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by Bill Harris More than a year ago, a challenge was issued to the telecommunications industry at SUPERCOMM '99: raise the fraction of purchasing dollars spent with minority-, women-, and disabled veteran-owned business enterprises (MWDVBEs) to more than 10 percent. What has happened since? What is the current state of supplier diversity programs in telecommunications? The View from Major Manufacturers The view from companies surveyed by PulseOnline is clear; these programs are under way, and they're having an effect. As Heather Herndon-Wright, National Director-Channel Diversity of Lucent Technologies, says, those at the top of the company lists published by Black Enterprise and Hispanic News are increasingly telecommunications companies. That says something about the industry. So does the fact that 24 additional companies became signatories to the Supplier Diversity Challenge at SUPERCOMM 2000. TIA companies that were interviewed are also unanimous in agreeing that supplier diversity has become a business imperative in the telecom industry. While many companies sponsored some diversity efforts focused on the supply chain in the past, they made it a formal priority when major customers began demanding evidence of inclusion of minorities, women and disabled veterans on large contracts. George Ehrgott, materials manager and supplier diversity coordinator at Communications Test Design, Inc., says, "It's becoming a strategic advantage for companies." Arlene Hennessy, supplier diversity manager of Supply Network Solutions at Lucent Technologies, says, "Companies that wish to do business with us and others in the industry are finding that not only are price, service and quality the deciding factors in who gets the business. A fourth criteria also considered in the equation is how much MWDVBE inclusion is in the product or service they are providing." Irene Fay, supplier diversity manager at Advanced Fibre Communications, points to its mentoring programs as a way it helps smaller companies it begins working with learn "the details of doing business with the new company." Advanced Fibre was doing business with a small, woman-owned business called Everywhere Computers. The company invited Everywhere Computers to come in so they could educate each other on their processes. "The second time we did the review, they had gone from X number of dings to practically none," she says. "We want to give them every opportunity to learn how to grow with us." Advanced Fibre is now beginning to feature selected MWDVBEs on its Web site. That publicizes Advanced Fibre's work, helps the MWDVBE grow their business, and encourages other MWDVBEs to work with Advanced Fibre. As with any business initiative, supplier diversity is also subject to delays and setbacks. Programs are designed with a particular partner, and that partner is bought by another company. And funding runs scarce at inopportune times. MWDVBE Perceptions With those business realities, maybe it's not surprising that the MWDVBEs' perceptions of these programs are somewhat different. When asked about what evidence she sees of supplier diversity programs, Mary Munger, president of A.C. Data, says, "I think the strongest evidence was TIA's initiative at SUPERCOMM. I see paperwork; I see supplier diversity program initiative participants, but I don't see that translated into outreach programs that result in sales opportunities." She would expect that someone would say, "You are a minority or women-owned business and you contribute some percentage to our supplier program, and we'd like to see that percentage increase as part of our supplier diversity program. Are there other markets we can enter into with you?" But she has yet to receive such an invitation. Find ways to bring MWDVBEs to the table to talk, and let their products and services, not their name recognition, determine their success, she suggests. "I'm not complaining about the growth of our business or the telecommunications market. It has been phenomenal, and I am grateful to each and every customer," says Munger. "However, [PulseOnline's] question deals specifically with supplier diversity programs and how is that benefiting you, and my answer is, 'Oh, it's not!'" Keith Doucette, vice president of sales at Communications Products Inc. (CPI), notes that the supplier diversity challenge misses his company totally. CPI is a systems integrator, not a supplier; while it takes business to its equipment providers, it wishes thoses equipment providers would on occasion come to CPI and invite the company to bid together on a project, simultaneously giving the equipment provider entrée into the broader market of minority requested contracts and providing CPI more business. Phil Brown, director of engineering systems at CPI, says, "Our TIA partners are doing plenty of minority business with the government through us, but it's CPI doing the marketing, CPI selling, and CPI delivering our partners' solutions with our services. If our TIA brethren want to be good partners, all we'd like is for them to bring us some reciprocal opportunities. We do have a good story to tell. We want