From the "Ask The White Guy" article series ...

What Would Make White People Support a Black Business?

By Luke Visconti
Diversity Magazine
June 13, 2007

Question:

What would make white people support a black business over a white business, all things being equal?

Answer:

I'll assume that your question involves a hypothetical company, one which is average, and, therefore, does not have a robust supplier-diversity program. I'll also make the assumption that the procurement department head and/or CEO is white.

With all things being equal, and with the above circumstances, there are several reasons for a white businessperson to decide to do business with a black-owned business over a white-owned business (per your question).

It's called "supplier diversity." (For supplier-diversity best practices, read the DiversityInc Top 10 Companies for Supplier Diversity .)

Supplier diversity is not charity. It is a process by which companies improve their business. Properly implemented, supplier diversity lowers costs and increases margin and/or revenue.

There are several ways this happens:

* If you increase the number of suppliers with which you're doing business, you will lower overall procurement costs.

* Women/minority business enterprises (W/MBEs) are forming and growing at a much faster rate than business in general. Aligning your business with a growth sector is a good strategy.

* If your company is a consumer company, supplier diversity will help your company brand new consumers (your suppliers and their employees). In the process of doing business, your company will learn the skills necessary to better form relationships with people of color and/or women.

* If your company is a business-to-business company, you probably already know that other progressive businesses are asking for supplier-diversity numbers on RFPs. You are at a competitive disadvantage if you do not have a good record to show.

* If your company is a business-to-government company, you already know that supplier diversity is a mandate. Beyond mandates, however, is intent. Progressive governmental agencies (they're not all the same) are looking for exceptional performance. The late Dave Sampson at Marriott told us of three $1-billion-dollar contracts they won from three different city governments on the basis of superior supplier diversity.

* There is ample anecdotal evidence that shows that broadening your supplier base to include M/WBEs decreases costs AND increases innovation.

* Supplier diversity can increase the economic sustainability of a local economy by broadening and strengthening the economic base of the region. This is most quickly done by working with people who have formerly been excluded and/or oppressed (you get the most gain from an underutilized asset).

* Supplier diversity is a sound business practice, especially practiced by companies that outperform the general stock-market indexes. The 2007 DiversityInc Top 50 Companies averaged 9.3 percent of their procurement spend with M/WBEs; we estimate the national spend at 2 percent. The DiversityInc Top 50 Companies, expressed as a stock index, outperform the Nasdaq, Dow Jones Industrial Average and the S&P 500 on a long- and short-term basis.

This short list of factors is not inclusive of all the reasons to promote supplier diversity, but it may give cause for you to ponder why supplier diversity isn't more widespread.

Ultimately, we must all come to grips with the reality that we are visually oriented tribal beings; diversity management—in this case, supplier diversity—isn't going to come "naturally." What comes naturally is to do business with people who look just like we do. Diversity management is like managing any other business discipline: Expectations must be clear, accountability must be absolute and vigorous metrics must be utilized.

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I am not a fan of this type of thinking. This guy is basically saying "promote your business to white people on the basis that the business owner is black." That is as ridiculous a business model as a Latino walking into my office saying, "buy from me because I am from the Dominican Republic" If you're going into business, it helps to have a compelling business proposition...such as superior service, superior product, superior pricing. If all you have to offer a potential client is "I'm black" you have a truly weak business proposition.

I don't think he was steering it in that manner at all ...

quote:

Supplier diversity is not charity. It is a process by which companies improve their business.

quote:

Ultimately, we must all come to grips with the reality that we are visually oriented tribal beings; diversity management—in this case, supplier diversity—isn't going to come "naturally." What comes naturally is to do business with people who look just like we do. Diversity management is like managing any other business discipline: Expectations must be clear, accountability must be absolute and vigorous metrics must be utilized.

... But actually was coming from the angle of why it would be to HIS advantage to start supporting AA/minority businesses ...

For his OWN on the surface - and Bottom Line - benefit.

