Practicing Patience

So we’re all entrepreneurs here, right? SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) owner(s), certified or on the path to certification or interested in the topic. We write and talk about supplier diversity professionals and certifying organizations, but it occurs to us that we haven’t talked much about the analysts and certifier staff members.  As entrepreneurs we often get to make up our own organizational policies, processes and  procedures as and when we wish … and then, the people who work in our businesses have to follow them.  Sometimes, because we are used to having so much control, we forget that others simply don’t. Patience is a key skill we’ll need to practice when seeking diversity certification, because it is a complicated process with mandated compliance requirements.  The mandates may differ slightly between certifiers, but the similarities far outweigh those differences.

Another major similarity is that certifiers are not-for-profit organizations.  Unlike we business owners, who must be organized as for profit for virtually every diversity certification, certifiers are either government agencies or non-profits. And, most of these certifiers are backlogged with hundreds of pending applications and annual updates.

We know the effort that goes into preparing just one application, our own business is certified by 26 states, two cities and two non-profit agencies and has helped many companies on their own paths to certification. The actual application is 8 or 9 pages of questions about the owner, the business, its history including references, banking relationships, employees, equipment, etc. If a disadvantaged (DBE) certification is being sought, there’s three more pages of personal net worth data to be collected.  Finally, a stack of supporting documents and an affidavit complete the application.  Conservatively, that’s likely to be about 200 pages for the certification analyst to review.  For a 36 year old company like ours, its about a ream of paper (500 pages).

As time consuming as the process is for the SDMWVLGBTBE company, the information you’re providing isn’t new to you.  Patience is required now, there is no reason to expect a fast turnaround.  You know your business. The certification analyst doesn’t. S/he starts at the equivalent of page one with the name of the business and reads the entire application, cross-referencing with the documents to ensure that the business is truly owned, controlled and governed by its SDMWVLGBT owner(s).  During this review, the analyst may have a question or two.  You’ll be notified of the question and given a specific period of time to respond.  And, the certifier expects that SDMWVLGBT owner(s) will comply, if not cheerfully at least politely.

Once all the questions have been answered, the documents accounted for and reviewed, the site visit will be scheduled. If the certification sought is DBE (disadvantaged business enterprise) through a state government — Department of Transportation (DOT) or Unified Certification Program (UCP), etc. — the visit will likely be conducted by a government employee. And, s/he likely has a backlog of applications and visits.  If you are pursuing a third party certificate there may be volunteers involved serving on committees or other steps in the process, possibly even the site visit.  No matter which certifier you have chosen,  it may take several months between the time your application is submitted and the initial site visit.

As entrepreneurs, most of us are accustomed to demanding clients who expect immediate results and we jump through hoops to deliver quick, efficient and effective goods or services. It is easy for us to become frustrated with the certification process.  Some so frustrated that they don’t finish the application:  many overwhelmed by the sheer amount of historical documents requested; others feel the need for personal financial information is too intrusive; or, view the time commitment as excessive.  It seems natural that we expect the certifiers to jump through hoops in evaluating and approving our applications.  But, in the real world, these non-profit or government certifiers are also overwhelmed.  As supplier diversity has become a driving force in corporate and government procurement, more businesses apply for certification and the certifiers, too, become backlogged by the inundation of applications and hundreds of documents to review. Certifiers are faced with incomplete applications, missing materials or questions about language in governing documents all of which require extensive communications to resolve before they can schedule the site visit.  Oh, and don’t forget these certifiers are also having to review annual affidavits from previously certified companies. Also complicating and delaying the process is site visit scheduling. So it’s really no wonder that the wheels of certification can seem to grind very slowly.  Our recommendation … buckle up buttercup and be patient, nothing worth having comes easily.

