Helping minority-owned suppliers win bids

Days after the 1994 Northridge earthquake, John W. Murray Jr. was on the phone, cold-calling the head of facilities at devastated Cal State Northridge.

He identified reconstruction needs and outlined his minority-owned firm’s capabilities, including relationships with larger players. The quick action and solid credentials earned the firm a $15-million contract to help reconstruct the school.

“I just worked my tail off,” recalled the chief executive of the Southern California Minority Business Development Council Inc.

Today, Murray uses his experience in the trenches, both private and public, to teach minority-owned businesses how they can pull off their own winning contract bids. The council’s 202 corporate members, ranging alphabetically from Aerospace Corp. of El Segundo to Yum Brands Inc. of Louisville, Ky., fund the work.

“Minority entrepreneurs, by their very nature, are very competitive,” said Murray, 62. “What they want is an opportunity. Let us in the door and give us a chance.”

Minority-owned companies are the fastest-growing segment of business, he said. The downtown L.A.-based nonprofit is a matchmaker of sorts, certifying businesses in which an African American, Latino, Asian American or Native American owns at least 51%.

It keeps a database of 1,100 certified firms to help its corporate members find suppliers.

One of 39 regional councils in the National Minority Supplier Development Council network, Murray’s organization also offers business development classes and access to loans, health insurance and networking events. Murray joined the council in 2002.

How does minority certification help?

It’s like the princess in the castle. Yeah, [big corporations] would like to do business with minority businesses, but minority businesses have to fight through the bramble and brush and get there. They have to do what businesses traditionally do, which is to know their market, know the value they can bring, build relationships. If they get to the point of a bid or proposal, they have to be competitively priced and they have to meet credit requirements and have sufficient capital or resources to allow them to perform the service.

Then, if they can jump over all those hurdles like any other business, toward the end of that process, you say, “By the way, we are a certified minority business.” Maybe it gives the corporation a chance to say, “We think we can get equal value but this minority company also allows us to be a good corporate citizen and allows us to meet whatever our internal [diversity] goals might be.”

Is the push for supplier diversity still necessary?

Supplier diversity is tremendously valuable. It is a way of opening the door for people to come in who historically may have found the door shut on them. Even still today, a lot of times companies don’t want to speak to someone that they perceive as a minority company because they might think they are “less than.” But through a diversity program, that door will open.

Are minority-owned businesses making progress with corporate buyers?

There is one statistic we all have to confront, and this is today, corporate America as a whole still only spends about 5% of total spending with minorities. That’s held for the last 10 or more years.

Has the economic downturn affected corporate supplier-diversity efforts?

Overall, we still see pretty much a normal flow of opportunities. . . . A study done by the Hackett Group found that corporations having a strong supplier diversity program actually generated better returns for their shareholders because smaller firms and minority firms tend to be more agile.

When minorities are in the majority, will the council have to change its name?

Let’s be honest. This whole area of minority business contracting is an outgrowth of the civil rights movement. People don’t speak of it in those terms anymore. It’s not viewed as affirmative action. That’s a passe word now. Next thing was because it was the right thing to do. That’s passe now. Then it was because my customer base looks like those businesses. That’s passe.

Now it’s really about the economy, but when you ask the [name change] question, I often think of affirmative action. OK, it may have been fought for years very, very hard. What happens when there is a population shift and the majority today becomes the minority? We are not talking about tomorrow. We are looking out 50 to 100 years. Maybe by that time, which I hope, none of this will make any difference.

Is the type of minority business you deal with changing?

There are a whole new generation of young men and women coming into business. So I think it is a particularly vibrant and exciting time for minority businesses. Yes, it’s a difficult time for some but that’s always the case in business anywhere.

Overall, we are seeing the growth of a wave of very sophisticated, very innovative business owners, which is good for minority business and good for major corporations and, I think, good for the economy.

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cyndia.zwahlen@latimes.com

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(BEGIN TEXT OF INFOBOX)

Business development

Name

John W. Murray Jr.

Title

President and chief executive

Company

Southern California Minority Business Development Council Inc.

Purpose

Council certifies minority-owned businesses and maintains a database of the firms for its corporate members; offers business development and networking resources

Revenue

$1.4 million for 2008

Background

Murray has held executive positions at several companies, including First Nationwide Savings. He is a board member of the Metropolitan Water District of Southern California, among other posts.