MAKING WAVES WITH DIVERSE VENDORS
For California American Water, the process of choosing vendors bears a resemblance to a friendly talent show.
The California American Water event is no ordinary supplier sourcing event, nor are things being done in a “business as usual” way. Using an everyday commodity delivered to every American, extraordinary steps are being taken to implement innovative strategies.
The man behind this is Edward “Ed” Simon, director of Business Performance & Supplier Diversity at California American Water. He has taken a different approach to executing supplier diversity. His most recent event, the California American Water Supplier Diversity Showcase, illustrated how impactful his new initiatives are at making waves. Individuals on the team at California American Water shared their perspectives and why they feel the supplier diversity program and outreach events are so important.
Rich Svindland, California American Water, President.
American Water is the holding company of California American Water. Rich Svindland, president of California American Water, is looking to do things differently. The company is on the forefront of supplier involvement and leads the country as a pioneer in operations and providing services. This outreach event is different because it is innovative. The individuals work directly in the areas where they can hear from the DBEs directly. People like to do business with people they know. They get to hear firsthand from the companies they could be working with to support the organization. All the key decision-makers are in the room at the events, not just when it is time to decide on a proposal or quote. California American Water is the think tank that makes things happen.
Their approach is successful, in part, because of the event’s format, which allows company decision makers to hear direcdy from vendors. It’s their moment to tell their story in a personal and authentic way. The audience judging the presenting small business consists of representatives from the various departments that will utilize the service or product. These individuals are in charge of the dollars they have to spend. The business owner shares business offerings and unique information that provides insight into their organization. The audience often finds the history and differentiating factors of these DBEs intriguing.
The California American Water department leaders select businesses with which they would like to have a one-on-one meeting with later that day. This activity has provided a way to learn and grow. It is also an opportunity for the business owner to tell them about their company and their business accomplishments.
“A lot of educational learning happens all at the same time, internally and externally,” Svindland said. “It is a learning experience to support growth from both the corporate perspective and the vendor’s view.”
This water company was the first regulated water utility to produce a Supplier Diversity Economic Impact Report. The report shows exactly what is being done in the community and it serves as a model to demonstrate the importance of the work that is done.
“It is the proof that we did good,” Svindland said.
Despite the merging and purchasing of other entities, they are not looking to reduce the number of suppliers. As the organization grows, the number of diverse suppliers will increase. Svindland recommends that suppliers be honest about their capabilities, provide value and keep safety as a top priority. Ensuring that suppliers make good, smart decisions in all they do connects them with the values of California American Water.
Svindland models this behavior and shows his commitment by sharing and learning from others. He spent the whole day at the event demonstrating how leadership is committed to the success of the event and all the represented stakeholders.
Larry Wooten, American Water, Senior Manager Supplier Diversity.
Larry Wooten supports all of the American Water’s supplier diversity efforts. They have a five-year progressive goal strategy by state in their spending with diverse suppliers and a percentage of diverse suppliers. Each state has a state president with a state goal. To support these efforts, they have developed a supplier development program to help diverse suppliers improve their business model to be able to work on behalf of American Water organizations. Increasing the communication about supplier diversity across the business is also a key focus.
“We are making sure people know supplier diversity is a value-add,” Wooten said. “It’s not just the thing to do.”
Supplier diversity is a core value of American Water that impacts 46 states across the country. This event supports the internal and external stakeholders to help meet the goals. The internal key stakeholders meet high-performing diverse suppliers. The measures of success of these events are the contracts awarded, the learning that occurs and, from an internal perspective, hearing from key stakeholders that the event is an internal perspective and positive responses from key stakeholders.
Edward Simon, California American Water, Director, Business Performance and Supplier Diversity.
California American Water had a record-breaking year exceeding the CPUC target for minority, women and disabled suppliers. Ed Simon worked with his organization to determine the strategy to make this happen. Committed leaders and monitoring progress were keys to driving the success of the California American Water supplier diversity program.
“We were intentional in our efforts to meet the goals,” Simon said. “And you know what gets measured, gets accomplished.”
Simon led the charge with a friendly competition among his peers from other agencies to meet all three CPUC targets: 15 percent DBE, 5 percent WBE and 1.5 percent DVBE.
This is a win for the diverse suppliers as they are all diligently looking to partner with them.
“Inclusion of diverse businesses is important to us from a community perspective,” Simon said.
This is an integral part of the procurement process and they are making sure their vendor pool matches the communities they serve. This outreach event serves as an avenue to source for new suppliers. The focus is on building relationships. The suppliers are encouraged to regularly attend outreach events to gain access to the procurement leads.
