from HCSC (No. 20 in the DiversityInc Top 50) in the past year.

Best Practice No. 6: Protect Your Investment, Provide Financial Support

Many companies nowadays are adjusting payment terms from 30 days to 45, 60 or 90 days to keep suppliers in business. Until lawmakers pass some version of the Small Business Bill, companies such as Minneapolis-based Cargill are coordinating loans with MWBEs so they can secure additional lines of credit.

“We’ve had some diverse suppliers that, unfortunately, didn’t make it through the financial crisis,” admits North American Procurement Leader Roger Larsh. “So one of the things we’ve had to do is put more rigor around … putting stronger plans in place to successfully … support our suppliers and help them grow with us.” Over the past year and a half, the agribusiness has worked closely with a new WBE to develop a strategic plan that’s helped it expand to the point where it’s now doing $2 million a month in business with Cargill and employing between 30 and 40 people.

Financial support can also come in the form of expertise. At Atlanta-based Cox, as part of the one-year Georgia’s Mentor Protégé Connection program, an MBE has been paired up with Cox’s finance and accounting teams with the goals of improving the company’s financial infrastructure and sharing metrics. 

Best Practice No. 7: Tap Suppliers for Solutions

By listening to advice from one of its hardware suppliers, Cox was able to improve the way in-store customers are directed to the next service representative when waiting in line. Similarly, PepsiCo gets cultural feedback from MWBEs during taste tests to determine flavoring preferences among various racial/ethnic groups.

Many companies report that Tier I vendors will often make suggestions to use Tier II diverse suppliers, and Cargill is heeding the call. This year, Cargill reached out to these suppliers and brought in a mix of new MWBEs into the fold, representing $8.5 million to $9 million in new spend. “Hopefully, these second tier will turn into first tier,” says Larsh.

Best Practice No. 8: Consider Consortiums

Often, MWBEs don’t individually have the clout to win large contracts, but when combined with other MWBEs, they do. And supplier-diversity consortiums help them build capability so they can take on larger contracts. Companies often host supplier-diversity events to help vendors form collaborative contracting relationships, and purchasing managers can tap contracting consortiums. Example: When 23 information-technology companies wanted to bid for portions of the U.S. Air Force’s $24-billion NETCENTS 2 contract, they joined forces under the Minority Information Technology Consortium (MITC), whose members are classified as either an SBA 8(A), HUB zone, business owned by veterans with service-acquired disabilities, WBE, small disadvantaged business or veteran-owned business. Although the deal is still pending, the consortium has opened the doors of opportunity for these businesses.

“A company would have great difficulty winning a contract even twice its annual revenues, [but] a consortium translates into strength in numbers and is a way of formalizing how we pool our collective capabilities,” says Dr. Randal Pinkett, chairman and CEO of MITC-member company BCT Partners and the fourth-season winner of “The Apprentice.”

Best Practice No. 9: Partner With Regional or Industry-Focused Groups

Several years ago, HCSC partnered with Chicago United in the Five Forward Initiative, a local MWBE-development commitment to work with five companies over a five-year period. As a result, the initiative has helped HCSC bring aboard a new law firm and staffing agency—and moved its supplier diversity to the next level.

Industry-focused groups such as the Financial Services Roundtable Committee on Supplier Diversity (FSR-SD) also move the dial. This 10-year-old peer group of National Minority Supplier Development Council (NMSDC) members consists of 43 of the largest financial-services companies in the United States. FSR-SD is creating a supplier-diversity spend accounting standard to help better benchmark the financial industry, and it has hosted a capital summit to facilitate relationships with private equity and venture capital firms, among other initiatives.

In addition, Cargill, which spent close to $300 million with North American MWBEs this past year (or 15 percent of total spend), regularly hosts the local supplier-diversity council events at its facilities while sharing information about its sourcing initiatives. “This is much more productive than saying ‘Go look at our website,’” says Larsh.

This special report is sponsored by:

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Despite the lingering economic slump, Berchet “Dottie” O’Daniel Mays was able to buck the trend and hire six new employees for her telecommunications firm earlier this year. The president and owner of Call One, Mays attributes the recent hires to a supplier contract that Wells Fargo awarded the company in April. Her Cape Canaveral, Fla.–based business will supply and repair headsets throughout the banking giant’s call centers, on trading floors and throughout Wells Fargo. Wells Fargo is No. 33 on The 2012 DiversityInc Top 50 Companies for Diversity list.

