Fifth annual report reveals City received fourth consecutive “D+” grade overall,”F” grade among African American owned businesses
City contracted just five percent of $19.3 billion budget with M/WBEs in Fiscal Year 2018
Lack of progress highlights need for City Charter mandated Chief Diversity Officer in City Hall and at each City agency
(New York, NY) — New York City Comptroller Scott M. Stringer today revealed that New York City is still lagging behind on spending with minority and women-owned business enterprises (M/WBEs) and renewed his call for a Chief Diversity Officer in each City agency and in City Hall. The fifth annual “Making the Grade” report, which evaluates each City agency’s spending with M/WBEs, showed that while overall spending with diverse firms increased in Fiscal Year 2018, 80% of certified M/WBEs are still not receiving any business from the City. The City received its fourth-consecutive “D+” grade by awarding $1 billion in contracts to M/WBEs out of a $19.3 billion budget in FY18 – just 5.5 percent of the total budget.
Comptroller Stringer has been issuing Making the Grade since 2014 in an effort to drive the City to improve its spending with diverse firms, and hold agencies accountable when they fail to do so. This year’s report highlights the City’s failure to meet spending goals with firms owned by women, Hispanic-Americans and Asian-Americans, but sounds the loudest alarm on the City’s spending with Black-owned firms. Despite an overall “D+” grade, the City earned an “F” for spending with Black-owned firms. Meanwhile, spending with Asian-American firms earned the City a “C”, with Hispanic-Americans a “D”, and with Women-owned firms a “D.”
“New York City is one of the most diverse cities in the world, and yet our own government fails to make fairness and equality a priority when it comes to spending city dollars. There needs to be someone in every city agency making sure minority and women-owned businesses are being given a fair shot to get a piece of a $19 billion budget – that’s why the City Charter has to be changed to include a Chief Diversity Officer,” said Comptroller Stringer. “If we are going to build a five borough economy, we cannot perpetuate a system that fails to build wealth in communities that have historically been left behind. While progress is happening, this report shows just how far we have to go.”
Despite the City’s overall “D+” grade, several agencies made progress over the last fiscal year.
Grades increased at 9 agencies, decreased at 5 agencies, and stayed the same at 17 agencies – meaning almost 30 percent of agencies increased their grade.
Three agencies received an “A” grade – Department for the Aging, Commission on Human Rights, and Department of Health and mental Hygiene.
However, ten agencies that received either a “D” or “F” grade account for 50 percent of the City’s total M/WBE spending, depressing the citywide grade despite areas of improvement.
Stringer’s report advances four proposals to level the playing field for M/WBEs and ensure the City’s multi-billion dollar procurement budget is lifting up all New Yorkers.
A charter mandated Chief Diversity Officer. Accountability begins at the top – and that’s why Comptroller Stringer is calling for a City Charter change to mandate the hiring of a Chief Diversity Officer (CDO) in the Mayor’s cabinet and in every city agency. According to public data, out of 32 mayoral agencies, only seven currently have a CDO, with only four reporting to the Commissioner. But every agency needs a dedicated, executive-level leader to focus on diversity and drive results. The current City Charter Revision Commission provides a unique opportunity to enshrine a CDO in the City’s governing document.
Create competitive opportunities for M/WBEs on citywide requirements contracts. A major obstacle to increasing M/WBE spending is the Citywide requirements contracts that represent approximately 10 percent of the City’s total budget. These contracts are agreements that agencies enter with a limited number of vendors to meet the City’s demand for particular goods or services on an “as-needed” basis, often over multiple years. Examples of items and services purchased through requirement contracts are automobiles, fuel, equipment maintenance, cleaning services, large scale printing of election documents, and more. The City spent more than $1.5 billion through requirement contracts in FY18, but M/WBEs received only $102.5 million – less than seven percent – of this spending. The City should increase opportunities for M/WBEs by awarding requirements contracts to a pool of vendors, rather than one vendor alone, and by striving to include M/WBE subcontracting goals in all requirements contracts.
The City should require prime vendors to disclose details about their commitment to diversity, including their own supplier diversity plans. In FY18, the City’s top 25 vendors received $2.7 billion from the City, but only 3.8% of those dollars made it to M/WBEs. To encourage more M/WBE opportunities among top vendors, the City should require vendors to share details of their own supplier diversity programs when they bid on City contracts. Agencies should be allowed to award points to prospective vendors with robust M/WBE programs and Chief Diversity Officers.
