June this year represents not only LGBTQ Pride month, but also a year since the world responded to the murder of George Floyd in the form of civic engagement, protest, and in many cases new awareness and initiatives around diversity and inclusion in some of the world’s largest organizations. Like many companies, a year ago we issued our BLM statement and tried to better understand what role we could play to further racial equity. Now, we reflect on our effectiveness and what we can do to maintain momentum a year after the statements were made. For this Insight, we interviewed an expert on the topic, Ed Simon, to continue learning how companies can meaningfully become more inclusive beyond statements of support.
Van: We are here today talking with one of our clients, Ed Simon. He is Director of Business Performance and Supplier Diversity at California American Water. Ed and I were having a good conversation a few weeks ago about supplier diversity. We thought he'd be a great person to interview about the topic, especially as we think about supporting companies in implementing their diversity and inclusion in Supplier Diversity initiatives. So, Ed, what we really want to do is talk a bit about your background and your role, and just learn a little bit more about the D&I [Diversity and Inclusion] space in corporate America today, and just get your insight as a subject matter expert. So, what I'm hoping is maybe to start off, you can just tell us a little bit about yourself and about your role at California American Water.
Ed Simon: Sounds good, Van. And thank you very much for asking me to participate today. I'm certainly appreciative and excited to be with you and your team. I did want to start my introduction by sharing with the audience that I am currently, as Van mentioned, an employee with California American Water.
I started my employment with California American Water in 2001 - a little over 20 years ago, I started as a call-handling customer service supervisor. I moved into a liaison type of role for a short period of time. In 2003, I transitioned to a field operations role. I was the Operations Manager for American Water's largest single district in St. Louis County. After that role, I designed and built a customer relations team where I was the Director of Customer Relations for the central division of American Water. After successfully leading that team, I moved to California 2010, as the Vice President of Operation. In 2015, I was asked to lead our Business Performance and Supplier Diversity team. At that time, we were merging two positions into one. Just last month, our board California American Water Board, asked me to be an officer focused on inclusion and diversity based on my experience leading our supplier diversity efforts and the last three years leading our inclusion and diversity champions. So that's my journey, if you will, with the American Water System.
Personally, I'm married to a wonderful man since 2013. Although we've been married since 2013, we've been together for over 34 years of our life, and it's been a great one. I’d be remiss if I didn't mention my dog, Winston, a Shih Tzu. Educationally, I completed my Master's in Executive Leadership at the University of San Diego in 2017, my Bachelor's in Organizational Studies in 2009 from Fontbonne University, and I currently hold two certifications. I am a certified Diversity Professional through the National Diversity Council and received my Diversity and Inclusion Certification from Cornell University. So that's me at a high level professionally, personally, and educationally, Van.
Van: Great, Ed. So, you've had a pretty long career in this space. Can you talk to me a bit more about what your role is around Supplier Diversity specifically?
ES: Yes, so specifically around Supplier Diversity, I've overseen Supplier Diversity and managing the Supplier Diversity efforts of California American Water since I joined California American Water 10 plus years ago as the Vice President of Operation. And in that role, I was responsible for ultimately making certain we included small, diverse businesses in our procurement processes. But you can imagine as a vice president, there are many strategies and roles and responsibilities that you have, so I quickly decided to hire a Supplier Diversity manager because we needed to enhance our focus and our monitoring and management of the overall efforts.
In the Supplier Diversity space, and I think most of your audience around that's familiar with Supplier Diversity, knows that it's a team effort when it comes to making sure you're engaging people that have the checkbook and your supply chain organization. I'm pleased to say that our team, since 2009, has met or exceeded our California Public Utilities Commission goal of 21.5% of our spend being with diverse suppliers. I'm proud to say that our five-year average is 29%. Just last year, we achieved about 39% of our spend with diverse suppliers. So, my current role as the Director of Business Performance and Supplier Diversity is certainly focused on Supplier Diversity and including small, diverse businesses in our procurement processes, Van.
Van: Got it. Okay, so we're going to dig into that a lot more, and about how companies implement Supplier Diversity at first, but before we go, I think you're right that a lot of our audience is familiar with Supplier Diversity. But there's a few terms that you've mentioned here. And I know that we're going to keep coming back to you throughout the rest of the conversation. So, things like inclusion, diversity, equity, would you mind just setting a baseline of what those terms mean, so they were all functioning on the same definitions?