Call One received the job by offering free shipping and increased efficiency. But that’s not the whole story. It’s one of a growing number of ways that corporate America is supporting minority- and women-owned business enterprises (MBEs and WBEs), and it’s having a ripple effect. When large companies obtain goods and services from traditionally underrepresented groups, both parties thrive and the local economy gets a boost. Everyone wins.

As these groups gain traction and visibility, more corporations are embracing the use of Black-, Latino-, Asian- and women-owned suppliers as a business strategy. Some companies have expanded their supply base to include companies owned by veterans, LGBT people and people with disabilities. Last year, the U.S. Census Bureau reported that business ownership by Blacks, Latinos and Asians is increasing at more than twice the national rate, and women-owned businesses have increased by more than 20 percent from 2002 to 2007.

‘Just Good Business’

“Supplier diversity is just good business,” says Ramona Blake, diversity and inclusion manager at Public Service Enterprise Group (PSEG), an energy company based in Newark, N.J. These suppliers bring unique insights and an entrepreneurial energy that helps companies retain a competitive advantage. Plus, contracting with MBEs and WBEs has a “multiplier effect” that increases spending and consumption and promotes job creation on a local level, says Blake.

At Cargill—an agricultural producer with more than 2,500 suppliers including multinational corporations and farms in developing countries—a diverse supply chain is a chance to engage local markets and participate in community activities. “We’re a global company,” says John Taylor, Cargill’s director of supplier diversity. “We would like our supplier base to reflect that.” These vendors offer an added benefit to Cargill’s customers, adds Taylor. “At the end of the day, we’re talking about being able to enhance and create additional jobs within the communities that we live and work.”

Health Care Service Corporation (HCSC, No. 19 in the DiversityInc Top 50) sees direct benefits from its relationship with diverse-owned businesses as they in turn become local ambassadors of the company’s values. “We’re committed to our diverse community,” says Malinda Burden, HCSC’s director of corporate vendor management and system management. “We are committed to partnering with minority-owned, women-owned and other diverse businesses because it adds value to what we do, as well as promotes prosperity in the communities we serve.”

Wells Fargo has a similar appreciation for its supplier-diversity program, which expanded in 2009 to include veteran-, disabled veteran– and LGBT-owned businesses. It has made employees more engaged, increased profits and reduced bid response time, says Sonya Dukes, Wells Fargo’s senior vice president and director of corporate supplier diversity.

“When our suppliers have different experiences, perspectives, cultures and backgrounds, we receive the most innovative, creative and cost-effective products and services available.”

At Minnesota-based SUPERVALU, a grocery chain with more than 2,500 retail stores nationwide, executives see supporting diverse businesses as a natural extension of the corporate mission. “From a macro perspective, working with diverse businesses provides increased accessibility and familiarity to the local community and stronger products and services, along with increased innovation and flexibility,” says Michael A. Byron, corporate vice president of supplier diversity. Byron is a board member of the Midwest Minority Supplier Development Council.

Emerging Markets

Any time demographics shift, executives hope that suppliers from traditionally underrepresented groups will offer new ways to reach populations whose buying power is on the rise. According to the Selig Center for Economic Growth, the combined purchasing power of Blacks, Asians and American Indians was $1.6 trillion last year. By 2015, these groups will represent a combined spend of $2.1 trillion, accounting for 15 percent of the nation’s total buying power. And last year, the U.S. Latino market had grown to $1 trillion, larger than the entire economies of all but 14 countries in the world.

With the rapid growth of a diverse population—roughly one of every six people living in the United States is of Latino origin—these companies are recognizing the value of relationships with MWBEs that may have their fingers on the pulse of a multicultural consumer base.

For example, SUPERVALU’s partnership with Catallia Mexican Foods, a Latino-owned supplier, allows it to sell private-label tortillas to its customers at a competitive price. Highlighted in the company’s 2011 Corporate Social Responsibility Report, SUPERVALU notes that Catallia’s knowledge of Latino food trends is helping it provide “locally relevant” products.