to be invited to share their opportunities and help them win and deliver business." On the other hand, that said, many MWDVBEs do see the effects of increased awareness. Suzanne Bakiewicz, director of marketing for Mohawk Ltd., says, "The major telecommunications organizations have made great strides in establishing initiatives to seek out MWBE supply partners. Many have created MWBE liaisons or databases, which encourage these initiatives. For the suppliers, the opportunity to compete with major players for a share of the business is a major opportunity." Alexis Scott, business liaison officer at Lexcom Telecommunications Company, says, "Supplier Diversity programs have a great impact, in that it is allowing MWBEs to compete with large majority companies in arenas that would otherwise not be open to them. It has given MWBEs a vast amount of visibility. It provides an opportunity for MWBEs to be sought out and recognized by the telecommunications industry at large." Tips for the Majors Communications companies that are not already actively engaging their MWBE partners in their channel processes should take this as a challenge and rise to the occasion. Those that are should lead by example and ensure that others learn about their success stories. If industry is committed to meeting the challenge laid out at SUPERCOMM, efforts on this front cannot be restricted to affirming these goals only once a year. Whatever the case, clear lessons emerge for companies initiating (or continuing) such an effort. Start at the top. "You absolutely, positively have to have support from the highest level within your company. It simply will not work if you don't do that," says Fay. That's classic change management advice for any initiative, reinforcing the notion that supplier diversity has become a standard management issue. Next, Ehrgott strongly suggests, "Try to make it part of the managers' compensation so that they act on this as they would on any other customer need." This helps ensure the CEO's support is felt throughout the organization. Plan this as any other major business effort. Assess your current situation honestly and create a plan to address your particular needs. Set goals and schedules. Communicate well inside the organization. Heather Herndon-Wright, Lucent's national director of channel diversity, recommends reviewing your plans against industry best practices. The QuEST Forum (www.questforum.org) provides a best practices document for diversity initiatives. "There's a maturity assessment tool attached to it allowing you to literally go down and rank your company's diversity initiative," says Herndon-Wright. Joan Kerr of SBC Communications and David Pell of Nortel Networks summarize that document in "Supplier Diversity as a Best Practice" near the end of http://questforum.asq.org/public/ppt/BPCpm.ppt. Network! No one will share competitive secrets, but peers across the industry seem dedicated to helping these programs be successful. Join the National Minority Supplier Development Council, Inc. (NMSDC) (www.nmsdcus.org/) and its Telecom Industry Group subgroup to associate with those who can advise on plans, point out MWDVBEs that can fulfill specific needs and help with best practices. The Women's Business Enterprise National Council (WBENC) (www.wbenc.org/) and the Association for Service Disabled Veterans (www.asdv.com/) also have useful resources. Finally, make sure your efforts show active progress all the way to the point of contact with MWDVBEs. Sant Gupta, vice president of North American sales and marketing at Cornet Technology, Inc., says it is "essential for ... telecom service providers (large and small) and the large telecom equipment manufacturers to inform the vendors that they have an 'active' program to encourage the minority-owned suppliers." Fay says, "You probably already have within your supplier database diversity firms you are using. Once we put a formalized program together, we went through our database and contacted all our suppliers and asked them if they fit the criteria." When you've identified an MWDVBE, have a "supplier diversity exhibition," suggests Munger. Invite them to present a seminar on their products and services. "Provide me an opportunity to put my product in front of the buyers and the users. Give me that, or all you're doing is reporting, and that's passive. I would like an active program." MWDVBE Tips Clear lessons emerge for MWDVBEs, too. Start with knowing your company vision and core competencies, and communicate them well, both in person and on the Web. "If you are a minority company, make sure the world gets to know about it," says Gupta. Build relationships inside companies. "You have got to have somebody in that company who will advocate on your behalf to at least get you some face time with the decision maker," says Herndon-Wright. "That's what the diversity coordinators ought to be doing; that is our main job and our main function in the company." "Without these programs, many MWDVBEs would never get the chance to walk through the door due to the large number of calls purchasing organizations receive each week," says Ehrgott. Look at companies' Web sites to see