HP has developed an industry leading supplier diversity program that other companies benchmark against. Expert leadership is taking the program global, using HP shared values as a guide.

- By Debra Jenkins

Every company has “glue” that holds it together no matter how far its reach extends. As Hewlett-Packard (HP) prepares to celebrate its 75th anniversary as a successful technology company, it is shared values that create the foundation upon which everything else rests.

A good example is supplier diversity. As the company expands its global sourcing and small business operations, supplier diversity is incorporated into the process as the right thing to do. It is challenging to address supplier diversity in other countries because each government’s requirements are different, but that has not stopped HP. It sees its strength, and its role as a good corporate global citizen, in helping small-to-medium sized businesses develop the capabilities needed to grow and prosper.

Adapting Globally as a Team

Hewlett-Packard sells products directly, but as Chairman, President and CEO Meg Whitman says on the corporate website, “…partners are at the center of everything.” Over 145,000 distributors, resellers and alliance partners work with HP on a domestic and international basis. HP deeply believes in its shared values and the value of helping SMEs become successful partners. Sourcing, procurement and small business development are occurring at the same time, and integrated into the process is supplier diversity.

In fact, the two roles of sourcing and supplier diversity were brought together in positions like that of G. H. Swaleh, who is the director of global category centers and supplier diversity. He leads three Category Centers located in Guadalajara, Romania and Malaysia which do negotiating and contracting for mid-and low-tier suppliers in the Americas, Europe, the Middle East, Africa, Asia Pacific and Japan. The suppliers also include diverse suppliers by U.S. definition. Swaleh’s responsibilities include- procuring for HP and managing an international supplier diversity program from a program perspective. The supplier diversity program covers multiple countries and depends on a network of global procurement staff that interacts with Swaleh’s team.

Working in many countries means working with a variety of supplier diversity programs at different stages of maturity. The HP supplier diversity program has been in place in the U.S. since 1968, but many companies are operating in emerging countries so benchmarking to the U.S. does not make sense. Swaleh’s adapts each supplier diversity program to the country based on what HP is doing and government requirements.

A good example is the recently started program in the United Kingdom that has to do with sourcing small-and-medium enterprises (SMEs). Once recruited, HP champions and works with the SMEs to share skills, capabilities and technology so that they become part of the HP-UK DNA. “We establish goals for supplier diversity as we get involved in different countries. We look at what the businesses are doing and what the government is trying to do and work within those parameters to develop goals that are not arbitrary or unreasonable,” Swaleh said.

Shared Values at the Core

Everything HP does revolves around the shared values concept which underpins goals and expectations. They were developed by HP co-founders Bill Hewlett and Dave Packard in 1957 and continue to serve as the operational foundation for everything HP does. The shared values are trust and respect for individuals, achievement and contribution, results through teamwork, meaningful innovation, and uncompromising integrity.

Shared values are put into practice in many ways and include developing and maintaining a diverse, inclusive workforce that gives HP a competitive advantage. The company believes in maximizing engagement of the workforce.

On the supply side, shared values promote the fostering innovation in the workforce, integrating small suppliers in the HP DNA, developing the capabilities of suppliers through the mentor-protégé program, and expanding the HP Supplier Diversity Program.

Swaleh readily embraces the shared values in all he does because, as he says, “They reflect our passion for our customers. As a supplier, our partners or businesses focus on our customers outside and supplier diversity focuses on internal customers. The shared value of trust and respect for individuals applies to our huge D&I program, as well as our supplier diversity program.”

The shared value of achievement and contribution is reflected in the Mentor-Protégé Program and Capacity Building Programs which are managed by Nancy Minchillo, supplier diversity manager in the HP global supplier diversity function.

Minchillo advocates for and develops suppliers, focusing on SMEs, diverse suppliers, and other under-utilized businesses. She works closely with Swaleh and Michael McQuarry, the strategic procurement manager and commercial small business liaison Officer for Hewlett-Packard. McQuarry is a core member of the Supplier Diversity Program and is responsible for developing, preparing, and executing the global HP Commercial Small Business Subcontracting Plan. He also manages the reporting and analytics for the supplier diversity program.

Becoming Visible

It is clear that taking supplier diversity principles and activities global is complex, and especially when there are two huge processes involved – global sourcing and global small business development. The Mentor-Protégé Program that Minchillo manages is designed to foster long-term relationships between HP and a select group of diverse SMEs. Minchillo is herself a mentor. The businesses chosen for participation join an openly collaborative process in which the business and HP exchange information on capacity, the technology map, long-term goals, business culture, marketplace insights and so on. The ultimate goal is to identify the spaces each business is in now and plans to enter and then determine how the SME can best build capacity.

Minchillo describes the Mentor-Protégé program as a way to help diverse suppliers gain visibility.

“There are two areas that are very significant for growth of the diverse businesses – functional or capability expansion and geographic footprint expansion. By giving suppliers visibility, category leaders become more aware of how the diverse businesses can assist with growth in the two defined areas.”

Over the life of the program, supplier capabilities grow and can be matched to the HP geographical footprint outside the U.S., giving suppliers a competitive advantage by accessing opportunities to compete in categories and geographies.

