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A Microsoft Case Study: 7 Tips to Build Supplier Diversity in Capital Projects

By Bonita Craig

Any project manager will tell you that each and every project is unique in some way. Whether it’s a new approach, design feature or unexpected complication, occasionally there’s an element that throws you for a loop. Regardless of your role in the industry, it’s these challenges that drive us forward and inspire us to come up with new and innovative ways to make the delivery of our capital projects that much better.

When Microsoft approached us with a vision for its new Edmonton, Alberta headquarters, we were prepared to take on the task. One of the elements that made this project unique was a request to increase the proportion of diverse suppliers in the delivery of the new space.

The Government of Canada defines supplier diversity as “the concept that small- and medium-sized companies owned by women and minorities add value to large organizations and the national economy by creating mutually beneficial relationships.” Diverse suppliers include “businesses that [are] at least 51 percent owned, operated, and controlled by either women, members of an Indigenous community, members of a visible minority group or members of the lesbian, gay, bisexual and transgender community.”

Many Canadian public and private sector organizations will agree that diversity and inclusion is an important initiative, but our approach can be quite conservative. It’s common for organizations to prepare a general statement that explains its dedication to diversity and the policies it’s developed to build a workplace that is inclusive of all genders, races, backgrounds and physical abilities. Although this is a respected approach, it begs the question – what more can we do to take tangible, measurable actions that extend these values into actual economic opportunity for minority owned or identifiably diverse corporations? And more importantly – where do we start?

Microsoft challenged us to respond to these questions and find a solution that could apply the concept of supplier diversity to a Canadian capital project. Here are the lessons we learned as we developed a supplier procurement model that builds diversity and can be applied to projects across multiple industries, sectors and regions.

The capital project that started it all

When searching for an office space for Microsoft’s new headquarters in Edmonton, Ryan Fleury, Real Estate Portfolio Manager, knew he wanted this project to be special. Inspired by Microsoft’s racial equity initiative, and a goal of extending inclusivity inside and outside of the company, Ryan was interested in seeing how Microsoft’s commitments could be applied to Canadian construction.

Approximately one-third of companies that are actively working on Microsoft’s construction projects in the United States are minority-owned businesses. In the United States, there are programs, models and legislation in place that make it easy to validate and track diversity accreditation and certifications – but Microsoft had yet to investigate the market for certified diverse suppliers in Canada. With that in mind, Ryan took the first step and invited Colliers Project Leaders and Synergy Projects to join him in an initiative to identify diverse suppliers that could support this project.

What the team learned

In the words of Roy T. Bennett, “Change begins at the end of your comfort zone.”

Exploring supplier diversity for Microsoft’s Edmonton headquarters started with all project team members feeling like “fish out of water”. One of the first hurdles was determining exactly where to begin and what to say in the RFP to accurately and respectfully convey Microsoft’s supplier diversity objective.

Some of the steps that helped us to find the answers and support we needed were:

  1. Getting the right people in the room
    Weekly calls were critical to setting goals, sharing ideas and figuring out our approach to sourcing diverse suppliers for the project. These calls helped keep us accountable and motivated, and were a key factor in our success.

  2. Choosing the right construction approach
    Microsoft worked with my colleague Nichole Kennard, a Senior Project Manager based in Edmonton, to select a construction approach for its new headquarters. At the time, the construction management approach selected wasn’t based on Microsoft’s supplier diversity goal, but it turned out to be a key factor in our ability to deliver the project with diverse suppliers because it enabled us to tackle our supplier diversity goals trade by trade, package by package, without all trades rushing to respond to pre-qualification questions and then tender, all at once.

    As Nichole points out, “Had construction for the project been tendered as a traditional design-bid-build, we would have faced significant challenges – and quite possibly a different outcome.” Construction managers know the trades and market well, and they’re well positioned to lead informal market soundings that actively seek out and invite more diverse trades and suppliers that may not have otherwise participated in a bid.

