Diversity & Inclusion Programs: How to Do Them Right

The conversations surrounding diversity and inclusion are not absent from the design and construction industry, and in fact, have been commonplace for quite some time. On this episode of AEC Marketing for Principals, host Katie Cash is joined by co-host Donya Edler and guest Jim Beall, Chairman and CEO of Collaborative Work Environment, to discuss the Diversity Consortium and how it can help AEC clients who seek to improve their diversity inclusion, empower minority companies to compete more effectively, and position both sides at a competitive advantage in the long run.

What you’ll learn about in this episode:

• An overview of the Diversity Consortium and how it benefits corporate and minority businesses
• How the Diversity Consortium is standardizing the vetting environment for corporate entities through a tiered vetting system
• What makes the diversity consortium unique when compared to other organizations focused on helping companies find work
• Next steps for primes and minority businesses and how they can become involved in the Diversity Consortium

Resources:

• https://thediversityconsortium.com/

Transcript

[00:00:16] Katie Cash: hi everyone. Katie Cash here, we are switching things up a little on today's episode. Today I'm joined by Smartegies executive. Vice-president Donya Edler. If you've been a listener over the last few years, you probably recognize her. Her name and certainly her voice because she was one of our guests on our very first season.

[00:00:37] So Donya and I are excited to be together today and talking with Jim Beall, who is a longtime consultant categorized as an integrator and a visionary who spends his time with the Diversity Consortium, which is an organization really dedicated to solving the problem in our industry related to sourcing. vetting and securing diversity partners and suppliers, and kind of bringing those together. So without further ado, we're going to dive right in and get talking with Jim. Jim I'd love for you to tell us a little bit about yourself, your professional journey and kind of what you're doing. 

[00:01:17] Jim Beall: You bet, Katie. So I graduated from Indiana university with a marketing and finance degree, uh, came out and spent a few years in the family business and then decided I wanted to go into corporate America. So in early nineties, 1991 joined Johnson controls as a global director in their industrial performance contracting world.

[00:01:41] In addition to spending time working on their manufacturing capabilities, we also did several third-party customers. Bristol-Myers Squibb, Alcan aluminum and several other fortune one thousands. In the late nineties, I moved from Johnson controls to a group called . Uh, EMCOR was starting a facility services business, uh, about that time.

[00:02:03] And I joined as their fifth employee was with those folks about nine years when I left, they had a 10,000 employees and about $1.2 billion of revenue. And when I left EMCOR, I started the consulting practice, the Plan Consulting Group. And at that time, we started with our first customer and Kraft foods where we were helping them in their carbon footprint reduction program.

[00:02:27] Their largest customer in Walmart was requesting that they reduce their costs. And as part of that instituted initial. Across all their supply base to reduce the carbon footprint by 35%. So in that initiative, we led, uh, the craft engineering and operations team through audits and identification of about 700 discreet projects that helped craft to save about $185 million a year in operating costs and reduce their carbon footprint by 32%. Over the last decade and a half, we have done work around carbon footprint and cost reduction and large corporates. Over the last seven or eight years, we have expanded into the area of healthcare. And in those, in that timeframe, we've done 23 of the 60 largest healthcare systems in the US. So that kind of gets me to, to my engagement with the Diversity Consortium. It has been a passion over the last decade or so to try to build, uh, a capable network of contractors and service providers that were capable of doing these high intensity high rates of return initiative. Corporate initiatives. So in working with a group of industry folks, we built a consortium and that's designed to be able to help corporate America be able to build and deploy supplier diversity programs and to work with the disadvantaged business enterprise community to build competency, build capabilities, properly resource, to be able to effectively address the corporate needs of supply.

[00:04:10] I do it profitably at quality and at the right price. So that brings me to today. 

[00:04:15] Katie Cash: That is awesome. And that's exactly why we wanted to talk to you. We feel like the conversations around diversity and inclusion are really happening on a daily basis, all around us and our industry, the design and construction industry is not exempt from those conversations.

[00:04:33] As I sit here, Smartegies, we've been around for 12 years. We've worked with over 200 brands in north America and in design and construction and locally minority participation has always been part of that equation. We're starting to hear more and more about sustainability and making sure, environmental impact climate resiliency.