“Additionally, this partnership led to cost savings for SUPERVALU in this product category, while also significantly growing Catallia’s business,” the report states. “It’s a true win-win for both companies.”

Cargill also benefits from partnering with a multicultural supply base. “MWBEs have very good insight with regard to the products and services that they are offering and can bring that market intelligence to Cargill,” says Taylor. Looking to capitalize on this market intelligence, this year the company has committed to increasing its supplier-diversity spend by 9 percent each year through 2015. Wells Fargo has a goal of spending $1 billion annually with diverse-owned business enterprises, starting in 2013.

Last year, PSEG spent 5.3 percent of its annual direct-contractor procurement budget with MBEs and 6.7 percent with WBEs. HCSC, which operates Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas, is spending 5.2 percent of this year’s direct-contractor procurement budget with MBEs and 7.4 percent with WBEs. That’s compared with an average of 8.5 percent spent with MWBEs by The 2011 DiversityInc Top 10 Companies for Supplier Diversity.

Economic Downturn Makes Diversity Imperative

In uncertain economic times, sometimes support is about keeping diversity in mind when making tough financial decisions. When Cargill recently reduced its number of select suppliers from 17 to 12 to improve efficiency, no Black-, Latino- or women-owned businesses were cut. All things being equal, says Taylor, Cargill would rather not lose a supplier from a traditionally underrepresented group.

Pat Hemingway Hall, president and CEO of HCSC, echoed these sentiments. ”Having diverse and inclusive perspectives and practices in our organization will be even more crucial in the face of unprecedented economic challenges,” says Hall. “To be as innovative as possible, we must capitalize on the talents and skills of all of our employees. At the same time, we need to continue to anticipate and respond effectively to the needs of our increasingly diverse customer base who will be facing their own unique challenges during this difficult time.”

With the multicultural population experiencing such growth, it’s no wonder more and more businesses are embracing supplier diversity to stay competitive. DiversityInc reported a 50 percent increase in companies including supplier diversity in their RFPs between 2004 and 2009.

Long-Term Investment/Growth

But the commitment to a diverse supply chain goes deeper than financial support. These companies are leading the charge with a host of innovative programs and resources to ensure the long-term growth of their supply base including mentorship, education and networking programs.

Wells Fargo’s Leaders of Change program takes a holistic approach to supplier engagement and development. It includes sponsorship of MWBE suppliers to attend leadership training at Dartmouth’s Tuck School of Business and Northwestern University’s Kellogg School of Management; partnership with industry advocacy organizations to provide classroom training to suppliers; one-on-one coaching and mentoring opportunities for MWBEs with expert consultants in business-strategy planning and operational improvement; and development of young and emerging entrepreneurs through university and organizational collaborations. The anticipation is that investing in these suppliers will have a ripple effect.

“To succeed in financial services, we must be committed to serving our diverse customers, team members and suppliers,” says Wells Fargo’s Dukes. “We believe that together with our diverse suppliers, we can contribute to the long-term economic sustainability of our communities.”

With an eye toward the community, many companies support the growth of these suppliers by investing locally. For example, PSEG fosters minority- and women-owned enterprises in its home state of New Jersey. Annually, the company pairs up with a member of the New Jersey Association of Women Business Owners to offer one-on-one mentorship, employee training, marketing contacts, shared tickets to industry events, and more. Similarly, Cargill provides tuition assistance to select suppliers through the Wisconsin Iowa and Central Illinois Minority Supplier Development Council’s business program.

In an effort to strengthen the regional economy, health insurer HCSC has joined Chicago United’s Five Forward initiative to mentor five area vendors from underrepresented groups over five years. To date, the company has reached platinum status in its efforts to build businesses of scale that reflect Chicago’s diverse demographics. HCSC requests that its prime vendors have a minority program and report Tier II spend on a quarterly basis. Today, at least 35 of the company’s top vendors report Tier II spend, says Burden.

SUPERVALU’s company mission hinges on what the company calls being “hyper local.” Through supplier diversity, the company is seeing firsthand how supporting businesses owned by traditionally underrepresented groups has a tangible effect on the local community. Of the company’s 2,800 registered MBE and WBE suppliers, 60 percent have a formal community-outreach program and nearly 20 percent have their own supplier-diversity programs.

