The Pacific Gas & Electric Company (PG&E) is committed to suppler diversity. In fact, California Public Utilities Commission (CPUC) member Catherine Sandoval praised PG&E recently at the company’s Annual Supplier Diversity Achievement Awards event saying, “PG&E literally provides the power that creates the engine for supplier diversity.” The awards event is proof of the utility company’s strong belief in supplier diversity because it honors employees that were responsible for helping PG&E increase its Diverse Business Enterprise (DBE) spend.
The praise was well earned since PG&E exceeded the CPUC goal of 21.5 percent of diverse supplier spend by quite a bit. In 2011, PG&E reached 36.6 percent by spending $1.61 billion with DBEs. The totals include minority, woman, and service-disabled veteran business enterprises. PG&E is a standard bearer for the entire state because it spent more on products and services sold by DBEs than any of the 30 other utilities and telecommunication companies in California.
This isn’t the first time PG&E has exceeded the CPUC goal. It’s the sixth consecutive year. That’s not surprising when you consider that PG&E began its supplier diversity program over 30 years ago. The core component of the supplier diversity program is developing strategic partnerships that benefit PG&E and the suppliers. Supporting the partnerships are subprograms that include mentoring, technical assistance, capacity building and access to expanded opportunities like the Diverse Suppliers Go Green initiative.
Opportunity, capacity building and mentoring are not necessarily separate goals. For example, the signature PG&E initiative called Diverse Suppliers Go Green supports a commitment to the environment by offering educational workshops and training sessions to DBEs. Partnerships are formed with agencies including the American Indian Chamber of Commerce (CoC), the Service Disabled Veteran Owned Business Network and the California Hispanic CoC to name a few. Workshops train diverse suppliers on writing green policy statements and developing and implementing green business practices leading to cost reductions. The cost reductions improve supplier competitiveness, and when the customer is PG&E, the improved efficiency benefits the utility company and its customers. The workshops improve capacity by educating diverse suppliers on the value of competing for green business.
Capacity building through partnerships and collaboration plays a central role in PG&E’s Supplier Diversity program. A new Supplier Development Program was launched in 2010 that includes executive mentorship, identification of opportunities and access to technical assistance resources. This is a formal mentorship program that includes developing a customized development action plan for selected DBEs. Chosen mentees get access to a broad range of services, opportunities, training, and even scholarships to attend university-based executive management development programs.
Robust Supplier Diversity Efforts
PG&E has developed a robust Supplier Diversity program designed to attract and develop businesses bringing innovation and creativity. In return, increasing supplier diversity increases economic development. The PG&E Technical Assistance Program (TAP) offers training to DBEs in the community, many of which will become PG&E suppliers. PG&E collaborates with various community organizations offering small business development offerings, with UCLA to offer business management skills training, and with the University of California Advanced Technology Management Institute to offer advanced technology training.
The training sessions are designed to address the needs of DBEs based on their years of experience and revenue. There are three tiers delineating business experience and success. Tier 1 includes smaller DBEs that benefit from business development offerings. Tier 2 includes mid-size businesses ready for management skills training and development to support growth strategies. Tier 3 is larger and includes more advanced diverse suppliers ready to grow by expanding into emerging technologies. The training programs sponsored by PG&E adhere to the CPUC Joint Utility’s Multi-Tiered Technical Assistance and Capacity Building Program. The initiatives often intersect. For example, the Diverse Suppliers Go Green initiative supports all three tiers of TAP.
Given the success of the diverse supplier spend, diverse supplier training is clearly effective. Of course, the PG&E program involves much more including membership on diversity councils; attendance at conferences and tradeshows; and employee training. All the goal setting and effort have one ultimate purpose. As the 2012 PG&E Annual Plan states, the goal setting process “…is designed to establish and maintain world-class supplier diversity initiatives and results through a careful multi-layered approach to DBE inclusion and development.”