ES: Absolutely. Absolutely. As you know, there are Webster dictionary definitions. But I like to be a little bit more practical and really let your audience and even folks that I work with know, kind of real life, what it means. I hear a lot of quotes about diversity and inclusion, inclusion, and diversity. But the one that stands out to me that I think your audience could relate to is one from Verna Myers. She is the founder and president of Verna Myers Consulting. And it sums it up well what the difference is between diversity and inclusion, and she says, and I quote, "Diversity is being invited to the party. Inclusion is being asked to dance." And so, when you think about that, diversity is the characteristics that describe our differences, gender, ethnicity, age, religion, that's diversity, if you will. And inclusion means really, truly embracing our differences. And so, if you go back to the quote from Verna Myers diversity being invited to the party, is one thing, right? [chuckle] But someone asking you to dance is another, and that's truly being inclusive. So that's how I like to communicate the difference between diversity and inclusion.
Now, from an equity perspective, I like to differentiate between equity and equality. And the definition that I like to share is one that's included in a book called "UNBIAS: Addressing Unconscious Bias at Work", and the author is Stacey Gordon. And she says equality and I quote, "Is the assumption that everyone benefits from the same support." So equal treatment if you will. From an equality perspective, and she says, and I quote, "Everyone gets the support they need, thus producing equity." Now, there is a diagram that I like to show people when we talk about equality versus equity, and I'm going try to talk it through.
(Source: Robert Wood Johnson Foundation)
If you think about riding a bike, equality is giving everyone the same bike. Let's say you had a person in a wheelchair, that person is going to get a bike, just like a tall gentleman is going to get the same bike, same size, a woman's going to have the same bike, same size, and let's say a toddler's trying to ride a bike, they're not going to have a smaller bike, they're going to have the same bike. So, everyone has the same bike. And if you see the picture of this, you could tell what the struggles would be if we gave everyone the same bike. And so that's actual equality. Everyone starts with the same bicycle. Equity is when you accommodate for those differences, meaning you give the person in a wheelchair, maybe, a three-wheeled bike, you give the taller gentlemen, a taller bike, you give the woman the size that fits her, and the toddler has a little tricycle. That's equity. So those are my definitions of diversity, equity, inclusion, and equality.
Van: Thanks. I think that makes it a lot clearer. Because I think a lot of people, you know, we hear these terms all the time, and we kind of know what they mean. But a lot of times people are kind of even afraid to ask what the definition is sometimes, so I like to go ahead and just put it out there, so we all understand it.
Alright, so going a little bit more back to your role specifically. Something that's been on my mind lately is how diversity and inclusion in the corporate world have changed over the last year. So, about a year ago, at this point, there was the George Floyd murder. There were a lot of promises made in corporate America, around the Black Lives Matter movement, and around how corporations can be more inclusive and support diversity and social justice. I'd love to hear a little bit more about how you think your role has changed, specifically over the last year, and perhaps, if it's relevant, in response to that as well.
ES: Yes, absolutely. My role has evolved since the unfortunate murder of George Floyd. But I will tell you, for me, my role evolved even before that. I have several colleagues in the Supplier Diversity space. Their roles have truly evolved in the last year based upon the George Floyd incident. I want to make sure your audience is clear. To me, we must be careful asking Supplier Diversity focused individuals to now wave a wand to be inclusion and diversity experts. That doesn't happen. That comes with education, training, and willingness to roll up your sleeve and do the hard work and efforts to be an inclusive person – inclusive of all. So, for the audience out there that's thinking, "Oh, I can ask my Supplier Diversity lead now to become, automatically become, diversity and inclusion experts." I would caution you with that regard. But going back to me individually, my role evolved two to three years ago, when our parent company, American Water, and its subsidiaries, embarked upon our inclusion and diversity journey. We’ve been on this journey since late 2016 and early 2017.
