Full Text of David Hernandez’s Speech on Supplier Development at the 2014 NMSDC Conference

Liberty Power co-founder and CEO David Hernandez addressed attendees of the 2014 National Minority Supplier Development Council (NMSDC) annual conference Awards Banquet on Wednesday, November 5 in Orlando, Florida. Liberty Power was co-chair with The Walt Disney Company of the annual gathering of supplier diversity professionals, minority-owned businesses, and Fortune 500 corporations. David challenged the audience to re-imagine supplier diversity in terms of supplier development. He said that ensuring companies better reflect the changing demographics of the population is the only way for the United States to take on the challenges of the global economy in the 21st century. Below is the full text of his speech.

One of the last conversations I had with Joset was about “who moved my cheese”?

She said, “I don’t care who moved my cheese, I want to know what I have to do to get it back!”

That’s at the heart of my remarks here tonight.

The reason is that in 2014 the world changed dramatically, and I will elaborate on that in a minute. And we in this room must change with it or we risk becoming irrelevant.

First, I want to take you back to 1872, which was a momentous occasion for the US economy. That was the year that we as a country overtook the UK as the world’s largest economy.

This year, 2014 is a momentous occasion for China, because it just became the world’s largest economy, ending the 142 year reign the US had previously enjoyed.

1972 was also a significant year. In 1972, one hundred years after the US became the world’s largest economy – the same year the NMSDC was founded – my family received an exit visa to leave Cuba, ultimately allowing us to come to this country from a land that had no opportunity, no freedoms, no liberty.

My personal experience would eventually inspire the name for the company I co-founded in 2001. As a proud American I believe in the power of liberty, and that is why I named my company Liberty Power.

My family bought into the U.S. brand – which is “the land of opportunity” Back then, my parents could have never imagined a world where the United States wasn’t the world’s number one economic super power. And yet, here we stand today – #2, behind China with other countries like Brazil and India breathing down our neck.

The cheese has moved and so we must move.

Are you comfortable with the US being #2? What about #3, #4, or even #6? – which, by the way, is where UK ranks today.

Do you think in 1872 when the UK became the world’s second largest economy that they thought they would continue to slide?

What would it feel like if the US went from #1 to #2 to #6? Not very good, I imagine.

We must change, we must adapt. If you don’t like change, just imagine what the alternative looks like?

In the 1960s, Avis – then the second largest car rental company behind Hertz – embraced their second position with a new tagline.

“When you are only number two, you try harder. Or else.”

Today, Avis – a Liberty Power customer, by the way – leads their industry in terms of customer satisfaction. They tried harder and we must try harder.

OWN THE MOMENT

Simon Bailey also talked about how we must “own the moment”.

He challenged us and tonight I will issue my own set of pleas or calls to action.

Tonight I urge the government to stay in within its role which is to put the right rules in place so that the game is played fairly and enforce those rules.

I urge Corporate America to advance from Supplier Diversity to Supplier Development. I urge the NMSDC to grow beyond measuring diversity spend to measuring impact. And I urge MBEs to invest in their people and processes because that, in large part, is how Liberty Power has become successful.

The Government, Corporate America, the NMSDC, and MBEs must collaborate in order to better understand how our needs have changed and what we must do to address these changing needs. The things that got us here, that made us successful, will not be same things that get us to where we want to be.

Like all of you, I love the United States. I’m passionate about the future of the United States – our children’s future. I’m passionate about Free Enterprise. That’s why I’m here standing before you today. That’s why I am so supportive of this organization.

Some people say it’s the government who creates jobs. I disagree.

It’s you who create jobs.

That’s why I recently teamed up with Bernie Marcus, co-founder of Home Depot and the organization he founded – Job Creators Network. Its goal is to bring about public policy to ensure government stays true to its role which I described earlier.

Again, it’s private enterprise, and small businesses in particular that drive growth.

According to the SBA, small businesses make up nearly half of private-sector employment and create nearly two-thirds of new private sector jobs.

