Landing a contract with a major corporation can be a turning point for small and minority-owned businesses, but many never get the chance because they haven’t had the sort of networking opportunities that create contacts within large organizations.
“There is an unconscious bias for organizations to be leaning toward suppliers with whom they are familiar,” said Pradip Khemani, vice-president of global business services with Blue Shield of California.
To dismantle these barriers and promote equity and inclusion, many large companies have established supplier-diversity programs. Blue Shield's program is open to certified small businesses and those that are at least 51% owned and operated by women, minorities, disabled persons, disabled veterans or LGBT (lesbian, gay, bisexual, transgender) people.
The centerpiece is a web portal where diverse suppliers can register to be considered for contracting opportunities. The program also includes outreach efforts, such as an annual fourth-quarter summit that is open to all, including Blue Shield’s existing diverse suppliers and community organizations that bring in their own members.
“A lot of innovation and transformation is happening in diverse communities. A lot of our suppliers with different backgrounds are doing some fantastic work. We want to be the preferred brand for diverse suppliers,” says Khemani.
Blue Shield of California spends nearly 10% of its total procurement outlays with diverse suppliers. DiversityInc, which evaluates companies on inclusion efforts, ranked Blue Shield as its top regional company for overall diversity in 2021, which included a review of supplier practices.
Dealing with any large company, of course, can be daunting. To get the most out of Blue Shield’s program, follow these five simple dos and five don’ts:
- Visit Blue Shield’s supplier diversity website. You will find facts about the program, a link to enroll and a list of products and services that Blue Shield buys from outside vendors. Information technology and human resources are the largest categories for diverse suppliers, but the list is expansive and includes marketing, professional, printing and other services.
- Get certified. To participate, a business must go through a formal process to become certified as small or diverse by one of the independent organizations listed on the website.
- Know what you’re offering. “Once a supplier is registered, we will contact the supplier to understand more about the services they provide and if they will be a good fit to be included in an RFP (request for proposal),” said Karen Clark, Blue Shield’s director of supplier governance. Be prepared with a clear, focused explanation of your capabilities. “Although most contracts are awarded after an RFP, there may be an occasional need that requires us to hire a supplier under our standard terms and conditions via a one-time purchase order,” such as providing catering for an event, said Clark.
- Understand the company’s mission and culture. When a large company reaches out, be ready to explain how your business is aligned with its mission and culture. “Our mission is to create a healthcare system that is worthy of our family and friends and sustainably affordable,” said Khemani. “Our values are to be human, honest and courageous.”
- Establish customer references. “Bring in a set of references where a company like Blue Shield can pick up the phone and see what kind of experience and outcome did this supplier deliver,” said Khemani.
- Cold call or email individuals at Blue Shield or reach out through social media. Instead, send any questions to firstname.lastname@example.org. This is a group email that gets the attention of global business services leadership and will get a response.
- Assume that just because you have registered, you are a contractor. “There is still a contracting process we have to onboard them with,” said Clark.
- Be impatient. It can sometimes take more than a few weeks or months to get a contract. Trust in the value of your product.
- Expect that the lowest cost bid will win. “We are not here to buy the cheapest product. We are here to buy a product or service that creates the greatest value for our members. Focus on the value proposition, not coming down to the lowest price point. That’s not the attraction any more in large corporations,” said Khemani.
- Get carried away by titles. “There is a temptation sometimes to only engage with the C-suite,” said Khemani. “At Blue Shield of California, other levels of management staff are empowered to make decisions. Don’t just get carried away by the title. Engage the person from the depth of knowledge and authenticity they bring to the conversation.”
Blue Shield of California is the winner of the HFS Research OneOffice Award for supplier diversity in 2022.