Under Simon’s leadership, a new mentor protege program, Partnering Forward for Success, has emerged. The program is in partnership with Chicago United, a nonprofit that has a Five Forward program with a proven five-step process to support development in education and revenue. In their program, they have asked their larger non-diverse and diverse suppliers to mentor one DBE for a one-year period. Taking a key component from this program is the name given to prime suppliers and subcontractors.
“Who wants to be a ‘sub’ of anything? The terminology breeds ‘less than,”’ Simon said.
California American Water took a bold move by changing the name of the companies they contract with as suppliers. The prime suppliers are now called “committed corporations” and the subcontractors are now called “partners.” To align with the partner program, the committed corporations are now mentoring one DBE. The pilot program will start next year with 10 committed corporations.
A unique component of the program is preparing the mentors by having them complete a thorough introduction to understand the five-step process to ensure they execute successfully. Not only do they get to count the second-tier spend, but they are engaging protege and putting them to work outside of the California American Water projects.
Another beyond-the-norm strategy for this unconventional leader was to make the search for qualified vendors easy for their procurement team. The solution included a partnership with Brojure. This partnership led to the creation of the California American Water Online Marketplace. It allows DBEs to create a visual, electronic capability statement that can include images, videos and links to other media to demonstrate their capabilities and past performance. It gives the procurement team a dynamic view into current and potential suppliers.
Joshua King, American Water, Vice President, Supply Chain.
Providing insight into the “how” and “why” of the inner workings of the water company during this event gives business owners additional intelligence that they wouldn’t get anywhere else so that their efforts are more effective.
“We get to tell the story of American Water and what we do,” says King.
Watching the participants gather information to better position their solution is one of the highlights of the event. The learning becomes two-way as American Water learns there are new solutions providers in the industry.
Connecting with potential suppliers is not traditional at this event. The various representatives share their challenges and the future plans of the organization to better position suppliers to support the various goals they need to achieve. This is also done in community partnerships.
“The suppliers are leaders in the community,” King said. “[They are] stewards in the community.”
They are helping to strengthen the local area, mirror the community in which they serve and increase the number of customers. This makes American Water events a true outreach to the community they serve.
“We try to keep the spend in local communities,” King said. “[It’s] one of the most rewarding things we can do in the supply chain.”
Giving back in service, support, leadership and finances is part of the California American Water story.
The Fair Shake
Chris Cook, California American Water, Central Division Operations Manager.
The events at American Water have proven to be efficient and effective. The category leaders are amazed at the number of quality new suppliers attending the events. Chris Cook expresses his surprise at the process.
“It is amazing to me how it happens so quickly,” Cook said.
It is not uncommon for new suppliers to participate in the event and become a supplier. Ed Simon has mastered how to bring quality suppliers to the events. The new suppliers deliver and offer competitive pricing.
Many organizations have goals set to achieve a level of diverse suppliers.
“I personally don’t think of goals,” Cook said. “I think of giving them a fair shake.”
The leadership of California American Water is not working to achieve a target but instead is giving everyone an opportunity to participate. Suppliers have access to learn about the organization to better position themselves for success.
Audie Foster, California American Water, Northern Division Operations Manager.
The outreach events provide introductions from specific work areas to vendors who can support them. Having so many diverse businesses attend the California American Water events saves the operations section of the company time on sourcing suppliers. The focus is not about goals; it is about finding great vendors to do the work. Being qualified to do the work is the greatest need and key decision factor.
One approach used from an operational perspective is getting potential suppliers involved in the everyday business so they are prepared for long-term projects.
“From an operational standpoint, we plan our work,” Foster said. “For vendors looking to get in, don’t just look at the plan work. Things happen every day.”
Vendors need to be there when things don’t go as expected. They need to look at the common work that is completed every day. Building relationships while getting the work done is a unique way to get to know the vendors. The vendors get an up-front view on working with their customers. An uncommon way for vendors to grow their business is to dedicate the time and resources to be there when the unexpected happens. This gives CAW the opportunity to see a vendor’s capabilities in action and trust that they can be a trusted resource.
Laura Gonzales, California American Water, Operations Specialist.
Laura Gonzales is usually the initial point of contact into California American Water for suppliers. As a champion, she vets suppliers and addresses the documentation and administrative tasks needed to approve them to work with the water company. Making sure companies are: compliance and are ready to do the work helps to reduce the risks associated with having suppliers. At the event, she meets with vendors to answer questions and often helps navigate the internal team on the process to get suppliers they have sourced into the system.
California American Water uses the actual representatives in their marketing collateral. They are their brand. This makes it easier for suppliers and those seeking to meet company representatives. Gonzales is one of the faces of the supplier diversity team that connects individuals internally and externally. She is that key contact with access to the inside to support DBEs in their efforts to be a supplier.