Inclusive procurement practices can drive prosperity as cultural competencies are essential in today’s marketplace. A 2018 Harvard Business Review study found that companies with higher-than-average diversity yielded 19% higher innovation revenues.
Yet systemic barriers often prevent historically marginalized businesses from securing corporate contracts. To address this in Chattanooga, the Chamber of Commerce spearheaded an innovative Procurement Pilot Program in partnership with vendors, funders, and anchor institutions.
Its main mission: promote economic inclusion for historically marginalized businesses while incorporating measurable performance metrics.
In the fall of 2022, the Chamber assembled a Diversity, Equity, and Inclusion (DEI) advisory of thought leaders to discuss the formation of a Procurement Pilot. Guided conversations revealed a deep and urgent need to increase procurement opportunities for historically marginalized businesses.
Regionally, there are very few businesses founded or owned by Black entrepreneurs; this contributes to a Black poverty rate (24.1%) that’s three times that of white residents (8%) in the area.
Simply put, Black businesses hire Black residents. This reduces poverty and increases economic engagement. To that end, the Procurement Pilot seeks to drive inclusivity, mobility, and prosperity which are key goals found in the Chattanooga Chamber’s strategic economic and talent development plan known as Chattanooga Climbs.
At the beginning of the Procurement Pilot work, the Chamber began selecting participants poised for growth and strengthening relationships with lenders, advisors, and corporate partners. A CEO Pledge for Racial Equity was ultimately signed by 90 local leaders who then became stakeholders in this ongoing work.
Internally, the Chamber began to change its criteria for corporate engagement by seeking out companies that promoted inclusive procurement practices through publications, social media, or annual reporting.
Intentional conversations led to impactful, effective lessons and new understanding. With increased clarity, participants saw the myriad of communication gaps, the value of social capital, and the dangerous power of unconscious bias.
The Chattanooga Chamber formed genuine partnerships with corporate leaders and elected officials. The relationships that proved most fruitful came from organizations with transparent and inclusive procurement policies and executive-level champions for inclusion.
Healthcare giant Erlanger Health System met both marks. Its Chief Diversity Officer personally sponsored Chamber-led info sessions for vendors while offering ongoing support with bid navigation and certifications.
The work bore fruit, as the Chamber began strengthening and clarifying relationships between vendors and buyers. It also unearthed the significance of behind-the-scenes sponsors for upstart minority firms and pushed companies to assess vendor capacity individually rather than make blanket assumptions.
The Procurement Pilot underscores the Chamber’s vital role as conveners and collaborators in advancing inclusive procurement. When executed well, such pilots can improve communications, reduce bias, and build the social capital to grow diverse businesses as the Procurement Pilot worked best with corporations and people both passionate and flexible.
Finally, it was critical to identify the right allies within the organization. C-suite level executives need to be engaged as they are often most able to influence change in three key areas:
- Improve communication between and among vendors and corporate procurement leaders
- Provide venues for the creation and manifestation of social capital to build small business
- Reduce unconscious bias with companies and vendors by developing opportunities to advance strategic engagement – which grows inclusive business participation and practices
Chambers across the nation can and should champion efforts that lead to equitable and inclusive environments and business opportunities especially as more and more customers demand this.
DEI means productivity and profit. By dismantling barriers to procurement, chambers help build a vibrant economic ecosystem where all businesses can thrive. In Chattanooga, the Procurement Pilot marks a meaningful step on this ongoing journey.
Lorne Steedley, Vice President, Diversity and Inclusive Growth, Chattanooga Chamber
Steedley, who has worked in Atlanta, Boston and Baltimore, is an equity leader with applied program and project management experience in community building, philanthropy, and civic participation.
Steedley also led Motus Consulting USA, LLC, a management consultancy that provided management, operations and training services to groups engaged in transformation, including nonprofit organizations, corporations, and government entities.
Steedley is a former International Fellow of the Emerging Leaders Program in the Graduate School of Business at the University of Cape Town, South Africa and a former Research Fellow in the Department of Urban Studies and Planning at the Massachusetts Institute of Technology. He received a B.A. from the University of South Carolina, an M.S. in Human Services from the University of Massachusetts-Boston and an M.A. in Sociology from Boston College.