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Thoughts About Roots

We’ve talked about how Supplier Diversity has its roots in Civil Rights and Affirmative Action legislation before.  Long story short, President Johnson amended President Kennedy’s E.O. 11246, which established the Office of Federal Contract Compliance. This required companies with federal contracts to make good-faith efforts to expand employment opportunities for both women and minorities. Once large corporations were required to comply with EEOC, and the rules established as a result of legal actions taken throughout the country, supplier diversity became the next logical step. And, in fact, President Nixon used E.O. 11458 to create a federal Office of Minority Business Enterprise (OMBE). In 1971, President Nixon issued E.O. 11625, directing federal agencies to develop comprehensive plans and specific program goals for a national Minority Business Enterprise (MBE) contracting program. Then, in 1983, President Ronald Reagan issued E.O. 12432, which directed each federal agency with substantial procurement or grant making authority to develop a Minority Business Enterprise (MBE) development plan. During 1979, the agency was renamed the Minority Business Development Agency (MBDA), a part of the U.S. Department of Commerce. The actions of Presidents Kennedy, Johnson, Nixon and Reagan led to the formal process of identifying and vetting the credentials of businesses that claim to be owned and operated by qualified members of diverse ethnicity, veteran, women or disabled groups. The initial program was run by the U. S. Department of Transportation, which remains the primary engine of Disadvantaged Business Enterprise (DBE) certification as it is deployed by states and U.S. territories.

Recently we’ve been intrigued by how the program started with an application of a page or two grew to eleven pages plus a ton of supporting documents. We believe, at the root of the issue, each new iteration of required proof stems from an attempt to prevent fraud.

Fraud in the program likely began immediately. DOT’s Office of the Inspector General (OIG) investigated 89 allegations of fraud nationally between 1983 and 1988. A detailed review was conducted by the Government Accounting Office (GAO) and resulted in a fifty-eight page report to Senator Daniel P. Moynihan who was then Chairman of the Subcommittee on Water Resources, Transportation and Infrastructure, Committee on Environment and Public Works of the US Senate in November 1988.  They closed 70 of the cases:

  • 53 were closed administratively, 21 of which resulted in actions against the contractors
  • 17 involved litigation
    • 12 convictions
    • 5 acquittals
  • $1,040,434 in restitutions

Another 90 cases were investigated in New York and Pennsylvania, with 61 cases resolved administratively by taking action against the contractors or closed due to lack of evidence. One Pennsylvania case, however, led to four convictions. Twenty-one years later, the GAO reported that ten firms received approximately $100 million from service disabled veteran owned small business (SDVOSB) contracts through fraud or abuse of the program, or both. DBE fraud can even occur over decades. In 2011, one corporate officer pled guilty to criminal charges of money laundering and conspiracy defrauding the government between 1988 and 2009. And his company paid several million dollars to settle the civil suit against it stemming from the fraud.

DOT’s Office of the Inspector General reported on its DBE fraud investigations in March 2016. DOT spends about $50 billion per year on construction programs, with 10% to DBES, or $5 billion. Between January 2011 and 2016, DOT OIG’s DBE fraud investigations resulted in:

  • Over $245 million in financial recoveries, restitution, and forfeitures
  • 425 months of incarceration
  • 1,161 months of probation and supervised release
  • 1,340 hours of community service

Two years later, in June of 2018, Small Business Administration’s (SBA) Office of the Inspector General (OIG) “found that Federal agencies’ contracting officers and firms did not comply with Federal regulations for 50 of the 56 Program sole-source contracts, valued at $52.2 million. As a result, there was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the Program.” (emphasis, ours)

So each time we SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise)  owners are asked to prove in yet another way that we do, in fact, own, operated, control and govern our businesses we can thank those who tried to cheat the system. Yes, they made it more difficult for us.  Ultimately, however, they made our vetted certifications even more legitimate.

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Profiles in Certification – OQ Point LLC

We’re back with another certification profile. As a reminder, Samantha Smith interviews potential businesses, so email us with a request to be included — and no, you don’t have to be a GetDiversityCertified.com client.  Next up, OQ Point, LLC.

If you are considering diversity certification, you might be asking yourself: Which certification should I choose? And how many do I need? That is a question Earl Mann, president and CEO of OQ Point LLC, asked during the process. Like many small businesses, he dove in with a plan that he ultimately needed to revise. His plan changed when he learned he could apply for multiple certifications. He currently holds four— NMSDC, VOSB, UCP and the NVBDC—and plans on attaining more. I asked him to ballpark a number and he admitted, simply, as many as possible.

