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Higher ed drives economic diversity

While diversifying their own supply chains, institutions also help minority businesses grow
University Business, August 2016
  • Opportunity knocks: Drexel University, like a growing number of other institutions, hosts vendor fairs to help minority and female entrepreneurs find business opportunities on and off campus.
  • Entrepreneurial showcase: Metropolitan Community College hosts free vendor fairs where minority, female and LGBT businesses can exhibit to other companies.
  • Admissions connection: The director of the supplier diversity program at Metropolitan Community College in Kansas City, Missouri, says outreach to minority businesses has led some entrepreneurs to enroll their students in the institution.

A bit of institutional self-interest motivates campus leaders when they work to spend money with businesses owned by minorities, women, veterans and other underrepresented groups.

In fact, the institution’s own bottom line comes into play, says D.M. Hodnett, director of the University of Missouri System’s Supplier Diversity and Small Business Development Program.

“If we can’t help our communities thrive with greater economic opportunities, we, as businesses, are going to have problems in the future,” Hodnett says. “If folks in our communities aren’t strong economically, they may not choose us as an institution—they may not be able to.”

The concept of supplier diversity also extends far beyond campus—though administrators say it hasn’t become a major issue for students. An equally important goal shared by many institutions is helping these business owners develop the know-how to compete in the wider economy.

Missouri and several other two- and four-year institutions have ramped up their supplier diversity programs in an effort to close this economic loop, and to spread the wealth among entrepreneurs who better represent the demographics of the communities that surround campus.

Source of new ideas

At Kent State University in Ohio, Veronica Cook-Euell sees herself as an economic matchmaker. As manager of the university’s supplier diversity program, she coaches less experienced business owners on how to communicate with buyers on and off campus.

She also gives guidance on meeting with purchasers, how to submit a bid and how to follow up—even if the businesses aren’t awarded a contract.

It’s all about helping diverse entrepreneurs grow their companies, she says. “We coach, we mentor, we advocate. I’m encouraging them about how to get business not just from us, but from other state agencies.”

For purchasers on Kent State’s eight campuses, Cook-Euell is building an online database of diverse suppliers, which will include descriptions of each business’s capabilities. Photographs of completed work can also be uploaded to the database.

Cook-Euell also spends time visiting various campus department leaders to make them aware of the database and the opportunities to do business with diverse suppliers. And when there is work to be bid, she makes sure these suppliers get a chance to meet with campus decision-makers.

“You should diversify your spend because you don’t always know what level of service or products is out there,” Cook-Euell says. “If you’re still buying from the same person because that’s what you’ve always done, you don’t know about new or innovative ideas or cost-saving methods.”

Hodnett, at the University of Missouri, says supplier diversity can succeed only if there is widespread campus buy-in and support from the top.

To that end, achieving supplier diversity is built into the performance objectives of key personnel such as the university’s chief financial officer, chief procurement officer, and the head of design and construction. Each of these employees, including Hodnett, has numerical goals to meet.

This brings more diverse suppliers to the table when work is being contracted. And even when these diverse businesses don’t win the bid, Hodnett will make sure they know where they fell short so they can make improvements for the next opportunity.

Across higher ed, institutions should also make a more concerted effort to bring diverse entrepreneurs into their business incubators and extension programs, he says.

“When you have somebody with a really good idea and a really good business mind, that’s an opportunity for you, as a university system, to help grow these businesses,” Hodnett says. “We should always look for ways we can help suppliers who we think are going to be good partners, who will help us succeed.”

Reflecting communities

A number of community colleges now place supplier diversity at the forefront of their traditional role of supporting regional economies.

When the Community College of Allegheny County in Pittsburgh built a new science center a few years ago, officials made a concerted effort to include underrepresented contractors, says Clyde Pickett, special assistant to the president for diversity and inclusion.

The center also was named after K. Leroy Irvis, a Pennsylvania legislator who was the first American-African to serve as any state’s speaker of the house since the Reconstruction Era.

“Pittsburgh is a region that struggles with diverse representation, so it’s important to be active in the community, developing stronger bonds,” Pickett says.

Supplier diversity has been a priority for the college’s board of trustees for about the last decade. In 2012-13, the college spent 30 percent of its procurement dollars with underrepresented business owners—a significant expenditure, Pickett says.

The college has held a number of supplier diversity fairs where business owners get a better idea of how they can work with the institution. Pickett and the college’s procurement director have also developed strong relationships with Pittsburgh’s Hispanic and African-American chambers
of commerce.

