Driving Change
Business Courier of Cincinnati - by Lucy May Senior Staff Reporter
Successes include assisting with the creation of River Cities Furniture, World Pac Paper and Amantea Nonwovens, among others. Buford also introduced the CEOs of Megen Construction Co. and the Cincinnati Center City Development Corp., a meeting that helped Megen win the job overseeing the $43 million makeover of Fountain Square.
Dave Foxx credits Buford and the MBA with renewing his enthusiasm about seeking more local clients for his construction and facilities management and staffing firms that make up his downtown-based de Foxx & Associates. He was skeptical at first, fearing the MBA was just another initiative that would offer him training he didn't need. But he has become convinced that the program can help him grow his businesses locally.
"The majority of our growth had been focused outside of Cincinnati," Foxx said, adding that his company has grown between 20 percent and 30 percent each of the past six years, thanks to that strategy. "The MBA re-energized us around Cincinnati as a possibility."
Stephen Hightower, though, is more guarded. While he appreciates the work the MBA's three-man staff has done for his Franklin-based Hightowers Petroleum, he worries the MBA has run into the same obstacles he has.
"The MBA has ultimately found themselves as being a minority business," Hightower said. "To some degree, they are faced with some of the same limitations that other minority companies in this marketplace are faced with. There's a lot of good talk. ... But there's not as much action to support the conversation."
Buford insists many local corporations view the MBA's work as "an economic development imperative."
In 2004, the MBA's first full year of operation, local corporations spent an estimated $100 million with local minority-owned businesses. This year, the MBA expects that figure to reach $250 million. And the program has a long-term goal of delivering $500 million in annual spending by 2008, he said.
"But," Buford said, "there will always be those who may have some anticipatory fatigue about meeting with us because of their preconceived notions that we are a social program designed to provide social benefits ... and that we don't serve a strategic purpose for them."
And not every company touched by the program has succeeded. The formation of Dynus Corp. -- when Orlando Carter bought CBS Technologies from Tom Revely -- was celebrated as one of the MBA's first wins. But Fifth Third Bank locked Dynus's doors last year after a controversy over a contract the technology company had with Butler County. Now embroiled in legal battles, Carter couldn't comment for this story.
But Buford defends the MBA's work with Dynus, saying the firm had "a world of potential" when the MBA helped it in 2003.
"We don't fool ourselves into believing that 100 percent of the minority businesses that we work with will be successful," Buford said. "Entrepreneurship in particular is extremely difficult. There will be setbacks along the way."
Can't rely on mere serendipity
The key, Buford said, is staying focused: Continuing to work with minority-owned businesses while at the same time building demand by pushing for more corporate spending with minority-owned firms.
But before corporations can be expected to boost their spending with local minority-owned businesses in any meaningful way, they must be shown that supplier diversity initiatives can strengthen their businesses by reducing costs or improving revenues, said Rod Robinson, whose Accel Advisors works with corporate clients to strengthen their purchasing programs.
In some respects, Robinson's Accel is a private-sector MBA, working with corporations and large organizations nationwide.
Accel, however, focuses first on the demand side of the equation. When working with a client, the firm helps streamline purchasing and develops a supplier diversity program with an eye toward which business niches minority-owned firms could fill. Then Accel seeks minority-owned firms that can do the work, screens them and helps them connect with the corporation.
That demand-side approach is far more strategic than just trying to build capacity among local firms, said Thomas Lyons, professor of urban and public affairs at the University of Louisville.
"Most efforts consist of, 'Here's the list of the companies, here's the list of minority suppliers, you figure it out,'" Lyons said. "It leaves everything up to serendipity."
The chamber of commerce in Jacksonville, Fla., is in the early stages of building a demand-side supplier diversity initiative and might contract with Accel to run it, said Glenda Washington, senior director for economic inclusion at the Jacksonville Regional Chamber of Commerce.
"We could offer companies up every day, all day long," Washington said. "But unless you need them, they're not going to be used. Rather than put them on a vendor list and let them sit there, we wanted to identify an opportunity."
But Buford argues that the MBA is attacking the issue both from the supply side -- helping local minority businesses build their capacity -- and the demand side -- by encouraging corporations to boost spending with local minority-owned businesses.
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