[00:04:51] Those pieces are taken into account as well, but it seems now that there just seems to be this magnifying glass. On these projects and programs that we see lots of our clients chasing simply because construction can drive such an impact on diversity and inclusion and local community impact. And so, I know Donya has been working with some of our CMGC firms on building some subcontractor programs.

[00:05:17] She's been working with you, Jim, on, helping the consortium and kind of getting that together. Donya, why don't you share a little bit about what you're doing and then maybe how you and Jim. Are working together. Yeah, 

[00:05:30] Donya Edler: for sure. When I first met Jim and he talked to me about the, thought behind the diversity consortium, it was such a great idea because it helps both sides of the table if you would.

[00:05:42] And I felt like we really needed it in our industry, so, and I could relate to it from a, from a corporate standpoint, when I worked at a national AEC company whenever our clients would ask us for reporting on our diversity spin or our program, it was never an easy exercise. Just trying to match diverse suppliers our company is very specific needs, with sometimes a, it was a challenge. And also just trying to track the metrics of how the program was going. If we had a program was a challenge also. So having something, a third party or a group like the diversity consortium to assist would have really been helpful.

[00:06:20] And then from the standpoint of these diverse firms, the diverse supplier firms, they've got the talent, they've got the passion, they've got the desire just to deliver great results. But sometimes just having some insight from some of the larger companies on how to position themselves and present their businesses so that they can win the work and even get more work is invaluable to them.

[00:06:46] So when Jim talked to me about the diversity consortium, I felt like it addressed both of those areas and I could see how, how valuable that would be. And so shortly, yeah. Well, not shortly after, but I guess alongside our conversations with the diversity consortium, a lot of Smartegies.

[00:07:04] Construction clients especially have really been active in this space also. So a lot of our AEC clients are really wanting to include minority and diverse businesses, not just on one or two projects and be done with it. Yeah. We're seeing that they're really wanting to help these companies be sustainable themselves and be successful.

[00:07:26] And so many of our larger GC clients are beginning to provide tools and resources and training and almost develop a mentor protege type relationship with their diverse suppliers. And and it's, for example, in a lot of these cases the companies are bringing those suppliers in house to meet with their procurement teams.

[00:07:46] Learn how that process goes are bringing them in house to meet with their CFO or their finance team just to, to learn best practices. And Smartegies has really been fortunate in that a lot of our larger clients, a few of them have asked us actually to come in and talk with their diverse suppliers about marketing practices, what are the best marketing practices and how they can differentiate themselves in the marketplace, how to respond to RFQ and RFPs, and sometimes things as simple as how to set up a LinkedIn account so that it's professional and representative of the firms.

[00:08:23] So. We're seeing a lot of good things happening out there with our clients and in the industry in term, in terms of just helping these companies. 

[00:08:33] Katie Cash: I agree, Donya, Jim, I do want to go back to one thing you mentioned and that was your background and working with a lot of these corporate entities. It sounds like a lot of in food manufacturing and maybe some industrial manufacturing, but then also in the hospitals and kind of working with these healthcare organizations and making sure that you are helping to connect those organizations with competent and qualified suppliers. And I think that that's one area that kind of speaks to design and construction, that some of the challenges that Donya is talking about is how to find some of these partners, people that understand how to work in, secured environments that is like, Cure environment that that's all about health and life safety systems, where do you find those types of suppliers? And can they take on a project that's big and do they have the resources? Do they have the background? So I'd love for you to share maybe a little bit more about what you're seeing from owners and kind of how your program has evolved over the last few years, because this is not the first year that it's been going on, but we'd love to kind of get that perspective.

[00:09:38] Jim Beall: Sure Katie. So what's interesting is this whole diversity, uh, focus, although has been around for decades has really kind of changed its its velocity, certainly over the time of COVID and the challenges with the supply chain that resulted or the social issues that are going on in our country and in the focus on those things. So we spend a lot of time in the corporate of Rina's talking to the procurement organizations, talking to the supplier organizations and the procurement groups. It is a constant focus of, how do we find the capable, the folks with the capacity, the capabilities, and the desire to do our type of. Right. Cause it doesn't take all three. I was recently on a call with the, the gentleman who leads the diversity for a large hospital system in Louisiana. They've got, uh, five to seven capital projects, all, loading up to about a billion dollars for the construction and they will see 75% of their diversity goals achieved through that construction.