When bidding out a project, the college distributes its RFPs through a wide variety of outlets, including in Pittsburgh’s historically African-American newspaper. Still, smaller companies sometimes can’t provide the work for big contracts—in that case, the college works with the chosen contractor to set aside subcontracts for underrepresented businesses, Pickett says.

“The benefit to our organization is that, by having diverse operations, we’re reflective of our communities,” he says. “And in certain situations where communities lack diversity, we can attract new groups.”

At Metropolitan Community College in Kansas City, Missouri, relationships with diverse suppliers center as much on helping entrepreneurs grow their businesses as they do on signing contracts with the institution, says Christine Kelly, the coordinator of the school’s supplier diversity program.

“There are times we just cannot procure with all business owners—and we may never be able to do business with some of them,” Kelly says. “But I feel if we can’t do something with a business, let’s reach out and help the owners in other ways.”

Each year, the college holds several free expositions and forums where minority, female and LGTB business owners can exhibit their products and services to campus buyers as well as to outside companies and government agencies. Many leave with new procurement opportunities, Kelly says.

Kelly is putting together a directory of diverse-owned businesses that buyers at all five of Metropolitan’s campuses can access. And in exchange for extensive outreach, some of these business owners have enrolled their children and employees in the community college.

“All of our campuses are in diverse communities,” she says. “So it is important for us to stay focused on diversity and inclusivity, not only with our students and faculty, but in every aspect of our business.”

Evidence of progress

Leaders at Drexel University feel a responsibility to help create jobs and stimulate economic activity in the school’s West Philadelphia neighborhood, says Stephen G. Mack, associate vice president of procurement services.

“To small businesses, universities can be incredibly complex structures, and they become frustrated quickly because they don’t know where to go or how to start.”

About three years ago, Drexel created an online system that allows business owners to describe what their company has to offer. That can lead to an interview with university officials who will further assess whether there are opportunities for the company to work with Drexel. This can lead to future contracts.

And companies that aren’t quite prepared to work with the university are referred to the Minority Business Enterprise Center, a federal contractor that offers a variety of business development services and mentoring.

Because small, minority-owned businesses sometimes can’t handle the scale of a large university contract, Drexel has forged partnerships between these companies and larger suppliers. For instance, a local, minority-owned print shop manages ordering, support and invoicing for a larger New York firm that handles the actual production of university stationery and business cards.

In other cases, the university puts incentives and reporting requirements in contracts—particularly for construction contracts—that encourage its suppliers to hire locally. “We want to partner with people who share our commitment to diversity and civic engagement,” Mack says.

In some cases, smaller jobs can lead to larger contracts. Drexel hired a female-owned company that was willing to hire locally to do pest control at one of its off-campus facilities. This work led to a larger contract at a new 27-story residential/retail project on campus that Drexel built in partnership with American Campus Communities.

Drexel will also train local workers who can then be hired by campus vendors such as Sodexo, which operates dining services.

“This work has transitioned the diversity spend from just trying to achieve some kind of number to where you see people being employed in a neighborhood that is one of the most underemployed in the country,” Mack says. “When you start seeing this impact you’re having, it makes it so much easier to get really energized around a program.”

10 ways to diversify your campus suppliers—and the local economy

  • Build relationships with business owners by hosting job fairs, and by attending meetings of chambers of commerce and with minority- or female-centric professional organizations.
  • Make sure minority businesses know about the work or services needed on campus. Consider advertising with minority-focused newspapers and websites. 
  • Host forums where entrepreneurs can show off products and services to your institution, and the general public.  
  • Provide one-on-one coaching to better inform entrepreneurs about how to work with your college or university and how to navigate sometimes complex procurement procedures. 
  • Also offer guidance—such as how to submit bids—on doing business with local government agencies and private businesses. 
  • Partner with local organizations (such as the Minority Business Development Agency) that can provide more comprehensive assistance to help minority businesses grow. 
  • Encourage suppliers to subcontract work to underrepresented companies. 
  • Create a directory where minority business owners can create a profile of their companies. Make this database accessible to all campus buyers. 
  • Add supplier diversity goals to performance reviews of key officials, such as the CFO and procurement managers. 
  • Invite minority entrepreneurs to set up shop in campus business incubators. 

Matt Zalaznick is UB’s senior associate editor.

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