Certainly, the George Floyd incident did cause our company and I'm sure a lot of other companies, to pause and really think about their journey, their focus and the timeline, their structure, and the strategy that they have developed. But the bottom line for my role is it's now focused on not only Supplier Diversity, but inclusion and diversity, and rightfully so, based upon my experience and my education and my focus on inclusion and diversity. So that's where my role has evolved. I oversee our inclusion and diversity champion network. We have inclusion and diversity champions throughout our company, and at different levels, and we involve and engage a lot of different people from different backgrounds in our efforts. So yes, my role has evolved. I think companies, and California American Water, American Water, have heightened their efforts to be more inclusive of individuals and educate them around it based upon the unfortunate murder of George Floyd and many others.
Van: Thanks for that. You mentioned even companies in general, outside of California American Water, which leads right into my next question. It's very easy to make a statement, and a lot of corporations did make some very powerful statements, some very moving statements about a year ago. I'd love to get your insight on what tends to happen after those statements are made and if you have any thoughts on how companies are doing and living up to the statements they made. Speak, of course, in general, how that occurs, but over the last year, how do you think that's been playing out?
ES: Yes, that's a good question, Van. I appreciate you asking. I will tell you, and to your point, many companies have indeed issued statements, but people are watching and it’s what comes after the statement is issues that’s the most important part. Quite frankly, I know that our company has issued a statement, and I'm pleased to say that we're following that up with action and specific action. And so, I would say to the companies that have issued the statements and have done nothing, it is certainly not a good strategy obviously, and if you haven't taken any action after the statement, it really means nothing to your company, to the team members, and the communities that you serve.
At American Water, we were already on our inclusion and diversity journey. We had a strategy. What happened with George Floyd catapulted some of our efforts and focus and changed our plans quite a bit. We are continuing to work our strategy. We have actionable steps that we're taking to support our statement. But to me, before a company issues a statement, there should have been a strategy or a plan on how they planned to implement what they're saying. So, a lot of companies out there have done that but have not followed through with a solid strategy that includes pillars and key areas of focus around inclusion and diversity which is key to being a successful and truly inclusive organization, Van.
Van: Got it. And then that's really kind of where I'm interested in, so humor me a second And I'm going to take a step back because a lot of what we do is organizational change management and transformation management. We're very interested in how you can effectively implement some of those statements. How do you take those ideas and convert them into real change within an organization, right? And when you look at how you implement diversity and inclusion initiatives in an organization, a lot of it's very similar to how you implement any other big change if you want to do it effectively. You establish what your goals are, you establish effective leadership over those goals. You figure out a way to see, "Are we being successful in these goals, and if we are not, then how do you change what you're doing so that you are effective?"
So, I'd like to ask a few questions about that. Let's start with the leadership part because any big initiative, including D&I, will not be effective without powerful executive leadership at the top. So, can you talk a bit about the importance of that and how you see that leadership being established in corporate America?
ES: Absolutely. I agree with you that any type of change, if you're thinking of any type of strategic direction of a company and the various strategies that you implement to be successful as a company, any type of values creation, any type of change management plan, to your point, Van, it all starts with leadership. And in my opinion, leaders must model the behaviors expected to support that demonstrated actionable items that you're trying to accomplish. I think leaders must be clear, especially from an inclusion and diversity perspective, what the expectations are at every level of the organization, not just leaders, but managers, supervisors, frontline team members. It must be clear on what the expectations are and how folks are going to be held accountable. Let me give you a couple of examples that I think will bring home that idea or thought process.
In my opinion, and from an inclusion and diversity perspective, it's one thing to say that we're a company focused on inclusion and diversity, but a company continues to hire the same individuals, the white individuals that look like the current leadership make up. That's not diversity, [chuckle] that's not inclusion when you're still hiring the same white individuals. Some companies think that "Okay, well, we're going to hire white women." Well, yes, when you look at some definitions in different states around diversity, it does include women, so that's some progress, but that's not genuine progress from a person of color perspective. So, I would encourage folks to really think about that when you're working with HR and hiring folks, make sure that they're truly including people of color in your diversity effort.
The other thing I would say, is a good example is for leaders to truly embrace inclusion and diversity – all the time. Those in leadership positions can’t support inclusion and diversity from 8:00 AM to 5:00 PM only. I think leaders must embrace inclusion and diversity beyond the work hours to truly be an inclusive person, and we all know being inclusive is a choice. It's an individual choice. However, for leadership and people who are managing people and really wanting to include and be an inclusive culture, it goes beyond an 8:00-5:00 PM. It must be something that you truly embrace. For example, you can't talk about inclusion and diversity and after hours, talk about people of color or talk about an LGBTQ person. That's not truly embracing diversity, in my opinion, Van.
