Honda Partnership Network emphasizes inclusion a U.S. Rep. Joyce Beatty, a speaker at the Second Annual Honda Partnership Network
6 FORGING RELATIONSHIPS 6 Attendees at the Second Annual Honda Partnership Network event included (from left): Stephanie Franklin, HPN MC and procurement diversity team member; Rick Schostek, executive vice president, Honda North America Inc.; Joset Wright-Lacy, president, National Minority Supplier Development; Joyce Beatty, U.S. Congresswoman of the Ohio s 3rd District; Rev. Dr. Paul Smith, Honda diversity advisor; Tom Lake, vice president, North American Purchasing; Mike Lapham; department manager, North American automotive purchasing. 42 MBN USA Vol. 1, 2017 mbnusa.biz
Let s Dance Honda Partnership Network emphasizes inclusion BY MELISSA LOWERY H onda North America Inc. s Purchasing Procurement Diversity group recently hosted its Second Annual Honda Partnership Network event, designed to create business opportunities for minority- and women-owned enterprises within its supply chain. During this daylong event, Honda matched Tier I suppliers with women- and minority-owned companies that facebook.com/mbnusa twitter.com/mbnusa Vol. 1, 2017 MBN USA 43
6 FORGING RELATIONSHIPS possess capabilities to help the suppliers meet their business needs. Honda began this program to foster discussion between companies. Last year, 22 percent of the companies quoted business based on the event, and of those, 37 percent were awarded business, said Rick Schostek, HNA executive vice president. Held in downtown Columbus, Ohio, the event was attended by more than 214 minority business enterprises and women business enterprises, as well as 109 Tier I suppliers. In addition to matchmaking, attendees heard from Honda executives, U.S. Rep. Joyce Beatty a Democrat for the 3rd District of Ohio and National Minority Supplier Development Council President Joset Wright-Lacy. 6 LET S DANCE Diversity is being invited to the party. Inclusion is being asked to dance, Schostek said during his opening remarks. Honda is committed to making sure the diverse companies not only receive invitations to the party, but are asked to dance. As such, the conference was retooled to tighten the focus around the concept of inclusion. We re again playing the role of matchmaker, Schostek told suppliers. Our team is making an effort in advance to create the right matches for you and provide the opportunity to find multiple dance partners. The first Honda Executive Task Force on Diversity was formed in 1998 to take a more proactive approach to advance diversity in all of our business and community activities, he said. In 2011, Honda established the North America Diversity Steering Committee to make those efforts even more strategic and focused. The automaker also assembled a team of Honda Diversity Advisors consisting of Rev. Dr. Paul Smith, Esther Silver-Parker, Dr. Stephen Jones and Sen. Al Torres. This group of executives, representing Honda s entire business in North America, is charged in part with tracking the company s progress in diversity and inclusion. It looks at efforts and initiatives across key pillars such as the dealer network, hiring practices and procurement. Our team is making an effort in advance to create the right matches for you and provide the opportunity to find multiple dance partners. Rick Schostek Minority-owned firms are an engine of job creation. They demonstrate the highest level of new job growth and company formation compared to nonminority-owned firms. Joset Wright-Lacy 6 Joset-Wright Lacy, president, National Minority Supplier Development President, delivers the keynote address at the Second Annual Honda Partnership Network event. Spend is one metric used to track progress, specifically continued growth in spend with diverse suppliers. Honda joined the Billion Dollar Roundtable in 2007 and achieved another milestone in 2016. I m very proud to announce that with the fiscal year that concluded in [spring 2016], we reached the $3 billion mark for the first time, Schostek said. That amount translates to over 10 percent of total purchasing, putting Honda in the top tier of diverse spend within the automotive industry. Schostek acknowledged the purchasing and procurement teams that helped achieve that milestone. In particular, Cathy Osborne and Stephanie Franklin members of HNA s purchasing team were recently recognized as Buyers of the Year by NMSDC regional councils. Honda has seen significant growth in the number of diverse suppliers at the Tier I or lower levels, boosting diverse spend as a result. The company now counts more than 2,000 diverse companies in the supply chain with a reported spend of more than $635 million, an increase of over 41 percent in the past three years. This [growth] is where inclusion is particularly important, Schostek said. Smaller businesses can reach where big companies often cannot, providing economic impact and employment in communities that don t always receive the benefit otherwise. An increased focus on spend at the Tier I level is, of course, good news to the many diverse companies that attended the conference. He reiterated Honda s commitment to increasing spend by providing opportunities for diverse companies. Honda is committed to increasing inclusion in all of our sourcing decisions, Schostek said. Our target for Tier I remains at 10 percent. Based on the last 10-15 years of activity, our Tier Is are currently at 4 percent. We remain focused on forging partnerships that will help you achieve that remaining 6 percent. We hope you embrace the concept of inclusion by finding a few great dance partners. 6 JOB GROWTH ENGINE NMSDC s Wright-Lacy, the event s keynote speaker, put forth evidence showing how critical minority-owned businesses are to economic growth. Citing research from the U.S. Census Bureau, she informed the audience that currently 21 percent of all U.S. firms are owned by minorities. These companies generate $1 trillion in economic input and have created 6 million jobs more than their nonminority-owned counterparts. Minority-owned firms are an engine of job creation, Wright-Lacy said. They demonstrate the highest level of new job growth and company formation compared to nonminority-owned firms. Also of note is the demographic shift happening in the United States and what that means for the economic future. 44 MBN USA Vol. 1, 2017 mbnusa.biz
