Southern Company works with WBE Vulcan Industrial Contractors
The diversity program was started because it made
good business sense for Southern Company.
It still makes sense and promotes small business growth
Southern Company (Atlanta, GA) is a Southeast U.S. energy company with 4.4 million customers, more than 42,000 megawatts of generating capacity and operating revenues of more than $17 billion. A supplier diversity program has been an integral part of the company since 1978. Last year the company spent 13.7 percent of its procurement dollars with minority- and women-owned businesses; over the last five years the average annual spend has been 13.8 percent. That's up from just 5.5 percent in 2000.
Southern Company encourages its prime contractors to subcontract with diverse firms. The resulting tier-two spend is an important consideration, although there's no required percentage.
Ken Huff, who has been with Southern Company for twenty-seven years, has managed the supplier diversity team at Georgia Power Company (GPC), one of Southern Company's operating units, since 2007. He also chairs the Southern Company supplier diversity council.
Huff notes that Southern Company was the first electric utility in the U.S. to implement initiatives to develop and grow diverse businesses. The program began as outreach to the minority business community and was later expanded to include women-owned businesses, he explains.
"The right thing to do"
Alice Gordon is manager of supplier diversity and relations for Alabama Power, another operating unit of Southern Company, and vice chair of the corporate supplier diversity council. "The program was started because it made good business sense for Southern Company and its operating companies," she notes. "It still makes good sense and provides continued economic development and small-business growth."
Most importantly, she says, "In each of our four operating company communities in Alabama, Mississippi, Georgia and Florida, many of our suppliers are also our customers. By providing opportunities for them and other small and diverse businesses to grow, we build partnerships and strong alliances. Overall, supplier diversity is the right thing to do."
A multi-faceted venture
In fact, some of the first steps the program took back in 1978 involved developing strong lines of communication between Southern Company and the many communities it served. At the same time the overall company was getting deeply involved in all forms of inclusion.
Southern Company's supplier diversity efforts are extensive. A dozen supplier diversity (SD) professionals work locally, regionally and nationally to identify, recruit and develop diverse businesses; they are supported by hundreds of internal business unit partners who mentor and contract with diverse suppliers. Southern Company sponsors many small business advocacy groups throughout the southeastern U.S. Additionally, SD team members serve in leadership roles in the regional Arkansas-Mississippi Minority Supplier Development Council (AMMSDC), the Georgia Minority Supplier Development Council (GMSDC), the South Regional Minority Supplier Development Council (SRMSDC), the regional Greater Women's Business Council (GWBC) and nationally with WBENC, the Kauffman Foundation's FastTrack, the Edison Electric Institute's supplier diversity committee and many other organizations.
The company encourages NMSDC and/or WBENC certification for its diverse suppliers; HUB Zone companies must provide SBA certification of their status.
The Southern Company supplier diversity program includes internal mentoring and educational scholarships. Since 2001, fifty-four diverse suppliers have received scholarships to the minority business executive program at Dartmouth College's Tuck School of Business. Each company admitted to the internal mentoring program is assigned a Southern Company mentor. Mentor and protégé work together to develop a business plan to identify needs, training opportunities, barriers and development solutions.
"The formal mentoring program was established in 1998, and we have several other initiatives with a mentoring flavor to them," says Huff. "Mentoring does not guarantee a contract; but even if protégés do not receive contracts, they'll get valuable insight into our industry and into corporate procurement."
Vulcan Industrial Contractors works with Southern Company
Vulcan Industrial Contractors Co, LLC (Birmingham, AL) is a WBENC-certified industrial construction and maintenance service contractor. The company provides a full range of operating maintenance services in mechanical, electrical, civil and structural areas to industries nationwide, including power, paper and pulp, oil and gas, chemical and defense.
Vulcan Industrial began in 1949 as part of Shook and Fletcher, an insulation distributor. Sandy Killion, a nurse by training, became very much involved in the operations of Shook and Fletcher, which was owned by her father-in-law. In 2003 Killion took over the contracting arm of the company and named it Vulcan Insulation, and in 2006 she took the company through WBENC certification. In 2009 she changed the name to Vulcan Industrial "to better reflect our range of services," Killion says.
Teresa Magnus, Vulcan CEO, started with the company in 2008. She has a 1999 accounting degree from Miami University (Oxford, OH) and a 2008 law degree from Sanford University (Birmingham, AL), but her working background is in construction.
Before joining Vulcan she was construction contract strategy manager for Southern Company, and before that she worked for Arthur Andersen and Price Waterhouse in construction consulting.
"I can't think of a better industry for someone who loves tangible results! I love knowing I am part of this," says Magnus.
Mentoring increases opportunities
Vulcan connected with Southern Company more than five years ago when Vulcan and Killion were accepted into the mentorship program at Southern affiliate Alabama Power.
It's a two-year program, Magnus notes. "They introduced us to the diversity champions and decision-makers within various business units, including Georgia Power, and we entered their mentorship program as well.
"When we started in 2003 we operated just in Alabama, had fewer than 200 employees and revenues of six to eight million. Today we work throughout the Midwest and Southeast, and have more than 700 employees and revenues of forty million," says Magnus.
A full range of services
Magnus points out that Vulcan's services have changed as well. When the company started the focus was primarily insulation and asbestos abatement. Today Vulcan offers a full range of construction and operating services.
The relationship with Southern Company has been tremendously important to Vulcan's growth and success. "At one point they were almost 75 percent of our business. It's less now, but they've provided us with a lot of opportunity. Bidding is still competitive and we have to meet expectations, but they've given us opportunities to expand to all their companies.
"Once you do work for one large company it makes it easier to meet with other large companies," says Magnus.
Magnus has a strong interest in involving girls and young women in technical work. While she was at Southern Company she started "Girls Can!"
"It's a one-week program to introduce girls to careers in welding, carpentry, electrical work and drafting," she explains. "It expands their horizons in terms of science and engineering and introduces them to a nearby school of technology they might consider."