The City Charter should be amended to alleviate the financial burden of contract delays for M/WBE vendors by assigning deadlines to every agency in the contract review process. In FY18, one in four M/WBEs had to work for at least three months without a contract in place or wait just as long after their contract start date to begin work. Meanwhile, over 69 percent of contracts awarded to certified M/WBE vendors were submitted to the Comptroller’s Office for registration after the contract date. Without a registered contract, a vendor cannot get paid – that’s interrupted cashflow. In order to make the process more efficient, transparent, and sustainable for all firms, the Charter Revision Commission should include specific timeframes for each oversight agency in the procurement process.
“In a City that prides itself on opportunity, women and people of color in business continue to be sidelined and neglected, ” said Public Advocate Letitia James. “In a City that thrives on diversity and inclusion, it’s our duty to ensure that M/WBEs are given the opportunities they need to survive. I commend Comptroller Scott Stringer for his continued efforts to highlight and correct this important issue.”
To read the full report, click here.
By The City of New York and MGT Consulting Group
The City of New York contracted MGT Consulting Group (MGT) to conduct a Minority and Women-owned Business Enterprise (M/WBE) Disparity Study (“Disparity Study”). The objective of this Disparity Study was to conduct a disparity analysis of the utilization of M/WBEs in New York City procurement activity, compared to the availability of M/WBEs in the relevant market area.
The Disparity Study’s findings are presented in detail in the full report and supporting appendices. This executive summary summarizes the evidence on the overarching research question:
Is there factual predicate evidence for the continuation of the City’s M/WBE program?
MGT found sufficient evidence of disparity and recommends that the City continue its M/WBE program to address identified disparities. The following sections summarize the approach, findings, and recommendations stemming from the effort.
2. STUDY OVERVIEW
FRAMEWORK AND APPROACH
State and local governments may create affirmative action programs to guide their purchases of goods and services “…where there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality’s prime contractors.” See Richmond v. J.A. Croson Co., 488 U.S. 509 (1989) (“Croson”). Croson further states that the appropriate remedy for such an inference is likely not a “rigid numerical quota,” id. at 508, but could be a program that offers “some form of narrowly tailored racial preference,” id. at 509. This study has been designed and executed to assess whether such statistical disparities exist in the City’s procurement activities, and successively, to recommend appropriate actions to remedy any observed disparities.
To ensure conformity of findings to the “narrowly tailored” standard prescribed by Croson and successive precedent, the approach and analysis was bound by specific parameters to ensure its relevance to City contracting activity.
- The period over which the City’s procurement of goods and services was analyzed extended from July 1, 2006 through June 30, 2015.
- The study examined the following procurement categories:
- Architecture & Engineering
- Professional Services
- Standardized Services
- Goods or Commodities
MGT, in collaboration with the City engaged in the following outreach efforts: reached over 100,000 businesses and business groups by e-mail or phone, and engaged the business community through community meetings held in each of the five boroughs, and the Disparity Study website. The comprehensive outreach campaign also included digital and print ads in various ethnic media sources, radio ads, postings on social media, as well as printed materials distributed at public events. Outreach was conducted in Spanish, Chinese, Korean, and Haitian Creole, as well as English. As a result of these efforts, over 5,000 business owners and representatives provided direct input into the study’s research and findings, through surveys, interviews, focus groups, and testimonies. Of those, about 60 percent of the respondents were M/WBEs.
It was of importance to the City and to MGT to maximize engagement with the business community and stakeholder organizations, and provide opportunities to comment on their experiences with the current M/WBE program. Activities included:
- Community meetings in each of the City boroughs;
- In-depth interviews and surveys with business owners representing business categories procured by the City
- Focus groups for business owners representing business categories procured by the City, to share experiences and perceptions
- Meetings and interviews with program stakeholders
- Online and social media communication
- Printed, digital, and radio
3. KEY FINDINGS
The current default certification area, encompassing 13 counties spanning between New York and New Jersey, met the 75 percent standard of awards and was therefore identified as the study’s relevant market area.1 MGT analyzed both utilization (dollars awarded by M/WBE classification and procurement category) and availability (proportions of firms by M/WBE classification and procurement category) within this market area.
Table ES-1 shows availability estimates, which are the proportions of firms by M/WBE classification and procurement category deemed willing and able to provide goods or services to the City of New York that are located within the relevant market area.
