It has been over a year since George Floyd was killed in front of millions across the world. The response to this dreadful event was immediate and global. There were demonstrations in the streets and statues were overthrown not only in America, but in countries in Europe, Latin America and Asia.
Many will claim George Floyd’s assassination motivated them to withstand threats and pouring rain to cast their votes in historic numbers. However, for me, the most startling series of events was the rapid response from corporate America. Quick goals were established to reduce racial injustice and expand minority business enterprise. It is estimated that in a short period of two to three months, over $100 billion had been promised to achieve these two goals.
There have been a lot of good intentions, but three critical groups have never been able to work together — corporations, minority businesses and nongovernmental organizations.
After 12 months, it is time to assess what progress has been made and to what extent these two ambitious goals have or have not been achieved.
Working with many corporations, I believe the corporate commitments were sincere. But we have to ask, why are billions of dollars being left on the table?
There are multiple answers to this question within all three groups — corporations, minority business enterprise communities and MBE advocate groups. In the following sections, I will further define the problems and make recommendations for change. To maximize corporate goodwill and effectively utilize the billions of dollars allocated, I strongly believe there should be a coordinated effort in support of the various initiatives with advocate groups and the ultimate recipient of the funds — minority business enterprises.
Every major corporation has the right to design, implement and fund their own minority business enterprise development programs. I have observed strong existing programs getting stronger, larger and better over the past 12 months. But the bottom line is there has been minimal impact on minority business. To alter this situation, I offer the following:
1. Form a high-level, CEO-led advisory board to support, guide and fund the MBE office’s responsibility.
2. Assign the overall responsibility of the MBE program to a senior executive, possibly the chief procurement officer.
3. Hire an outside, highly qualified consultant to assist in designing the company plan for MBEs.
4. Establish and fully fund a strong MBE team — supported by outside consultants — to design and execute the plan.
5. At all levels, research best practices of other corporations.
6. Ensure that all targeted MBEs have individual plans to address weaknesses of organizational design, financial planning and capital management. They should also ensure that their products or services match the needs of the corporations.
7. Be clear on how corporations plan to offer support to the different sizes of the minority business community. Small business needs are different from large MBEs.
Think outside the box and be bold.
Minority business community:
Most corporations have been sincere in their efforts to increase their minority spend both morally and legally. But too often, I hear the same corporations state they cannot find “qualified and strong MBEs.” For years, I urged MBEs to be growth-oriented in their thinking. I am immensely proud of the graduates of the Kellogg Advanced Management Program at Northwestern University and the Amos Tuck Diversity Business Programs at Dartmouth College who have followed that advice, but there should be more. To that group, I offer the following advice:
1. Start with a change of mindset to envision dramatic and speedy growth.
2. Reorganize to be able to handle growth.
3. Merge and form strategic partnerships with minority and nonminority businesses.
4. Develop plans that address the needs of clients.
5. Conduct deep research on trends in your industry.
6. Support nongovernmental organizations or NGOs who support you, but ensure they provide assistance beyond “certification.”
7. Embrace equity capital; do not fear it.
8. Form banking relationships before you desperately need a loan.
9. Hire smart, extremely aggressive professionals, regardless of their backgrounds.
Nongovernmental organization community:
For over 40 years, I have actively supported National Minority Supplier Development Council Inc. and other NGOs, because I believe in their missions, and I respect the many hours invested by their dedicated staff. However, five years ago, I wrote an article stating the nongovernmental organization community had to be very introspective and accept we were living in a moving, global economy — and they had to change. I, once again, recommend that NGOs:
1. Devote less time to “certification” and more time to MBE capacity-building.
2. Develop alternative options to increase revenue besides annual retreats and black-tie dinners.
3. Aggressively market their cases to corporations and government agencies to double their budgets.
4. With increased budgets, diversify staff resources to enhance organizations’ abilities to market, conduct in-depth research, train MBEs at all levels and create deeper relationships with other NGOs.
5. Focus on making existing certification processes more efficient and effective.
6. Prove that the organization is protecting the MBE movement from minority front companies i.e., companies that claim to be of minority ownership when in reality they are white companies or minority people falsely claiming ownership to an activity that is for minority business credit.
7. Be better listeners of what the corporations/clients want and your MBEs need.
8. Redesign the organization and clarify the mission to address how MBEs can effectively participate in the 21st century.
If increasing minority spend is a priority for corporations, they must be honest and admit they will never reach their goals on the backs of micro businesses. They should be focused on building a large network of midsized to large businesses and invest in minority founders who might be the new wave of “disrupters.”
Disrupters are changing industries, economies and the world. Why can’t we have more minority disrupters to make our country greater?