Massive Annual Spend is Devoid of Responsible Transparency

Supplies diversity management has longed for openness in annual product and service outsourcing requirements from the American public and private sectors.  When corporate America exercised rightsizing and downsizing strategies of their firms in the 1980-90’s this phenomenon benefited a number of major corporations to merge and acquire at multi-billion dollar levels, a feat certainly never to repeat.  Sadly, we are now in the mist of encountering entire major cities downsizing such as Detroit, Cleveland, Pittsburg to name a few, and to some extent Los Angeles.  What is critical to this state of affairs is unlike stockholder-controlled corporations, whereas the public sector does not have the operational luxury of benefiting from lucrative merger and acquisition processes.

The Federal government created legislation that would safeguard society from enduring this type of economic implosion, but leadership has dismissed the shared knowledge in lieu of deficiency in responsible socioeconomic development.  A considerable amount of time and material has gone into the general business model of launching and operating socioeconomic development programs.  Conversely, there is a serious lack of responsible care of implementing a transparent course of action for supplier diversity and contracting inclusion.  Slim to no positive outcomes are developing as it pertains to black-owned and operated concerns.  There appears to be a disconnect from the sprit and intent of legislation for socioeconomic development includes employment, supplier utilization, and philanthropic support among protected classes designated by race, color, religion, sex, national origin, disability, or age, which still presents enormous parity gaps. 

These aforementioned protected classes add up to a large range of American citizenry, but yet the distribution of annual spend among these groups from the public and private sectors is more disproportionate today than it was when these programs first began in the mid-1960’s.  Banking, finance, insurance, petroleum, energy, food/beverage, entertainment, technology, and telecommunications are making some unreal multi-billion dollar profit margins.  All the same, it is not so much the excessive profits to blame as the problem for the shrinking economy; as much as it is how these successful major industries have selectively chosen to divest their respective annual spend for operational products and services.  Annual spend dollars are not going to enough companies to help defray the tax burden required to run large scale economies like the city of Los Angeles, thereby creating vast disparity gaps in the American landscape. 

For example, let us take a snapshot of the National Minority Supplier Development Council that has a membership base of the top Fortune 2,000 corporations, plus many of the major municipalities and state agencies.  This is roughly a 40-year old organization that records an aggregated annual corporate spend with minority businesses in excess of $100 billion.  Corporate America sourcing qualified minority firms and awarding such contracts on a competitive basis may sound like a good investment, but this annual spend with minority firms hardly breaks the surface of underserved communities, once again pointing out how the spirit of intent of socioeconomic is being lost.

Therefore, if regular competition is the business model, the public and private sector socioeconomic development programs at this time may be redundant work product.  The outcome is showing no benefit or innovative application with supporting the protected classes to build historically underutilized business enterprises.  Contracting fairness is apparently resolved where any company demonstrating responsive competitive pricing and responsible management will reach parity through an auditable win-capture rating of contract opportunities.

All the same, one has to question the significance and relevance of what does a $100 billion mean regarding the groups labeled protected class and to what extent does recording such a large annual spend accomplish if the very communities and cities where minorities reside are going bankrupt?  Pronouncing an annual collective spend of $100 billion dollars without transparency of positive outcomes does not make for trustworthy socioeconomic progress.  Especially when the business model expressed by the Fortune 2,000 corporations maintains doing business only with other like companies, then there is no change in the game, the hierarchy of wealth remains analogous to the start of addressing socioeconomic barriers.

More than ever before, the dreams of black-owned business proprietors for operating a successful enterprise are facing evasive purchasing opportunities and it has shaped a slim likelihood for such companies of obtaining sustainable long-term contracts from the public or private sector.  The rules of engagement for blacks overtly deal with ownership certification processes and other frivolous upfront acceptance requirements to market their prospective supplies, which are taking black business enterprise on a deceptive socioeconomic ride. 

This is especially applicable when it comes down to meeting with diversity specialists in who in turn do present a good game, but in the end can produce no tangible or transparent results of how the outsourcing budget is being invested.  Relatable business management job descriptions to the self-made term ‘supplier diversity’ has little use during our current economic crisis, where whole cities are eroding while a sizable qualified workforce sits idle on the side lines watching as Rome burns to the ground.  In the present day, capturing contracts by small business owners appears achievable at a much different management level than diversity officers who operate unaccountable, or are unconscientiously prepared, to deliver.

We are in an economic crisis and the sacrificial lamb is small businesses, slaughtered right in plain sight due to the lack of business offerings that go to black-owned and other small business enterprises.  The lack of transparency in obtaining those aforementioned competitive bids is an obvious problem as the lack of participation from small business is withering away.  It is withering away with the populace seeking areas of refuge within corporate America as consultants, contractors, leased employees and temporary workers.  This is good for Corporate America who can aptly continue to prosper and bad for small business enterprises who can barely forecast next month, less alone produce a five to ten year plan with meaningful accuracy.

