UPMC addresses state of region’s minority business

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Capacity building, mentoring, efficiency, accountability and inclusion were words and phrases often used during the Community Conversation on Supplier Diversity presented by the Center for Inclusion in Health Care and the Supply Chain Management Department at UPMC. Moderated by Lynne Hayes-Freeland, KDKA TV2 reporter, producer and host, the theme of the event was “Partnering to Make a Difference.”

Outlining a three-fold agenda, Toni Silva Jeter; director of Supplier Relations at UPMC, encouraged the audience, inclusive of Minority, Women and Disadvantaged Businesses, certification and business development agency officials and UPMC personnel, to strive to build capacity and to work together in the future. “Just as it takes a village to raise a child, it takes a community to build businesses,” she said.

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HORACE J. BRITTON, AUDREY MURRELL, PH.D., W. DWIGHT MAYO

The event’s purpose was to provide an update of the status of minority businesses in the region; to address issues and concerns facing the businesses and to offer recommendations and solutions; and to establish strategies to improve economic conditions of businesses by forming collaborations with the community.

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CANDI CASTLEBERRY-SINGLETON, chief inclusion and diversity officer, UPMC, gave the closing remarks

On hand and witnessing the outcome of the event and providing opening remarks was Robert DeMichiei, senior vice president and CFO of UPMC. He said he is passionate about doing business with minority businesses, but aware of the many challenges for both parties. He pointed out that the UPMC Minority Business Development Initiative Group has grown since 2003 until now and that spending with MWDBEs has been growing, especially on the tier two level. He also indicated that UPMC now focuses on doing business and fostering establishments that employ four or five employees and up. He says their mentoring program, which he is excited about, currently has 12 executives providing coaching and support to businesses. “We are trying to build capacity, provide access to capital, to develop joint ventures and to provide training and education and networking opportunities for businesses,” he said.

Audrey Murrell, Ph.D, University of Pittsburgh Katz/CBA Business School; associate professor of Business Administration, Psychology, Public and International Affairs and Director David Berg, Center for Ethics & Leadership addressed the state of minority business. Quoting facts and findings from a January 2010 study conducted by the U.S. Department of Commerce, Minority Business Development Agency, called “Disparities in Capital Access between Minority and Non-Minority-Owned Businesses: The Troubling Reality of Capital Limitation Faced by MBEs,” she confirmed that efficiency, accountability and inclusion are critical issues for MBEs locally and nationally.

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LORI J. POLLACK,  LYNN HAYES-FREELAND, HOST

The study indicated that minority-owned businesses have been growing in numbers, with gross receipts, and paid employment, at a faster pace than non-minority firms. Murrell pointed out that minority business enterprise makes a substantial contribution to the U.S. economy, generating $661 billion in total gross receipts and that minority-owned firms also employed 4.7 million people with an annual payroll totaling $115 billion. She recognized that minority-owned firms are an engine of employment, that the growth potential of minority-owned businesses is being severely hampered because of the obstacles of access to capital, access to markets and access to social networks. She said that the report indicates that limited financial, human, and social capital as well as racial discrimination is primarily responsible for the disparities in minority business performance. Her concern is that minority-owned firms are found to pay higher interest rates on loans and minority-owned companies are found to have less than half the average amount of recent equity investments and loans than non-minority firms.

Summarizing the report and pointing out the realities, Murrell said the current economic crisis will present greater obstacles and barriers for MBE firms as capital is restricted. “The real issue and barriers to building capacity is for businesses to over come stereo types and perceptions,” she said. “Perception creates reality.”

She also emphasized that entrepreneurs must always remember that in today’s society culture and climate are set.

In a panel discussion—“Awakening the Region to Supplier Diversity and Inclusion”—members of the UPMC Minority Business Development Group discussed recommendations addressing efficiency, accountability and inclusion as well as issues pointed out by Murrell. Panelists were Horace J. Britton of CDI Printing, Lori Pollack of the AEC Group and Dwight Mayo of Transportation Solutions.

A synopsis of the recommendations include: Efficiency—the adoption of a single standard for certification, bidding and contract review processes to be established throughout the various departments, divisions or lines of business within the corporation. To help insure M/W/DBE retention, the panel recommended that a program be established to recognize both potential and lack of potential of the designated vendor. Concerning cash flow and development funding, it was recommended to adopt clear standards for contract and non-contractual payouts.

On the accountability issue the panel recommended that corporations provide clear roles, job requirements and responsibilities for all M/W/DBE managers that corporations adopt best value packages as system-wide practices, adopt single sourc
e monitoring as standard organizational practices, and to develop and implement clear processes for resolving disputes and problems encountered by MWDBE firms to implement a specified percentage on the amount a change order can be increased. “Diversity is about accountability. A lack of accountability brings unfairness and is a means of exclusion,” said Britton.

Suggestions for inclusion were that inclusion training be provided for supplier diversity, procurement, purchasing and operations officials be within the corporation. That a commitment be made to changing the culture when considering MWDBE vendors from one of charity to one of developing a partnership with the MWDBE vendor. The discussion ended by the panelists pointing out that inclusion is a matter of attitude and culture and a direct reflection of the corporation’s leadership. “We must remember that the growth and development of local diverse businesses will have a far reaching effect within the communities in which we live by providing jobs, community development and sustainability,” said Britton.

Pleased with the results of the event, Jeter said the three objectives were accomplished and people signed up to continuously be a part of the community initiative. With UPMC currently the largest employer in the city, Jeter said it is important for them to address the state of minority business in the Pittsburgh region and to create a collaborative initiative to increase the utilization of the businesses. “It is important for entrepreneurs to have a voice for their issues and concerns to be addressed. Businesses need to be utilized and put to work throughout the region. And we are glad to be the corporation to lead the challenge.”

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