Getting Schooled At Diversity University
With a market capitalization of nearly $8 billion and annual sales of $20 billion, Johnson Controls is hardly a small company. Still, it pales in comparison with OEM customers like GM with 2002 sales of $186 billion.
But when it comes to commitment to diversity purchasing, JCI is toe-to-toe with the big boys like GM, DCX, Ford, and General Electric. It is one of only 12 U.S. companies that spend more than $1 billion annually with minority- and women-owned businesses, a feat which it achieved for the first time in 2002 and was thus named to the prestigious Billion Dollar Roundtable.
By way of celebrating and to further strengthen the program and the process that drives it, JCI convened a Supplier Diversity Showcase last month and the hours allotted couldn't contain the exuberance and depth of the experience.
For me it was like an immersion language course where you struggle at first to crack the code and then you achieve a breakthough and suddenly your comprehension begins expanding exponentially.
Walking to the parking lot after the event, I'm shaking my head wondering how I could possibly have so little insight on the significant progress being made by U.S. companies.
Perhaps glaring headlines concerning corporate scandals on the scale of Enron and WorldCom tend to crowd out positive accomplishments. From Kozlowski at Tyco to Ebbers, what chance is there for righteous corporate governance?
It turns out, plenty! And it all begins with a far-sighted vision of the future for U.S. corporations operating in a population matrix where the customers of Western European extraction are a shrinking minority and where Hispanics, African Americans and Asians are clearly in the overwhelming ascendancy.
You put a street smart savvy guy like ex-Green Bay Packer Willie Davis on the board of directors and you listen to him. You add a bright light like ex-Detroit mayor Dennis Archer to the board. You make sure they are allowed to make a contribution and you find yourself getting hooked up.
The JCI process for progress in supplier diversity consists of 10 best practices: build program infrastructure and obtain executive commitment; establish accountability processes; enhance decision-maker involvement through recognition processes; strengthen supplier diversity's linkage to sales and marketing; develop supplier recruiting and referral processes; maintain diverse purchases during supplier base consolidation; build diverse firm capacity through mentoring relationships; train diverse supplier executives; develop strategic alliances; and develop joint ventures.
JCI did only $2 million with diverse suppliers in 1993. It took five years to top $100 million. For 2003, JCI projects $1.07 billion. This isn't altruism. It is just good business.