By Pamela Randall, Vice President of Staffing, AgreeYa Solutions
As more and more public, private and government organizations realize the value and social impact of partnering with a woman- or minority-owned business enterprise (WMBE), there’s never been a better time to become a certified diverse supplier. While some of the largest companies in the world such as Google are just beginning to address the need for a supplier diversity program to help with dismantling its dismal diversity paradigm, companies like General Motors (GM), Johnson & Johnson and Walmart have long been ahead of the curve, reaping myriad benefits, which include attracting a more diverse customer base and giving their reputation a boost by demonstrating social responsibility. In fact, GM was the first automotive company in the U.S. to incorporate a supplier diversity program in 1969, primarily as a way to help provide jobs for the local community after the 1968 race riots in Detroit, which left more than 40 people dead and hundreds injured. Since that time, GM has purchased nearly $62 billion in goods and services from tier one and tier two—direct and indirect—minority suppliers.
According to a study done by The Hackett Group, organizations that embrace supplier diversity are generating up to 133 percent higher return on their investments than organizations that have yet to get on board. Johnson & Johnson recognized almost two decades ago the importance of having a supplier diversity program to not only reflect its patients and customer base across the globe but also provide marketing, manufacturing and R&D teams with more substance for building on its world-class brand. Since the program was formally established in 1998, Johnson & Johnson spending with small businesses and diverse-owned suppliers has reached close to a billion dollars. Walmart, on the other hand, strives to embrace diversity in all aspects of operation, from store associates to the supplier partners it works with in order to secure low-priced products and services that create savings that are passed on to its worldwide consumers. In 2015, Walmart reportedly spent some $13.5 billion with women- and minority-owned businesses.
While it appears to be a win-win partnership for corporations and certified diverse suppliers, not all eligible companies have tapped into this advantageous scheme even though as a group they are growing in unprecedented numbers. SCORE, which works with small businesses and entrepreneurs, has created an infographic to visually show that women-owned businesses are growing at 1.5 times the national average, rising 67.8 percent since 1997, compared to 34.4 percent for companies owned by men. Within that same time frame, SCORE also indicates that the number of businesses owned by African American women has also grown—from 1 million to 3 million. Latino-owned businesses, too, are growing at twice the national average.
There are dozens of compelling reasons to go through the diverse supplier certification process, not to mention the fact that it can provide inroads into what has historically been a male, Caucasian-dominated world of business and commerce, particularly in the U.S. But, if that’s not reason enough, then consider these:
- Uncle Sam Wants You.
Though it may not be widely known, state and federal government agencies set aside a significant number of opportunities specifically for women, minority, veteran and disadvantaged businesses owners. In addition, for manufacturers that supply products and services to the federal government, diverse supply chains aren’t an option; they are a requirement—which means these companies must actively search for businesses certified as WMBEs to provide a percentage of their procurements.
- Corporate America Needs You.
In addition to the federal government requiring it, many large companies in corporate America are now requiring more diversity in their supply bases, often submitting quarterly or annual reports to measure their success in reaching diverse supplier inclusion goals. Sure, it may give their brand a boost by “doing good” but more and more companies realize that their customers are becoming increasingly more aware, educated and concerned about social issues that directly relate to the company, its products, services and practices. In other words, their customers are demanding more social responsibility.
- Minorities Will Support You.
Certification not only allows your company to take advantage of government contracting and corporate opportunities but also opens up avenues for reaching a broader customer base. Becoming a certified diverse supplier can likely create a natural kinship among minority groups in the U.S., which according to a study conducted by Jeffery Humphreys, director of the University of Georgia Selig Center, have a buying power that is growing at an exponential rate. In 2014, for example, African Americans, Asians and Native Americans had a collective buying power of $2 trillion, 117 percent higher than the $916 billion they had available to spend in 2000. Knowing they are supporting companies representing minorities may be reason enough for these groups to pledge their loyalty to your brand.