Cargill aims to add Tier II requirements to new sourcing contracts in North America. If a supplier from a traditionally underrepresented group isn’t ready to contract with them directly, the company will try to partner them with a select supplier, says Taylor. The goal is that with mentoring and support, today’s Tier II vendors will become tomorrow’s Tier I suppliers.

This kind of long-term, goal-oriented support makes a huge impact on small-businesses growth. A Wells Fargo–sponsored training session on capacity building was a great opportunity for Alpa Patel, CEO of We Print, a minority- and woman-owned printing company in Orange County, Calif. “It taught me to work on my business, create strategic partnerships to build capacity to scale and grow,” says Patel. “The overall experience has been tremendous for me personally and for my business. It was the lifeline I needed to take my business to the next level.”

Yet financial and educational support won’t expand the reach of these suppliers unless they have access to company decision makers. Keeping this in mind, PSEG hosts annual supplier-diversity fairs at no charge, giving minority- and women-owned enterprises the access they need to begin a relationship with the company. As a direct result of these procurement events, PSEG has awarded more than 37 contracts to new MBEs and WBEs, says Blake.

In the fall, Cargill hosted the Twin Cities’ largest-ever supplier-diversity symposium. Nearly 250 MWBEs attended, free of charge. “It’s their opportunity to talk directly with our sourcing departments,” says Taylor. In addition to face time with Cargill staff, attendees were offered a number of business resources, which included a seminar on how to bid on government contracts and guidance about securing financing.

Ensuring Accountability

With so much invested in diverse businesses and so much at stake in the local community, corporations are taking pains to ensure the long-term success of their MWBE partners. Many of these companies use quarterly reporting, annual procurement goals and internal training to make diversity a priority. But one of the most important factors in nourishing supplier diversity is the involvement of company leadership.

At Wells Fargo, diversity starts with the board of directors, CEO and senior management and permeates the entire organization. Dukes says, “Increasing spend with minority- and women-owned businesses has been a corporate goal since 2006.”

At PSEG, internal goals are developed on the executive level and are tied directly to performance reviews and increases.

HCSC’s commitment to MWBEs extends from the board of directors, CEO and senior management to the entire organization. Regular reporting to the leadership team, establishing a corporate diversity goal and reporting yearly to the corporate board keeps HCSC’s supplier-diversity program on track, says Burden.

This kind of top-down commitment is crucial to creating a company-wide understanding of the value in diversity. “Our commitment to supplier diversity comes from the CEO on down,” says Cargill’s Taylor. “We report monthly, quarterly and annually all the way up to the C-suite.”

In order to better monitor goals and continue to tap diverse vendors, PSEG contracted with SciQuest to streamline its records and build an online supplier-management database. Thanks to the new system, they’re able to report that more than half of their 8,700 registered suppliers are diverse.

Cargill also brought in outside expertise, inviting leaders from the Women’s Business Enterprise National Council and the National Minority Supplier Development Council to meet with company executives and sourcing teams. As a result of these meetings, “there’s a heightened awareness of supplier diversity,” says Taylor.

In addition to bringing in external support and advice, most of the companies have in-house teams that ensure diversity throughout the supply chain. “Our best overall asset is our people,” says Blake, referring to PSEG’s teams that follow procurement contracts from start to finish to assure that MWBEs are sourced and included. Not only did the presence of these interdepartmental review teams increase spend with these suppliers, it “opened the lines of communication,” says Blake, resulting in a better understanding of diversity throughout the company.

Similarly, SUPERVALU has found that its communication has flourished because of its diversity program. Byron says, “Relationships are cultivated as a result of information sharing and awareness.” SUPERVALU has received awards from the Women’s Business Development Council, the Midwest Minority Supplier Development Council and the U.S. Hispanic Chamber of Commerce.

When diversity and inclusion permeate corporate culture, the results are tangible. While strategic procurement typically starts with an eye toward reducing costs and increasing value, companies are finding that a diverse supply chain leads to a healthy business. Women- and minority-owned business enterprises have the capacity to be real allies in a diverse and constantly evolving market. In addition, they act as regional ambassadors and proof that companies are making the sustainable growth of the populations in which they live and work a major priority. It’s imperative that contracting with diverse businesses remains a focus, says Blake: “It will ensure long-term success for our local economy, customers, stakeholders, employees and communities.”

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