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Tuesday, October 1, 2013

This Biz of Supplier Diversity How To Do Biz With Corporate America ... Book Review

Book Review . Business . Diversity . Entrepreneur . Minority . Gill Law Firm . Corporate . Corporate America . Business Fable . Billion Dollar Round Table

I was sent a complimentary copy for review by Mr. A. Wayne Gill's marketing department, or Mr. Gill himself.



At the other spectrum of corporate involvement are corporations that see the minority mission and are acting in innovation ways to strengthen minority businesses and communities. These companies should be studied and emulated. One such company is Johnson's Controls, Incorporated,one of the eighteen Fortune 500@ members of the Billion-Dollar Roundtable.

CEO John Barth said in 2004 "Supplier diversity is about expanding opportunities for everyone.

Companies are swift to tell about their great commitment to supplier diversity and why it makes good business sense. However, in practice, their activities fail to match the rhetoric. This is not so for JCI, a corporation that is at the cutting edge of minority business development.

In March 2004, Bridgewater received the largest contract ever awarded to a minority company by Ford Motor Company.

American business is in need of more companies like JCI and Ford companies that understand the business case for diversity and have stepped forward boldly to capitalize and show leadership. These companies demonstrate the future of supplier diversity for any corporation willing to listen and learn.

Mr. Gills grandmother died the day "Tales My Grandma Told Me," was published. It was if she'd seen him over the goal line, and then went home to be with the Lord. His grandmother is still his entrepreneurial hero and her blood still courses through his veins.

Since writing Tales, his life hasn't been the same.

It's opened countless doors to speak and collaborate with many minority business owners, aspiring business owners, students and supplier diversity professionals.

His hat is off to all who is in the arena; who fight daily for equality of opportunity. We aren't there yet, but you make achievement of the goal possible.

The first principle that Grandma would teach minority entrepreneurs and business people is that business is business.

In order to succeed, minority-owned businesses must abide by and operate within the same principles that drive all successful businesses. This means that minority businesses must, among myriad responsibilities, create a product or service that satisfies a demand, reach its target audience through sales and marketing channels, grow its market share, create profit for its investors, and stakeholders, and innovate for future growth and opportunities. Setting aside issues of social injustice, for the discussion, there isn't one set of rules that apply to minority business and another set for others.

There are no shortcuts. All business must create value for their customers.

The myth of receiving business based primarily on ethnic background probably grew out of affirmative action programs that provided for minority set-asides in government spending. However, these programs have been under attack from the outset and have been seriously eroded through court challenges. Minority businesses must recognize that the words "set aside" and "quota" are almost dirty words in the world of twenty-first-century American business.

Within the realm of supplier diversity, the practice of quotas and set asides never took root; but the programs were designed, in part, to address vast disparities in dollars spent with minority versus non-minority suppliers. For example, despite great gains over the last four decades, less than four percent of annual corporate spend is spent with minority-owned companies. Most Americans would agree that minority suppliers should not be denied a fair share of annual corporate spend in the aggregate. The disparity between the dollars spent with minority-owned companies and their non-minority counterparts begs the question of fairness and demands an answer.

You must be ready with an excellent product or service that adds value to its intended corporate target.

Minority entrepreneurs must come to the conclusion that business is business. There are no gimmes. However, presented with an opportunity for inclusion, minority entrepreneurs must be prepared to compete on the same level with their non-minority counterparts. If the minority company is not prepared to perform at a high (or even higher) level than the competition, then that company will be in for a rude but needed awakening.

Corporations are in the business of creating wealth for their stakeholders. Business is business.


The failure to plan prohibits the MBE from asking and answering hard questions about true target audience and fit.

Mr. Gill would suggest that all MBE's without a written business plan stop and immediately write a plan for the company. There are excellent resources available in the general library or on the general market. The plan should be personally written by the entrepreneur, without any initial assistance by outside "experts."

In our technological age, changes are sweeping and rapid. The modern business person must be nimble-able to turn on a dime to exploit business opportunities or to respond to rapid change.

A study by the Kaufman Foundation found that almost 18 percent of all bankruptcy filings stem from biz (business) failure.

Mr. Gill's advice is to forget the shortcuts. Write out the plan. Be specific. Be strategic. Be ruthlessly honest. Then get in the game and win.

Many MBE's wrongly assume that simply being a minority entities them to participate in corporate supplier diversity programs.

Minority-owned businesses should not approach business with a desire or expectation of any special breaks based on minority status.

Due to the size and breadth of the corporate spend of Fortune 500@ companies and the growing participation of American corporations in supplier diversity initiative; the spectrum of opportunities for minority businesses is wide. MBE marketing is often directed to departments or areas that either do not buy or do not have opportunities within the MBE's area of expertise. Other times, the marketing campaign is directed at several corporations, across the board, without a clear assessment of the corporations' needs.

The MBE's register frustration because the corporations seem uninterested or unresponsive.

This process works best when MBE's take the time and initiative to properly research their intended targets to either discover or make those corporations aware of how they intend to add value. Some MBE's market to certain corporations for name only, regardless of whether they can truly add value to that potential customers.

