Supplier and Workplace Diversity

How two distinct disciplines in your facilities team will lead to a successful FM organization

by Annemarie Scoby-Polacheck — Facility management decisions affect the tenor and tone of the workplace partly because employees define themselves and their business by the environment that surrounds them. For instance, excellent design can lead to a more satisfied and productive workforce; placing departments closer together can lead to more collaboration; and a well-structured and organized workplace can influence its employees to be similarly well-ordered and organized.

Having a facility team that sets the tone for this kind of commitment to diversity can pay huge dividends, both financial and otherwise.

Within any business, there are two main categories in a discussion of diversity—supplier diversity and workforce diversity. Supplier diversity concerns vendors with which a facility manager or other purchasing agent will contract as part of the supply chain, such as landscape companies, cleaning crews, or office furniture suppliers. Typically, a company is considered a diverse supplier if it is owned, operated and controlled by a historically underutilized population group.

Workforce diversity refers to the makeup of the employees who work within the facility. Diversity in the workforce can include gender, ethnicity and age, as well as other identifiable demographics.

Supplier diversity

Supplier diversity has three key components. First, having a diverse supply chain economically equips communities to continue to be able to purchase products and services. Studies show that minority- or women-owned companies are likely to have a greater number of minority or women employees than their counterparts. When companies commit to diversity by hiring non-traditional suppliers, the economy of the region can be enhanced as residents who customarily earn less have more disposable income.

Secondly, engaging diverse suppliers increases competition within a supplier category. Because there are many factors that go into a bid, a company has the opportunity to take advantage of alternative solutions by engaging diverse suppliers in the process. More competition with more varied solutions lowers prices and spurs innovation.

Finally, the use of diverse suppliers enhances customer intimacy. Reggie Layton, executive director of Supplier Diversity at Johnson Controls, Inc., a global leader in facility management, noted that when a company engages diverse suppliers, discussions with customers can center on something other than price.

“Customers want a diverse supply chain, and if you, as a business, can demonstrate your commitment to this, you are more likely to win that customer’s business,” Layton said. “You are able to talk about a value that goes beyond a lower price. It is a more sophisticated level of discussion.”

Layton emphasized understanding best practices in order to take full advantage of diversity.

“Just as there are specific processes engineers use so their building will not collapse in a storm, there are specific practices in the area of supplier diversity,” he said. “If a facility manager knows and understands the best practices in supplier diversity, he or she will be better able to respond to senior leadership’s directives for a given percentage of diverse suppliers.”

One of the most important first steps for a facility manager to take when looking for diverse suppliers is third-party certification. One such diversity certifying agency is the National Minority Supplier Development Council. Another is the Women’s Business Enterprise National Council. Both of these councils provide certification that a business is minority- or woman-owned and assist companies looking for diverse suppliers.

Layton warned that facility managers must be aware that without proper third-party certification there is a danger of fraud.

“It is not enough for a supplier to simply tell a facility manager that the business is owned by a woman or a minority—the business must be certified,” Layton said. “Both of these councils can help a company with outreach in terms of finding minority- or woman-owned businesses that they may not be familiar with.”

A diverse project bid

When a Fortune 100 company was searching for contractors to work on its US$73 million renovation of its corporate headquarters, senior management instructed Debrah Vander Heiden, director of headquarters projects for Johnson Controls, to award 20 percent of the contract to diverse suppliers. Heiden and her colleague, project manager Ann Stark, worked with Layton’s team to organize a bid social for minority- and women-owned contractors. The local NMSDC and WBENC offices invited potential contractors to learn about the project at this informal outreach event. The evening included a discussion of how the smaller companies could work in tandem with larger corporations to bid for the project. Companies not yet certified as minority- or women-owned businesses also received information about the types of certifications that would be required to bid.

“Some of the diverse suppliers were small companies that could not be bonded for such a large project,” Stark said. “But we broke the project into more manageable parts and held a second session with the intent of matchmaking some of these smaller companies with larger firms. It was a win-win situation. We exceeded our 20 percent goal and in the process, found excellent contractors for future needs that we would not have otherwise known about.”

The project ended up having the greatest concentration of LEED® (Leadership in Energy and Environmental Design) Platinum-certified buildings of any campus in the world—becoming a global destination for facility managers and architects interested in sustainable building. As they come to learn about the sustainable features, they also learn that the project was completed with stringent diversity-supplier guidelines.

Workforce diversity

Just as companies are realizing the benefits of a diverse supply chain, customers are realizing the benefits of a diverse workforce.

Therefore, “Companies that show a commitment to workforce diversity have a competitive edge,” explains Cassandra Alston, executive director of workforce diversity at Johnson Controls. “When a company is choosing whether to do business with you, your workplace diversity is a priority for them because it is a way to show alignment with their company’s values.”

Compliance with federal guidelines in terms of affirmative action is a starting point, but most companies reach past simple compliance.

