Reginald K.Layton

For those of you who lead medium-to-large U.S. corporations and have not heard the phrase “supplier diversity,” you’re probably already a decade behind some of your most challenging competitors. They’ve already figured out a way to convert economic development into customer loyalty, market advantage and long-term stability.

Supplier diversity is a privately driven phenomenon that has nothing to do with the composition of your workforce, compliance, set-asides or philanthropy.  Supplier diversity is a term coined by the business community that refers to the diversification of procurement opportunities with qualified businesses owned and controlled by minorities and women.

Diverse entrepreneurs are leading a quiet revolution in today’s business world. They are better educated, financially stronger and starting more businesses than ever before. Their businesses are growing quickly, and most importantly, they are leaders in creating jobs for minority workers –some 75 percent of all minority firm employees are minorities.  In addition, studies indicate that minority consumers are more brand-loyal and reward companies that contribute to their communities’ well being.

Johnson Controls recently hosted a Supplier Diversity and Business Development Showcase in Milwaukee with a Billion Dollar Roundtable (BDR) event called the C-Suite Summit. The C-Suite Summit featured senior executives from BDR corporations discussing supplier diversity best practices. These corporations each purchase more than $1 billion annually from diverse suppliers. The BDR’s mission is to drive supplier diversity excellence through best practice sharing and thought leadership.  The Showcase and the C-Suite Summit also featured high-level exchanges about core supplier diversity principles, perspectives, opportunities and pitfalls. The events provided proven ideas for advancing supplier diversity for competitive advantage, including winning processes that helped Johnson Controls make supplier diversity an integral part of its day-to-day operations.  More than 70 corporations and 200 individuals attended the event.

The Billion Dollar Roundtable senior executives believe that supplier diversity is not just good for goodness’ sake. They recognize that working with diverse-owned firms provides market intelligence that gives their corporations greater penetration in diverse markets. They encourage corporations to move from viewing supplier diversity as something that’s tolerated to viewing it as a value-add to their bottom line.

Supplier Diversity is strategically good for business. When more people have money and jobs, more people can afford to purchase products and services, competition increases, corporate revenue increases, communities are stronger, and lives are enhanced.  Isn’t that what every person and every business wants? It’s economic development at its best.

Reginald K. Layton is director of Diversity Business Development for Johnson Controls. The company’s achievements have garnered prestigious recognition, including being named Corporation of the Year in 2003 and 2008 by the National Minority Supplier Development Council (NMSDC).  Mr. Layton was named Minority Business Enterprise Advocate of the Year in 2003 and Minority Supplier Development Leader of the Year in 2008 by NMSDC.