Business groups up their focus on supplier diversity

The Massachusetts Competitive Partnership is rolling out a new tool to help companies assess the diversity of their supply chains

DRB founder Anthony Samuels was an early participant in the Greater Boston Chamber's Pacesetters program.Photo courtesy of DRB

Major Boston business groups are stepping up their efforts to help members improve the diversity of their supply chains, with the Massachusetts Competitive Partnership becoming the latest to join the fray.

The partnership, a group of high-powered CEOs, has unveiled an online survey that it will make available for free to companies to assess and improve their supplier diversity efforts with a series of measurable standards. The partnership used this survey to poll its own members, who run many of the biggest employers in the state, and found that 12 of 16 already have mature or somewhat mature supplier diversity programs.

In a coincidence that underscores the issue’s importance in the local business community, there were dueling panels held last Wednesday to address supplier diversity. In the morning, Associated Industries of Massachusetts held its second annual supplier diversity forum at Microsoft’s office in Cambridge. Then, in the afternoon, the Competitive Partnership held a virtual roundtable to discuss its survey data and online assessment tool.

One recurring theme: how tough it has been for companies to line up contracts with minority-owned businesses. AIM’s supplier diversity program, known as AIM Business Connect, has generated a dozen such contracts in its first year, a figure that also includes contracts with women-owned businesses. And the Greater Boston Chamber of Commerce’s most recent data for its five-year-old Pacesetters program shows chamber participants placed $204 million worth of contracts with Massachusetts businesses owned by people of color in 2021, a 20 percent increase from 2020, while the participants’ national spending with such businesses fell by 6 percent. The chamber’s goal: for 10 percent of Pacesetters’ supplier spending to go to minority-owned businesses in the state; in 2021, the average was around 5 percent.

“I was warned early on that it is hard work, and that has proven to be prophetic,” AIM chief executive John Regan said. “But that doesn’t mean you don’t do the work. ... We tried to emphasize that they don’t have to be extremely large contracts. They could be simple, [like] catering, developing marketing material, landscaping or janitorial, things that are the day-to-day needs of a business.”

Anthony Samuels, owner of building services firm DRB, spoke on the AIM panel and was an early participant in the Chamber’s Pacesetters program. It’s one of several such efforts that gained momentum after George Floyd’s murder in 2020 and the racial reckoning that followed.

Samuels said DRB now employs 725 people and that its revenue has nearly doubled since 2018 — in part by landing through Pacesetters networking a business relationship with Northeastern University that involves a range of janitorial services. Supplier diversity programs, he said, help lead to cross-industry relationships that often result in business opportunities.

In the Competitive Partnership’s case, the work grew out of a request in mid-2021 from Rapid7 CEO Corey Thomas and State Street CEO Ron O’Hanley, who lead the partnership’s social justice committee. They asked the partnership’s staff and accounting giant Deloitte — which did its work pro bono — to research what partnership members were doing to diversify their supply chains and offer suggestions for improvements. Results varied significantly. Some member companies have had supplier diversity programs for more than a decade, while others still haven’t launched one formally. Some have full- or part-time staff dedicated to this work, while others do not.

Rebecca Davis, the partnership’s chief operating officer, said Deloitte’s research found some keys to success: buy-in at the C-suite level, using metrics that can be tracked over time, and breaking up big contracts so smaller businesses can more easily bid on them. She said the partnership members hope other businesses can benefit from the Deloitte survey, particularly those that might not have their own “self-assessment” tools.

Greater Boston Chamber chief executive Jim Rooney, who spoke on the partnership’s panel, said many multistate employers have national supply chain procurements and often face pressure to use minority-owned suppliers in other cities. Some are limited by longtime contractual arrangements or credential requirements.

But Rooney said he’s still seeing progress with local spending among the chamber’s Pacesetters members.

“It needs constant attention,” Rooney said. “I tell my team, ‘It may not be as big and bold as you like it to be, but you’ve changed some lives.’ That one big contract kept someone in business or changed the trajectory of a company.”