“Each of these certifications represent a unique market for me. Each is a door to a different market,” he says. For example, the Veteran Owned Small Business (VOSB) and National Minority Supplier Diversity Council (NMSDC) certifications are accepted nation-wide, but may rank high or low on a corporation’s list of priorities, depending on their diversity spend goals. Being both a veteran and a minority, Mann benefits from registering with both certifications. He explains further, “It made strategic sense to cast a broad net.” Beyond that, a business could choose to get state-level certification. Mann certified with the Unified Certification Program in Washington and plans on taking a similar route with different states. With multiple certifications on state level, he has access to endless markets. “For example the state of Washington has projects that you have to be certified in the state of Washington to pursue,” he says.

When I asked him which level of certification he found more useful, he responded. “I think they all have their own value. Not sure if I would value one over the other. The advantage of State level certification is that there are multiple states.” If you are willing to put in the time and resources to get certified in multiple states, then, potentially, you have a broad web of unique contracts to draw from. According to Mann, his opportunities multiplied exponentially with each state certification.

OQ Point LLC is an IT solutions provider based in Washington, specializing in Microsoft technology and cloud products, such as AZURE. They provide Enterprise IT applications and consulting services. The name stands for the Optimal Quantitative Point, or the idea that in the array of data there is a powerful point capable of restructuring everything around it. Although IT services is a high growth market, Mann explains that his decision to get certified came down to accessibility. “I wanted to use the diversity supplier channel as a shorter path to forming relationships with large organizations.” He compares certification to a pipeline. Imagine a gridlock in New York City, people caught in a staring contest with the bumpers in front of them. If this is the modern market—cluttered, competitive, impersonal—then certification is the underground tunnel, which provides access and diverts traffic from the main street. For Mann, certification was a direct line to building the necessary relationships with larger businesses and state agencies. However, thinking back to the traffic analogy, even the underground tunnel can become a gridlock if there’s enough circulation there. It’s important to consider how certification benefits your current client list before imagining a world of untapped business. Remember to expand from within before branching out. Your current clients might be able to direct you toward a certain certification depending on their diversity spending goals. Check GetDiversityCertified.com’s Certification Strategies for an easy-to-follow guide on best practices.

When I asked Mann what the most difficult part of the certification process was, his response was instant. “Just being organized. To quickly provide the necessary documents.” He enlisted consultation help from the GetDiversityCertified.com team. They managed the application process, highlighted what he needed to put together, organized necessary documents, and acted as a repository for those documents. Moving forward, certification became much easier with everything he needed already in place. “The process is one hundred percent easier now that I don’t have to go through that process over and over again.”

Finally, I asked him what recommendations he might make to someone just starting the process. He responded with an interesting analogy. “Remember that certification is not guaranteed business, more like a license to hunt. You still need to market, sell, network, to be successful.” A diversity certification is, in many ways, a hunting license for business. You have been authorized, given certain access to a different market, but the game you bring home depends entirely on you.

To learn more about Mann’s business, visit the OQ Point website.

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Profiles in Certification – SourceOne Innovations, Inc.

This year we decided to do something different, profiling a SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) and a specific diverse certification. Samantha Smith interviews potential businesses, so email us with a request to be included — no, you don’t have to be a GetDiversityCertified.com client. Next up, SourceOne Innovations, Inc.

SourceOne Innovations is a business and executive coaching firm working with both innovative companies and small and diverse businesses to increase their sales, productivity and teamwork, so that they can decrease the amount of time spent on employee issues. As founder and President of SourceOne Innovations, Bill Hooker became certified with the National LGBT Chamber of Commerce (NGLCC). The NGLCC is the only national not-for-profit advocacy organization specifically dedicated to expanding the economic opportunities of the LGBT business community. The NGLCC also offers its corporate members a national LGBT Business Enterprise database—MyNglcc as well as an expedited process to businesses already certified with the Women’s Business Enterprise National Council (WBENC) and Disability:IN (formerly the USBLN). One challenge Hooker discovered during the certification process was the effort in proving not only the legitimacy of his business but that of his identity as well. He was required to provide a witness of sorts, who could confirm his identification as a gay man. This is meant to prevent fraudulent non-diverse businesses from swooping in and taking the opportunities set aside for minorities.

