Who’s Fed Up? - Teeth grinding over supplier diversity
Consider this: Two male baby boomers with similar academic degrees and corporate experience are downsized. Each uses his severance money to launch his own business. Five years later, both businesses have built up a client base and both are making a profit. They set their sights on bigger fish. One taps into his network and subsequently is invited to make a presentation to the procurement team of a major corporation. He aces the presentation, registers as a vendor, receives notice of a primary contractor opportunity and makes a bid.
The second entrepreneur taps into his network and gets as far as the supplier diversity officer of his target organization. The SDO tells him he has to go though the “minority certification process” before he can register as a vendor. He forks over the money to a “recognized” certifying organization to document that he is Black, a U.S. citizen, owns at least 51 percent of his business and operates it himself, making day-to-day, management, policy and operational decisions on its behalf. After six months of assembling financial statements and other documents, filling out forms and enduring a committee review, he gets the certification. He is informed that he must pay an annual fee to the certifying body—one charges $350—to remain certified. If the certification lapses, he will have to go through the entire process again. He is warned to keep track of his “MBE certification anniversary date.” After certification, he is instructed to register in the corporation’s supplier diversity database. He learns that registration does not guarantee certification as an approved supplier, that his firm will be placed on a bidder’s list, or even that his firm will be considered to bid on procurement opportunities. He also learns that his firm is selected for the corporation’s supplier diversity three-year mentoring program, where his company will be thoroughly prepared for doing business with major corporations and exposed to myriad subcontractor opportunities.
Meanwhile, in the arena where “general market” firms play, John Galt Corp. won a $177 million contract to demolish the toxic Deutsche Bank building. When two firefighters died fighting a blaze on the site, subsequent press reports used words like “shadowy” and “fictional” to describe John Galt. The company had never done much of anything since it was incorporated in 1983, and certainly nothing like the Deutsche Bank demolition, the reports said.
There is talk that some in corporate circles are tired of the supplier diversity industry. As an industry, it is complete with researchers, producers, marketers, regulators, consumers and profiteers. The sentiments expressed in “The Death of Diversity,” an Aug.16 article by Daniel Henninger, deputy editor of The Wall Street Journal, on the paper’s Opinion Page, are telling. “One of the biggest problems with diversity is that it won’t let you alone. Corporations everywhere have force-marched middle managers into training sessions led by ‘diversity trainers,’” Henninger writes. Diversity ideologues turned diversity into “a political and legal hammer to compel compliance. The conversions were forced conversions. As always, with politics comes pushback. And it never stops,” he notes.
Not that Henninger is anti-diversity. Properly understood, diversity is “a decent notion,” he says. In a world where people of color are disadvantaged, diversity has its place. If today there is teeth-grinding over supplier diversity, whom do you think is more fed up of the need for supplier diversity than whom?
By Rosalind McLymont