This is a mistake and a waste of time. MBE's must get to the place where they know their target clients immediately and tailor their approaching to address the needs of their intended customers.

A closely related principle to knowing the customer is knowing the competition. This is an area of real opportunity for MBE's who are willing to study their their customers, their competition, and to innovate. MBE's are often in the best position to design custom solutions for their clients. This is what corporate purchasing are looking for.

By understanding the competition, MBE's can innovate their way to successful contracts.

Minority business owners have overcome racisim, legal hurdles, and a host of incredible obstacles to make the advances that have been made up to the current date. Perhaps for these reasons-pride in themselves and pride in their companies - minority entrepreneurs tend to primarily sell themselves (and their companies) to corporate America.

MBE's have all been taught to polish their "thirty-second commerical" or elevator speech and to practice well to sell themselveds. While there is some truth to this advice, Mr. Gill adds that corporations are less interested in minority business entrepreneurs and their companies per se, and more interested in how those entrepreneurs and companies can help solve problems, make more money,or create more shareholder value. Every entrepreneur - to some degree - believes deeply in himself and can memorize an elevator speech.

Clients need to know how an MBE intends to make them better. If the MBE cannot do it, then it needs to rethink why it is selling to that client. The MBE may have a very impressive resume, but most clients listen to that favorite old radio station WIFM, namely, what's in it for me?

Elevator speeches don't satisfy needs, solutions do. To be effective, MBE's must research their targets in order to discover and sell solutions to their problems.

Business is all about relationships. It's a well-known truth that people are most comfortable doing business with those who they know and trust. As trust goes, so goes all relationships. It's imperative for MBE's to spend the time necessary to cultivate relationships with gatekeepers and other individuals within their target market.

Modern corporate shuffling and downsizing means that relationships get reshuffled and downsized in the process.

Knowing in advance that even the most well-tended relationship can be suddenly broken, the successful MBE should take steps to protect itself.

Mr. Gill also adds a word about lower-level employees. Do not underestimate their power by focusing on their position.

MBE's must learn the all-important lesson to develop relationships with individuals at all levels of management within their clients and targets. In business, as in life, relationships are everything.

MBE's should be open to exploring opportunities within local, state, and federal government; civic, trade, and business leagues; chambers of commerce; and a host of other avenues for potential business development. This is not to deemphasize the importance of supplier diversity initiatives.

One of the best corporate clients for Mr. Gill came from a conversation with an acquaintance in the hallway of his Church. Others came from volunteerism, trade associations, and other avenues. The bottom line is that MBE's must expand their business development horizons beyond supplier diversity.

Business volatility dictates that heavy dependence on few clients is a recipe for failure.

There is an irreversible trend i corporate procurement that all minority-owned businesses must quickly acknowledge: corporate America's desire to cut costs and build efficiencies and shareholder value by considering its supplier base. This means that corporations are looking to do business with fewer vendors with greater capacity and geographic coverage. This is a trend that is accelerating and is creating great challenges for minority-owned businesses, which are typically small in size and geographic scope.

In short, MBE's must look to grow size and scope in order to be competitive in the modern economy.

One of the greatest obstacles to growth and a constant challenge to businesses of all backgrounds is the lack of access to capital. This problem is acute in the minority business community.

MBE's must consider the option of out-right merging together in order to create companies of size. This requires homework, trust, and great risktaking; but MBE's who remain stagnant in growth are taking greater risks by failing to seriously consider this option.

In 2003, Mr. Gill merged his MBE law firm into the largest MBE law firm in the country.

His advice for MBE firms, particularly mature MBE's (Mr. Gill's firm was over 20 years in business) is to immediately begin this process if it has not already begun. Fortunately we live in a time where there are a plethora of resources, in the forms of consultants, university classes, published books, and white papers, etc., which map out effective succession strategies.

Succession planning is what Stephen Covey would call a Quadrant 2 activity - Important, but not urgent. Ninety percent of the mature minority businesses surveyed had not engaged in any succession planning. That is a disturbing and telling statistic.

Build a solid business before pursing supplier diversity opportunities. Most minority business startups are simply not ready to meet these requirements.

IT is more advantageous to develop a business platform by doing business with smaller companies, until the experience and resources are earned to service a large corporate contract. The experience of building up the company to the requisite maturity level is invaluable, and it teaches the minority entrepreneur how to build a business, independent of supplier diversity channels.

For the MBE looking to grow its business, no option should be off the table.

Develop good, old-fashioned perseverance.

Business relationships take time to nurture, and great companies are never built overnight. Minority entrepreneurs live in the most exciting era of American history for business opportunities.

To succeed, you get to keep improving, keep growing, and keep going. Eventually, your hard work and tenacity will reap dividends.

In business, timing is everything.

Never quit. Never give up. Even when it seems that all doors are slammed in your face and no one responds to your calls and iniquiries, stay the course. That transformational opportunity is in front of you. Just keeping moving in the direction of your dreams one step at a time and never give up.