Now that SourceOne Innovations is fully developed and certified, he is able to refer his clients to various diversity-certifying organizations. That’s where his alliance with GetDiversityCertified begins.

“We found one another while waiting in line somewhere,” he says. An off-chance encounter that has proved to be helpful when it comes to helping his clients through the certification process. “I often have clients who need to get certified with states or need to get certified with third-party agencies and they don’t know how to do it, so I’m often asked to help them get certified.” His alliance with GetDiversityCertified allows him to refer these businesses elsewhere, freeing him to help them in different ways. “My time is better spent doing other things,” he explains. He consults with businesses to implement training programs, secure stakeholder buy-in, and identify areas for skill development. However, he was glad to certify his business with NGLCC. Since many of his clients are diverse-owned small businesses, it is encouraging for them to know that they’re placing their trust and time in the hands of another diverse small business.

When asked how diversity certification should be viewed by the business, whether as a marketing tool or a provider of community and support, his response was automatic. “I think both, absolutely.”  Certification best serves you as the one opening the door to certain opportunities, whether that be access to national conferences, supplier diversity initiatives, or, simply, a seat at the table. While most agree that certification will not solve a faulty business plan or smooth-out a poor financial situation, it can help level the playing field for those hoping to expand their business. He continues, “[Certification is] a way to drive generational wealth amongst the underrepresented and under-served communities—that very much what supplier diversity should do. It should give diverse and small businesses the fair access to what we refer to as the buying table.”

To learn more about Hooker’s business, visit the SourceOne Innovations, Inc. web site.

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Spotlight on NaVOBA

National Veteran Owned Business Association’s (NaVOBA) mission is to create corporate contracting opportunities for America’s Veteran’s and Service-Disabled Veteran’s Business Enterprises (VBEs/SDVBEs) through certification, advocacy, outreach, recognition and education.  Since 2007 NaVOBA has worked with more than 135 of the world’s largest corporations that engage with veteran-owned businesses.

NaVOBA is a 3rd party certifier of Veteran and Service-Disabled Veteran businesses. To be eligible for certification a veteran(s) or service-disabled veteran(s) MUST owned, operated and controlled at least 51% of the the business.

NaVOBA’s certification fee depends on a business’s gross annual sales. For sales under a million the fee is $350. On the max end ($50 million+ in sales) the fee is $2,000. A full fee schedule can be found HERE.

Beyond certification, NaVOBA offers it’s certified businesses networking and educational opportunities, along with access to their corporate sponsors who include: FedEx, Lockheed Martin, Hilton Worldwide, Northrop Grumman, AFLAC, Google and Pitney Bowes to name a few. A full listing can be found HERE.

This past February, NaVOBA participated in the first Veteran EDGE conference in Austin, TX — which was dedicated to veteran and military spouse business owners — providing them with the opportunity to network, learn about best practices, and available resources. In June, NaVOBA was in attendance at VETS2018 an entrepreneur training and business development symposium in Williamsburg, VA created by veterans for veterans and included a golf classic, educational breakout sessions, 1-on-1 matchmaking, and an exhibition hall. Also in June, in association with JPMorgan Chase & Co, NaVOBA hosted their Woman Veteran Business Enterprise of the Year Reception.

Previous certifier spotlights:

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Profiles in Certification – Bill Evans

We’re back profiling another SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) — this time speaking with a business that holds multiple certifications, though the conversation focused on their Disability Owned Business Enterprise status.  Samantha Smith interviews potential businesses, so email us with a request to be included — no, you don’t have to be a GetDiversityCertified.com client.