AVAILABILITY ANALYSIS SUMMARY
Procurement Category – African American – Asian American – Hispanic American – Native American – WBEs – M/WBEs*
Architecture & Engineering 7.54% 7.33% 11.74% 0.32% 35.17% 51.84%
Construction 12.00% 11.10% 17.95% 0.56% 25.66% 54.80%
Professional Services 12.15% 9.56% 8.78% 0.68% 36.78% 53.55%
Standardized Services 14.32% 9.88% 10.20% 0.03% 29.26% 50.33%
Goods or Commodities 5.94% 10.59% 7.07% 2.44% 30.51% 44.71%
*Availability shown for all M/WBEs does not equal the sum of the individual categories because the WBEs category is comprised of all women-owned firms, regardless of race or ethnicity.
MGT found disparities between utilization and availability of M/WBEs during the Disparity Study period. The disparity indices were substantial2 and statistically significant3 in all procurement categories and M/WBE classifications, except for Native Americans in Standardized Services4.
1 MGT uses the “75 percent rule” to determine the relevant market area. This rule is generally accepted in antitrust cases. In another relevant case, James C. Jones v. New York County Human Resources Administration, 528 F.2d 696 (F.2d Cir. 1976), the court accepted less than 100 percent of the data when it was reasonable to assume that the missing data would not significantly change the results of the analysis.
2 A “substantial” disparity is an index value of 80 or below, which is a benchmark that has been recognized by the U.S. Supreme Court as a standard in the determination of employment discrimination (see Connecticut v. Teal (Teal), 457 U.S. 440 (1982)) and has been referenced in federal guidelines for conducting disparity studies (see National Cooperative Highway Research Program Report 644: Guidelines for Conducting a Disparity and Availability Study for the Federal DBE Program, p. 49 (2010))
3 Statistical significance was conducted at a 95 percent confidence interval, which confirms that there is a five percent chance or less that the observed differences between availability and utilization were a result of random chance.
ANECDOTAL EVIDENCE OF DISCRIMINATION
MGT gathered perceptions, experiences, and proposed suggestions to enhance the contracting experience from the business community, particularly among M/WBE firms. The examination of anecdotal evidence reveals the barriers that M/WBEs faced in participating in City procurements, including procurement process issues, certification challenges, financial obstacles, prime contractors’ behavior, competition against larger firms and other barriers. These findings provide anecdotal corroboration and illustration for the statistical evidence of disparities found by the Disparity Study.
DISPARITIES IN THE PRIVATE SECTOR
Analysis of the private sector demonstrates disparities that exist for M/WBE firms operating in the private sector within the City’s market area.
Specific findings from the research include:
- Findings from the U.S Census 2012 Survey of Business Owners (SBO) data indicate that there are substantial disparities for M/WBE firms across different business
- Findings from the 2015 Public Use Microdata Samples (PUMS) data indicate that:
- M/WBE firms were significantly less likely than nonminority males to be self-employed.
- If they were self-employed, M/WBE firms earned significantly less in 2015 than did self- employed non-minority
This evidence stands alongside the disparities observed in public sector contracting to illustrate the substantial inequities that continue to exist in the City’s marketplace.
4. KEY RECOMMENDATIONS
The following recommendations are based on the synthesis of MGT’s findings and do not necessarily tie to one specific finding. In developing the Disparity Study`s recommendations MGT focused on addressing policies that will strengthen the City’s efforts to increase utilization of M/WBEs in its procurement. These are presented in detail in Chapter 6 , Findings and Recommendations within the full report.
RECOMMENDATION A: PROGRAM CONTINUATION
This Disparity Study’s findings support the continuation of the City’s M/WBE program within the relevant market area. Based on the statistical analyses undertaken in the Disparity Study, there is a quantitatively significant disparity between utilization of M/WBEs and their availability in the marketplace. The findings presented in the anecdotal analysis provide additional corroboration of the barriers that M/WBEs face in participating in the City’s procurement process. Furthermore, the evidence from the private sector analysis illustrates the substantial inequities that exist in the City’s marketplace, underscoring its compelling interest in continuing to pursue remedies to address these extant gaps.
4 This was the instance where the population is too small to determine statistical significance. However, the Disparity Index value of 1.88 is so low that the statistical significance is less essential to the confirmation of the gap that exists between utilization and availability.
RECOMMENDATION B: PROGRAM EXPANSION
The results of the Disparity Study provide evidence for expansion of the current M/WBE program. The City should consider the following program changes:
- Revise the $100,000 contract cap in the Goods or Commodities
- Include Asian American firms in the Professional Services category in the M/WBE program for the purposes of crediting their utilization towards M/WBE participation
- Expand the current minority categories to include Native American
RECOMMENDATION C: GOAL SETTING
The Disparity Study provides support for the City’s current aspirational goal of 30% utilization for M/WBEs, for increases in the City’s current citywide industry-specific goals, and the establishment of new goals, such as for Asian Americans in the professional services category and Native Americans in all categories. The City should continue to set project-specific goals to further address disparities based on M/WBE availability for project scopes.