[00:10:47] Katie Cash: Yeah, those are big numbers for sure. 

[00:10:49] Jim Beall: Yeah. And what's interesting is, is we're dealing typically with organizations and the $4 billion net patient revenue. So kind of larger systems, multi-hospital multi location. All of them have got hundreds of millions, if not billions of dollars of capital planned and the relative near. So everybody seems to be focused and this construction and construction services area, because if you can't find it there, the difficulty of being able to find it and surgical equipment and, and beds and fixtures, and those kinds of things is nearly empty. So I believe that many of these organizations are going to be looking straight down the opportunity of construction and how do they work with their general contractors and their architects and engineers. How do we not only find these folks, but develop folks that aren't in that condition today to be ready to do it in the near future? 

[00:11:44] Katie Cash: And what are some of those initial items that those diversity suppliers need to have? Kind of speaking to what, what Donya was saying earlier, she's helping some of these firms just kind of create, create a digital presence, maybe on LinkedIn, helping them with some marketing materials so that they can that first hurdle of being sought after and being credible and being hopefully awarded a piece of the project. And what are you hearing from the owners in terms of what they need to know to qualify and, and to, to vet these vendors? 

[00:12:15] Jim Beall: So many larger organizations, more sophisticated procurement organizations are looking for certification. The vetting that takes place around the NMSDC for minorities or WBENC. For, for a woman owned business. And there are several certifying bodies that, that do some of the legwork to make sure that organizations are capable and vetted, so that to be able to do the work that they might be awarded, that that's a big challenge.

[00:12:42] And making sure that, uh, an organization does have those three things, their capability, the capacity, and the desire to do that work along with the resources and the ability to scale. As we go increase the volume of opportunity for folks by double because of the, the things that are happening in our country right now, can any organization grow by a hundred percent?

[00:13:08] And, and I would challenge that many might find it difficult to be able to do that. So to have a plan, to have the structure, to have the financial wherewithal and access to capital, to be able to grow like that is a piece of everyone's evaluation. At the diversity consortium, we work in a, uh, an environment where we try to take contractors through a vetted tiered vetted bench.

[00:13:31] So bronze is being certified by one of the certifying bodies. Five to seven of them, the larger ones that are national, but to be able to go climb through and certainly Smartegies working with us to be able to assess the marketing message and business plan and. Financial wherewithal, uh, customer references, packaging, the controls and quality systems to be able to, to scale their work. So as they kind of climb the hill from bronze to silver, to gold, to platinum, as they climb that they become more and more ready. So that's, that's one of the things that we're trying to do to standardize that environment and making it a little easier on the corporate entities, because they could get larger responses.

[00:14:17] If you have a $300 million project out there and you opened it up to the world, they, the number of people that are interested in doing that work is, is almost numberless, right? There's, there's so many, but the people that are actually capable of being able to do that is, is certainly a smaller number. So we, we want to make it as a predictable and is, is easy to find for those corporate entities so that they can locate those, uh, minority organizations or, or disadvantaged organizations be able to truly vet and qualify them to make sure that they're capable of being able to do it.

[00:14:54] And then it's about getting them onboarded into the organization so that they can actually do work and be successful in delivery equality and schedule. And that, and the contractor needs to be in to make money while doing that. So, so all of it becomes kind of an interesting balance. And I think it takes a bit of collaboration. That's where organizations have to be able to see the desire and the capabilities and help develop and make sure that there is a ramp to be able to grow, to be able to accommodate this incremental growth that's going to happen in the marketplace. Katie. There was an interesting dialogue with one of the large search engines that we all know.

[00:15:34] And one of the things that they plan to do is to be able to allow search engine company identification by ethnicity. And that's going to do some great things for minority businesses. It's also going to shoot an enormous amount of volume for people that have all the best intentions. But if those organizations get an onslaught of opportunity and they're not really prepared to be able to take on that much business as quickly as they need to, that could spell disaster for those reasons.