Van: And definitely, that says a lot about how leaders really set the example and set the tone for the organization. It's not even about logistics if everyone's getting on, it's about modeling the behavior, which is true of good leadership in increasing diversity in any other aspect of leadership, right?
ES: That's right.
Van: So, I think many of people have ideas about what inclusion and diversity really means, but where I see a lot of people struggle and a lot of leader’s struggle is translating that into tangible goals. We have these ideas of how we want the organization to look. Still, you've got to take that down a level and convert that into specifically what our targets are. So, what I think would be interesting to hear from you is, do you have any advice on setting those targets and setting those goals in a tangible way, so it's something that you can specifically march towards and measure the success of later on?
ES: Absolutely, Van. I would say each company really has to define where you are today. And be honest and authentic in that assessment because if you're not honest and true with where you are today, then you're setting goals and measures based upon your starting point being where you want to be, that's not going to help you get to the goals that you want to accomplish. So be true to where you are today and what is it that you ultimately want to accomplish and be realistic in reaching your accomplishments.
I think you need to design your strategy or plan around truly being an inclusive and diverse organization. When you're developing that strategy, you must include all levels of the organization -executives, middle managers, frontline managers, and frontline team members. So, make sure you are engaging all those levels. More importantly, [chuckle] you must make sure you're engaging all the diverse groups within those levels. So, include people of color, gender differences, LGBTQ+, etc. - make sure you are bringing different diverse perspectives.
You don't want to develop a strategy around inclusion and diversity with all white individuals, nothing against white individuals, but my point is that's not truly engaging and encouraging and understanding at all different levels. Inclusion and diversity are about creating innovative ways of thinking and bringing different perspectives. So, it's important you include all those team members in your strategy development. And if you think about where you want to be, you need to make sure that you have clear pillars in each area. Do you want to focus on communication? Do you want to focus on engagement? You must have those pillars clearly identified and what you want to accomplish within those pillars. Then you must identify measurement levels – do you want to measure down to a quarterly or annual level?
Van: Yes, that makes sense, and I totally get it about engaging a cross-section of people at every level. You mentioned you can't keep on hiring the same white people and I kind of chuckled at that, but it's good. It makes sense. And what I see a lot of times is people misinterpret why that is. In my view, it's about you want to make sure that the people that have the life experiences you need to speak to are a part of the conversations. It's not saying that where a white person's heart is, is not right. It's not saying that they don't support the initiatives, but they just don't have the life experience to be able to really add that voice to the conversation, and I think that's an important dynamic that people need to realize.
ES: I want to make sure that I'm clear to the audience, too, that we must include our white team members in the strategy development and in the discussions. For a company to be truly inclusive and diverse, it must be colorful, it must be people of color involved in those discussions. It is in no way saying that we don't want to hear from our white individuals. We do want to hear from you, but it's also time that we include, be inclusive of other ethnicities. For far too long, in organizations, most organizations, before the focus on inclusion and diversity, usually what you see at the top level of organizations and in executive leadership levels are usually white individuals with one sprinkle of a person of color. It's now time to increase that sprinkle to half, if you will, so you truly are getting a diverse perspective. There have been tons of research that shows when an organization includes diverse individuals – women, minorities, etc. an organizations market share increases, revenue increases and overall performance increases. It is a proven fact, and there are many studies out there that will tell you that.
Van: So, you just mentioned some metrics there. With D&I, as with many other big initiatives, a lot of times, organizations will put the goals out there. So, let's say they get the leadership, they set their goals, say, "Here's what we're going to do," they set it off and then never do an effective job of coming back and saying, "Did we actually do what we set out to do?" And so that's where the measurement of the success of these initiatives comes in. So, I was wondering if you could talk a little bit about how organizations measure success, or do you have any advice about how organizations can measure the success of their D&I initiatives?
ES: Absolutely, Van. I will tell you, in my opinion, there are three main areas of focus around diversity and inclusion. The first is workforce and truly measuring the percentage of diverse candidates. When you have a job opening, how many of those candidates are diverse. This includes new hires as well as promotions. It's really looking at the organization and saying, how many of those candidates for those promotions and new hires are diverse? How well are you including diverse people in your development plan and your succession planning process?
