Over the last few years, much of the progress achieved in bringing diverse suppliers to the Tier 1 level has been lost as a result of companies consolidating supplier bases to cut expenses. This has pushed a number of MWBEs into Tier 2 or Tier 3 because they are mostly small to medium-sized businesses unable to compete with the largest suppliers based solely on scale or price. This willingness of companies to lose the gains achieved in the past implies two things.

The first implication is that companies did not promote supplier diversity programs at the Tier 1 level because it was the right thing to do. They did it because they were expected to do so to compete for government contracts or to generate community goodwill. With a concern only for the bottom line, decisions reverted to relying on traditional financial measurements.

The second implication of the supplier consolidation trend is that companies apparently did not fully understand or accept the benefits MWBEs convey. Study after study have proven businesses with a diverse workforce and supplier base are more innovative, creative and productive, and those qualities flow right to the bottom line. A company would not willingly give up this competitive advantage so easily, if it truly understood the benefits garnered through diversity.

The consolidation of the supplier base continues, but something happened to make companies reconsider the trend. That something was the re-election of President Barack Obama by a diverse electorate that wielded unexpected power. In the inevitable analysis that followed the election, only one conclusion could be reached: The diverse population is growing, active and ready to assume leadership status. The MWBE suppliers they pushed back into Tier 2 or Tier 3 are the very companies that will drive the economy and attract a growing and diverse customer base. The corporations will have to rely on MWBEs in the near future because the MWBEs will become the majority businesses in the marketplace. The working relationships formed now will influence success later.

The nation is currently trying to close the philosophical divide that seems to exist. Obama carried 51 percent of the popular vote, meaning almost half the country did not want him re-elected. In particular, corporations are concerned about additional expenses associated with the full implementation of the Affordable Care Act and the slew of government regulations being issued. Yet it is Obama who has the power to direct the government agencies to strengthen the government’s role in promoting and rewarding small businesses, many of which are MWBEs.

Small businesses are the job creators that can help the economy break through the economic glass ceiling that seems to hang over it right now. However, MWBEs need access to capital and government contracts. In fact, corporations that are currently rewarded for claiming a certain percentage of MWBE suppliers at any tier could instead be rewarded with additional business for encouraging Tier 1 MWBEs. That could eliminate some of the game playing in which MWBEs lose business as a result of losing tier status, while the corporations continue to claim credit for MWBE suppliers.

There is no doubt that some corporations will dig in their heels and continue pushing MWBEs to Tier 2 and 3. To adapt to the changing marketplace requires changing how we think of the diverse populations and its growing contributions to the economy. Frankly, pushing diverse suppliers into lower tiers is self-defeating. It slows the growth of the very businesses that represent the core of the U.S. economy. Tier 2 should not be used as a tool for eliminating MWBE opportunities. It should only enhance existing initiatives that are creating meaningful opportunities for diverse suppliers.