- You’ll Expand Your Network While Increasing Your Net Worth.
Organizations that certify WMBEs, particularly those that champion women business owners—like the Women’s Business Enterprise National Council (WBENC), WeConnect and Women Presidents Organization (WPO)—go the extra mile to help diverse suppliers succeed. These specialized groups often hold networking events that facilitate business opportunities for both the diverse supplier and those companies that are looking for them. Networking is vital to the success of every business and by becoming more visible among these groups, women business owners’ chances for success increase tenfold.
- Hollywood Will Love You and Young Entrepreneurs Will Be Inspired By You
According to a new report from the Kauffman Foundation, a national entrepreneurship nonprofit, for the first time in five years the rate of new business startups rose in the United States, with the largest annual increase in 20 years. It’s not only an important sign of economic recovery but also an indication that more people have confidence in their ability to succeed. Conversely, the lack of diversity at the top of corporate America is downright abysmal. Though the numbers of WMBEs are on the rise, Fortune reported in February 2014 that of the nation’s Fortune 500 CEOs only 4 percent are women and slightly over 4 percent minorities—African Americans, Asians, and Latin Americans.
Ironically, people in the U.S. gain great satisfaction from helping others achieve their goals, particularly the underdog. Rooting for the success of those who have the odds stacked against them is well documented in numerous studies as well as Hollywood blockbusters, from Erin Brockovich to The Pursuit of Happiness. There’s no hardcore science to explain why, but by pursuing your dreams against all odds, you’re likely to gain added confidence from a majority that’s consciously—or subconsciously—cheering you on and at the same time you’ll be inspiring countless others to do the same. And there may be no better time than right now.
Certification as a diverse supplier doesn’t provide you with a guarantee of success but it certainly can place you in a spotlight where others are far more likely to see you and appreciate you for your unique perspective and capabilities. The key is to first realize your own intrinsic value as a WMBE, then embrace it for the greater good.
ABOUT THE AUTHOR: Pamela Randall is the vice president of staffing at AgreeYa Solutions, where she is responsible for driving U.S. business growth through a comprehensive approach to staff augmentation and business solutions. Pamela’s success comes from understanding both sides of the equation – sales and delivery. Bringing the two components together has been fundamental to AgreeYa exceeding its clients’ expectations. Prior to joining AgreeYa, Pamela spent nine years leading regional operations for ManpowerGroup across California, Oregon and Washington state with increasing responsibilties, and revenues exceeding $120 million. She holds four Power Awards for business management along with several Circle of Stars awards. Pamela’s greatest pride comes from being a single mother of two incredible sons, and the privilege of leveraging the talents of her teams to achieve remarkable results.
About AGREEYA SOLUTIONS: AgreeYa is a global provider of software, solutions, and services focused on deploying business-driven, technology-enabled solutions that create next-generation competitive advantages for customers. Headquartered in Folsom, Calif., AgreeYa has more than 1,300 professionals across its 15 offices in eight countries. AgreeYa is a certified MBE/WBE with the California Public Utility Commission (CPUC) and the Western Regional Minority Supplier Development Council (WRMSDC). Over the last 16 years, AgreeYa has worked with 200+ organizations ranging from Fortune 100 firms to small and large businesses across industries. AgreeYa’s software portfolio includes SocialXtend (intranet and enterprise social collaboration), VDIXtend (desktop-on-cloud), Onvelop (unified enterprise collaboration and communication suite for mobile), Edvelop (single window collaboration and communication solution on mobile for 21st century learning) and Cogent (comprehensive end-to-end case management solution for collections agencies and law firms). As part of its solutions and services offerings, AgreeYa provides portal, content management, and collaboration on SharePoint/Office 365, cloud and infrastructure, enterprise mobility, business intelligence and big data analytics, product engineering, application development and management, independent software testing, and staffing (IT and risk/compliance) solutions. For more information, visit www.agreeya.com.