EEI supplier diversity initiative celebrates its 25th
“It isn’t your company in competition with my company;
we are all together to support minority suppliers,” says Jewel Smith of CenterPoint
Energy, chair of EEI’s supplier diversity committee
This May, Denver, CO was the scene of the twenty-fifth annual conference of the supplier diversity initiative of the Edison Electric Institute (EEI, Washington, DC, www.eei.org). Diversity/Careers chief operating officer Jeff Weiner attended on behalf of the magazine.
EEI is, of course, an association of shareholder-owned electric companies, first organized in 1933. Its members represent some 70 percent of the U.S. electric power industry. The association is involved in advocacy, awards and supplier diversity.
The EEI supplier diversity initiative formally began in 1983. Even before that, EEI was one of the first industry organizations to sign the NAACP’s “declaration of fair share principles,” committing its members to support African American and other minority communities in its business dealings.
“That document served as impetus for
a core group of individuals to come together and begin to dialog with EEI’s materials, purchasing and contracts executive committee,” says Walter Loyd. Loyd is director of supplier diversity for Entergy Corp (New Orleans, LA) and a longstanding EEI supplier diversity committee member.
Into the mainstream
That opening dialog, Loyd says, “led to an ad hoc materials purchasing and contract committee within EEI, designed to advance minority businesses into the procurement mainstream. Soon afterward the EEI formed a committee on supplier diversity and appointed a minority business development coordinator to foster expansion of these initiatives in the electric utility industry.”
The committee turned to the then-fledgling NMSDC (www.nmsdc.org) to certify the businesses as minority-owned, Loyd relates. Since then, federal and many state governments have developed their own certification processes, he notes.
The business-case model
“Quite frankly, these initiatives started out as socially conscious activities within the electric utility industry,” Loyd says. “But now they’ve moved to a business-case model where our suppliers mirror our customer base. Deregulation had a lot to do with that.”
Since the initiative began, EEI has become a focal point for supplier diversity information in
the electric utility industry, both for corporate members and for entrepreneurs. “Member companies work together to build business cases for establishing their own supplier diversity initiatives,” Loyd says. Benchmarking and discussion of best practices are common, and new companies have a chance to learn from companies with long experience. “We serve as a clearinghouse where member companies can mentor each other.”
Cooperation is common even among competitors. “When the deregulation movement was in full force, supplier diversity was about the only thing electric utilities would talk to each other about,” Loyd reports with a smile. “Our executive committee was one of the few committees that remained in force!”
Mentors and protégés
Most EEI companies that have supplier diversity initiatives make a point of mentoring key diverse suppliers. “At Entergy, we have had managers visit supplier sites to examine their operations and offer services to help them improve their capabilities,” Loyd says.
“We share information about suppliers. When a diverse company applies to us our first question is, ‘Are you currently providing this service to any other electric utility?’ Or EEI will
say to us, ‘We have an inquiry, can you provide names of companies that can do this?’ We’re constantly sharing information about suppliers who’ve been effective with us.
“Because they are smaller companies they tend not to have a high overhead. They can be more agile and move a little quicker to service their accounts,” Loyd adds.
“The place I wanted to be”
Jewel Smith is manager of supplier diversity for CenterPoint Energy (Houston, TX). Last year she became chair of EEI’s supplier diversity committee. “When I attended my first EEI supplier diversity conference, I knew it was the place I wanted to be involved,” she says.
“The information available was phenomenal, and the willingness of EEI and member companies to assist was something I had not readily experienced. It wasn’t your company in competition with my company; we were all together to support minority suppliers.”
“A whole new set of challenges”
The next steps for the EEI supplier diversity committee initiatives will be big ones, Smith predicts. “We need to address the global and international perspective, and the resulting supplier diversity impact.
“The world is certainly much smaller in terms of procurement. We need to think about what value we can add as we start analyzing things like climate change, carbon footprint and the logistical issues of moving supplies in an environmentally friendly way.
“There will be a strong focus on new environmental regulations and global impact. It’s increasingly important for our suppliers to look seriously at international relationships and partnerships, and we can help them do that.”
For example, Smith thinks it will be important to have an international component at EEI’s supplier diversity conferences. “We will invite utilities from other countries to talk about opportunities and challenges. That may even lead us as utilities to look at fostering diverse supplier partnerships and alliance development with international utility companies.
“We have a whole new set of challenges!”
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