“If you’re looking for talent, a commitment to diversity means you are taking an intentional approach to exploration of the best candidates,” Alston said.

This tends to improve the overall qualifications of the eventual hire.

There are additional factors to consider, whether it is diversity within the facility management department or elsewhere. An organization that has diversity at the managerial level sends a strong external message of commitment to service providers with a large minority workforce. Internally, a diverse management team illustrates that there is room for growth within the company; that those at the lower levels can aspire to climb the corporate ladder and achieve success.

A diverse management team

As an African American woman, Karen Henley-Raymond knows firsthand that a diverse management team brings an important perspective to managing a facility.

Prior to becoming Global Workplace Solutions development manager for Johnson Controls, Henley-Raymond was director of facility management for Tulane University. She had been at Tulane for about 20 years when Hurricane Katrina hit.

“I was much more aware of what our African American facility employees would need,” Henley-Raymond said. “I knew where they lived; I knew where they went when they had to leave their homes.”

Henley-Raymond said that Scott Cowen, president of Tulane, reached out to his entire management team for advice and input throughout the disaster. She was able to act as a liaison between that severely affected African American workforce and the university’s administration.

“I told the president of Tulane that if we wanted to rebuild the university, we’d need housing for our employees, schools for our kids, vaccinations and a grocery store. The administration handled the disaster so well. I was pleased to be able to be part of the team, to give them the information they needed to respond properly,” she said.

Henley-Raymond added that the diversity of the management team allowed for favorable results for the workforce as a whole. Without this diversity, Tulane’s crucial hourly laborers would not have been able to fully contribute to the rebuilding efforts. Cowen subsequently received awards for his courage and leadership during this time.

Diversity also brings its own set of networking advantages, of significance in this age of global business. Gisele Marcus, strategic customer business director for Johnson Controls and an African American woman, has seen firsthand the value that her diverse background brings to the company. When she was at Harvard Business School, one of her classmates was Troy Stovall, an African American man. Later, when Stovall became chief operating officer of Howard University, he contacted Marcus when he needed help with facility management. While another Johnson Controls executive had also been in school with Stovall, it was Marcus and Stovall who were able to network because they were both part of the very small minority population at Harvard and knew each other well.

“Without diversity in your organization, your networking can be limited,” Marcus said.

Overcoming challenges

As different as workforce and supplier diversity may be, they can present similar challenges to a facility manager. In both disciplines, there can be a sense of desire without possibility.

“One challenge I often see is that a manager may be interested in finding a diverse candidate but doesn’t know where to look,” said Alston. “One answer is to ask the people you already have working there. If you have a great woman in the field, chances are she has a network of other great women she knows.”

Professional societies can also be helpful, Alston noted. The Society of Women Engineers, the Society of Hispanic Profession Engineers, the National Society of Black Engineers and the National Black MBA Association are just a few examples of professional organizations that may be able to help with a search.

Layton sees a similar challenge in supplier diversity.

“Many times a manager will say, ‘There is no diverse supplier in this area.’ But what he really means is that he doesn’t know of one personally. This is where the supplier diversity organizations can be of help. If you just choose from among those suppliers you already know, you’re not looking at all your options.”

In the area of workforce diversity, retaining diverse talent can be a challenge. When an employee is the only woman or one of just a few ethnic minorities in an organization, there is a risk that the individual will feel isolated.

“If you can find ways to make sure the employee feels included and engaged, and to make sure the employee has opportunities for development, you have a much better chance of retaining the employee,” Alston said.

On the other side of the hiring line, women and minorities in non-traditional fields often feel like their majority counterparts need proof that they can do the job.

“In my experience, acceptance within the company has come through my contribution,” said Marcus. “It may not be as automatic, but when they see me perform, that generates acceptance.”

Final thoughts

A facility management team that has a working understanding of both supplier and workforce diversity will have a positive impact on their business’ employee engagement as well as their company’s bottom line. These teams will find that they will be supported by the senior management team and respected by the service providers they hire. And most importantly, as their commitment to supplier and workforce diversity grows, they will find themselves with increasing innovation.

However, supplier and workforce diversity are two completely different disciplines and companies should not seek to have the same person managing both.

“The person who works to increase supplier diversity is working within an entirely different field than the person involved with workforce diversity,” Layton said. “Supplier diversity is about relationships outside of the company, while workforce diversity focuses on people within the company.”

Alston takes that thought one step further.

“A colleague of mine said it best: ‘You can’t get a new idea from an echo.’ We are learning that rarely will one person have a full and complete idea. Rather, a person may have an idea fragment. Different perspectives adding to that idea fragment is where innovation occurs.” FMJ

Annemarie Scobey-Polacheck is director of corporate programs for the diversity and public affairs department of Johnson Controls.

Johnson Controls is a leading provider of equipment, controls and services for heating, ventilating, air-conditioning, refrigeration and security systems for buildings. Many of the world’s largest companies rely on Johnson Controls to manage 1.5 billion square feet of their commercial real estate.

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