The minority myth says that minority business means lack of quality.

The truth is that corporations that desire to thrive in the twenty-first century must confront, expose the minority myth. Companies that continue in the myth are simply choosing to ignore reality.

Minority-owned companies are growing at four times the rate of the average Untied States firm and creating thousands of jobs annually. Corporations that see only social welfare opportunities in the foregoing statistics are sadly mistaken.

Since the publication of Tales My Grandma Told Me, in 2007, the nation's largest companies have not exceeded 3% of their combined corporate spend with minority-owned companies. Of the approximately 3,500 corporate members of the NMSCE, only 18 of those corporations belong to the Billion-Dollar Roundtable, a group of companies that spend in excess of $1 billion annually with minority-and women-owned companies.

Successful corporations must move from the minority myth to the minority mission, recognizing the latest potential of minority markets and therefore assigning mission critical status to minority business development programs. These programs build wealth in minority communities, which translates to bottomline profits for corporations that make the connection.

Far too many corporations use supplier diversity initiatives as window dressing. Beyond the platitudes and marketing fodder, there is very little commitment to the process of identifying and integrating diverse suppliers. These companies do more more harm than good by creating unrealistic expectations in MBE's who respond to their glossy invitations to do business.

World-class programs take time, so it may appear that these companies are insincere when, in fact, they are actually evolving. These companies are to be applauded for moving in the right direction.

According to the NNSDC, corporations that are committed to creating supplier diversity programs that are work should start with 6 key areas for development.

In 2012, The Billion Dollar Roundtable published the book "Billion Dollar Roundtrable Supplier Diversity Best Practices" which builds on the platform laid by the NMSDC.

The implementation of these policies spells the word: Commitment. Corporations must not only talk about supplier diversity, they must demonstrate commitment by their actions.

According to Diversity Inc. magazine, "successful supplier-diversity directors are passionate about their work. The best directors invest a lot of time in bringing together buyers and business-owners-a job that can't always be done between 9 a.m. and 5 p.m.

It is elementary that people make programs work.

Nothing speaks to commitment more than money. It is easy to discover what a company values by analyzing where it spends its hard-earned dollars.

In the first analysis, corporate insiders do not need to be experts on race relations. Ultimately, they should understand the color green - that supplier diversity translates to green for both their employers and themselves. Corporate executives may never understand brown, but when it comes to their own green, their learning curve will accelerate exponentially.

Corporate policy is set at the board level. It also follows tat corporate boards must be diversified to include members of minority groups and women.

Corporations must become proactive about recruiting diverse board members.

Good intentions without focus accomplish little.

Corporations must become strategic at the highest levels of management to uncover latent opportunities for minority business development.

One of the best resources for development in this area is the 36 NMSDC affiliate councils. These councils are home to the top minority businesses in the country.

Those at the table for the wrong reasons will falter. That is not minority business - just business.

Like all businesses, MBE's are seeking opportunities.

Take a look at any business magazine, and the messages are manifold. Corporations should establish a policy of straight forward communication with the minority business community, advising it of real opportunities and also of areas where opportunities do not exist. MBE's will appreciate the honesty if the information is honestly presented.

Mr. Gill's grandma taught him that everything happens for a reason-that there is an opportunity in every situation, good or bad. She would often say, "when one door is closed, another is opened."

Just across town, in downtown Chicago Luis Calderon was standing in side of Chicago Business Opportunity. He was looking inside a copy of Minority Business Digest, the glossy magazine that chronicled issues pertinent to minority-owned businesses in the United States.

Being Mexican he was sure that he met the "minority" part of the equation. Being the sole owner of his fledling public relations firm, he was equally sure that he had met the "business"side of the equation.

If he could attract even one percent of all the corporate attendees as clients.

Luis Cslderon hustled to conclude the telephone call: Today was the long-awaited informational meeting on AMCA minority certification.

Several Hispanics-Americans were featured, which made Luis especially proud.

There were ethnic minorities from several racial and cultural backgrounds.

Minority-owned businesses were welcomed, but not one cold force the corporate members to dance.

What was it Grandma once said? "Business is business, son. You got to give the people what they want. Quality and service at a fair price-end of story."

Back in Chicago, R. Clayton Hughes, CEO in the multibillion-dollar health and beauty giant Elegance Cosmetics, was fit to be tied.

The minority business would ask a lot of questions, get no real answers, and he and his colleagues would get made out to be insensitive bad guys.

First,the room was mostly filled with women. The second thing he noticed was the great diversity of ethnicity and shades in complexion, hair, and attire of the attendees. A strange thought entered his mind: This is what makes America great.

Mr. A. Wayne Gill is the Managing Partner and majority shareholder of Gill Law Firm, P.A., a law firm operating in multiple jurisdictions throughout the Southeast United States. His clientele includes leading multi-national companies, and he serves on the Board of Directors for the South Florida Minority Supplier Development Council. He is the recipient of numerous awards, including Macy's "Crystal Award" for Outstanding Minority Business Advocacy and Northwood University's Excellence in Entrepreneurship Award.

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