RECOMMENDATION D: PROGRAM COMPLIANCE
The City should increase efforts to ensure all contracts with M/WBE goals are subject to ongoing monitoring for subcontracting participation to make sure that prime contractors are making sufficient progress and complying with project goals.
RECOMMENDATION E: EXPANDING POLICY AND LEGAL TOOLS
The City should continue to expand its policy and legal tools to help increase M/WBE utilization, in collaboration with New York State.
RECOMMENDATION F: OUTREACH FOR M/WBES
The City should continue increasing outreach and recruitment of M/WBEs in the City’s program.
RECOMMENDATION G: TECHNICAL ASSISTANCE, CAPACITY BUILDING AND ACCESS TO CAPITAL
The City should continue its current programs that provide technical assistance, capacity building, and access to capital support. We recommend pursuing further expansion of such services and initiatives.
RECOMMENDATION H: REMOVING BARRIERS TO PARTICIPATION
The City should focus efforts on removing barriers to participation, which is important for increasing M/WBE participation in the City procurement.
By: REENA FLORES
Priya Basu, head of the Women Entrepreneurs Finance Initiative, touted the strength of the program in the latest episode of the Women Rule podcast.
“It’s been very challenging in some ways to work with so many stakeholders,” Basu said of We-Fi, the World Bank “start-up” that provides loans, mentorship and other services to women-owned businesses in developing countries. But, she noted, “a very welcome surprise has been that there’s so much commitment around everyone to sort of make this a success.”
According to Basu, We-Fi has already overshot its lifetime goal, which aimed to get a billion dollars in to the hands of women-led businesses by the year 2022.
“For the $120 million that we allocated” this year, she said, “we were able to mobilize an additional $1.6 billion,” with those extra funds coming from the private sector and other sources.
In April, We-Fi announced its first funding allocations for projects around the world, including initiatives to improve the business environment for women in some of the poorest conflict-affected regions in Sri Lanka and to grow already-successful projects promoting women-led businesses in Yemen, Mali and Nigeria.
Click here to read more.
By: Geri Stengel
Not everyone ignores women’s innovations. One trade group in the toy industry recognizes that women know what kids — and their parents — want. To encourage innovation, Women in Toys, Licensing & Entertainment (WIT) provides what entrepreneurs need: access to decision-makers and mentors to help them overcome obstacles.
As the primary purchaser of children’s toys, women are adept at perceiving market gaps and opportunities. “Our industry thrives on creativity and fresh ideas” said John Lee, cofounder and general partner of Bambini Partners. “Some of the most substantial toy and game brands in the market today were spawned by small, independent (female) entrepreneurs (Barbie Dolls, American Girl, Monopoly) who followed their passion and persevered in spite of daunting challenges to bringing their ideas to market.” Lee is a leader in the educational and developmental toy industry and is a WIT mentor.
But, as we all know, “It’s not what you know, but who you know.” If you didn’t go to an Ivy League school or come up the rungs of a big company in your industry, you may not have an existing network to get you where you want to go. Mentors provide guidance, advice, and, yes, may even open some doors for you. Not to worry about finding that mentor. Many organizations, not just accelerator programs, but also industry specific groups like WIT connect you to mentors.
To make sure women get the opportunity to showcase their ideas, WIT brings women together for WIT Empowerment Day, to be held this year on Monday, October 2, 2017, the day before Fall Toy Preview in Dallas. Entrepreneurs at every stage of development — from idea on a napkin to prototype to in production — get a chance to sit down with top industry experts in areas such as manufacturing, sales distribution, product testing, licensing, marketing and more. “Empowerment Day gives female entrepreneurs amazing mentoring and solid business leads that can help them launch,” said Nancy Zwiers, CMO at Spin Master. As a mentor Zwiers, advises attendees on “play value,” which bridges the disciplines of evolutionary psychology, child development and marketplace analysis.
It’s not just that toy retailers like Walmart that get access to innovative products for children, they benefit from increased loyalty from the primary buyer of toys — moms, “utilizing female businesses increases brand loyalty and commitment to these women-supportive companies,” said said Marsha Firestone, Ph.D. in Forget the Glass Ceiling: Build Your Business Without One. She is also president of Women Presidents’ Educational Organization, a regional affiliate of WBENC, an organization that certifies a business as women-owned. They show their gratitude with their purchases.
Click here to read more.
