You hear it all the time. Small businesses are the backbone and the fastest-growing segment of our economy. They are innovative, flexible and offer strategic solutions to Corporate America. Yet despite programs that are in place to ensure inclusion of small, diverse businesses in Corporate America’s supply chain, the truth is actual awards to diverse businesses have not kept pace with the diverse business population. And most awards to these businesses are generally small or as subcontracts to large, mostly nondiverse businesses.
In a recent Los Angeles Times article, the pioneers of supplier diversity were praised in introducing the idea of helping minority- and women-owned businesses penetrate “the good old boy network” through inclusion of diverse businesses in Corporate America’s supply chain. In the beginning, the idea was to outreach to minority- and women-owned businesses. Forty years later, through their efforts and others that came later, “inclusion” became the objective. And, yes, inclusion has arrived. But diverse businesses have yet to achieve parity with their nondiverse business counterparts.
Perceptions remain that work against diverse businesses. Consider that when one minority business owner fails, the failure resonates throughout the entire minority business community and becomes a community failure. Yet no one thinks that the failure of one nondiverse business is the failure of the entire nondiverse business community.
Moreover, diverse businesses owners are twice as likely to be denied credit, given the same credit history. Often the excuse for not awarding to diverse businesses is “There aren’t any,” “They have no experience” or “They’re too small and don’t have the capacity.” Yet, organizations like the Southern California Minority Supplier Development Council and the Women’s Business Enterprise National Council have existed for decades, and they have databases of minority men- and women-, and women-owned businesses that are hungry to do business with Corporate America, given an opportunity. And, as to experience and capacity, how did nondiverse big business get experience? Didn’t big business start small?
In business, relationships are key. And that is perhaps one of the greatest barriers for diverse businesses. Even if they have the experience, are price competitive and provide the best value, it’s difficult to break relationships formed years ago with the good old boy network.
With the ever-growing small and diverse business population (veterans; women; African-, Asian- and Hispanic-Americans; and American Indians), it’s time to recognize the economic impact they have in purchasing power; their tax base contributions; and their ability to create jobs, especially in the minority communities where the loss of jobs have been greatest.
Supplier diversity has moved from “outreach” to “inclusion.” Now it’s time to move from “inclusion” to “awards,” all things being equal, and take supplier diversity to a level where barriers and mind-sets change so that diversity in American business is no longer an idea but a reality.
Luis Vasquez-Ajmac is president of Maya Communications and Advertising, a multicultural agency operating in Redondo Beach and Washington. He is also a board member of the Regional Hispanic Chamber of Commerce and member of the Southern California Minority Supplier Development Council.
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