Also from a workforce perspective, companies should look at where they are today and really looking at your makeup and how many of your employees are women, how many are minorities and within the minority community, how many are African American, how many are Hispanic, how many are Asian American or Pacific Islander? So, it's really breaking down the workforce, and setting a plan and strategy to move those numbers. So that's the first part. The first part is about the workforce.
The other part is about community. How well are you engaging the communities that you serve? For us, I know we are not going to quit from a Supplier Diversity perspective until our supplier base matches that of the communities that you serve. So, when you're out in the community, the vendors look like the people that we serve. That's important for some communities. You must ask and really getting involved in understanding how well you are engaging under-represented communities in your efforts, and what are you doing to help those under-represented communities? So that's the community piece. So, we talk about workforce, we talk about community.
The last part of that is around Supplier Diversity. Again, measuring specifically, of your total dollar spent how much of that is spent with diverse suppliers? From a Supplier Diversity perspective, you need to look at a few metrics. One is, again, measuring your total procurement dollars and how much of that spend is truly diverse. That's one piece. That's what we call a tier-one result. The second piece is around tier two spend, meaning how well are your non-diverse prime suppliers engaging small, diverse businesses in their procurement processes?
And then finally, it's not enough to say, we've met this percentage, or we have this dollar spend, but what are you doing as an organization to really help small, diverse businesses build capacity and provide technical assistance?
From a diversity and inclusion perspective, again, a company needs to decide where they are today, but as I mentioned before companies should think about the inclusion and diversity pillars or strategies. There are four I would recommend:
The first one is training and making sure that you're developing a curriculum that includes all team members: White, Black, Hispanic, Asian, Pacific Islanders, all team members in your training curriculum development. Some of the training, in my opinion, should include level setting so team members are all on the same page. The training curriculum should include but is not limited to definitions (diversity, inclusion, equity, equality, and ally-ship, etc.), what are our goals, commitments, expectations. I would also say part of the training should include unconscious bias training because we all have our biases. It's how you counteract them in the workplace that's important. So that's the training pillar if you will.
The next one is around communications, and this one's a little tough because you must strike a balance, so that team members don't feel that you're beating them over the head regarding inclusion and diversity. So you really have to understand and strike a balance in your communication, but you definitely need a communication strategy. What is it that you want to communicate, what's the frequency, what is the method of communication? So, that's the communications pillar.
The next pillar, the third pillar, is around engagement. And I will tell you, based upon my experience, this is one of the more challenging parts of the four pillars because, as I mentioned, being inclusive is an individual choice, and understanding team members are at different levels on their inclusion journey. You must meet team members where they are, and this is the most time-consuming part of the pillars because people are at different levels. It's a lot of work, but you must hang in there and do the work necessary to really engage employees. It's making sure that you're engaging all employees.
I would recommend you have an executive sponsor. You have a council that includes all levels of the organization and people of color. You also include employee resource groups to make sure that those groups have a voice and a say around the strategy, and you are engaging the various communities.
And so, the final pillar, in my opinion, is around expectations and accountability. You need to be clear on what's expected of people at the different levels of the organization. That's very important. Not only what the expectations are, more importantly, how are you holding people accountable when those expectations are not being met.
Those are the four pillars that I hope your audience considers when developing and wanting to create measures around diversity and inclusion, as well as the Supplier Diversity.
Van: That's a lot of great information. I think that's probably very useful to a lot of people in our audience. I'm going to ask you to take it even one step further. So, I'll tell you, even after...
ES: You always do that.
Van: I at least try. So, my company is relatively small. It's usually the one that's considered a diverse supplier. However, we also set goals, as small as we are, for having part of diversity programs. And I'll be honest with you, full transparency, an area that I've struggled with as a leader is really figuring out if we are meeting those goals. And so, we have the support of leadership, we have clearly defined goals around those, but where I've struggled really with things is like, “What are some specific metrics or what are some methods of measurement to see that we've actually met those goals?” So, I know what would be useful to me at least, and hopefully, a lot of other people is if you could maybe talk about some real-world examples or just some very specific ways in which companies have measured their success around Supplier Diversity or D&I initiatives in general.
