The Color of Money

Minority owned businesses strive for capital gains in corporate America

With the specter of recession looming over America’s credit crisis, independent business forecasting demands short-term discernment and a keen eye for long-range solutions. In the context of a global economy experiencing constant shifts through the steady emergence of new sectors, how much of conventional wisdom still applies? How much has been outmoded? What are the trends to watch? Clayton Lloyd, senior vice president and executive director of Supplier Diversity for Wells Fargo & Co., puts emphasis on diversification— both as a market strategy and a guideline for cultivating partnerships—as a valuable 21st century asset for the Fortune 500 firm and venture capitalist alike. The Green recently met with him to touch on questions of best practices, entrepreneurship, intercompany relations and more.

Why is supplier diversity significant to large corporations and entrepreneurs/smaller businesses in today’s economy?

Minority business development has been growing over the last 40–45 years as a strategy to bring corporations to the forefront of providing equal opportunity. In the 60’s and 70s, supplier diversity became more of a political issue as government agencies tried to insure that large corporations did at least a small percentage of their business with small or diverse firms. Over time, we started to see opinions change and supplier diversity began to be viewed as a philanthropic endeavor. However at Wells Fargo, we view supplier diversity as a business imperative and development opportunity. By 2050 minorities will be in the majority. Currently, African Americans account for $9 billion in gnp, as do Hispanics; Asians account for another $6 or $6 billion and Native Americans are another $300 million. These diverse groups represent a key opportunity.

From your experience, what should the entrepreneur focus on to facilitate relationships with large corporations?

Several articles and books have been written on this topic—particularly by Dr. Melvin Gravely, an entrepreneurial thinker who talks about what minority businesses need most. If you interview minority suppliers, they will tell you “I need a contract and I need capital.” That is a temporary fix in Gravely’s estimation. He says many suppliers ignore the concept of building a strong foundation. What companies and small businesses need is profit, growth and ultimately wealth-building. These things will build a successful business able to attract corporate contracts.

The Boston Consulting Group did an analysis on minority business development in June 2005, and the report stipulated that government agencies, corporations and entrepreneurs need to change their mindset about the overall importance of minority development. On the other hand, entrepreneurs should change their mindset regarding business models. If you are running a small sole proprietorship you may want to consider partnerships or joint ventures with larger companies that have greater capacity.

What do you project as the trend or evolution of supplier diversity initiatives, particularly in light of Internet commerce and globalization?

Little has been written on the impact of supplier diversity on the global economy. In 2001 the National Minority Supplier Development Council established a Billion Dollar Roundtable, and each of its members spent $1 billion or more annually on a first-tier basis with diverse companies. This roundtable’s initial findings were reported in 2007 in a document entitled “Establishing The Business Case For Global Supplier Diversity.” The report concluded “the drivers that will move global supplier diversity activities will include executive commitment, the integration of supplier diversity into the supply chain…[as well as] global conditions and sourcing strategy.” Thus, one must begin to think about how to integrate a domestic initiative into the company’s overall global corporate strategy to result in a positive impact on the company’s bottom line.

Keys to success

Even while on the green, Lloyd finds learning opportunities

i started to take up golf in earnest in early 1998. After moving to a golf community, I felt it imperative that I learn the game. I watched videos and read books and articles and on the subject, but the one thing I couldn’t do was take that learning and transfer it into performance. So I got the idea to make some notes on a piece of paper about driving, chipping, pitching, posture, alignment, putting and sand play. I took that sheet with me out to the range and course for the next six months. At that time, I was shooting 120-plus for 18 holes.

“After about nine months, I took a series of six lessons and began to review my golf keys every time I played. Today, I have a 12 handicap, I shoot in the mid to low 80s and I’m having more fun. I Figured that if I was having the problem transferring information into performance, other people were too.”

Lloyd commissioned a golf pro to help develop content for a set of tips that could be clipped to a golf bag and provide players with the information they need to execute golf shots. The result was swingkeys, which he describes as a “golf pro via a set of cards.” Lloyd plans to develop swingkeys, for tennis,baseball,softball,hockey,squash and racquetball—all of which involve swing mechanics.