Shared Commitment To MWBE Development

Author(s):

Debbie Newman
Debbie Newman, Minority Vendor Coordinator, Houston Lighting & Power Company, Houston, TX 77251-1700, 713/623-3168.
Patricia Richards
Patricia Richards, Corporate Minority Business Coordinator, Texaco, Inc., Bellaire, TX 77402-2550, 713/752-3923.
Linda Butler
Linda Butler, Supplier Development Coordinator, Exxon Company U.S.A., Houston, TX 77210-4692, 713/656-7618

79th Annual International Conference Proceedings - 1994 - Atlanta, GA

THE OBJECTIVES

  1. Provide a practical, proven, successful model for MWBE Development
  2. Encourage and assist other corporations to build successful MWBE programs
  3. Share outreach/innovative ideas/sourcing with purchasing decision makers across the nation looking for workable solutions for MWBE inclusion in purchasing programs

INTRODUCTION
The panel will include three experienced and committed MWBE coordinators from Fortune 500 companies sharing their success as part of the National Minority Supplier Development Councils (NMSDC) affiliate, the Houston Business Council (HBC). Through participation in HBC's Buyer Advisory Committee (BAC), the panelists have formed a unique partnership with other procurement decision makers to learn about minority and women business development. They share ideas and experiences and take an active role in the programs and services offered by HBC. The BAC shares ideas on increasing supplier participation, support for corporate MWBE programs and utilizes the NMSDC affiliated council network to support individual and corporate efforts with MWBES. The panel will divide topics into three areas: Program Rationale & Getting Management Commitment; How to Develop & Sell Your Program; and Outreach, Innovation & Reality.

I. PROGRAM RATIONALE AND GETTING MANAGEMENT COMMITMENT
An understanding of what drives successful MWBE programs is needed in order to structure a strong corporate MWBE program and gain management commitment. First and foremost, the program must be focused on bottom line profitability and good business sense. Another program factor is satisfying competitive customer requirements which impact corporate marketing and sales strategies. Additional factors include complying with government mandates and corporate citizenship. One effective measure of a corporation's commitment to the communities it serves is the impact evidenced by a successful MWBE program.

Management commitment and buy-in for any MWBE program must have strong ties to the corporate vision as well as make good business sense. When structuring a corporate MWBE target, statistics are very useful in drawing a correlation between the MWBE pool and the general vendor pool. The benefits of MWBEs - competitive pricing, high service levels, and flexibility - are strong points in selling your program.

II. HOW TO DEVELOP AND SELL YOUR PROGRAM
A minority supplier program must have several elements to successfully create opportunity for minority and women business firms. one of the initial steps in developing a program is to create a strong positive policy statement.

The policy statement sets forth the corporate rationale for the special initiative. The policy also defines which groups are included and outlines specific actions which the corporation will take to produce results.

The corporate policy statement should mirror key values consistent with the overall corporate vision statement. The statement must be signed and distributed by the principal officer in the corporation to gain the proper level of credibility, motivation and recognition.

The characteristics of successful minority business development programs include:

  • Executive involvement
  • Direct access to the top executive
  • Company-wide employee involvement
  • Employee incentive
  • Unlimited goals
  • Development of MWBEs
  • Tracking and auditing

These characteristics must be dynamically developed in order to create and sustain a strong program. The Minority Business Coordinator facilitates the program development as well as sells the program internally.

Responsible for guiding the corporation's program and directing positive steps toward minority business goals, the Coordinator may also be designated as the Small Business Liaison Officer (SBLO), Supplier Development Coordinator, Small Business Manager or Director. Whatever the title, the selection of a dynamic advocate committed to the development of MWBEs is essential for the success of any minority supplier program.

An action plan is the next step to help the corporation stay on target for program development. The plan addresses issues such as corporate/business unit goals, managerial involvement, employee incentives and training, sourcing and developing MWBEs and tracking/monitoring/program assessment. The plan should reference specific goals (monetary/percentage) and include budget and specific activities which will continuously push the program toward target attainment.