6 FORGING RELATIONSHIPS 6 At a Honda Partnership Network Matchmaker event, a Tier I supplier interacts with Tier II companies. In less than three decades, whites will constitute a minority of all Americans, Wright-Lacy said. This milestone signals a transformation from the baby boom-dominated culture of the last half of the 20th century. As the U.S. becomes a more globalized, multiracial country, Wright-Lacy predicts that a younger, multiracial population will become the foundation of the American economy. To understand what the economic future looks like, NMSDC commissioned a report, The Effects of NMSDC-Certified Minority Business Enterprises on the U.S. Economy in 2014. Written by Scott Anthony Vowels, Ph.D., from the Institute for Thought Diversity, the report provides valuable insight into how MBEs reinvigorate a stagnant economy, create sustainable jobs and positively contribute to the tax base. The report found that NMSDC-certified MBEs generate $400 billion in annual revenue and employ 2.25 million people. In addition, these businesses contribute $18 billion in local and state tax revenue annually. Those numbers will only increase as MBEs grow. We now have evidence that the activities of the minority business community generate significant economic benefits for not only the local communities in which they exist, but also the nation as a whole, Wright-Lacy said. Companies that actively and intentionally enter partnerships with MBEs set themselves up for future growth and success. 6 FORGING RELATIONSHIPS Relationships are at the core of Honda s business model with both consumers and suppliers. Embracing diversity and inclusion empowers those relationships, said Tom Lake, HNA vice president, purchasing and cost planning. Honda s approach is to forge relationships based on mutual trust to serve as the foundation of doing business together, he said. This is where the concept of inclusion is so important. Inclusion is about forging relationships; relationships that go both ways. Honda recognized the need to better understand and embrace diversity within the supply chain, so the automaker turned to NMSDC. Honda procurement managers regularly attend NMSDC regional council events and are involved with the councils and their boards. Lake has been on the NMSDC board since 2011, an experience that has changed his perspectives on diversity and inclusion. Honda s approach is to forge relationships based on mutual trust to serve as the foundation of doing business together. This is where the concept of inclusion is so important. Inclusion is about forging relationships; relationships that go both ways. Tom Lake Our goal is to create a supplier network where the involvement of diverse companies is an organic part of the selection process. But, we re not there yet; so, our efforts at diversity and inclusion have to be intentional. Mike Lapham My mindset was the landscape of Central Ohio and the Midwest, where most of our suppliers are located, he said. NMSDC is in New York City where so many diverse cultures come together. Serving on the board with so many global companies, being on that world stage, the entire experience continues to shape my view of diversity. Lake encouraged the Tier Is in attendance to leverage the tools provided by NMSDC to advance their understanding of diversity and work toward inclusion. You may be thinking, I m a good person. I don t discriminate. How do I get from that mindset to embracing diversity? he said. The NMSDC can provide those tools. The resources it can provide are one of the best avenues available for any company seeking to forge strong relationships with diverse companies. Honda embraces the strategic value of supplier diversity, recognizing that diversity and inclusion is a benefit, not just a requirement. The company also recognized its leadership role in helping Tier Is build long-term, mutually beneficial relationships with MBEs. For Honda, our continuous pursuit of diversity and inclusion both makes our company stronger and enables our business to serve the community better, Lake said. We believe the process of embracing diversity and inclusion requires executive leadership and a role in creating relationships with MBEs. We want to not only lead by example, but [also] collaborate with you to make it happen. Honda s recent achievement of $3 billion in spend with minority-owned businesses is laudable. In addition, the company continues to broaden and expand the supplier diversity program to meet core business goals. This expansion includes encouraging and facilitating relationships between Tier Is and MBEs through events like the Opportunity Exchange. In a survey of companies that attended the 2015 Opportunity Exchange, more than half reported that they are engaged in the process of obtaining business or already have new business because of the conference. It s a good start, but there is still work to be done, Lake said. Our goal is sustainability not just achieving a dollar figure, he said. If you re not being inclusive, your MBE spend won t be sustainable. If you are an inclusive supplier, the dollars, the relationships and the benefits to your company will continue to grow. 6 INTENTIONAL DIVERSITY AND INCLUSION After discussions about how Honda is leveraging relationships to succeed in supplier diversity, Mike Lapham, purchasing division manager, Honda Manufacturing of Alabama LLC, spoke to attendees about being intentional in their supplier diversity initiatives. He underlined Honda s mandate that Tier 1s set a corporate diversity spend target of 10 percent and dispelled myths and misconceptions about obstacles to reaching that goal. 46 MBN USA Vol. 1, 2017 mbnusa.biz