Up this month, Bill Evans, the founder of Current Staffing Solutions, LLC, a DOBE (Disability Owned Business Enterprise) and MBE (Minority Business Enterprise).  We asked him to give an elevator pitch about his business and its origins. Current Staffing Solutions is an industry leader in client partnering relationships, specializing in recruitment and difficult-to-fill positions. He tries to place people with disabilities when he can and is a member of CTBLN (Connecticut Business Leadership Network), a coalition of 250 businesses who strive to connect people with disabilities. Current Staffing Solutions prides itself on diversity inclusion and has received multiple nominations and awards for excellence and growth from clients and industry organizations.

Where did it begin for him? Evans laughs, “Well, that story is a little longer than an elevator pitch.”  He was diagnosed with Parkinson’s about 10 years ago. At around age 38, his hands started shaking and other symptoms followed. Of the 1.5 million Americans diagnosed with Parkinson’s, he is among the 10-20 percent diagnosed under the age of fifty.

During the economic downturn, he found himself looking for a job and decided to create Current Staffing Solutions. While cold calling a Comcast representative, it somehow came up that Evans had Parkinson’s. Comcast suggested that he get certified through the USBLN and become one of their vendors through the supplier diversity program. Since then, Evans has experienced exponential client growth, working with several Fortune 500 Companies such as Comcast, The Hartford, and Bed, Bath & Beyond. He knows he wouldn’t have been able to land these businesses as his clients if he’d gone any other route. “We’re too small of a business.” And the market is competitive. The DOBE sets him a part.

The USBLN (US Business Leadership Network) unites business around disability inclusion in the workplace. USBLN has more than 130 corporate partners and represents over 5,000 businesses. They are considered a bridge between businesses and people with disabilities. People with disabilities are among the largest minority group. Evans continues, “Disability doesn’t discriminate. It doesn’t matter what you look like, what church you go to. It can happen to you at any time.”

The most difficult part of the certification process for him? “It did take several months,” he admits. “The process was similar to getting incorporated in the first place.” To anyone considering certification, he recommends being diligent, and quick. One of the tasks he was asked to complete was providing a doctor’s note, proving his disability.

When asked how businesses should view diversity certification, he said, “as a business tool or a source of community. Certification should be part of who you are.  As part of a greater presentation as to what you and your company represent.” As diversity certification becomes more popular, there are a variety of people with different intentions and goals. Some people get diversity certified as a route to build their businesses and then feel entitled to a flood of new clients. For Evans, it has never worked that way. “The more you put into it the more you get out of it.” He works within his community to better the circumstances around him. He recites a quote by Zig Ziglar, “You can have everything in life you want, if you will just help other people get what they want.”

To learn more about Bill Evans and his services, please visit Current Staffing. And check out the USBLN’s national conference next week.

Our parent company, Abator, is proud to be a USBLN DOBE.

ETA: During the national conference USBLN was rebranded as Disability:IN.

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Profiles in Certification – Coach Monique

This year we decided to do something different, profiling a SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) every couple of months. Samantha Smith interviews potential businesses, so email us with a request to be included — no, you don’t have to be a GetDiversityCertified.com client.  First up, in honor of WBENC’s National Conference – Coach Monique and Associates.

“It’s like I found my tribe.”

When I ask Coach Monique DeMonaco about her experience with Women’s Business Enterprise National Council (WBENC), the largest third-party certifier of women owned businesses, this is the common theme. Community. An association full of women helping women improve their business. She gets in touch with WBENC members to network and socialize. Each time, she notes, there is an ease about their interactions, free of hesitancy or shame. “Everyone here is a woman with a business,” she says. “We’re here to make money—to help each other.” Again, there is a note of joy. I found my tribe.

Coach DeMonaco went through the diversity certification process a little over two years ago after hearing about it from a friend. She owns a coaching practice, Coach Monique & Associates, which specializes in emotional intelligence, executive training, and Rapid Transformational Hypnotherapy. She was certified as an emotional intelligence coach in 2007 and has been practicing in some capacity for over 15 years. Trusting her friend’s recommendation, Coach Monique decided to follow up and get in contact with GetDiversityCertified. All at once, she was introduced to the lists upon lists of certifiers.

