How to pitch to corporate America: the top seven priorities of corporate procurement officers

Black Enterprise, Feb, 1994 by Adrienne S. Harris

IN THE EARLY 1970s, IT WAS A matter of political correctness. Scores of large corporations, responding to the demands of African-Americans for equal access to business opportunities, established programs to ensure that certified minority companies would be included in the corporate purchasing process. Today, minority business development programs are viewed as politically and economically correct.

That is not to say that it's any easier for minority businesses to land contracts with major corporations. To be successful, entrepreneurs must understand the goals, customers and culture of potential corporate clients, and be able to present quality products and services at a competitive price. And they must understand that minority business development programs are not a free-for-all sweepstakes for contracts.

BLACK ENTERPRISE polled 10 corporations with active minority-business development programs to find out the key to winning contracts. The executives and vendors of these companies--AT&T, Avon Products Inc., The Boeing Co., Borden Inc., Chrysler Corp., Eastman Kodak Co., First Union Bank, JC Penney Co. Inc., Lockheed Aeronautical Systems Company Inc. and Washington Gas Co.--sound a common theme: Entrepreneurs that are not prepared to compete for business and deliver the goods need not apply. In other words, companies look for people, firms and suppliers who can get the job done.

LISTEN TO THE CLIENT

While stressing that they still take seriously their obligation to treat business owners fairly, regardless of race, most corporations support development programs for minority companies because it makes good business sense. "Many minority purchasing programs were born out of corporate America's need to respond to certain social circumstances," says Connie Hammond, manager, supplier relations/MWBE for AT&T in Greensboro, N.C. "Now we recognize that demographics, markets and the economic landscape are changing. I'm encouraged that people are beginning to understand that those changes have to be reflected in how we do business."

Last year, the 100 American corporations that purchased the most goods and services spent almost $500 billion with outside suppliers. The New York-based National Minority Supplier Development Council (NMSDC) estimates that three-quarters of those corporations either have formal program or informal initiatives generating about $10 billion in business with minority-owned firms.

Among the NMSDC's 3,500 corporate members, 1992 purchases with minority firms totaled $20.5 billion. Two-thirds of the council's 15,000 minority-supplier members report that over the past two years they have done business with corporations through their business development programs. Most have contracts with at least five corporations. For one-third of the council's black-owned companies, corporate contracts represent most or all of their business.

Despite this progress, suppliers say that the single most important action corporations can take to assist the development of their companies is to award them even more contracts. Managers of business development programs agree that corporations still aren't doing enough business with minority firms.

"The long-range goal is to make minority and women business enterprise programs obsolete by institutionalizing diversity," says Hammond. "We're not there yet. Until that happens, we must maintain that focus in our organizations."

For their part, minority suppliers who want to land corporate contracts must know how best to take advantage of the opportunities represented by minority-business development programs. That begins with a fundamental question: What are corporations looking for from their minority suppliers? The short answer is that they are looking for the same thing they want from all of their suppliers--quality products and services, on time and for the right price.

"There's really nothing magical about it," says Ronald Cosey, manager of minority purchasing for Borden in Columbus, Ohio. "We look for companies that are good at what they do, competitive, resourceful and can get the job done."

KNOW THE COMPANY AND ITS ENVIRONMENT

As corporations struggle to stay competitive in today's rapidly changing, global marketplace, it's critical that their suppliers understand what they need in the context of this environment. That means that in addition to knowing what a corporation purchases, minority suppliers need to know something about the corporation's customers, competitors, and most important, marketplace goals and challenges.

"We now have more experienced and educated minority-business people than we had even five years ago," says Fitzroy J. Hilaire, director of external development for Avon Products in New York. "There is a growing awareness that minority-business owners are more knowledgeable about doing business. We see more newer businesses, but not businesses that are less capable."

Hilaire attributes the overall increase in business savvy among African-American entrepreneurs to the large number of executives bailing out of corporate jobs to start their own companies. For example, before he launched Royal Essence Ltd. in 1987, Howard E. Kennedy worked for 21 years as chief perfumer for Revlon and Pfizer. Today, his $2 million company creates flavors and fragrances for several large corporations, including Avon.