Nixon Reform Shaped Supplier Diversity

Agencies and programs dedicated to helping America’s minorities gain access to wealth and ownership have existed since at least the Reconstruction Era, though no agency or program met with the success of the Office of Minority Business Enterprise. That program, initiated by one of President Richard Nixon’s executive orders, was founded in 1969 and nestled in the Department of Commerce.

Its mission was simple: Create opportunities in minority communities for business owners to grow and develop their businesses to be strong, and pass those benefits back on to the neighborhoods and communities where those businesses are located.

It was part of a system of programs implemented by the 37th U.S. President to bring African-Americans into opportunity’s tent. Working together with civil rights leaders, Nixon implemented what came to be known as the Philadelphia Plan, which required all companies bidding on federal opportunity be equal opportunity employers, both in name and practice, and adhere to standards of non-discrimination codified by federal authorities.

This single reform brought down a decades-old wall of segregation that kept African Americans and other minorities out of organized labor, artificially forcing many qualified workers into lower paid positions not commensurate with their skills, all on the basis of their race alone.

Both of these programs have the same philosophy attached to them: Ensure that qualified business owners and workers from neighborhoods with few opportunities gained entry into the marketplace on an equal footing where they could make a living equal to their skills and contribution on the job. The idea was to speed the process of economic integration, making federal contract opportunities available only to those who saw the wisdom in a diverse workforce that parceled out contracts and wages on the basis of merit–not color, class or social affiliations. Importantly, these opportunities were not hand outs; they required workers and business owners to make a solid, measurable contribution or risk losing their job or contract.

The result? One of the least talked about but most successful government programs in the country. Nixon’s reforms enabled an existing class of entrepreneurs and workers to introduce good paying jobs to places where, prior to meaningful ownership, they had been few and far between. How? By introducing business owners to the federal marketplace and making the significant barriers to entry easier for individuals who needed a smoother ride.

The program was so successful many major states and corporations modeled supplier diversity programs on the federal ideas, and an organization specifically developed to helping minority suppliers popped up just a few years later–the National Minority Supplier Development Council, today with over 20 regional councils.

Most tellingly, though, are the business entities that practice supplier diversity absent a statute or set aside obligations, and others that expand their diversity far beyond public or private requirements. These are the cases that affirmatively demonstrate a business case for supplier diversity. In other words, what started out as a government assistance program radically improved the market by introducing diverse elements. New perspectives turned into new products, better services and improved methods.

Supporters of supplier diversity would be right to focus on the voluntary adoption of programs as the way forward. Corporations and governments, both large and small, regularly and voluntarily expand their set asides because it makes good sense. They receive excellent services from well-resourced, well-developed companies that pass a portion of the revenue they collect back to the communities where there is the best chance of causing real improvement.

Voluntary adoption of these programs also cuts short criticisms they wouldn’t exist independent of mandatory programs, and serves as an additional incentive to businesses participating to deliver even higher quality goods and services to their buyers.

Supplier diversity has made an enormous impact and, by nearly every criterion, has been a success. The future is in getting peers in the business community to voluntarily recognize they’re worthy programs and provide an excellent value.