6 The Second Annual Honda Partnership Network event was attended by more than 285 minority and women business enterprises, as well as 74 Tier I suppliers. Our goal is to create a supplier network where the involvement of diverse companies is an organic part of the selection process, he said. But, we re not there yet; so, our efforts at diversity and inclusion have to be intentional. Lapham started by discussing the myth that an emphasis on diversity and inclusion comes at the expense of Honda s high standards for quality, cost and delivery. Let me be very clear, he said, Our effort to increase the diversity of our supply base and our parts purchases doesn t mean our standards for quality, cost and delivery have changed. We haven t compromised any of our core requirements that enable us to provide our customers with products of the highest quality and value. On the contrary, Lapham said, it is Honda s experience that partnerships with diverse suppliers do not automatically add cost, especially in the long run. He also addressed why Honda is placing a mandate on supplier diversity, citing the value added in increasing the diversity of the supply base. It makes this country stronger by increasing the number of people who can become contributing and productive members of their communities, Lapham said. Economic impact is a significant result of partnering with diverse suppliers, but he went further, leaning into the idea of a global economic community and calling on Tier 1s to support diverse companies. Everyone in this room has received some form of help from Honda, Lapham said. We provide that support willingly because we recognize the strength of your companies and the value you can provide. When it comes to the goal of increasing the diversity of our supplier network, your role is very similar. We expect you to be supportive and give that kind of help to diverse suppliers. He also dispelled the myth that diverse companies are difficult to find. Citing Wright-Lacy s earlier remarks about the number of quality diverse suppliers certified through the NMSDC, he insisted that with intentional focus, there is a path to gaining access to these companies. Lapham walked Tier 1s through a plan to implement diversity initiatives as part of a business plan, based on Honda s own experience, from the investigation stage starting with top management commitment and setting business goals to establishing key performance indicators to producing an annual report of diversity activity to be shared with Honda. There are many ways to advance inclusion and diversity, he said, including finding an existing supplier, making a match with a diverse business to start a new joint venture company or identifying a company with a similar work ethic and culture as your own and working with them to help them grow into a strong partner with you. Honda has achieved success with each of these business models, Lapham said, through intentional action. In preparing to work with companies like Honda, ask yourself these questions: Do you understand its business? Are you flexible and able to retool when the company changes product design to meet supplier demand? Can you meet certain cost, quality and delivery parameters set by the organization? Are you open to joint ventures? Do you understand the company s way of doing business? Being able to answer these questions is critical to showcasing your company s worth and value as a supplier. U.S. Rep. Joyce Beatty Tier Is are not without resources to reach the supplier diversity goal. Honda is committed to providing support, even as the company holds Tier Is accountable. With diversity and inclusion becoming part of our business award selection criteria in the future, we want you to know that you can count on Honda to continue to provide support to your program development, Lapham said. 6 COMMITMENT TO SUPPLIER DIVERSITY U.S. Rep. Joyce Beatty provided the breakfast keynote address. As a congresswoman, she serves on the powerful Financial Services Committee and two of its subcommittees Housing and Insurance and Oversight and Investigations. A former small-business owner who established a successful management consulting company and later opened a small retail business in downtown Columbus, Ohio, she has unique insight into the economic impact of Honda s commitment to supplier diversity. One of the reasons I agreed to speak at Honda s Business Summit and Opportunity Fair was because of its commitment to supplier diversity, Beatty said. I have witnessed it firsthand, touring their facility in Marysville, Ohio, as a small-business owner and then again as a member of Congress. She noted that Honda is a valuable community member, sponsoring and partnering events across Central Ohio, including those with The King Arts Complex, Fire and Focus Scholarship Fund, The Ohio State University s African American Heritage Festival, NAACP Champions of Diversity Awards and Festival Latino. In addition, Honda is a bronze member of the Ohio Minority Supplier Development Council and is an NMSDC corporate member. Beatty said small and minority-owned businesses that aspire to work with companies like Honda cannot rely on luck. Someone once said, Luck is nothing more than opportunity being met with preparation, she said. She served five terms in the Ohio General Assembly before becoming a U.S. congresswoman and presented MBEs with five questions to consider when seeking opportunities to work with the Hondas of the world. In preparing to work with companies like Honda, ask yourself these questions: Do you understand its continued on page 104> facebook.com/mbnusa twitter.com/mbnusa Vol. 1, 2017 MBN USA 47