if they have published supplier diversity information. Be ready to grow. Have sources of capital available, and be ready to take responsibility for an entire process, not just a piece. Companies looking to contract out work don't see themselves as saving unless they can rid themselves of responsibility for an entire process. Herndon-Wright notes there is a problem around the issue of growth, as many MWDVBEs are small businesses. Telecommunications deals typically are large, and even one deal may double the size of a company's annual revenue. The problem? Some companies frown on any one supplier or channel partner doing more than a certain percentage of their business with any one company. Herndon-Wright says Lucent's approach is to work with MWDVBEs in two ways. First, they realize the supplier may do a very large part of their business with Lucent in the first year, and then they set goals to drop that each year until the target level is met. Second, they help the MWDVBE get connected to MWDVBE programs at companies which offer complementary products. That helps them get business and it avoids the MWDVBE generating that new business with products competing with Lucent -- a win-win result. Take advantage of the resources TIA and the local councils of the NMSDC can provide. Finally, take a look at Herndon-Wright's "top 10" list for MWDVBEs accompanying this article. But What About Government's Role? With this increased attention in the private sector, what about the government, an historical leader in diversity efforts? Some, predominantly MWDVBEs, see the federal government as continuing to drive this work through the contracts they bid on and win. Others, including all the companies interviewed that have supplier diversity programs, see the focus moving from federal programs to industry, driven by customer requests and business needs. Herndon-Wright notes these new buying practices won't go away "just by the sheer demographics of who owns companies now." The Bottom Line In the final analysis, it's all about good business. Fay notes, "Any company who expects to do business into the 2000s has to understand the demographics of its consumer base. If you understand that, you know who you're marketing to." It's all about how "you make sure that you're putting something back into your community so that your community is willing to use you as a supplier. It gives you a competitive edge." Hennessy says, "Our reason then, which can still be applied today, was that by helping the minority business community to grow, we would also benefit by growing our customer base, obtaining lower prices because these newly emerging businesses would have lower overheads, and receiving faster service for last minute changes because these suppliers would not have to deal with the bureaucracy that larger companies have to deal with to change their processes." Herndon-Wright notes that advocacy groups can now track their groups' buying power and companies' efforts towards inclusion of their group, and that drives purchasing decisions. Or, maybe most concisely, Ehrgott says, "This is a commitment to the community. This is for all of us." For additional information on how companies can participate in the Supplier Diversity Challenge at SUPERCOMM 2001, or to learn more about how MWDVBEs can leverage TIA resources, contact Jeffrey Espiritu, manager of small company development, TIA, at (703) 907-7742 or jespirit@tia.eia.org.1
1 Thanks to Irene Fay, supplier diversity manager, Advanced Fibre Communications; Denise Coley, manager, supplier diversity, Worldwide Sales Finance Contract Performance Group, Cisco Systems; George Ehrgott, materials manager and supplier diversity coordinator, Communications Test Design, Inc.; Anh Nguyen, minority business enterprise advocate, and Susanne Lithander, executive vice president and general manager, Ericsson Radio Systems; Karen Burkart, manager, minority/women business development, Graybar Electric Company, Inc.; Arlene Hennessy, supplier diversity manager of supply network solutions, and Heather Herndon-Wright, national director of channel diversity, Lucent Technologies; Nannette Kelley, supplier diversity manager, Motorola, Inc.; Deborah Davis, manager of diversified business solutions, Nortel Networks; Mary Munger, president, A.C. Data Systems, Inc.; Keith Doucette, vice president of sales, and Phil Brown, director of engineering systems, Communications Products Inc.; Sant Gupta, vice president of North American sales and marketing, Cornet Technology, Inc.; Alexis Scott, business liaison officer, Lexcom Telecommunications Company; Suzanne Bakiewicz, director of marketing, Mohawk Ltd. and Don Jones, vice president of North American Sales, Tellabs, for their contributions to this article. TIA Home | Industry Beat | TIA Press Releases | Subscribe | Past Issues Letter from the President | Inside Washington | TIA Around the Globe | Small Company Focus Trade Shows and Marketing Opportunities | Standards Update | Member Spotlight New TIA Members | Member News | Market Forecast | Calendar of Events | PulseOnline Home Contact Us: Jennifer Mead jmead@tiaonline.org |
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