by Dan Perkins

The strength of any corporation’s commitment to diversity can be evaluated across five categories: products and services, leadership, employment, procurement, and community outreach.  Corporations with strong diversity commitments tend to take a comprehensive and strategic approach to integrating diversity across all five categories.  Companies with less robust commitments tend to be strong in only two or three categories.

Continental Airlines has demonstrated remarkable leadership in diversity in four of the five categories, and the company is taking major steps to demonstrate that same level of commitment within the category of procurement.

Continental’s Latinization Initiative is an example of how diversity can profitably influence the development and marketing of products and services.  The initiative has been widely embraced by customers traveling to and from Latin markets; and management reports that the initiative has contributed to the company’s revenues and bottom-line.

The success of the Latinization Initiative is not an accident.  The initiative has the support of senior management.  In 2000, the issue of diversity received the attention of Gordon Bethune, Continental Airlines’ chairman and CEO.  He directed a group of highly placed senior managers to assume responsibility for strategic planning and to champion diversity throughout the company.  That directive gave birth of the company’s Diversity Council.

Continental Airlines commitment to diversity is also evident in the number of minorities who hold leadership positions within the organization.  More than 10 percent of Continental’s management is Hispanic, and in April 2003, Oscar Munoz, who is executive vice president and chief financial officer of CSX Corporation, was elected to Continental’s board of directors.  Munoz also serves on Continental’s audit committee.

In the area of employment, the airline’s work force tends to reflect the diversity of the markets in which it operates.  Around 16.7 percent of all Continental Airlines’ employees are Hispanic.  Nationally, Hispanics makes up approximately 13percent of the U.S. population.  In 2003, the airline hired 380 Hispanics to add additional support to its Latinization Initiative.  For seven consecutive years, 1998 to 2004, Hispanic Magazine has placed Continental Airlines on its list of “100 Best Companies for Hispanics.”

Continental Airlines has also demonstrated leadership by reaching out to minority communities.  While Continental sponsors more than 50 Hispanic organizations and events each year throughout the United States, its support of Hispanic youth is especially noteworthy.  Continental has partnered with Upward Bound, in a program called “Volando al Futuro (Flying Toward the Future), to provide airline tickets to Hispanic high school students in select Upward Bound programs who want to visit college campuses.

While the aforementioned achievements are compelling examples of Continental’s commitment to diversity, the company has recently taken steps to formally embrace supplier diversity.  Last year, Continental appointed Phyllis Graham to head its supplier diversity program.  Graham brings tremendous energy to a demanding, but important area of the company’s operations.

Prior to the Latinization Initiative, Continental Airlines reported its small business spend in compliance with federal contracts. In 2000, the company elected to elevate its compliance efforts into a formal supplier diversity program.

“When we began in 2000, we were mainly just reporting,” said Graham. “Since then we have worked very hard to identify our supplier base. We knew we were doing a lot of business with small businesses and minority businesses, but we didn’t know which ones those were.”

Since accepting the supplier diversity position at Continental, Graham has sought to lay the foundation for a strong program, and she has received the active support of senior management.  In addition to identifying its suppliers, Continental has established a Supplier Diversity Program Advisory Council to promote the initiative throughout each of the company’s divisions and to provide information back to Graham. 

The company has also taken steps to build stronger ties with the local minority business community.  This year, Continental is teaming up with the Houston Minority Business Council to mentor minority businesses in the Houston area.  “If this is successful, we’ll extend it to Newark - most likely.  We’d like to do that in our hub cities,” said Graham.

This month, the airline is rolling out its new buyer training program, which teaches buyers who have not had previous involvement with supplier diversity what they need to do to support the program.  The company has also launched an intranet web site that allows buyers and other employees to obtain additional information about the program. 

Prospective suppliers can also learn about Continental’s program through its web site, at http://www.continental.com/company/profile/supplier.asp.  Continental’s web site provides contact and general information about the program, but that information includes a list of key commodities and services purchased by the airline.

A lot of small businesses approach Graham seeking business opportunities, but she finds the ones that are most successful know how to network and are typically members of small business advocacy groups such as the Houston Hispanic Chamber of Commerce.

Inteleserve, a Hispanic-owned, Houston-based company, is an example of a minority company that recently became a supplier to Continental Airlines. 

“Last year, at the Government Procurement Connections Conference in Houston, one of our IT managers met Inteleserve and introduced him to EDS, which is our IT partner.  The two companies found some common ground, and Inteleserve did some cabling for us at our relocation facility at DFW (Dallas-Ft. Worth Airport),” said Graham.

While Inteleserve’s experience shows how networking can work for both the buyer and the supplier, Graham still has her work cut out for her in terms of increasing awareness of the opportunities among small businesses and in developing the information needed to operate a strong supplier diversity program. 

Continental reportedly exceeded its small business goals for 2002 and 2003, but Graham is working to implement reporting procedures that will enable her to better track procurement activities by each diversity group.

Better reporting will come as more buyers incorporate supplier diversity goals within their procurement activities.  “We have a very decentralized purchasing function in our company,” said Graham.  “Our purchasing and material services group handles primarily aircraft parts.  The rest of the purchasing is done in different divisions.”

"What I haven’t found is resistance,” said Graham.  “What I have found is curiosity and willingness (among buyers) to identify what they are already doing and what more they need to do.” 

Graham plans to introduce processes that will make reporting easy for buyers, and she is most anxious to discover more success stories within the various divisions that are just beginning to embrace supplier diversity.

Discovering that buyers routinely provide assistance to preferred small businesses is a finding that really excites Graham.  “We’ve provided special payment arrangements to help some businesses with their cash flow,” said Graham who acknowledged that such accommodations are occasionally necessary to nurture a small business.  “Not everything we do is part of a big formal program,” she continued.  “Sometimes, it’s simply a matter of buyers helping their preferred small suppliers get to where they need to be to do business with us.”

One of the known success stories for Continental Airlines is its relationship with GlobalHue, the largest minority-owned marketing communications company dedicated to strategically addressing multicultural consumer audiences.

GlobalHue, which has provided Hispanic public relations for Continental since 1996, is the brain-child of Don Coleman, the agency’s Chairman and CEO.  Coleman launched Coleman & Associates in Southfield, Michigan on January 11, 1988, as his agency only employee; but he successfully grew the agency by specializing in event planning and promotions for local businesses.  Later, the agency was renamed Don Coleman Advertising, Inc. (DCA), and in 1994, it was named the African-American Agency of Record for Chrysler Corporation’s Chrysler, Plymouth, Jeep, Eagle and Dodge brands. 

Recognizing the need to meet clients’ multiple diversity needs, Coleman spearheaded the unification of DCA with Hispanic agency Montemayor y Asociados in 2000, and with Asian agency Innovasia Advertising in 2002.  The three entities now operate under the GlobalHue banner.  Today, GlobalHue employs over 150 people and has offices in Los Angeles, Miami, New York and San Antonio, and its headquarters in Detroit.  GlobalHue’s success demonstrates the phenomenal growth that can occur among minority businesses when major corporations provide them with opportunities. 

Phyllis Graham is determined to help Continental Airline become a leader among corporations that support the growth of minority businesses.

The End

For more information on GlobalHue, please see GlobalHue Unites Colors Around the World.