  3. Communicating clearly
    Demi Grand, Manager of Interiors at Synergy Projects, took the lead on a voluntary survey based on the Federal Contractors Program’s guidelines. Knowing which questions to put to potential suppliers and how to ask them was a challenge in and of itself. Careful consideration went into developing language that clearly communicated that the exercise to ask suppliers to self-identify as diverse was entirely voluntary and non-exclusionary. Using clear language and laying a clear foundation that outlined the intent and purpose behind our information gathering activities was an important step to engage interested organizations.

  4. Challenging companies to think outside the box
    By clearly stating that the intent of the survey was to build a voluntary, non-exclusionary roster of self-identifying diverse suppliers, we were able to spark important conversations surrounding diversity and inclusion in the industry.
    “Businesses started reaching out if they didn’t feel they could self-identify,” says Demi. She challenged companies to look beyond ownership and asked about diversity among their staff, subcontractors, suppliers, transporters and more. As a team, we challenged survey respondents to widen their perspectives and evaluate diversity based on workflow, where they buy their goods, and how things get to and from work sites – an approach that was positively received.

    “[Companies] started reaching out to other businesses they could partner with on this project to then encourage diversity in the marketplace,” says Demi. Overall, we discovered that there is a willingness to meet diverse supplier criteria and that diversity in the Canadian market is more robust than we might have thought.

  5. Seeking support
    When we started this project, we had no idea there were existing services that have catalogs of diverse suppliers readily available. In our search for diverse suppliers in the local market, we came across a number of minority supplier network organizations, such as the Canadian Aboriginal and Minority Supplier Council (CAMSC), Women Business Enterprises, Canada’s LGBT+ Chamber of Commerce, and Inclusive Workplace and Supply Council of Canada. We quickly signed on as members to gain access to the wealth of resources and support these groups provide. As Cassandra Dorrington, President of the CAMSC, says, “Supplier diversity isn’t new. We’ve been at this for years. It’s just getting more attention, interest and support now, with teams like this one carving out their path for their industry – and we’re here to help.”

  6. Finding the right partner
    When Ryan set out with Microsoft’s vision to intentionally engage diverse suppliers for the Edmonton headquarters project, he was unsure whether or not it was actually possible. Without certification programs similar to those in the United States, he knew identifying and finding diverse suppliers would be a challenge.

    “As the owner of the project, you have to dip your toes in the water, and you have to be a little bit uncomfortable. You have to have the right partner to make this work. There was a passion [on this team] for diversity and inclusion and it wasn’t just taking a course online. It was actually putting in the work to find the right folks to better the supply industry,” says Ryan.

Supplier diversity moving forward

Our ability to identify capable and qualified diverse suppliers who supported the successful delivery of Microsoft’s new space went above and beyond what our project team and Microsoft hoped for – but we did it. It was Microsoft’s challenge that encouraged us to work with people we didn’t know in a truly fair and transparent way.

Cassandra’s experience with CAMSC gives her a unique perspective on the broad benefits of supplier diversity. Some of the key outcomes she’s witnessed when supplier diversity is strengthened include:

  • The successful delivery of a great product, be it a capital project or physical product.
  • The ability to encourage diverse companies of all sizes to seek opportunities where they can rise to the challenge of meeting owner and/or project requirements.
  • The creation of new partnerships between minority-owned or diverse-identifying suppliers that will move forward into the marketplace and build wealth within the community and economy.
  • The identification of a network of diverse suppliers that are exceeding delivery expectations, building capacity in their own ranks, and hiring more people – thereby building more inclusive and diversified communities.

It’s through storytelling and sharing project experiences that we open the conversation and learn more about supplier diversity. To hear more about Microsoft’s project and first-hand experiences from Ryan, Nichole, Cassandra, Demi, and myself, listen to the playback of our recent webcast, Influencing Supply Chain Diversity in Capital Projects.