The city of Los Angeles has a small minority business program; however, when you review the business corridors of the city you do not get a visual picture of thriving concerns.  Los Angeles’ annual spend investment does not align itself well with the community in which its serves.  Likewise, the protected class business owners located in the prescribed service territories of the investor-owned utilities have dissolved considerably over the past twenty years as these profitable major corporations thrive and their respective service territories waste away from the lack of corporate investment.

Scrutinizing the deficient transparency in contracting in this manner in no way attempts to call upon or seek to engage in a pity party; I am actually sharing this for public and private buying organizations to look at their probable wasteland of time and material in the correct disposition of socioeconomic development objectives.  It will do the public and private sector good to change their approach of coddling the window dressing of supplier diversity, the gatekeepers of purchasing opportunities and the door blockers of contracting engagement, in order to consider a more productive use of that same money by investing it in authentic community growth. 

With few exceptions, corporations are wasting considerable money with supplier diversity programs and outreach officers are useless when they are unable to share purchasing forecasts on outsourcing requirements.  The excuse normally shared by an outreach specialist is that the outlook on outsourcing is proprietary, but in reality, most managers of supplier diversity are ill equipped to open any transparency on how the operating capital of their respective organization plans to invest in the growth of small business enterprises.

There is corporate waste for operating supplier diversity programs that are unable to conduct business site visits in geographical areas that need economic development.  The past era of just-in-time purchasing brought on a massive need to bundle corporate contracts to give major suppliers the ability to meet quick demands and short turnaround requirements.  Consequently, local smaller companies lost a considerable edge to market their wares directly to area managers and department heads to sell to local/regional offices.  Long gone are the days of office supply stores, automotive repair/supply, hardware and/or general commodity sellers that would go to their banker with an open or blanket corporate purchase order that could demonstrate impending future revenue sources. 

The contemporary arena of corporate purchasing deals with major general construction firms, contract personnel staffing agencies, and personal/professional service companies given access to the billions of dollars allocated for the outsourced needs of products and services.  The protected classes of race, color, religion, sex, national origin, disability, or age reveals a considerable number of corporate executives placing this sort of diversity as its least important business initiative.  Additionally, large chambers of commerce are suspect to this instability led by the same captains of industry, as such groups offer no standing or ad hoc committees to address socioeconomic development programs.

In spite of these undesirable facts, I am optimistic that somewhere, somehow, public and private sector socioeconomic initiative planners will gain a better understanding on how valid socioeconomic development programs benefit the communities that they serve, and bottom line profits, respectfully.  Enjoyment of higher revenues is best when lower income communities have full building and fair trade practices in place. 

In southern California, the utilities are acutely aware of their service territories, but the leadership is quiet as to how poorer communities are experiencing a severe shortage in corporate business activity.  This steady decline includes the public and private sector socioeconomic placing excessive emphasis on affordable home mortgages, which are only as practicable as the sustainable jobs generated to help pay for and maintain them; where the bases of such activities begin and end with supplier contract engagements.

We had a much needed economy parity wake-up call in America some fifty years ago.  Even the time passing from the great depression of the 1930’s still had not jarred us enough to realize that we are all in this American enterprise building together.  The nation went right back to old ways of a class system and race was the easy divide.  During this era, for most blacks it was a distant concept to have equal protection under the laws as promised to all American citizens by the 14th Amendment to the U.S. Constitution. 

I can still vividly remember when the late great President John F. Kennedy gave his civil rights speech of June 11, 1963.  He asked for legislation to give all Americans the right to be served in facilities which are open to the public (hotels, restaurants, theaters, retail stores, and similar establishments), as well as ‘greater protection for the right to vote.    This was my first glimpse at a transparent public process where many people watched on and roughly, one week after the President’s speech a democratic congressional representative (Emanuel Celler) introduced new civil rights legislation in the House as H.R. 7152 by on June 20, 1963. 

Even without C-SPAN television, it was easy to find out about the bill’s status as it passed the house in February 1964.  Even despite the tragic assassination of President Kennedy just a few short months prior, and it fully passed the Senate on June 30, 1964, where President Lyndon Johnson signed the civil rights Congressional Public Law 82-352 on July 2, 1964. 

Conceivably, reminding major buying organizations and/or initiating training programs about understanding our ancestors’ socioeconomic visions are essential.  The previously mentioned legislative action underscores how we should never stray away from divesting from the American citizenry.  Collectively, supply chain managers are well suited to invent and help build America with all of its resources, even with members from protected classes.

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