Russ: This is the BusinessMakers Show, heard on the radio, and seen online at thebusinessmakers.com. It's guest time on the show, and I'm at the 2012 Business Matchmaking Event in Santa Clara, California. And my guest now is Joan Kerr, the director of supplier diversity and social responsibility with PG&E. Joan, welcome to the BusinessMaker Show.
Joan: Thank you Russ. It's a pleasure to be here.
Russ: That title is really cool - supplier diversity and social responsibility. Tell us what your job is.
Joan: Well, up until very recently, my focus has been exclusively supplier diversity and supplier development, but our company has a real strong focus on having an ethical supply chain ourselves, ones that's focused on social responsibility, and we realized that we wanted to make sure our suppliers were in line with us in that commitment. And supplier diversity is an element of social responsibility, but we want them to also look at all of the elements.
Russ: Yeah. I'm worried that nobody seems to understand or articulate how this thing works, that as you and I have shared before, we even think the have-nots, the poor people are better served by capitalistic system, I mean, clearly, in the long run, but probably - Okay. Really cool. Now, we have viewers and listeners all over the country, some might not know when I say "PG&E", what that is - why don't you give them an overview?
Joan: Well, Pacific Gas & Electric is a utility that is focused in Northern California and Central California, but we are one of the largest gas and electric utilities in the United States because of the size of our territory and our customer base. We have 20,000 employees, who are dedicated to providing safe and reliable gas and electric services in this entire territory.
Russ: Okay. So you are a very large company, but here you are at the Business Matchmaking Event, what's your function here?
Joan: Well, we're very eager to do business with entrepreneurs and small and diverse businesses. We found they bring a competitive advantage to our company, and help us optimize our supply chain and deliver the best products and services to our customers.
Russ: Okay. And I suppose at events like these, there's an awfully broad diverse group of small businesses that would help you meet the companies objectives, as well.
Joan: Absolutely. Because we purchase just about everyone. I mean as you can imagine, there are things that we purchase around our core business of gas and electric, but we also run a large operation that uses IT and office supplies and staff augmentation and safety products, just about anything you can think of.
Russ: Okay. So tell us what PG&E's definition is right now of diversity?
Joan: Well, we have a very broad definition, and our supplier diversity program includes working with small businesses, you know, following the federal definition of that. And then also with minority women-owned and disable veteran-owned businesses, all of which are third party certified as 51 percent owned and operated by a minority woman or disable veteran.
Russ: Yeah. We had a total of three. I've got another perspective guess lined up that might make it to number four. So what's the company's goals to have as far as the percentage of suppliers that come from the ranks of the diverse?
Joan: Well, our goal for 2011 was 35 percent, and I'm pleased to say that we have met that goal.
Russ: Wow. That's huge.
Joan: Yes, well, we have been working on this for 30 years, you know. The company has had a deep commitment to supplier diversity. And last year, we celebrated our 30th anniversary and the first year we broke the 30 percent barrier.
Russ: Okay. Now do you keep track of records in which category these small businesses - and which is the largest that you're dealing with now?
Joan: Well, we have to file a very extensive report on our supplier diversity program to the California Public Utilities Commission. It's available on our website for those that want to get into all of the details. It is there, as well as available through the California Public Utilities Commission. Our largest vender of course in gas and electric delivery and transmission. All of our people are very familiar with seeing our transmission towers and pipelines and all of that. There's a lot of construction involved in that, as well as in the generation. There are things like our hydroelectric facilities all over the state. We're very lucky in California to have a lot of natural resources, and the ability to get energy from water. So that's another area that's large. Another is our customer service. Of course, we have folks reaching out to our customers, we have very excellent energy efficiency programs for our customers, and there's a lot of spend in that area too.
Russ: Okay. On these various farms of electricity, are you saying that you have employees throughout that qualify in the various diversity sectors?
Joan: No, not employees. Businesses, small businesses.
Russ: Okay, so your responsibility has nothing to do with employees.
Joan: Nothing. My responsibility is to make sure that we create opportunities for small diverse businesses to compete for our business and to help us serve our customers. So the 35 percent I mentioned is 35 percent of our total spend goes to diverse suppliers in every area of our business, whether it's financial management, accounting, legal, any area that PG&E procure goods and services, we ask all of our officers to help us achieve this goal.
Russ: Now I would also sort of assume, unfortunately, that the group of disabled veterans has probably gotten quite large in the past few years.
Joan: Well, remarkably, it's not that large in terms of entrepreneurs. And we hope more disabled services, disabled veterans will decide to become entrepreneurs and grow that group of suppliers. And we have a really good solid core, but we're hoping that many that qualify in that category will find that entrepreneurship is the right thing for them.
Russ: Okay. Well, I sort of sense that you kind of like what you do; would that be right?
Joan: I love what I do.
Russ: Okay, and how long have you been doing it?
Joan: I started out as an attorney that was working with this group at AT&T, so I was an attorney corporate counsel for the procurement department, and learned about this program and found it to be, you know, really exciting to see the positive affect we can have in the community, the economic stimulation that we're able to provide. And I thought this is really great. So when they asked me to come over and lead the program, I was, of course, reluctant at first to lead the legal department. I got a buy back provision for three years, and then after I jumped in, I went forward and never looked back.
Russ: That's really cool. Joan, I really appreciate you sharing your story with us.
Joan: I know. I think it's a good take on an overused metaphor - Thank you Russ.
Russ: You bet. That's Joan Kerr, the director of supplier diversity and social responsibility with PG&E. this is the BusinessMakers Show, heard on the radio and seen online at theBusinessMakers.com.