“It was a laborious process,” she tells me, lasting nine months to complete. I nearly fall off my chair. Nine months. The re-certification application alone includes an eight-page form and enough supporting documents to stack an inch and a half off the ground. “I have two weak points,” she confesses. “Technology and paperwork.” Luckily, she had help from the GetDiversityCertified.com team, who guided her through the process step-by-step. “If it hadn’t been for them, I wouldn’t have gone through with it,” she laughs. The first time through, her application returned with 15 issues, which is apparently a low number compared to what could happen in a worst-case scenario.

Why is the process so involved? The answer is simple: To prevent fraud. But diversity certification is no golden ticket. There is no guarantee that certifying your business will get you more contracts or business.  Nor should certification be treated as a be-all-end-all for transparent business practices. Its like a driver’s license … you don’t get a car, just a license to drive one on the road. It’s true, having a diversity certification meets many businesses’ requirement for supplier diversity. You have access to companies that you maybe didn’t before, but it’s up to you to be competitive. When I asked Coach Monique how certification changed her business, she explained in two words: Networking and Marketing.

“Before I was certified, there was a certain amount of chasing I had to do. You had to go in as a stranger and introduce yourself,” she laughs. “Now they’re looking for me just as I’m looking for them.” In her experience, she finds the most opportunity among WBENC members. There is a calendar of events for WBENC members seeking an opportunity to network, including the MatchMaker Series and NextGen, a network designed for millennial women. In terms of marketing, she attaches the certification everywhere she can to get the information out there. Besides the supplier diversity standards, there are other companies that are simply comforted by the fact that they’re working with a diversity certified organization. “There are some that absolutely have to spend money on a diverse business, but some people are more simply more inclined,” Coach DeMonaco tells me. Corporate culture is changing with the rest of us. We all want to be more aware of our impact on others.

To learn more about Coach Monique and her services, please visit her website.

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Spotlight on NVBDC

The National Veteran Business Development Council (NVBDC) is the approved 3rd party certifier of the Billion Dollar Roundtable for Veteran and Service-Disabled Veteran owned businesses (VBE/SDVBE) in the United States. A 501c3, NVBDC was started to provide reliable certification for businesses who fall outside the small business definition of the Department of Veterans Affairs Center for Verification and Evaluation Vets First Verification Program.

NVBDC has developed a fast track process (offering certification in as little as 30 days) for businesses who already hold a diverse certification from one of the following organizations:

  • Center for Verification and Evaluation (CVE) [VBE]
  • National Minority Supplier Development Council (NMSDC) [MBE]
  • Women’s Business Enterprise National Council (WBENC) [WBE]
  • National Gay & Lesbian Chamber of Commerce (NGLCC) [LGBTE]

If not certified by one of these organizations, the NVBDC certification process can take up to 60 days, with a possible extension based on the owner’s availability for a site visit.

To be eligible for certification the US-based business must be 51% owned and controlled by a veteran(s) or a service-disabled veteran(s). Per NVBDC, veteran status is defined has having actively served in the “military, naval or air service” and having been “discharged or released under conditions other than dishonorable.” NVBDC will base their decision in regards to veteran status “on the detailed information contained in the veteran’s DD214 document.” For service-disabled veteran status a veteran’s “annual disability letter from the Veterans Administration” will also be reviewed.

As with many of the other 3rd party certifications, NVBDC’s certification fee depends on a business’s gross annual sales. For sales under a million the fee is $500. On the max end ($100M+ in sales) the fee is $5,000. A full fee schedule can be found HERE.

Beyond certification, NVBDC is involved with events nationwide to educate and connect VBEs and SDVBEs with buyers. In San Diego, in conjunction with the U.S. Veteran Business Alliance, NVBDC hosted May’s “Keeping the Promise” National Business Expo. Towards the end of June (the 29th to be exact) NVBDC will host its Annual Golf Outing at Selfrige ANG base in Harrison Township, MI. Registration ends June 8th. In July, they have their 3rd Annual Doing Business with Federal Reserve Bank event in Chicago. Thanks to the generosity of JP Morgan Chase & Co and Federal Reserve Bank of Chicago the event is free to attend. In September, NVBDC will host their National Veteran Business Matchmaking Event at the MotorCity Casino Hotel in Detroit, MI. And in November, they’ll have their first east coast event – NVBDC’s Northeast Veteran Business Development Conference – in Brooklyn, NY.