Specific activities which help in program development are:

  • Involve and inform management
  • Provide technical assistance
  • Develop-A-Vendor (mentor/protege) programs
  • Assist in funding for MWBEs
  • Participate in regional purchasing councils
  • Form advisory council/task force
  • Offer in-house training courses
  • Create formal policy and procedures
  • Arrange match sessions between suppliers and corporate representatives
  • Include MWBEs in supplier quality process
  • Identify specific opportunity areas (inches)
  • Offer opportunity through 2nd tier efforts
  • Encourage favorable terms and progress payments
  • Link up with other departments
  • Advertise in minority publications

Once the policy statement is in place and an action plan has been created, you must sell the plan. Communicate the plan throughout the corporation by providing quarterly updates to business units and reporting annually to the CEO on program objectives attained. Internal training efforts must ensure that executives, managers and all employees receive information on their roles in achieving the corporate program initiative.

The specific activities previously listed will aid you in selling the minority supplier program. The structure must provide for the selection of coordinators within each business unit to serve as advocates for the overall corporate initiative. Equally important in creating an effective minority business development program and sharing corporate commitment are external outreach efforts to other corporate coordinators, minority support organizations and the greater business community.

III. OUTREACH INNOVATION AND REALITY
Corporate America is proactively changing and realigning its business and continues to face some of the most challenging problems in recent memory. The need has never been more pressing for businesses to confront these problems directly, change and adapt accordingly. Together, corporate and supplier employees must seek to understand the changing business environment and through cooperative efforts find viable solutions. Change, improve, re-engineer, and improvise are the key words in today's corporate vocabulary.

Outreach to minority and women-owned businesses in this environment makes good business sense. These MWBEs have proven they can be innovative, creative and competitive when placed on equal footing with all of America's businesses. Failing to recognize the contribution of this segment of the business community is a critical error in today's and certainly this country's future economic environment. The current procurement operation cannot afford anything that doesn't make good business sense. Corporate supplier partnerships, whether new or in a long standing relationship, must offer something unique or different or must allow continued savings.

A critical element of outreach extends to cooperative efforts with other corporations, business organizations, and minority support groups -- all with common commitment and goals for minority business development. Such cooperative efforts encourage dynamic alliances like the one which exists between the Houston Business Council, NAPM-Houston, Inc., Greater Houston Partnership and Minority Enterprise Small Business Investment Corporation (MESBIC) . These alliances leverage resources to create innovative opportunities for minority and women-owned businesses in the greater Houston area.

Innovation is crucial in today's minority and women-owned business programs. Historical data has proven corporate America is not doing its best to recognize and include all parts of society in its business plans. This lack of planning has necessitated "set asides" and continually complicates and encourages programs which are not benefitting any part of the business community in the long term. Sustained efforts must be made to improve candor in communications between corporations and minority and women-owned businesses. Candid communications ensure MWBEs as well as corporate America can share the vision of where the corporation needs to go, how its going to get there and what roles each will play while improving overall business.

The reality of the current state of America's business economy is that no corporation, small business or minority and women-owned business can work alone. Continued side shows and in-fights for small pieces of business dilute efforts gained by working together.

Leading edge corporate procurement organizations are sharing in a commitment to seek out MWBE suppliers who can assist in addressing the difficult issues in today's economy head-on. This search for qualified, certified minority and women-owned businesses should be part of every corporate procurement program.

REFERENCES

  1. Federal Acquisition Regulation. U.S. Department of Defense, General Services Administration, National Aeronautics and Space Administration, March 1, 1991.

  2. "Minority Suppliers in the United States." Fortune and the National Minority Suppliers Development Council, May 21, 1993.

  3. 1977 Survey of Minority Owned Business Enterprises. U.S. Department of Commerce, 1977.

  4. Survey of Minority Owned Business Enterprises, MB 87-4. 1987 Economic Census. U. S. Department of Commerce, August 1991.

  5. Survey of Women Owned Businesses, WB 87-1. 1987 Economic Census. U.S. Department of Commerce, January 1991.

  6. The New Vision Report. Denver, Co.: New Vision, 1989. United States Commission on Minority Business Development, Interim Report 1990. U. S. Commission on Minority Business Development, 1990.

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