Every event hosted by the Women Presidents’ Educational Organization (WPEO) represents a powerful opportunity to expand your professional network, learn about different industries and support other female business owners. Being a proactive participant at every event has a way of coming back to your company in the form of visibility, insight, and partnerships. Call it strategic karma.
With the ides of March fast approaching and signaling the return of WPEO’s Annual Awards Breakfast on March 9th, one of the most common questions our WBEs ask is: “Will there be Matchmaking at this event?” Some people are disappointed to learn this is not the case.
Matchmakers are great opportunities to pitch your company’s unique value proposition one-on-one to supplier diversity executives at Fortune 1000 companies. But the notion that participating in Matchmakers is the only way to make a connection is short sighted and can definitely hurt your chances of identifying and ultimately closing the next big business deal.
Optimizing any business event starts with your own attitude and perspective. That doesn’t just mean talking about yourself, your company and your interests. The best female entrepreneurs create opportunities for themselves by being a generous listener when it comes to other people’s interests and challenges or sharing their company’s work on your social media channels.
Even referring a useful contact for services or products makes you and your company memorable at a large event like the Annual Awards Breakfast. People remember those that helped them. More often than not, they are eager to return the favor. All that is required is a follow-through, persistence and patience.
This year, approach WPEO’s Annual Awards Breakfast with a new mind set: Use it as a chance to take the initiative to learn about other people, industries, and WBEs. You’ll be surprised to find how a small change of perspective can bring you closer to opportunities on the horizon.
New York City is home to the most diverse business community in the country, and the success of New York City’s minority- and women-owned businesses (M/WBEs) – which collectively employ almost 600,000 New Yorkers – is critical to the city’s economy.1 This is particularly the case in communities where business owners are confronting today’s deep affordability crisis while facing long entrenched economic disparities.
The City has the ability to confront both of these challenges by choosing to purchase goods and services from M/WBEs that are likely to use those funds to grow jobs, invest locally, and create wealth in all corners of the five boroughs.2 In addition, by contracting with a diverse array of businesses, the City fosters the competition needed to spend taxpayer dollars most efficiently. Consequently, a vibrant M/WBE program is vital for the fiscal and economic health of the City and its communities.
Since 2014, the Office of New York City Comptroller Scott M. Stringer has annually evaluated the performance of the City and its individual agencies on their spending with M/WBEs.3 Building on that previous work, this year’s report provides both an analysis of the City’s 2017 M/WBE performance and a more comprehensive review of the M/WBE program as a whole since 2014.
The City has made tangible progress since 2014. In 2015, Mayor de Blasio set a goal of awarding $16 billion to M/WBEs by 2025.4 Building on that commitment, in September 2016, the Mayor designated high-level City Hall personnel to oversee the M/WBE program and committed the City to awarding 30 percent of the dollar value of contracts to M/WBEs by 2021 while increasing the number of certified M/WBEs to 9,000 by 2019.5 In May 2017, the City announced that it was on its way to meeting the $16 billion goal and had grown the number of certified firms to over 5,000.6 And, more recently, the City’s Fiscal Year (FY) 2017 Agency Procurement Indicators Report found that the City had increased its M/WBE procurement awards from $463.5 million in FY 2015 to $1.037 billion in FY 2017.7
While these announcements demonstrate positive steps forward, this report finds that there is ample room for continued progress. Specifically, in FY 2017:
- The City procured a total of $21 billion in goods and services, of which slightly more than $1 billion, or only 4.9 percent, was awarded to M/WBEs.8
- Only 22 percent of New York City’s 5,259 certified M/WBEs received City spending.
- Overall, the City received a “D+” grade from the Comptroller’s Office, the same as in FY 2016. More specifically, the City earned a C grade with Asian American-owned firms, a D grade with Hispanic-owned firms and women-owned firms, and an F grade with Black-owned businesses.
- Compared to FY 2016, grades increased at 13 agencies, but decreased at seven agencies and stayed the same at 11 agencies. Overall, 42 percent of agencies saw their grade increase in the last year.
- Three agencies received an “A” grade, the Commission on Human Rights, the Department for the Aging, and the Department of Small Business Services, while four agencies received “F” grades, the Department of Buildings, the Department of Citywide Administrative Services, the Department of Sanitation, and the Department of Transportation. Notably, the combined amount spent overall for the three agencies that received an “A” grade is less than one percent of the dollars graded in FY 2017, while the 13 agencies that received either a “D” or “F” grade account for 89 percent of the City’s grade.