[00:16:04] Right? So we will sell those folks right out of business. And that will kind of throw back to all the people that have always had a negative position to say I didn't want to do it. And, and they made me do it and see it failed. And that's a disaster for, for our desires and our objectives and certainly the commitments we're making to the market. 

[00:16:25] Donya Edler: I agree. And, and Jim, I was going to ask, if you could talk a little bit about how the diversity consortium differs from some of the other organizations out there that have been there for a while, helping those, those companies to identify work. What are some of the things that the diversity consortium offers above that? 

[00:16:46] Jim Beall: So, I'm not sure that we differ in a lot of ways. I would tell you that I think we augment. So there is certainly some longstanding fabulous organizations around the advocacy for certain groups. Women has got an outstanding association that, that advocate for, for women owned businesses and minorities, the same and, disabled folks have got an, an excellent organization, but all of those people are kind of interested in their own, Membership or their own, constituents and, and across the board, I think we all want to see a equality, true diversity so that everybody has a fair chance.

[00:17:23] If they find themselves in a disadvantage business class. So I think that what we're trying to do is be the hands and feet to the industry and to those contractors, to be able to develop, to be able to gain capacity, get the resources they need to be successful, and also try to provide the resources market to the corporate folks who have strategies and commitments, but not always did they have the budget and resources to make these things happen. So trying to bridge the two, and I think that's what makes us incredibly unique is that we have nearly 50% of our effort and revenues are generated from the up-market corporate strategy and program deployment work and the same amount down to the XPE downmarket that includes all diverse class of business enterprises. So I think we work hand in hand. Recently had had lunch with one of the state directors for the small business division centers. We work with the NMSDC on a variety of different levels having one of the, the CEOs on our board. We're constantly trying to make sure that we're United in this group of resources that can help this community and not trying to subdivide, or differ, right? It's it's pool our resources and get better.

[00:18:48] Katie Cash: The rising tide. Right. Bringing everybody up. 

[00:18:50] Jim Beall: That's exactly. That's exactly right. It's a challenging issue. And as we all know, COVID played a significant role in business and a variety of ways. In particularly in the supply chain, we saw on an unbelievable number of business failures and, and the failures amongst this XBE class, this disadvantaged business enterprise across the board. Those companies failed at a significantly higher rate than other businesses. So, if you thought it was hard to find good suppliers before COVID, it's become more challenging sense, right? Cause there's less of them. Now, what we've got to do is be able to start new businesses and get them through their maturity cycles so that they're ready to take on large scale work.

[00:19:36] Like we're talking about out of the hospitals or, or some of these corporate entities that are spending $20 billion a year. And they're trying to send 15% and to the diverse, disable are disadvantaged business enterprise space. 

[00:19:51] Katie Cash: Let's talk a little bit about that. I do think that's highly insightful just how much demand and pressure and attention was put on healthcare systems really around the globe during the pandemic. And everything was really focused on getting mission, critical items and supplies and, and facilities up and going to, to handle the influx of COVID patients.

[00:20:13] So a lot of other capital projects were put on hold, then we're starting to see. longer term visions for their capital planning, but at the same time, we're also hearing that a lot of them are gearing up for this new wave of the Delta variant and trying to go ahead and secure partners in the event that they need to add additional temporary facilities or whatever that might be.

[00:20:36] And Jim, if I'm not mistaken, you and your team at the DC, you have an event coming up, that's specifically focused on some of these healthcare organizations. Is that something that you could share? 

[00:20:47] Jim Beall: Yeah, absolutely. So what we're meeting with is several integrated delivery networks, IDN, and their construction and facility operations groups, as well as some trade associations around the design and construction, operations of hospitals and health facilities and several of the suppliers in the space that are integral in the, the particularly new supply and operations of hospitals. We're bringing them together in a high-reliability summit. And that's really intended about new construction and the systems that are there and the technology that's being installed. And how do we make it work together? And how do we make sure that it is available when we need. So that event is scheduled in mid-September and we'll have half a dozen or more healthcare systems that probably have $10 billion worth of capital constructions on their books. And of course, organizations in the manufacturer, these are, these are large multinational companies.

