Daryl M. Hodnett Business Case and ROI for America

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Supplier Diversity –Business Case and ROI for America NAEP Supplier Diversity Institute August 5 Chicago Daryl M. Hodnett

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, 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 ( ) 15 Years building Procter & Gamble’s Supplier Diversity effort ( )

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 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”.

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 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 “2 nd 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! Colleges and University’s Must develop compelling reasons for Supplier Diversity– It’s about “BUTTS in SEATS” for our future!

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! What we’ve recommended at UM System and its 4 campuses: – Developed a comprehensive 5-year Plan (FY ) – 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 4 key focus areas—”Where we Play!”: – Increase direct spend of Supplier Diversity at UM Implement a formal 2 nd 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win! 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 2 nd 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

NAEP Supplier Diversity Institute Chicago, IL August 4 – 5, Why we Play…How we’ll Win!