With the FY 2017 analysis complete, the Comptroller’s Office has analyzed the last four years of data on the City’s M/WBE program and found that:
- M/WBE awards, as a share of total City contracts, increased from 9 percent in FY 2014 to 4.9 percent in FY 2017, although a high of 5.3 percent was reached in FY 2015.
- Annual spending with M/WBEs increased to $554 million in FY 2017, a $208 million increase since FY 2014.
- The number of City-certified M/WBEs increased from 4,115 in FY 2015 to 5,259 in FY 2017 and the percentage of M/WBEs that received spending increased from 18 percent to 22 percent during this time.
- Compared to FY 2014, more City agencies are receiving “A” and “B” grades while fewer are receiving “D” and “F” grades in FY Specifically, in FY 2014, only two agencies earned an “A” or “B” while 21 received a “D” or “F,” compared to FY 2017, when 12 agencies earned an “A” or “B” and 13 received a “D” or “F.”
The City must continue to make progress to meet its important goal of awarding 30 percent of the dollar value of contracts to M/WBEs by 2021. Indeed, City leadership on this issue is of national importance, as New York and the nation face the potential for federal disinvestment in programs that support M/WBEs, including a proposal by President Trump to eliminate the Minority Business Development Agency (MBDA) and cut funding for the Small Business Administration (SBA).9 For that reason, this report also makes a number of policy recommendations that will help the City attain the Mayor’s goals and increase its spending with M/WBEs. Specifically, this report calls on the City to take the following steps:
- The City should assess large contracts with upcoming renewals and consider re- bidding those contracts to create new M/WBE opportunities. A number of the City’s largest contracts will reach their conclusion in the coming years, presenting an opportunity for the City to evaluate whether they should be renewed or re-bid. That decision is made on a case-by- case However, through re-bidding and “debundling” them into smaller contracts, greater procurement opportunities could exist for M/WBEs. For instance, in FY 2017, the City’s largest vendors received $2.3 billion in City spending. These vendors collectively hold 148 contracts ending over the next four years with a combined total value of $4.5 billion.10 Local Law 1 already requires the City to review new procurements over $10 million to examine whether they should be “debundled.” Although this law does not require the City to conduct the same review of large renewal contracts, the City should still determine whether it is appropriate to exercise renewal or to re-bid at the point of expiration.
- A working group composed of all certifying bodies and relevant stakeholders from the City and State should convene to streamline the M/WBE certification process and move towards a single platform for certification. Currently, there are more than 10 institutions that certify businesses in New York City that are owned by minorities, women, or other historically disadvantaged groups. Even with recent improvements, the redundancy within the various certification processes poses a barrier to firms seeking to certify across multiple government agencies. The City should work with other certifying entities to simplify the process and make it easier for M/WBEs to become certified across multiple government The Office of the New York City Comptroller will work collaboratively with interested parties to pursue this goal.
- Every City agency should hire a full time Chief Diversity Officer to focus exclusively on M/WBE accountability. Local Law 1 requires every agency to designate an executive officer as an M/WBE Officer, but the application of this requirement is uneven, and it does not require the M/WBE Officer to focus full time on supplier In order to drive compliance, each agency should hire a Chief Diversity Officer (CDO). Similar to the M/WBE Officer, the CDO would report directly to the agency head. However, M/WBE accountability would be the full time focus of the CDO, rather than just one part of their larger portfolio. This directive could be given by City Hall, or could be accomplished through City Council legislation to create long term sustainability beyond any one administration.
As with previous years, these findings are based on a review of 32 City agencies: 31 mayoral agencies and the Office of the Comptroller. The grades are based on actual spending with M/WBEs during the fiscal year rather than the value of contracts awarded, because the value of contracts may or may not result in real dollars being spent over time. Therefore, the grades represent an assessment of the City’s real-time utilization of M/WBEs, rather than an estimate of future year M/WBE spending.
Click here to read more.
By: Madeline Farber
The mega-retailer—along with Campbell Soup, Coca-Cola, ExxonMobil, General Mills, Johnson & Johnson, Mondelēz, PepsiCo, and Procter & Gamble—is taking part in a collaborative effort to source from more women-owned businesses (WOBs). The Women’s Business Enterprise National Council (WBENC), the largest third-party certifier of businesses owned, controlled, and operated by women in the U.S., will track and publicly report the aggregated value of the sourcing done from WOBs each year for the next five years.
Walmart, which is spearheading the program, announced it Wednesday during its Women’s Economic Empowerment Summit in Washington, D.C. This isn’t the first time that the retail-giant has taken part in an effort of this kind, though never before at this scale. From 2011-2016, Walmart initially sourced over $20 billion from WOBs on its own, as part of its five-year Global WEE Initiative. The effort resulted in more than 1,500 WOB suppliers to-date, varying from food, to children’s toys, to lingerie, to cleaning products, and more.
