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Big Business-Small Business Partnerships
Partnerships across divisions of scale can benefit companies of all sizes.
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Business New Haven
3/31/2003
By: Anne Marie Brungard
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The notion of Fortune 500 companies partnering with small and/or minority-owned businesses is not a new one. But it is taking on a new look as corporations raise the bar in terms of accountability, community connections and growth strategies.
"To survive uncertain times a cognizant business recognizes the value of having in place a diverse and reliable partner network," says General Electric Industrial Systems' Anne Witkavitch. "For GE this includes its supplier base."
Economic downturn is certainly encouraging larger corporations to look seriously at the way they do business - and with whom they do business. The every-man-for-himself ethos diminishes both large and small business profit potential. GE's recent "Supplier Diversity Day" supports the company's philosophy, which is an extension of its employer diversity program.
"[GE] is about promoting opportunities for a variety of people," says Chris Lepp, the company's supply chain leader. GE's corporate supplier-diversity program promotes opportunities for diverse suppliers, including minority-, female- and veteran-owned businesses, to do business with GE. The day of best-practice sharing brought together more than 60 suppliers with key personnel from GE's purchasing staff.
"Opening the doors to diverse suppliers gave us the opportunity to share what we are looking for, what we do to be successful and how we can leverage each others potential," adds Lepp. "It's a win-win for suppliers and [GE] Industrial Systems."
The Fairfield giant partnered with the Connecticut Minority Supplier Development Council (CMSDC) - an organization with a 24-year history of promoting the benefits of the small business-big business partnership process - to develop the event. An affiliate of the National Minority Supplier Development Council, CMSDC assists corporate members in identifying certified minority-owned businesses - and helps minority-owned businesses to identify selling opportunities with corporate members.
CMSDC has taken an important intermediary position by providing a rigorous certification process for small companies that takes away the initial question as to whether or not a small company is "qualified" to do the work. "[GE] only does business with quality suppliers, and there is no relationship between being a small company and a poor supplier," notes Lepp.
CMSDC's corporate members are introduced to potential suppliers that have already been screened and met standards for business management practices and service provision. The certification also recognizes the company as a certified minority- or woman-owned business. CMSDC's corporate membership in the organization includes the likes of Aetna, FleetBoston Financial, Pfizer and Merrill Lynch.
Explains CMSDC Executive Director Fred McKinney: "In business, if you are not constantly improving you are losing ground." CMSDC provides a forum for corporations to come together with small and minority owned businesses, furnishing networking opportunities and direct introductions with purchasing managers to develop profitable business partnerships.
A corporation's commitment to community building and economic development can also be motivating factors in establishing big business-small business partnerships.
Yale's University's Office of New Haven & State Affairs (ONHSA) was created to provide a "front door" to Yale and its resources for the people and organizations of greater New Haven. Bringing together under one roof members of the Yale administration who work with the city, it is a place where representatives of both town and gown can come together to build partnerships for economic development.
To this end the ONHSA established a "Buy New Haven" program in the late 1990s in an effort to concretely have a positive impact on New Haven's small business community. The idea is that, "Wherever and whenever we can, [Yale] will use vendors within the city of New Haven," explains Thomas Violante, assistant director of public affairs for institutional issues. The circle obviously widens beyond the city limits if services or products are not available at the right price, moving first to the region and then to the state. But Violante says every effort is made to keep business within Connecticut.
Greater New Haven Chamber of Commerce President Anthony Rescigno also cites the importance of creating opportunities for large and small companies to come together.
"We spend a tremendous amount of time connecting small companies with large corporations," he explains. Of the 1,500 or so companies that are members of the chamber, Rescigno estimates that approximately 15 percent are large to very large (500 or more employees) companies - the vast majority being small companies with half a dozen or fewer employees.
The Chamber's Small Business Council has as its mission enhance business through contacts, even in some cases introducing companies to their competitors. According to Rescigno, the group's networking events and special committees are a vehicle used to support and grow business while encouraging partnerships.
But while some companies and organizations have attained a coveted "win-win," other small companies have been thwarted by the bureaucratic obstacles to doing business with their larger brethren.
In some cases the paperwork alone is enough to discourage, while for others access to capital to finance a larger job can be a deal-breaker. Companies like Plainville's GE Industrial Services and New Haven's Fusco Corp. are seeking a better way.
While GE trained small companies on the finer points of understanding the needs of their customers, so that they could do business with GE, the company also recognized that it had to fine-tune some of its own systems in order to partner successfully with smaller companies.
"We re looking to automate the [vendor] process, including online registration," says Chris Lepp, "we are finding ways to leverage technology to ease the burden of the paperwork."
Meanwhile, Fusco established a mentor program in collaboration with the Greater New Haven Business & Professional Association, providing valuable technical assistance and physical support to small and minority-owned companies.
"The partnership has opened the doors to contracts for some companies and support and training for others who are employing growth strategies," explains Dale Bethune, CEO of C-Tech of New Haven.
But you know that lasting progress has been made when a large corporation seeks you out.
This was the case for Hank Bolden, president of Custom Fiberglass & Plastics Fabrication in Hamden. In business since 1976, Bolden took on many fiberglass projects made to customer specifications - from tanks to car fenders and more. Because not many companies can do what he does, Bolden says, Foxwoods Resort Casino quickly learned that it needed his services when Foxwoods' contracted vendor from Florida failed to deliver.
The call was made to Bolden's company and he stepped in to complete a "turtle" that would be the school for preschool-aged children on the Mashantucket reservation.
The process of vendor selection and certification of qualifications is different for each corporation, but Custom Fiberglass received site visits from Foxwoods executives to ensure that his company was capable of doing the job.
"I think they needed to be sure we could handle intricate details," says Bolden, "it was a learning experience."
The construction project was completed ahead of time and met Foxwoods' stringent specifications. "I felt I had to prove myself and let them know I was experienced," Bolden says.
This sentiment pushed him to finish before most of the other trades on site, and has led to some additional small contracts for projects inside the casino.
"It is imperative that large corporations open the doors to smaller companies," Bolden said, "it is just something they should do - in some instances they should bend over backwards to create the opportunities."
The idea that there is much to be gained from a collaborative supplier relationship gets put to the test often during these tough economic times. What is clear is that viable growth-oriented businesses can benefit from direct connections with purchasing/contract opportunities, and that strategic partnerships enhance economic progress.
For larger corporations the benefits include access to a larger pool of diverse qualified suppliers. Small-business owners have the opportunity to leverage their sometimes singular skills, market niches, flexibility and creativity in areas that the standard big-boys can't match.
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