Supplier diversity with muscle

January 09, 2017 | GET MORE : Entrepreneurship

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U.S. Bank's spending with small firms owned by women, minorities, veterans and LGBT entrepreneurs is on the rise.

After months of pounding the pavement, cold calling and massaging his network, Robert Battle was frustrated.

As a sales representative working on commission for B&L Supply in Minneapolis, Battle was fighting to get the small, minority-owned firm contracts with large companies. With two children in college, Battle and his wife faced two tuition bills along with everyday expenses.

“We were struggling,” he recalls.

Then he and B&L owner Clifton Boyd Jr. were introduced to U.S. Bank facility manager Terry Stade. Stade gave B&L its first order with the bank: replacing lights in two branches. It was the break the electrical supplier was waiting for. Scrappy B&L gave top-notch customer service and earned more and more business from the bank. Now, four years later, profit at B&L is up and the number of employees has grown from four to seven.

“I told (U.S. Bank CEO and Chairman) Richard Davis that our companies’ association has had a tremendous impact on me and my life. The seed has sprouted and now it has grown into a mighty oak,” said Battle. Then joked, “And my wife likes me more.”

U.S. Bank’s supplier diversity program has had a marked impact nationwide on small firms owned by women, minorities, veterans and LGBT owners. Especially in recent years, as the amount the bank spends with diverse suppliers is growing steadily each year and hit $368 million in 2015, up 19 percent over 2014.

The growth is due to several factors: senior executives – not just supplier diversity staff – attending minority supplier meetings, managers actively championing vendors for additional contracts across the bank, and clear support from Davis and other senior leaders.l

“That has demonstrated to me in not just words, but actions, that we are serious about supplier diversity. I’ve seen a lot of companies check the box, but this is different. It’s an enterprise-wide endeavor,” explained Hector Martinez, head of U.S. Bank’s supplier diversity program.

One of the biggest factors was a change the program made two years ago: adding LGBT- and veteran-owned suppliers to its list. That addition is rare in supplier diversity circles and helped earn U.S. Bank the “Corporation of the Year” award in September from the North Central Minority Supplier Development Council, a supplier advocacy group in Minneapolis.

“Our stance has been proactive,” Martinez said. “We are at the forefront of supplier diversity.”

And the program is winning recognition for another rare practice: championing the companies it works with internally and externally.  Martinez and his colleague Fesha Buie actively seek more contracts for their approved vendors within U.S. Bank’s various divisions, as well as with other large corporations.

“The supplier diversity program has warranted us opportunities with other companies based on the relationships Hector has. Opportunities have been brought to us because of someone sticking their neck out for us with other companies,” said Sabin Ephrem (pictured left), president and CEO of information technology staffing and digital agency Horizontal Integration in St. Louis Park, Minn.

As a result, Horizontal Integration has gained business with other large corporations in the Twin Cities. It also won a prestigious supplier diversity award this year, in part due to its growth from 20 employees to 160, including 50 in India, and revenue growth of 15 percent to around $75 million for 2016.

Elsewhere, for companies like Faison Office Supplies in Aurora, Colo., winning business from U.S. Bank affected the company on multiple fronts. The veteran- and minority-owned business has boosted its revenue and tripled its employees to nearly 100 in seven states since the late 1990s when it began selling products to U.S. Bank. Faison recently earned the Corporate Plus designation by the National Minority Supplier Development Council for its ability to fulfill large, national contracts.

“We are always reinventing ourselves and looking for ways improve what we offer our customers,” said Faison CEO Jared Casey, Jr. “We have been very fortunate and we are excited about what lies ahead.”

“The diversity team at U.S. Bank are great champions,” he added. “They take the time to understand who we are and what we’re about. It’s a real program, not a façade.”

Another aspect of U.S. Bank’s program is the mentorship component. Each year, the bank pays for two entrepreneurs to attend the advanced management program at the Kellogg School of Management at Northwestern University in Chicago and the Foster School of Business at the University of Washington.

“We spend about $15,000 a year on education for our suppliers. That’s rare,” Martinez said.

U.S. Bank invests in its suppliers so that they can expand further and reach their greatest potential.

“The [education component] is awesome,” said Horizontal Integration’s Ephrem, who attended Kellogg on his own before becoming a U.S. Bank supplier. “The fact that they sponsor minority suppliers to go through that advanced management program is amazing.”

Shera Dalin is a St. Louis-based member of U.S. Bank’s corporate communications team.