[00:21:51] So, so that will be a significant amount of industry knowledge to really talk about the issues. When I install, how do I get the technology to work together, not against each other? How do I manage those assets that are there from a construction first cost and a long-term, uh, total cost of ownership?

[00:22:11] And how do I make decisions that, that don't get you served or, or run their life cycle and a time way shorter than, than what we would expect them? So it's going to be interesting. It's really a think tank environment, lots of brainstorming people talking about planned or in current or new construction and the challenges that they're having around integrating systems, being able to understand where the assets are and what those assets required to, to remain highly reliable and, and try to manage that cost, which is incredible. Particularly as the, the skill sets and the trades that trade technicians, it's becoming harder and harder to fill those spots. So healthcare organization and construction and engineers that are doing the commissioning work, they're having troubles placing those.

[00:23:04] So it's, it's super important these days to make good decisions, well-coordinated decisions value-based decisions as it relates to what are we designing? What are we installing and how do we plan to operate those things so that we don't, uh, fall off a cliff in one of those phases. In the, and I think a lot of systems run that risk is not always, there are those systems or those departmental functions coordinated as well as they can.

[00:23:31] Katie Cash: We are fortunate that a lot of our listeners come from some of the larger brands that would often pursue these projects as prime that may be looking for partners on the diversity side, either through suppliers or maybe they're going to be consultants on the team. What advice do you have for those primes out there on maybe how they could get involved or become more knowledgeable around what you and the DC are doing and, kind of take their next best step. And then second to that, Jim, I'd love for you to maybe give some advice to our other bank of listeners that might make up the diversity pool. Those that are maybe smaller minority, female owned, and how could they get engaged? What's what's the best thing for them to do as a first. 

[00:24:17] Jim Beall: So Katie, I think we've got to start that conversation with the foundational premise that we all live, work and play in the same community. Right?

[00:24:26] So when we recognize that that we're all here and we're all in it together, and when we have natural disasters, we all struggle and help each other, the world of business community, and the fact that we're all together, human nature wants to drive. And in some way together to a diverse world and other ways that wants to drive us to a place that while I know who I can trust, I know where I can do business. I keep my radar very narrow to limit my risk. So once you kind of identified that those are the two principles that place corporates, and particularly contractors and GCs they need to have an effort. They need to be aware of who's in the space. One of the facts that I found incredibly interesting of all of the women owned business in the us 1% or less are certified.

[00:25:20] So if you're counting on the certification list, It gives you the inventory of organizations that can help you, that is not the entire universe. So being able to see those organizations that might be certifiable, but not certified, understand what their capabilities are and what their, their attributes and maybe some of the challenges that they have really is, is an issue of passion. You really have to vet those people to understand. 

[00:25:46] Katie Cash: Being a female and also, we're a female owned business I just have to talk to our female listeners, you're running an organization and you're not certified. You are doing yourself a disservice. Take the time, do the paperwork, do all of that legwork. To take advantage of these programs that are really helping you set up to succeed. We were one of those gym that were unaccounted for, for a number of years early in the Smartegies journey.

[00:26:12] And it's something that I wish we would have done sooner. So if there's anybody out there listening that hasn't taken that step, I would strongly advocate that, that you do follow Jim's advice. And go ahead and take that first step towards certificate. 

[00:26:25] Jim Beall: Katie, I think you make an excellent point and understanding what do I need to certify for? Why am I certifying? What am I trying to achieve? And how do I manage that asset a certification? I mean, I think that is cognitive decisions that need to be made by management. There are people that are looking for folks that they can find. So that's one thing. So I think that's really, it. I think that, organizations are also trying to understand their true impact.

[00:26:53] So one is, is how much do I spend? So that's having good visibility into their, their spend matrix or their, spend data. Classifications, who the supply base are first tier and second tier. And we're seeing organizations drop below that first and second tier down into the fifth and the seventh and the ninth tier of spend to be able to truly understand the impact of diverse suppliers or are in that supply chain.

[00:27:24] And particularly what's the impact on communities. We had two interesting scenarios recently, one in the, in the Baltimore area where a business was being provided significant tax relief for new construction environment. And that tax entity started to complain that the money wasn't showing up, like they had forecasted.

