Other than selling pharmaceutical goods, Walgreen Co. has been pushing diversity as one of its important values. The company’s efforts extend beyond its internal workforce, striving to make changes in communities with diversity supplying. The company works with minority-owned businesses to get them on board with larger projects and help spur the economy.
Walgreen has been inducted into the United States Hispanic Chamber of Commerce with a distinction as a member of the Million Dollar Club. Furthermore, they reached $1 billion in spending on diversity supplying.
Rona Fourté is Walgreen's director of supplier diversity. She explains how the company reached the milestone and the resulting effect on communities they worked with. Below are edited excerpts from her interview with Diversity Executive.
What led to Walgreen’s induction into the USHCC Million Dollar Club?
We were recently inducted to the USHCC Million Dollar Club by evidence in $25 million or more with Hispanic-owned businesses. We were able to discern that in various ways. One is on the retail side with products that we have in store that are brought to the marketplace by Hispanic-owned businesses, and then the other ones on the side of our goods not for resale. A lot of came from our new store construction build activity that we have within the Midwest, and also within the southern region.
On a local level, and by way of interacting and interfacing with those businesses, we were able to identify businesses that could participate either in the store or for the good not-for-resale activity that we have.
How did Walgreen reach $1 billion in spending with diverse-owned businesses?
When we say diverse-owned businesses, we’re talking about businesses that are across the broad spectrum of diversity. We’re not just looking at any one channel, we’re looking at: African-American-owned businesses, Hispanic-owned businesses, Asian-owned businesses, persons-with-disability-owned businesses, veteran-owned businesses — that combination of all that activity has yielded us to a threshold of exceeding one billion dollars.
Because we do a lot with preferred providers, we actually look at the activity they do with these businesses as they are associated with our contract. So in our missions, facilities, and constructions a little bit ago, we have general contractors that subcontract work for say, electrical, drywall, painting and those sort of categories, on our projects as well, but we capture their diversity to contribute to that billion dollars.
How does the program impact communities?
We want to make sure that the businesses that are providing product in our stores actually reflect the demographics of the community so that we ensure that we contribute to that economic stimulus.
For example, businesses that have patients in various venues, they’ll ask of the business owner, “Hey, show me your Balance Rewards card.” Well, that’s tied directly to our bottom line because we are trying to enroll more and more people in that program and it also helps to continue to champion everyone’s right to be healthy. That’s where supplier diversity plays into it and strategically aligns to the business, by way of ensuring that those diverse-owned businesses in the community have an opportunity to bid on the project that we go out to bid for and again. We contribute to that economic face of that community.
There’s definitely an impact as it relates to job creation. We do have businesses that as a result of being awarded a contract with us are able to employ individuals within the community, so that’s one impact statement. Again, as we continue to look at small businesses as a great part of the economic stimuli throughout the nation, as we award small businesses, we drive that economic factor to those communities so that they have, hopefully, additional income to the vine powers stimulated. It’s a both/and proposition, we do have our need to spread and champion everyone’s right to be well, so that diverse business communities are definitely important to us, but then also, as we are able to identify those business partners that we can strategically align with and we can bring on as part of our supply chain, we grow the economic face within those communities.
What exactly constitutes a diverse-owned business and how does Walgreen find them?
Diverse-owned business are businesses that are 51 percent or more owned by African-Americans, Hispanic-Americans, Asian-Americans, Pacific Islander, that would constitute our minority-owned businesses. Then we have women-owned businesses that are 51 percent or more led by women and controlled at the board level, then we have veteran-owned businesses, same criteria. Then we have persons with disabilities, and then the last category would be historically underutilized businesses.
Walgreens participates in various outreach events by way of business developments there, tradeshows, so we partner with organizations like the National Minority Supplier Development Council and the Women’s Business Enterprise National Council, and again, various chambers like the USHCC, in order to sit-down, have one-on-one meetings to talk with these business owners about the criteria that we have for various projects that we have upcoming. So that’s our primary catalyst for engaging with the community and identifying businesses that can participate on our bid opportunity.
What has been the progress with supplier diversity over the years?
Our span has grown six-fold over the last seven years or so. We formalized our program in 2007, and since that time, we grew the program to attain the billion dollars that we are at today. That attests to the outreach efforts we’ve undergone, the need to embrace and understand the fact the economic climate and the face of the nation is changing to a majority, minority state. We’ve definitely been enveloped in that, we understand that, and that attributes to our growth in this area.
The essence of what our diversity supplier program is built on are the words of our founder, Charles Rudolph Walgreen. There’s a statement on the cover of our annual report that states that he made a determinate decision that he wanted to pay colored pharmacists the same as white pharmacists. That has really been the support we’ve gotten internally by making sure we are being inclusive in our practices as related to vendor integration. So again, our group is very supportive entirely of embracing the opportunity to look at diverse business, so I would like to add that in terms of our growth and what we’re doing going forward in attaining this billion dollar status and beyond. We definitely have the internal support and the founder’s blessing on the work that we do.