A Key Challenge for Minority-Owned Subcontractors? Misperceptions.

By Sonya Walton, Economic Inclusion Vice President, Messer Construction Co.

Earlier this year, a Business Journal article pointed out that lack of access to capital is one of the biggest challenges for minority-owned businesses, and I have to agree. In the work I do with minority- and women-owned subcontracting businesses, access to capital is a major barrier young companies face.

However, I think there’s an even bigger hurdle facing my construction industry colleagues: Overcoming misperceptions.

As Economic Inclusion Vice President at Messer Construction Co., supporting Supplier Diversity is one of my main concentrations. This means that I identify minority- and women-owned subcontracting businesses in the community and find ways to support their growth such as providing opportunities to bid on our construction projects, as well as creating capacity-building strategies.

Since rolling out a formal Supplier Diversity strategy, Messer has increased its spend with minority- and women-owned subcontracting businesses from $35 million (8%) in 2005 to $170 million (19.5%) in 2016. This increase was achieved by creating intentional efforts around mentoring, capacity building and educating our project leaders on the importance of diversifying our supply chain. We had to shift the focus of always hitting the “Easy” button. That means breaking old habits of using the “go to” company that we have worked with for years and opening the door for creating relationships with new businesses.

Shifting that mindset and changing company culture is not always the easiest thing to do. However, when your CEO and Executive Leadership believes in the importance of growing smaller businesses within the communities that you serve, it makes the task a lot easier. One of the challenges we needed to tackle was the misperception that small, minority- and women-owned subcontractors were too risky to work with due to their size, limited resources and portfolio. Although many of these companies have exactly what it takes to be successful, they aren’t given the chance to compete for contracts because of this misperception. I can’t tell you how many of the world-class structures we’ve built over the years have been in partnership with companies that almost didn’t have the opportunity to bid on the project purely based on perception, not reality.

As I mentioned, overcoming this challenge must be an ongoing focus, especially in the construction industry, as jobs are a major driver for lifting individuals and communities out of the harmful cycles of poverty. When there are more construction jobs available—especially with businesses owned by minorities and women—then the citizens in our communities will be able to grow and prosper. And this helps the entire region to grow and prosper.

How do you help change the perception?

As a minority- or women-owned contracting business, you need to believe that you are just as good as your larger competitors if you are ever going to compete. To say it in a different way, unless you leave fear at the door, you won’t ever break through to the next level. You must utilize the resources that are available to help you become a solid business, and always work to outperform your competition by providing top-notch customer service. Deliver a product of excellence that is on time and on - or under - budget.

As a buyer, treating minority- or women-owned contractors like any other business is critical. This means recognizing that everyone’s needs are not the same and that many smaller firms may not have had the opportunities available to other larger firms. Take a chance with your new subcontractor; someone took a chance with you. When possible, mentor, assist with bonding, insurance, and financing. Identify ways to make contracts more manageable for smaller firms. Do whatever it takes to be inclusive and create successful relationships.

In closing, I encourage all involved with the process to take bold steps to prove your mettle. Identify and seize these opportunities to successfully grow and diversify the construction industry.

Sonya Walton is the Economic Inclusion Vice President for Messer Construction Co., ranked #8 in the country for Supplier Diversity by DiversityInc. Sonya is a strong advocate of minority- and women-owned businesses, and for the past sixteen years has successfully implemented economic inclusion and supplier diversity programs in both the public and private sectors. Her efforts have contributed to the success of exceeding inclusion goals for major capital improvement projects throughout the Midwest.

Learn more about Messer’s Economic Inclusion mission at messer.com/economic-inclusion