During the first session of DiversityInc’s Oct. 15 virtual event, “Supplier Diversity: New Trends, Innovative Solutions,” panelists discussed tips on how businesses can become diverse suppliers to Fortune 500 companies. Jalayna Bolden, director of supplier diversity at AT&T (DiversityInc Hall of Fame company); Erica Stephens-Lynch, director of supplier diversity at Dow (No. 22 on The DiversityInc Top 50 Companies for Diversity list in 2020); and Erika Gibson, director of supplier diversity and corporate procurement at Hilton (No. 2 in 2020) offered advice to diverse and minority-owned businesses on how to approach and become suppliers to these large corporations.
The panelists first discussed the importance of prospective suppliers doing their research on companies before approaching them and gaining related experience.
“Understand what categories the company is looking for,” Gibson said. “And one of the greatest things that I’d really recommend is getting experience. And I think that’s really easy, especially in the hotel industry, because you can start on a local level.”
Gibson said businesses can gain experience being suppliers for individual locations and management companies on the local level to gain experience before approaching a larger international organization like Hilton.
“When you’re ready to take on the full supply chain, then you can approach an organization like Hilton Supply Management, which does all the procurement for Hilton. And you’re able to really come in there with competence with that experience,” she said.
In addition to gaining related experience, the panelists also recommended understanding what the company’s needs are in order to pitch services that offer unique solutions. Instead of inquiring about what opportunities the company can provide to small businesses, offer information on what your small business can provide the company.
“If you’re approaching a major corporation, understand what that company does and where they’re working in,” Bolden said. “Then look at, ‘How do my products and services align with a particular challenge or provide a new technology or solution?’ … I think a lot of suppliers make the mistake of coming to the table in a capabilities review and saying, ‘What do you have? Where are your opportunities?’ Well, I think that the innovative supplier will create those opportunities because you’re going to come with us with an innovative product or solution, or you’re going to save me money in some kind of way.”
Because of their size, Fortune 500 companies also require businesses to ensure they’ll be able to deliver on their contracts. Bolden said that for a Fortune 10 company like AT&T, contracts with suppliers are quite demanding. She said prospective suppliers should make sure they have the capacity, financing, resources and insurance to deliver on contracts with large companies.
Furthermore, it is important to keep in mind that fostering relationships with large corporations is about building relationships over time — not just making quick sales.
“You want to build that relationship so that people understand your capabilities, you understand what the company is looking for, we can vet each other as far as that’s concerned, and then when something becomes available, you can be included in that bid,” Stephens-Lynch said. “And that’s the one thing I would really stress, is that this is not an overnight thing. This is not a quick sale. This is something that’s going to take some time.”
COVID-19’s Impacts on Diverse Supplier Success
This year’s pandemic derailed many areas of business and caused small businesses in particular to face challenges they’d never encountered before. On top of the struggles minority-owned businesses face unrelated to the pandemic — such as access to capital and short-term liquidity — they also faced the challenge of not being able to meet in person with suppliers. Bolden said this problem was especially difficult for minority suppliers in the hospitality space.
However, the panelists said COVID-19 presented unexpected benefits as well. For example, virtual meetings have allowed for more stakeholders within an organization to be involved in meetings, because no one was limited by travel arrangements and budgets. Stephens-Lynch added that COVID-19’s challenges also left room for entrepreneurs to innovate.
“COVID-19 has presented challenges, but it’s also shown the best in these entrepreneurs and their talents and their abilities, by being able to change and supply what the market needs at the time,” she said.
According to Bolden, AT&T also hasn’t experienced a slowdown in onboarding new suppliers. In fact, it gained 11 new diverse suppliers in the past year. She added that AT&T has been trying to meet as many new diverse suppliers as possible remotely and has even adopted a new platform for virtual matchmaking.
The Importance of Certification
The panelists all spoke about the importance of being a certified minority-owned business when seeking out corporations looking for diverse vendors. Being certified by organizations like the National Minority Supplier Development Council (NMSDC), the Women’s Business Enterprise Council (WBENC), the National LBGT Chamber of Commerce (NGLCC) and Disability:IN will not only ensure your business is truly diverse, but it will also connect you to networking and development opportunities. Organizations like these add your business to a database that corporations can access to find diverse suppliers that meet their needs.
Out of the DiversityInc Top Companies for Supplier Diversity specialty list, 100% sponsored WBENC and the NMSDC, 93.3% sponsored the NGLCC and 80% sponsored Disability:IN.
“Some of those organizations are also saying, ‘Hey, we know that these are things that you look for. These are areas where you need help. We’re going to provide for you these five vendors. Meet these folks. We’ve vetted them already. We think that they’re a good fit. Let’s go talk to them and see how you can do business with them,’” Stephens-Lynch said.
Working with these certifying bodies and large corporations affords small businesses valuable opportunities for advancement through mentoring and financial support. Dow offers mentoring opportunities for businesses looking for grants.
“[We help] to mentor the different vendors in search of those grants and to help them to sell their business, talk about their business and be able to apply for these grants and get those opportunities as well,” Stephens-Lynch said.
Nearly 87% of the companies on DiversityInc’s Top Companies for Supplier Diversity specialty list provide financial assistance and education to diverse vendors, and 93.3% offer external training or mentoring programs for diverse suppliers.
AT&T and Hilton have both donated to help certify businesses and also offer financial mentorship directly to small diverse-owned businesses. When the pandemic hit, AT&T made donations to 16 certifying organizations around the country so they would be able certify new vendors or to recertify established vendors. Hilton also began its supplier diversity advancement fund to assist companies that demonstrated need and were part of certain certification networks.
“We advertise through NMSDC and on WEBENC, letting them know that we would be able to give them a small grant to really help them take their business to the next level,” Gibson said. “That’s something that we started and we were able to award during COVID-19 and considering the impact that the hospitality industry has faced, I was really happy and excited that we were able to do that.”