ES: Sure, absolutely, Van. Why don't we start with Supplier Diversity first and some real-life examples of measuring utilization of diverse suppliers, as I mentioned before. One, it's understanding what your total procurement dollars are. How much of that is with diverse suppliers? Here in California, as a regulated company, all of the regulated utilities, those regulated by the California Public Utilities Commission, we can only count ‘spend’ as diverse if the vendor is certified through the Supplier Clearinghouse. However, in other states and entities within California, they recognize the different certifying bodies. When I mean certifying bodies, I mean The National LGBT Chamber of Commerce, the Women Business Enterprise National Council, the National Minority Supplier Diversity Council. So, it's really making sure you set the right expectations around what you spend and are counting as diverse. That's important.
I think to truly measure how well you are performing from a Supplier Diversity perspective and inclusion of diverse suppliers, you really need to measure down to the individual user, the ones that have the checkbooks and are procuring the services and products. I know for California American Water; we have talked about that. We are measuring success at the local level, team level. We have looked at some individuals. And when I say that, for example, we have a large amount of our spend around infrastructure, and that's the folks in operations and engineering. So, can I look at Sally, who is spending maybe $30 million a year on engineering projects? Let's see how much of Sally budget and project spend is with diverse suppliers. If you can drill down to that level, that's impactful, in my opinion.
So, part two of it would be around the inclusion and diversity piece. And I would tell you, that's a little harder to measure, but it is possible. I know there are many companies out there that can take a snapshot of where your company is today with regards to, let's say, unconscious bias. This is certainly not a paid advertisement for them, but I think the one company that does a great job at that is a company called BiasSync. It's a Hispanic woman-owned company, and they have a unique software program that allows all employees to complete an assessment. The results can be drilled down to the position, functional, by state, or however you operate, and then, their tool provides individualized training based upon how well the individual responded and to try to help reduce their unconscious bias. But they do a great job at that. But it's using a tool like that to truly assess your team members' unconscious bias.
I would also recommend surveying your teams on how they feel about the organization and their inclusivity efforts. Are team members really embracing inclusion and diversity? What would the employee like to see more of, less of, more training, less training? So, it's all those types of components that help you develop a robust Supplier Diversity and inclusion and diversity strategy.
Van: Thanks. Yeah, that does help a lot. And so, I'm probably going to end up having some follow-up conversations with you one-on-one about that as we continue to refine how we do it, so hope you don't mind if I pick your brain some more after this.
ES: Absolutely. No, absolutely. Absolutely.
Van: So, this has been helpful to me, and I think for our audience as well, but I'll stop and say, is there anything else you want to add that we haven't covered here?
ES: Being an inclusive organization starts with leadership and those individuals leading people – frontline managers, supervisors, etc. These team members must embrace inclusion and diversity and role-model the behaviors around being inclusive. Because if your leader's not role-modeling and you're not seeing it, then your employees will not embrace being inclusive.
As a company, you need a strategy. You need a picture of where you are today, and as I mentioned before, being honest in that today part, and then being clear on what your strategies are around the pillars that I mentioned. And certainly, we didn't get where we are today overnight. So, one should not expect results overnight. In your strategy development, make sure that you're being realistic about what you can accomplish in a quarter, a year, two years, or five years. Your strategy needs to be robust, but more importantly, you need to make sure that you understand that inclusion and diversity are ever evolving. You have to be adaptable to change. So that's my closing comments for you, Van.
Van: Thank you, I'll take that to heart. Well, Ed thanks so much for your time. I know that you're very busy and that you have a lot to get back to, and I know we're almost out of time for our interview. I just want to thank you so much, I really appreciate the time, and I look forward to chatting again soon.
ES: Thank you very much for agreeing to have this discussion. It's very important, and I hope others also do the same thing. So, thank you and your team for engaging me in this dialogue. It's certainly been an honor to be part of the discussion.
The conversation here expresses the opinions of Ed Simon and/or Van Goodwin, and does not necessarily imply the position of California American Water or Van Allen Strategies. Van Allen Strategies is a certified diverse supplier to California American Water and with the CPUC’s Supplier Clearinghouse, and is a certified LGBT Business Enterprise through the National LGBT Chamber of Commerce.