According to Kathleen McLaughlin, the chief sustainability officer at Walmart, the companies taking part in the larger initiative have a similar objective: to increase the awareness of the importance of sourcing from women’s businesses. She declined to put a dollar figure on the sourcing target of the effort—but did emphasize that the program aims to be transparent.
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Like Walmart, Coca-Cola has led programs focused on supporting women’s economic progress. Nearly seven years ago, Coke made an external commitment to “enable the economic empowerment” of 5 million women entrepreneurs by 2020 through programs that enhance financial literacy, job training, and more. By the end of last year, the company helped over 1.7 million women, says Charlotte Oades, the vice president and global director of women’s economic empowerment at the company.
As for the collaborative sourcing initiative, Coca-Cola hopes to work with women-owned fruit suppliers, among others.
Ariela Balk, CEO of lingerie company Ariela & Associates, has been doing business with Walmart for over 18 years, and is one of the many WOBs it sources from. Aside from running her company, Balk says she helps to advise and guide other female entrepreneurs before they pitch to Walmart.
“To do businesses with a retailer the size of Walmart, the requirements—both logistically and operationally—are very significant, so we wanted to make sure that these companies are ready, and that it will be a good thing for both Walmart and the businesses,” she said. “It’s a rigorous process.” But despite the tediousness of the preparation process, “it’s exciting to be a part of this and help other women-owned businesses grow,” she says.
Both McLaughlin and Oades stressed that sourcing from women’s companies is not just the right thing to do—it’s the smart thing to do.
“This isn’t just good for women, it’s good for everyone,” says Oades. “We are are now the leading companies in this space.”
By Geri Stengel
How do you start a tech-enabled company when you’re not a techie? One way — but not the only way — is to find a technical co-founder. After Julie Auslander sold her business, she founded a new company, partnering with David Rifkin and with Ken Redler, who as CEO of a web development company had helped her take the old company into the modern era.
Their company — cSubs — is a technology company. It helps financial institutions, manufacturing companies, ad agency conglomerates, media firms and others manage the information resources they consume. It helps eliminate duplicate spending and manage site licenses more efficiently.
One of the companies it partners with to deliver its services is SAP Ariba. Auslander, cSubs president and chief culture officer, Redler, cSubs CTO and Annie Neubrech, COO and regional VP of SAP America, gave me some great tips on how non-technical founders can get the tech help they need in our wired world.
- Get with the program: most companies are tech-enabled
“Today almost every business is going to use technology to function optimally,” says Auslander. Chances are, you have a website to market and sell or you’re using technology internally to make systems flow more smoothly. Of Women Presidents’ Organization’s 50 Fastest-Growing Women-Owned/Led Companies, 39 planned to make capital investments in technology in 2016.
- Find a guide
“Technical people are a breed unto themselves,” says Auslander. “They speak their own language.” Auslander found a guide to that world in Redler. He has a foot in both worlds. He can speak both user needs and programming code. Who is going to be your guide? Will he or she be on staff or will you outsource?
- Kiss a lot of frogs
Whether you insource or outsource, “It’s like dating,” Auslander said. “You have to kiss a lot of them before you find your prince.” Redler was the CEO of the web developer for Auslander’s previous company. “We liked working together,” said Redler.
- Know your wants, resources, and ability
Bringing in a technical co-founder may not be the right solution for every company. Usually, a co-founder gets a piece of the company. Are you both comfortable with that? Or would you rather pay a salary? Cash flow projections will be part of the decision as to whether you want someone in-house every day or just need someone on call.
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By: Shani Soloff, PT, MS, CFMT, CEAS1
Keeping healthy at work is a daily effort, and requires regular attention and mindfulness. Movement during the day is critical to maintaining wellness, while also fostering greater concentration and engagement and boosting productivity. The key becomes how to set up for success, and be wary of common pitfalls. Also, knowing what will help and what will hurt is extremely advantageous.
It is fairly common knowledge at this point that too much inactivity such as prolonged sitting is harmful to our health. The alternative to immobility is to add more activity. Replacing static sitting with static standing does not combat the inactivity. A standing desk is not a magic panacea. Movement in the Workplace discusses how productivity is improved by adding mobility to the workplace.
