In the wake of the May 2020 killing of George Floyd, a flood of American individuals and corporations marched across the country and voiced their support online for the Black community.
It was a place to start, but it is clear that real work and corporate actions need to be taken to advance equity in American life.
For instance, a McKinsey Global Institute study found that 39 percent of all jobs held by Black Americans—compared with 34 percent held by white Americans—are threatened by reductions in hours or pay, temporary furloughs or permanent layoffs due to the coronavirus pandemic.
In addition, the virus has disproportionately impacted minority groups.
According to the CDC, Black Americans are 3.7 times more likely than white Americans to be hospitalized due to Covid-19, and Hispanics are 4.1 times more likely to be hospitalized. Death rates for both groups are 2.8 times higher than for the Caucasian race.
When it comes to entrepreneurship, research also shows Black entrepreneurs are three times as likely as white entrepreneurs to identify “lack of access to capital” as a major detriment to business profitability. Research also shows, however, that targeted support efforts, which include mentorship, investing in minority community groups and developing supplier diversity programs, can benefit everyone.
In 2017, when City National Bank opened a branch in the Crenshaw neighborhood of Los Angeles, a historically Black community with a mix of affluent and low-to-moderate income households, its commitment was to serve everyone and not just its wealthier residents.
“As a business, you must be intentional with diversity efforts,” says Karen A. Clark, multicultural strategy manager for City National Bank. “In Crenshaw, we had a plan, and we committed to the people there. No matter who came into the bank, we wouldn't turn them away. If we couldn't lend to someone right away, we'd give them a warm handoff to a business development center that could help them. And we support those organizations with real money, too.”
Connecting local people to resources - such as microloans and financial literacy programs - is just one part of the bank's successful strategy in the community that can be replicated by other firms.
Below are important ways you can help make a difference in communities most impacted by inequality and begin removing the systems that have fostered racial disparities.
Corporate leaders: Prioritize supplier diversity
One way for business leaders to take concrete action is through their supplier diversity programs.
Some companies, for instance, mandate that at least one of the five or so suppliers they consider must be from a diverse supplier when they have a procurement need, although the final decision is based on merit.
The result is not only an increase in a company's own diversity, but also a positive change in other suppliers' diversity as they are encouraged to look at their own inclusionary policies.
While many companies see the value in supplier diversity and would like to offer more opportunities to minority-owned suppliers, one challenge that many businesses face is that they have long-term relationships with legacy suppliers that can be hard to break.
”We've learned one way to overcome this challenge is to talk with those long-term suppliers and ask them about their own supplier diversity and inclusionary initiatives,” says Sal Mendoza, manager of City National Bank's community reinvestment program.
“The key is to be intentional across the board and to bring together the different groups that can address what people really need,” says Mendoza.
Small business owners: Make yourself visible
“There are responsibilities on both sides to increase diversity in the business world,” says Clark. “Yes, a larger company must understand the benefits of increasing supplier diversity, but small business owners also need to understand that big corporations aren't going to change the way they do business in order to work with them, in most cases. Small businesses need to be proactive and learn how to work with their larger counterparts to ensure they understand the supplier diversity programs and learning opportunities offered by them.”
Additionally, small business owners of color in the B2B space should find ways to form alliances with each other in order to build their capacity and ability to fulfill big corporation needs, says Clark.
One place to start is by reading corporate responsibility reports to determine which companies have active supplier diversity programs, explains Robin Billups, founder of The Billups Group consulting firm in Los Angeles.
“If you're a supplier who wants to work with a specific company, you can start by following their press releases and sending them a congratulatory note when you see they've acquired another company,” suggests Billups. “This also provides an opportunity to ask for a 15-minute meeting to gain insight on working together or on who procures your specific commodity.”
Government agencies and corporations that do business with the government typically need to meet established supplier diversity targets, so they also can be a good place for entrepreneurs to start making connections.
”Lastly, you can get certified as a small and/or diverse business, which can help those companies with an active focus on diversity find you,” says Billups.
Getting certified as a minority-owned business is a varied process that depends on each source and requirement of the prospective client. Timing can range from 30 days up to 90 days or more. Costs also vary - from free to required fees - and documentation can range from minimal to substantial documentation and an interview, says Billups.
While states and cities have their own certification organizations, you can accomplish the process through the SBA and organizations, such as the National Minority Supplier Development Council (NMSDC) or the Women's Business Enterprise National Council (WBENC), Billups suggested.
Wanda Brackins, global head of diversity for RBC Wealth Management, agrees that certification and understanding the process of working with larger corporations can increase inclusion.
“We focus on training suppliers on how to work with organizations like ours because we understand how many small businesses don't know how to get through the red tape to be considered for an RFP from a larger business,” says Brackins. “We're affiliated with groups like the NMSDC, NGLCC, NVBDC, DisabilityIN and WBENC that work to educate business owners and make sure they get the third-party certification needed to qualify for some RFPs.”
Everybody: Embrace best practices
The focus on racial justice that emerged from 2020 should provide incentives for businesses to revisit their diversity, equity and inclusion efforts in 2021.
Jennifer Nickerson, corporate citizenship manager for City National Bank, says that authentic outreach is an important component of success, and there are important questions everyone must ask him or herself moving forward.
“How can I use my position, my expertise to effect change?” says Nickerson, who oversees corporate giving and volunteerism for the bank. “How do I personally and professionally take action that is intentional to make a difference? For example, if I am an IT professional, can I volunteer with an organization that brings coding classes to girls or BIPOC clients? What is authentic to me and helps move the needle?”
Brackins and Clark also suggests go-to practices for business owners who want to engage with minority-owned businesses, including:
- Researching multiple minority-owned businesses to include as potential suppliers.
- Expanding your network to include minority-owned business owners who can share ideas and best practices.
- Implementing inclusive recruitment practices and intentionally hiring employees of color.
- Mandating effective online diversity training for your employees to help strengthen interactions with minority businesses owners and your community.
- Expanding your customer base to include minority consumers. ”We researched our target market and partnered with local organizations in order to help raise the banking IQ for residents, which would help put them in a position for future financial success,” says Peter Jackson, senior relationship manager at City National Bank.
Whether you're a business owner with the goal of increasing racial equity or part of a larger corporation that wants to expand its diversity efforts, diversity training and intentional outreach can benefit both sides.
”Inclusion leads to profitability for everyone,” says Jackson. But remember the timing is important, too.
“Now is the time to strike, while most people are facing economic challenges and joining a bigger conversation around diversity,” says Clark. ”There are countless ways to successfully design diversity programs that reflect your brand, your business strategy and the communities you aim to serve.”
This article was originally published by City National Bank.