Previous certifier spotlights:

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What’s Being Certified?

We get asked this question frequently: I’m selling my business (or buying one). Is the diversity certification transferable? There is no short yes or no answer, the reality is that it depends on the type of certification held and who is  purchasing the business.

What’s actually being certified? The certification process is two-fold. 1) The business itself is being certified as having the capability to provide its products and/or services. Our favorite example to use is a pretzel maker — during application review and site visit the certifying agency will verify that the business has the expertise, equipment, staff and back-office support needed to produce its end product, a pretzel. 2) The business is being certified as being at least 51% owned, operated, and controlled by a SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) owner(s) who possesses the knowledge and skill to run the business applying for certification.

This means that the business’s diversity certification is reliant on its owner(s).

All certifiers require that any major changes to the business be reported (in writing with supporting documentation) within 30 days. Major changes include:

  • Business Structure  (i.e. a sole prop becoming an LLC)
  • Ownership
  • Management and/or Control of the Business
  • Address
  • Work Capabilities

An instance where a certification cannot be maintained: A business is certified as veteran owned and a non-veteran purchases more than 49% of the business.

An instance where a certification is eligible* to be maintained: A business is certified as minority owned and another person designated as a minority purchases the business.

* We say eligible because certifiers will not automatically approve new ownership.  The new owners must demonstrate the ability to run the business and the supporting documentation MUST illustrate that the business remains at least 51% owned, operated, and controlled by a SDMWVLGBTBE owner(s).

If you’re looking to buy or sell a company where diversity certification is considered an asset of the business, please exercise due diligence.  Check with the certifying agent(s) to make sure that you understand their rules for maintaining the business’s certified status.

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Best Practices

In the world of supplier diversity literature, best practices are defined and expressed by the professionals in corporations and government agencies. SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) owners are often unaware of the challenges facing supplier diversity organizations.

We’ve written about The Inclusion Dividend: Why Investing in Diversity and Inclusion Pays Off by Mark Kaplan and Mason Donovan, a book that we believe provided the roadmap for best practices in D&I, though its focus was certainly more human resources oriented. Essentially, they document and encourage organizations to practice:

  • Executive commitment to diversity.
  • Diversity in planning, vision and mission.
  • Diversity as a core value.
  • Leadership teams mirroring customer base and its general population diversity.
  • Reporting on established diversity metrics.
  • Mentoring programs to increase diverse participation.
  • Diversity awareness training.

When you Google “Supplier Diversity Best Practices”, you’ll find that the top recommendations are very similar:

  • Top management support.
  • Purchasing committed to supplier diversity
  • Set measurable goals and make sure supplier diversity improvements are made.
  • Develop/track qualified diverse supplier pool (database).
  • Partner with supplier diversity organizations (NGLCC.org; NMSDC.org; USBLN.org; WBENC.org, etc.).
  • Promote diversity.
  • Make diverse spend flow down (through subcontracting criteria).

What can we, as MBE, WBE, VBE, DOBE, SDVOSB or LGBT business enterprises, do to mirror these best practices in our own companies?

  • First, regardless of size, we should be committed diversity in our own organizations.  That can  seem overwhelming to a small business, but even a one person business has suppliers and can make its purchases from other diverse suppliers or large suppliers who are committed to supplier diversity.
  • We can establish our own formal supplier diversity programs, something we wrote about last year. We can partner with other diverse suppliers to offer unique solutions to address our clients’ business needs while offering them additional resources to meet their diversity goals.
  • We can grow our capacity through strategic partnerships in order to compete for larger projects with our customers who are committed to diverse spend.  For example, innovative building material supplier partnering with a general contractor or with architects; a software product company with an IT services provider; equipment rental with masonry contractor; or, a savory caterer with a baker.  The possibilities are endless.

Supplier diversity is global issue for the large companies that so many SDMWVLGBTBEs want as customers.  It would be in their, and our own, best interests to help them achieve their diversity goals and objectives.

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