American Water’s superior, successful and sustainable D&I programs.
When the CEO of an organization declares diversity and inclusion their mission, and charges the leadership team to support that vision, the commitment exhibited results in some of the most successful D&I workplace and supplier strategic plans in the industry, such as those at American Water. American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,800 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to 15 million people in 46 states. American Water made a strategic decision to focus on inclusion and diversity (I&D) instead of diversity and inclusion (D&I). “Because we truly feel that creating a culture of inclusion for our employees brings diversity to the forefront. When inclusion is the focal point, it brings diversity that is well-rounded. Diversity in itself doesn’t ensure there will be inclusion,” says Valoria Armstrong, VP National Government and Regulatory Affairs and American Water’s I&D Council lead.
Former CEO Susan Story, a champion of I&D, is attributed with instilling core values across the organization. When she announced retirement plans in April of this year, successor Walter Lynch, who worked as chief operating officer under her leadership, was well-prepared to continue American Water’s I&D business imperatives. The company’s diversity engine operates like a well-oiled machine: a combination of authentic top-down commitment, effective strategy and a team of dedicated diversity leaders.
Leadership is committed to supplier diversity and their support and willingness to discuss the business case for new initiatives is key. At American Water, they are aligned on goals and strategy, but on occasion have to execute them based on individual state needs. The focus on local economic development is why the collective team is larger than most companies of its size. In addition to the corporate office, there are supplier diversity offices at subsidiary facilities in California and Illinois. These subsidiary offices are unique in that each has a president responsible for ensuring that state reaches its diversity goals, and reports diversity progress to the national office.
In California, President Rich Svindland explains his focus, “We serve diverse communities throughout California, and it is important to us that our employees and contractors mirror our customers…We do this because we want to build wealth and contribute to the economic development of diverse communities.” Svindland works closely with Director of Business Performance and Supplier Diversity Edward Simon, who is responsible for managing the supplier diversity program for California. “We may be spread across the country, but we really are one big collective team. We all work to achieve a common goal which is to be a part of the communities we serve and to include them in contract opportunities,” says Simon.
Goals are set high to ensure support to diverse communities is impactful. Minority goals vary based on the size of the projects. For large projects that goal is 21.5%, with the percentage decreasing for smaller scoped projects. Prime suppliers receive training and onboarding where expectations for subcontracting are clearly communicated. They are required to report subcontract engagements, which includes a list of suppliers, spend, and percentage of project goals. There are consequences for non-compliance including being classified as in default of contract terms, ineligible for contract extension or blocked from additional opportunities.
Rhonda Carter-Adams (2nd left) and Bruce Hauk (2nd right) accept the 2019 National Black Chamber of Commerce Inclusion and Diversity Award»
Senior Buyer and Supplier Diversity Coordinator Sharon Manker leverages a master’s degree in organizational leadership and 20 years’ supply chain experience. She describes herself as a change agent. “Our supplier diversity focus is robust in large part due to our buyers. They are fully engaged in the process and keep diverse suppliers top of mind when they are sourcing,” she shares. “There are so many layers to what we do to ensure all stakeholders do their part so that we all can be successful.” The team also invested in innovation and hosted a virtual summit, in collaboration with Eventdex, a certified minority-owned virtual conference provider, for matchmaking between business stakeholders, primes, and diverse suppliers
California American Water’s Committed Corporations (Prime Suppliers) pictured with Lawrence Wooten, Rich Svindland, Josh King (center left to right) and Ed Simon (far right) at its Partnering Forward for Success Training»
California American Water has consistently exceeded the California Public Utilities Commission (CPUC) supplier diversity goals of 21.5%. In 2019, they reported the highest levels of diversity spend in the company’s history at 34.7%. President of Illinois American Water and former Head of National Regulatory Affairs Justin Ladner shares his views about what’s important for regulators, “Safety is a priority, but diversity is also high on the list for this industry, and we receive that messaging all the time. We aren’t driven solely by regulations. Our leadership understands how diversity of thought, workplace and supplier diversity is critical to the growth and sustainability of our business. We invest a great deal of resources, time and attention into ensuring we have strong engagements with diverse communities for both career and contract opportunities.”
The resounding message, and the source of American Water’s success, is the constant strive for excellence and continuing to raise the bar in everything they do. In an effort to improve its workplace diversity performance, the company named Rhonda Carter Adams as program manager for workforce and supplier diversity at the Illinois subsidiary. She is responsible for creating and executing strategies for identifying and engaging a qualified diversity applicant pool and viable minority suppliers throughout the state. Carter Adams partners with human resources to execute these strategies, where Marianne Taylor is the director of talent acquisition.
“We are very intentional in our efforts to build relationships with organizations like Disability:IN which assessed our D&I performance and made recommendations on how we can do better. Engaging the veteran workforce and talent with specific skill sets related to utility work requires engagement with external organizations like ESG for environmental workers. We have made some great strides, but still have more work to do to reach our goals,” says Taylor.
The national supplier diversity leader for American Water is Lawrence Wooten, a veteran in the supplier diversity community who manages the corporate supplier diversity strategy. Wooten joined American Water three years ago with expectations to enhance an established process and bring the state and corporate diversity efforts together. He is responsible for supporting the supplier diversity leads who manage the state strategic efforts. “My role is to be the voice to the business and the diverse business community that supplier diversity is much more than the right thing to do, it is a business imperative that we support the innovation, customer focused, attitude of small and diverse business. I collaborate with the other supplier diversity leads to ensure our efforts are succinct and that we are positioned to best serve the local communities in which we provide water utility services,” he says.
American Water’s supplier diversity processes and efforts go above and beyond industry norms, explains Wooten. “What we have here is commitment from people who actually do the work… Those of us who are on the ground challenge the status quo to encourage inclusion across all our business segments.”
Finding new ways to move the strategy ahead is not lost on California American Water. “We no longer look at supplier diversity as a program,” says Simon. “Supplier diversity is part of our overall business’s strategic plans and goals.”
In the 2020 Annual Report to the CPUC (for 2019 results), Svindland and Simon outline some out-of-the-box approaches they have taken to ensure their numbers will keep climbing. An Internal Supplier Diversity Marketplace for their team members helps to ensure that diverse companies are not overlooked when money is being spent. Webinars provide a venue for potential suppliers to learn more about how to do business with California American Water. Their New 2020 Partnering Forward for Success Program created a structured process to encourage non-diverse prime suppliers to mentor one MBE for the program’s inaugural year. Ten of their prime suppliers agreed to participate.
The perfect mix of people, process and passion is what makes American Water a standout in the utility industry and beyond. When leadership stands with diversity practitioners and agree that a diverse and inclusive corporate culture is the destination, those corporations and diverse communities are the beneficiaries. Josh King sits high on the leadership ladder as vice president and chief procurement officer. He is responsible for managing the supply chain and procurement function, and for developing the procurement strategy on the national level which is executed on the state level. His sentiments mirror that of many of his colleagues.
“Executive leadership at American Water fully embraces diversity, it’s in our DNA. We value diversity as a business priority and share that messaging with employees across the business. We’re aware of some practices where companies show up to diversity events, shake hands, and pass out promotional items, but our approach has to be more authentic to support our workforce and supplier goals,” he shares. The collective team focuses on assessing category spend to identify viable diverse suppliers, targeting specific categories and facilitating matchmaker opportunities, and other activities that inevitably promote relationship building.
The achievements of California American, Illinois American, and American Water overall are due to a singular, shared focus, and determination to create positive change in diverse communities. The message is consistent throughout the leadership ranks, across a variety of roles and geographies. And that, is the anatomy of superior, successful and sustainable D&I programs.
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