Venom the article is stupid. Take a look at what the author says is going to grow business for the buyer. Really take a look at his arguments and his supporting statements. He ain't getting nowhere. He better talk to minority business people about using their cultural and learning differences to find innovative ways to address common problems. Nobody is trying to hear that same ole '78 rhetoric.

I talked my father out of doing business from the perspective of "set asides" or any other affirmative action initiatives...

Why? (A) Statistical DATA revealed that only 10% of the businesses that utilize these programs survive beyond 7 years before their
DEMISE - IMHO, they became complacent and did not develop the business beyond the initial client(s) and when the governmental mandatory period was up, the contractor severed ties... (B) AND because I believe, IMHO, that people do business with those they are 1) comfortable with 2) have a quality product or service 3) meets their need 4)who they respect and build a relationship with 5) who offer the best, most efficient and effective combination of value, resourcefulness and quality in delivery of there products or services.

Consequently, my parents have Jews, Italians, African Americans, Jordanians, Mexicans, Chinese, German, Irish, Scottish and British Americans as business partners.

They all go through the business cycle ups and downs together, but above all, these people have become a part of our family.

In addition, doesn't it make more since, if you can deliver the good or service, to compete with the majority which gets 75-90 percent of Public/Private Sector contracts, than to settle for the crumbs left for Small & Historically Disadvantaged businesses...

It has been our experience that Whites do business with those that can help them make Green - PERIOD!!!

Thats my two cents...

This message has been edited. Last edited by: iceman4221,

That may be true, BO&G and Iceman, but Fortune 500 companies are initiating and utilizing "supplier diversity" initiatives on a constant and regular basis. I believe it's for fear of being "labeled" as "non minority friendl," hence the magazine articles with the "best in diversity" issues, etc...I'm not sure if those initiatives are beneficial, but I do know that they are implemented and utilized often.

I'll take the set-asides please.... I've seen many small businesses thrive after starting with those.

quote:

It has been our experience that Whites do business with those that can help them make Green - PERIOD!!!

... And if they can earn additional Brownie Points by doing that with a company "that also happens to be a minority company" ... Then so be it.

Granted, annual Report Cards like the one the NAACP intstitutes on the hospitality industry has definitely helped to raise the consciousness level of some companies in having more minorities in the industry, the bottom line is still that nobody does business - nor should feel it has an obligation to do business - with those that can't deliver the goods.

Minority set asides are kool, and have indeed been the foot in the door for many to eventually thrive ... But it's the ability to deliver is what matters most.

FYI...

From Beginners to Bigshots: Going and Growing with the SBA

Case Studies: Going and Growing with the SBA

Thanks FAMUVenom

By the way, my parents business is the Repair & Calibration of Torque Products.

The other business is the sale of Fine Men's Wear(Sports Coats, Pants and Suits) by Nautica, Geoffrey Beene, Oscar de la Renta, Fineri, Manzini Uomo, Givara and Nino Cardi, the later 3 being Italian Designers...

This message has been edited. Last edited by: iceman4221,

quote:

Originally posted by Ms MEAC:
That may be true, BO&G and Iceman, but Fortune 500 companies are initiating and utilizing "supplier diversity" initiatives on a constant and regular basis. I believe it's for fear of being "labeled" as "non minority friendl," hence the magazine articles with the "best in diversity" issues, etc...I'm not sure if those initiatives are beneficial, but I do know that they are implemented and utilized often.

Here is what I saw when I ran a Minority Business Development Center: Firms that had a good business model and participated in Minority Supplier programs did well. All those folks lined up talking about "I'm here to participate in your minority supplier programs" did poorly because they had no plan and on the first screwup they were replaced with the next "minority" standing in line.

IF you don't have a viable business plan, no minority supplier program in the world will save you.

I think the gist of the article is not from OUR side of the table ...

But more looking at it from the "other side"'s perspective on why it might be advantageous for THEM to consider doing business with US ... All things being equal.

It didn't say just hire "Any Ol' Mugg" who may be minority ... but all things being on the same level playing field, it might be worth also considering looking into some minority firms that many may just shrug off prematurely - if for some of these "added value" reason discussed above.