7 Tips for improving your health at work, focusing on simply adding more activity to your day:
Tip #1: Drink more! Bring your water bottle to work, as drinking more water accomplishes many things. First, it hydrates your body, which makes the tissues of your body feel better. Second, it forces you to get up and go to the bathroom more frequently (Yes! Moving around more!).
Tip #2: Move frequently used items further away, enough so that you have to get up and get them. For example, the aforementioned water bottle: place it so that standing and walking a few steps is required. (Of secondary benefit, this reduces the likelihood of potentially damaging liquid spills.)
Tip #3: Stand up to talk on the phone, when not simultaneously typing (or writing). Everything counts, so a few minutes standing to talk is definitely better than staying fixed to your seat for the duration of the whole phone call.
Tip #4: Take the stairs instead of the elevator! This is commonly recommended, yet often hard to follow through on. Consider taking at least 1-2 flights to your destination. Invite a colleague to walk with you.
Tip #5: Move more frequently! Sitting still for too long is bad for the body and the brain. You can get “stuck” in the position you’re in, and it becomes physically difficult to get out of that position. Moving around, standing up, changing your position- these can jumpstart both your body and your brain.
Tip #6: Walking or stand-up meetings: encourage meetings to be either walking meetings, or shorter meetings conducted while standing. Nowadays, many people are interested in health and wellness, and more inclined to be receptive to the suggestion. It is also a great way to keep your meetings shorter, and save on wasted time. Short article on stand up meetings how-to’s here: It’s Not Just Standing Up: Patterns for Daily Standup Meetings
Tip #7: Track your steps! As you can see from reading these tips, we are trying to encourage you to minimize stationary behaviors and maximize your mobility during the day. Many people find step trackers a great incentive to encourage more mobility during the day. Start tracking your steps- see how much you really walk around, and how many calories you are burning!
Every little bit counts! Don’t give up on adding motion because you cannot do this list in its entirety. Rather, pick the one item that seems easiest and start there. Often, a small amount of mindfulness will get you started on your journey to improve your working health.
Start small, and start today!
By Geri Stengel
An exit strategy is how entrepreneurs and investors transfer ownership of their business to a third party, or lays out how they will recoup money invested in the business. You may want to be acquired by another company, do an initial public offering (IPO), sell to employees or keep the business in the family. For many of you, the plan is simply to liquidate the company or close its doors.
For those of you who are considering passing your business on to your children or to other family members — whether they run the business or not — this article is for you. Family businesses comprise 90% of all business enterprises in the U.S., and 62% of total U.S. employment.
Susan Michel, founder and CEO of Glen Eagle, a broker-dealer and investment advisory service, not only advises clients on succession planning for their businesses but she’s done it for her own business. Here are six tips she shared.
- Start planning for your succession early
When Michel started Glen Eagle, she wasn’t thinking of establishing a family legacy. Initially, the goal for Glen Eagle was to provide supplemental income so the family could take vacations. But the values of the company resonated with a segment of the market and it grew because they, like Michel, believe:
- There is a higher purpose to money than just increasing it.
- Wealth management can help you fulfill your dreams, which often revolves around relationships and family.
- Your business helps you serve others, including clients, employees and your community.
“When the company became profitable, I realized that I needed to develop a succession plan to protect my family and employees,” said Michel.
- Form a posse
She formed a team, like the ones she participates on for clients, that included an attorney and an accountant who helped her figure out her strategy. If you’re not a financial planner, you want to have one on the team. You may also want to have an executive recruiter who can help you develop a formal process for evaluating internal and external talent as well as develop a training program for the successor.
Your advisors help you evaluate whether you have the talent and interest in the family or not. “Having outsiders provides objective insight,” said Michel.
- Identify your successor
You may dream of keeping your business in the family and passing the torch on to a child or family member. The reality may be that no one in the family has the interest or talent to take over the business.
Not to worry. If you choose to turn over the management of the company to others, there are financial structures, such as trusts, that can provide for family members.
As teens, Michel’s four kids helped with shredding and filing. As they got older, they helped prepare Excel spreadsheets. She discussed the business around the kitchen table. Her kids enjoyed giving their advice. She never imagined that they would have an interest in becoming financial advisors or coming into the family business.
Now that her children are adults with careers in the legal and financial services industries, they’re all on the family board and are a huge asset. After graduating from Yale, her youngest son, Robert worked at Morgan Stanley and is now going for his MBA at Wharton. He expressed interest in working in the firm. It is likely he will take over the business.
- Prepare your successor with training
Determine the critical functions of your business and have your successor work in each. Technology is critical to managing clients at Glen Eagle With his big-firm experience, Michel’s son is well suited to managing this area and is already contributing significantly.