[00:27:47] So we did, an exercise of being able to track that financial impact right down to the community, right down to the organizations that. Operated in the community and the staffing levels that they had there down to the county level. So we're able, and heat maps be able to demonstrate, not only did you give tax incentives, but this is exactly where that money went and the forecast not short, but long as it came in reality. So the reason I kind of tell that story is, is there is good information. There is good systems out there. They're excellent service providers that can help you to understand. Not only what am I doing?

[00:28:28] How well am I doing it? But what's the impact of that because ultimately, and I, I've got to give some credit to our friends at DuPont. And we were having some dialogue and they have a very sophisticated program, probably been in this as long as any large scale organization and certainly a member of the billion dollar round table.

[00:28:47] We were having a discussion about there could be more suppliers in your supply base and he goes, that's true. And if I were just counting so that I could tell people that I'm doing something good, that would be meaningful, but my real mission is to improve those communities. So whether I got to count them or not, is really insignificant.

[00:29:07] Am I really creating an opportunity for folks and, and communities and organizations that, that are disadvantaged to be able to Excel. And I thought that was a very pure motivation to go get these, this kind of work done. And I think all of us from a corporate perspective need to have a bit of that thought.

[00:29:27] Katie Cash: I'm seeing and hearing more and more often a lot of these larger major corporations kind of taking that stance. I know there's a large technology company that has made some major investments here in Atlanta and that's their whole mission. And that's kind of how Donya got involved with their whole construction subcontractor diversity program. But we're hearing more and more, I feel like it, there's some kind of news article, maybe once a week coming out with these big firms, making these, these claims on what they're going to do on the diversity and inclusion front, and then it's really driving business. So if I had to kind of summarize what we've been talking about today, it's really that a diverse future is a fruitful future for everyone.

[00:30:06] And Organizations out there to help individuals in a position to start a business or certify their business get on the right track. There organizations similar to yourselves that are integrating different parties together. Connecting individuals with organizations that are looking for suppliers, looking for partners.

[00:30:26] Jim what I'd love for you to do is as we kind of wrap up today, what is the best way for our listeners to learn more about. The diversity consortium and what you guys are doing, maybe how to get engaged. And what's the best way for them to reach out to you if they have questions or, they want to engage you to maybe help build a program.

[00:30:45] Jim Beall: Yeah. Well, thank you very much for that, Katie. So, uh, certainly visit our website. It is, uh, thediversityconsortium.com. thediversityconsortium.com and , the main switchboard there is (919) 502-3104. And someone in that organization will be glad to, to answer any questions, or provide any insight, to, what we do or what we perceive the marketplace to be.

[00:31:16] So look forward to the opportunity to chat with anybody and any of your listeners that, uh, that need help. There's some great organizations out there that are in this space. I encourage encourage folks to, to kind of lean out. I think I, I end in particularly with the last question that you asked me of what can corporates do and, and, and what should XBEs do I think is to have a plan, you know, really understand where you are. And, and where you want to go and to have a roadmap that gets you there. I think many folks are finding themselves a bit flat-footed when they make a commitment to go do something and they really don't understand where they are or how they're going to get there. And then someone comes back sometime later and says, you said you were and how are you doing on that?

[00:32:02] And they go I don't. I really don't know. I'm sure we're doing great. And then they find themselves in a bit of a catch 22 and try and understand it. So get a plan and work that plan. There is absolutely benefit to all of society. I think we've been able to demonstrate that diversity strategy is, is green, right? Is sustainable and it can make. So the, so that's a good thing. 

[00:32:29] Katie Cash: Well and that is a perfect ending. We're in the middle of season three and our whole theme of this season is really the AEC revenue driver. And I think you're right, Jim. I think that there's, there's lots of projects out there. There's lots of opportunities.

[00:32:43] There is money to be earned and sometimes just putting the right team together and having those right partners is a step towards earning those revenues. So I really appreciate it on behalf of Smartegies and all of our listeners, Jim, thanks for sharing your insights. Donya, thanks for sharing yours as well. And we will see everybody next time. 

[00:33:01] Jim Beall: Pleasure. Thank you. 

[00:33:02]