Session 9 - Positive ROI on Recruiting & Utilizing Diverse Businesses - Daryl Hodnett (3)

Daryl M. Hodnett

Business Case and ROI for America

NAEP Supplier Diversity Institute l Chicago, IL l August 4 – 5, 2014 2

Supplier Diversity –Business Case and ROI for AmericaNAEP Supplier Diversity Institute

August 5 Chicago

Daryl M. Hodnett


Why we Play…How we’ll Win!

Daryl M. Hodnett• Director-Supplier Diversity and Small Business Development at University of

Missouri System• Previously-Trainer and Facilitator for Diversity Information Resources (2006-2014)• 15 Years building Procter & Gamble’s Supplier Diversity effort (1991-2006)



U.S. Automakers—Building Consumer Loyalty• Losing ground to imports• Detroit: How do we help rebuild the city?• Future and current demographics• Developed a business case that could work within their business units• Toyota, Honda have adopted this effort (Based on having U.S. Mfg. plants)• All 5 companies spend more than $1BN annually



Consumer Products—Reaching the New America• 2040—50% America is minority (California already there)• Hispanic and AA population boom with birth rates 1-2x whites

(immigration as well)• P&G is CPG leader—Only CPG company over $2BN in SD spend,

Pepsi and J&J $1BN



Advocacy Groups—Not why you should do it!• Companies that have had “significant history” with discriminatory

practices• Have had federal government intervention• Understood it is “bad for business”.



Business-to-Business: Pleasing your customer!• Major customers ask suppliers to create supplier diversity efforts• A long-standing practice (joint ventures) in construction industry-public

projects• Automakers started the “2nd Tier” initiative from corporate side• Johnson Controls has created joint ventures and strategic partnerships—

making them incredibly competitive• Many suppliers (Office products, foodservice, etc.) have efforts to report

spending to us—competitive advantage



Colleges and University’s Must develop compelling reasons for Supplier Diversity– It’s about “BUTTS in SEATS” for our future!



What we’ve recommended at UM System and its 4 campuses:– Developed a comprehensive 5-year Plan (FY 2014-2018)– Tactical links to the University Strategic Plan– Focus on “Where we’ll Play” and “How we’ll Win”– Working on defining “Why we Play”– Roadmap allows us to go “sell” Supplier Diversity clearly



4 key focus areas—”Where we Play!”:– Increase direct spend of Supplier Diversity at UM• Implement a formal 2nd Tier program with goals and

timetables– Expand Missouri’s educational focus of M/WBE’s– Leverage SD to increase UM’s image and reputation for overall

diversity– Help lead the conversation in Missouri (state institutions and

private sector) on SD



4 key focus areas—”How we’ll Win!”:– 15% of total annual spend by FY 2018

• Design/Construction and Procurement• 5 year goal of cumulative $500MM in total spend• $6MM annual 2nd Tier spend by 2018 (Less than $1MM today)

– Expand Missouri’s educational focus of M/WBE’s– If we succeed, market and sell our work in diversity

• Can help with minority recruiting of students and parents• UM “looks/feels” diversity friendly• Can be part of the “Go-to-Market” strategy to win with ethnic students in

the future

Session 9 - Positive ROI on Recruiting & Utilizing Diverse Businesses - Daryl Hodnett (3)

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