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Minority business development — Why now more than ever

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Minority business development — Why now more than ever

Fred McKinney, president and CEO of the Greater New England Minority Supplier Development Council.

We have to go back to the Civil Rights era in the 1950s through the 1960s to understand fully why we are so concerned with minority business development. People sometimes forget that in the 1950s America suffered from its own unique brand of apartheid in all of the former Confederate states. And in most of the Northern states that had become a refuge for many blacks since the Civil War, the forms of segregation and discrimination existed in a less overt form. The desegregation of public accommodations, the right to vote, the ability to live and work without discrimination based on the color of one’s skin did not occur overnight and without sacrifice. Dedicated people of all races and creeds gave their lives to make America a place where race was not an insuperable impediment to accomplishing your dreams.

While change was progressing in areas of basic civil rights, and in educational  and employment opportunities, minority business growth,  the key to full participation in American culture, was slow to develop. Most Americans are unaware that Richard Nixon was the first president to push for black business development. He believed that his concept of “Black Capitalism” was a key missing ingredient in the Civil Rights struggle of the late 1960s. Nixon created the Office of Minority Business Enterprise to help blacks and other minorities, but particularly blacks, “get their piece of the action.”

From the very beginning of the federal program to promote minority business development, there were challenges from non-minority businesses that claimed it was unfair for the federal government, or any local or state government for that matter, to ameliorate hundreds of years of discrimination if it hurt a non-minority business. There has been vigorous opposition to change. As a result, legal challenges have narrowed the ability of public sector efforts to bring about racial and ethnic inclusion in American business.

A private sector initiative

Nonetheless, minority entrepreneurs have grown from close to oblivion to where we are today. The National Minority Supplier Development Council (NMSDC) played a critical role in this development by taking the cause of minority business development to the private sector. Corporate members of the NMSDC pledged to give certified minority businesses opportunities. Certification was important because from the very beginning of the Nixon era programs, non-minority businesses were setting up “fronts” to steal opportunities away from legitimate minority enterprises. This practice continues to this day, and is particularly prevalent within the women’s business community.  Despite the legal challenges, progress has been made even though today the federal government does not technically have a minority business procurement program. Federal contractors could meet all of their goals and not buy one dime of services from a certified Minority Business Enterprise (MBE) in our Council. This is one of the reasons why minority business development in the private sector is needed now more than ever.

Over the years, the push for racial diversity has increased. Ironically, the emphasis on minority business development in the public sector has waned, even while the push for racial diversity and inclusion elsewhere has grown. Indeed, diversity and inclusion are needed and are desirable. However, racial integration in other areas should not come at the expense of minority business development. This is a lesson that the best corporate members of the NMSDC understand; but unfortunately, that lesson is lost on many corporations.

In a tough economy like we have right now, corporations are not buying as freely as they once did. As a result, minority businesses and minority business development are at risk. The role of supplier diversity leaders is to make sure that minority business development and minority businesses are treated fairly in these difficult times and not just jettisoned from the supply chain. This takes real leadership and leadership takes guts. While there are other corporate goals, this is a corporate goal that is equally as deserving as any other for the long term health and survival of a corporation. Supplier diversity leaders must believe this, and if they do not, minority business development and minority businesses are in trouble.

Today’s challenge

I write much about how MBEs need to do this or they need to do that. Indeed, there are also some requirements for corporate leaders in minority business development. Primary among them is to get out in front of minority business development. They must make the case to internal stakeholders that even if a MBE is a little more expensive to do business with right now, it does not mean over the next few quarters that will be the case if the corporation is willing to “develop” that MBE. In baseball, the Yankees do not expect a Double-A shortstop to come in and replace Derek Jeter tomorrow. They do expect that Double-A shortstop to compete for that position one day.  MBEs need to be brought into corporate supply chains so that one day they too will be able to compete for major business. Then they will be able to support the goals and objectives of the organization.

I am afraid that if corporations do not rededicate themselves to minority business development we will lose a generation of minority entrepreneurs who started their businesses with a dream to get their piece of the action. Make no mistake about it, we have much to be proud of in the brief history of minority business development.  Now is not the time to rest on our laurels.