Teamrecruiter.com is one of HP’s success stories. A diverse supplier and MBE, its transition to becoming an HP supplier is an interesting one. Per Teamrecruiter.com’s President Leonard Jean-Pierre Anthony, HP played perhaps the most pivotal role in the development of Teamrecruiter.com Canada and Teamrecruiter.com USA.

In 2007 Teamrecuiter.com was one of a handful of small companies selected by EDS to provide staffing services in Canada and the USA. During the transition of EDS to an HP company in 2009, all EDS suppliers were assessed for suitability for long-term relationships with HP.

Anthony believes it would have been easy for HP to overlook his company as a small business, but instead HP chose to do a performance assessment and evaluate TR.com based on merit. Working closely with existing Tier 1 HP suppliers, Teamrecruiter.com performed at a very high level on a contract labor agreement and was rewarded with an additional HP contract for Permanent staffing.

According to Anthony, the relationship with HP was so successful by 2010 that, “Teamrecruiter.com was nominated by Hewlett Packard for the CAMSC Supplier of the Year Award. During the 2010 Business Achievement Awards Teamrecruiter.com was named the winner.” Teamrecruiter.com is now a supplier in all U.S. contract labor categories and plays a key role in all HP contingency staffing initiatives. Anthony believes that HP’s support created a success story in Teamrecruiter.com

ITSource, another HP supplier success story, proves the importance of mentoring. Chief Executive Officer Brian Arellanes says that without the help of people like Minchillo, Swaleh, McQuarry, and others, ITSource would have not been able to get its services in front of HP leaders.

“We attribute our position of no 29 on the ‘100 Fastest Growing’ U.S. Hispanic businesses to the access we were given to HP leadership. HP went above and beyond and connected us with other HP providers like one of their crowdsourcing vendors. Nancy also introduced us to her peers at companies like CDW, Merck and Dell,”

Arellanes said.

Passion for Making a Difference

HP also focuses on developing support for external programs by making things happen internally. The supplier diversity requirements for the sourcing process were developed for internal stakeholders.

All HP staff involved in sourcing and procurement decisions are expected to meet requirements for contracts over $150,000.” All suppliers are expected to bring innovation, creativity, and growth opportunities to HP. A business may know of a market opportunity but need HP skills and technology to take advantage of it. The market knowledge becomes the supplier’s differentiator. If the assessment proves the supplier and HP can both benefit, HP’s team kicks into high gear and works to make new business happen.

One of the two biggest challenges in running a global technology organization is packaging a program for suppliers that engages them around innovation. As a resourceful manager, Minchillo decided to leverage a component of the Supplier development program called the supplier collaboration and Initiative program, a supplier relationship management program. “I added the innovation and collaborative concept to the Mentor-Protégé Program,” she said.

Another challenge is working within limited resources when there is so much to do. Armed with a passion for making a difference in the world, all the supplier development professionals must work within a budget. Some of the resource limitations are overcome through collaboration.

Adding additional difficulty is the fact HP, like most corporations, has asked procurement organizations to reduce their spend bottom lines year-over-year. Strategically the best way to reach goals is to consolidate contracts and reduce the supply chain. Suppliers get bigger and offer better prices. “Balancing supplier diversity with reductions in spend can lead to conflicting goals,” Swaleh explained. For this reason we are constantly messaging internally to remind stakeholders of the importance of supplier diversity and messaging externally to suppliers to remind them they cannot rely on minority status.”

McQuarry says that one of the outcomes of efforts of the supplier programs is a tighter interlock between internal stakeholders and sales organization. “When supplier diversity is a component of an RFP, we are trusted resources and can provide significant value while developing a customized customer solution.”

Supplier results are tracked via a dashboard that measure progress against spend goals. There are also other non-financial areas measured, including ability to deliver products and services that meet customer expectations and the amount of positive feedback from customers and stakeholders.

Innovation in the DNA Engrained

HP is truly all about innovation. One of the most forwarding thinking programs is the GP Supplier Marketplace supplier portal for the United Kingdom and Ireland.

The Web-based tool is a virtual marketplace that is meant to reach a broader SME group more efficiently than would be reached by attending expensive and periodic supplier events. HP sends out hundreds of invitations to suppliers, inviting them to the virtual marketplace where assessments and negotiations can occur. When a supplier enters the marketplace, HP will determine supplier capabilities and evaluate the supplier’s technology needs and customer and supplier pipelines. It is hoped that one day the marketplace can be leveraged outside the U.K.

A revolutionary new HP platform named HAVEn for HP partners was also recently introduced. The program enables HP partners to use and profit from accessing and utilizing Big Data. The HAVEn platform connects intelligence applications, and suppliers can use results to accelerate market entry and growth.

HP does not worry much about benchmarking supplier diversity because it is an industry leader. Other companies turn to them, and leaders like McQuarry, Swaleh and Minchillo are more than willing to share best practices.

It is not easy being a technology leader in today’s market, but HP has succeeded. The shared values drive consistent efforts throughout the global organization. It is a business model that works well and ensures that HP will continue to fulfill its vision of a networked, diverse organization bringing technology market solutions and economic development for at least another 75 years.

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