While the mission of the NMSDC – for the last four decades – is to “advance business opportunities for certified minority business enterprises and connect them to corporate members”, make no mistake, the NMSDC’s aim is job growth and wealth creation.

Promoting supply chain diversity is simply a means to that end. After all, minorities are becoming the majority.

It’s inevitable, given that more than half of today’s U.S. children under the age of five are minorities. Yet, economic disparities still remain.

Recall, I mentioned earlier that the NMSDC was founded in 1972. Both the NMSDC and Corporate America have come a long way since then.

Many Fortune 500 companies have promoted diversity in hiring and their supply chain. We acknowledge and celebrate these success stories, but the evolution must continue.

It is time for corporations, including Liberty Power, to “own the moment” and change.

Here’s an example of why: of the list of Fortune 500 companies in 1972 – the year this organization was formed, only 18 companies are still on the list.

SUPPLIER DEVELOPMENT

To the audience here today – whether you are a minority business owner, a supplier diversity professional, or a leader at a Fortune 500 company…

Are you ready to take supplier diversity to a whole new level?

It’s what many refer to as “Supplier Development.”

It means entering into a trusted, long-lasting, mutually-beneficial relationship with a minority supplier.

As Len Greenhalgh says in his book, Minority Business Success, an investment in developing the suppliers in the corporate value chain is an investment in their own competitive advantage.

MBEs bring measurable, bottom-line value to their customers. They often accomplish this because the vast majority of MBEs have an entrepreneurial spirit. They are creative, innovative, nimble.

MBEs have the ability to develop disruptive technologies or business models – because they must, out of necessity. The only way that a minority business can compete is by being better than the competition.

Supplier diversity programs provide opportunities for MBEs. Opportunities to bid, to prove their value. The issue is that too often, the opportunities stop there.

A single transaction or a supply contract and we “check the box”. We measure success of supplier diversity by the growing the spend with MBEs. But that is a difference of degree.

What I’m talking about is a difference of kind.

Under a Supplier Development approach, the relationship doesn’t stop with an exchange of goods or services, it starts there. A contract is the jumping off point for what should be a much deeper relationship.

Supplier diversity is about finding qualified suppliers to fill an order.

Can you respond to this RFP?

Can you compete on price in a reverse auction?

Sure, Liberty Power can do that. We’ve proven it time and again.

But we’ve evolved from a simple transaction to much more – thanks to customer who took a supplier development approach with us. Supplier development is about finding a partner to develop innovative solutions to solve difficult challenges.

Supplier Diversity is about offering a seat at the table.

Supplier Development is about sitting side by side at that table, rolling up our sleeves, and tackling business challenges together.

I want to recognize the unsung heroes in this room tonight.

Supplier Diversity and Supply Chain professionals share one common bond – they are some of the most passionate people I know when it comes to their work and their mission.

I need your support.

I need your voice.

I need you to promote Supplier Development with as much vigor, passion, and commitment as you have when it comes to Supplier Diversity.

It is in large part because of your efforts, the companies you represent, and organizations like the NMSDC that have propelled Supplier Diversity spend from $20 billion in 1990 to well over $100 billion today.

The pitch is easy.

Supplier Development is the best and fastest way of extracting the most possible value from your strategic sourcing partners.

Again, you can accomplish a lot of great things with Supplier Diversity programs, but they have the tendency to leave a lot of un-tapped potential.

And to the MBEs in the audience, I need your help too.

I continually talk about the value you bring to the table – the innovative solutions, the value-creation, the drive to always go the extra mile for the customer. Prove me right.

In closing, I would admonish all of you to own the moment.

As a country, THIS is our moment. Our cheese has moved. We must try harder.

So I ask you:

As voters responsible for our government, as members of the NMSDC, as Corporate America, as Minority Business Enterprises…What are you going to do about it?

Let’s all commit to taking Supplier Diversity to a whole new level called Supplier Development.

Thank you and see you in San Diego.

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