ConnXus founder and CEO Rod Robinson wasn’t thinking about social impact when he conceived of his supplier management software business a decade ago; he just had a work problem that he thought someone should solve. But the fast-growing business he created might offer just what the corporate world needs to level-up its positive impact on society.
As a chief procurement officer, Robinson struggled to do more business with supplier companies owned by women, people of color, LBGTQ+ people, and veterans, even though contracts often mandated that he do so, and as a black man he wanted to support businesses owned by disadvantaged groups. While suppliers can obtain third-party certifications for their diversity status, fragmented resources made it hard for purchasing officers to find them. “I wondered, ‘With all of the technology at our disposal, why isn’t someone leveraging these tools to provide visibility down and across supply chains?’” Robinson recalls. “I wanted to solve that problem and help companies quickly identify and measure diversity within their supply chains.”
He had an idea for a service that would play matchmaker between small and medium diverse suppliers and large companies’ procurement divisions. At first, he tried to get another company to create it, but with no luck. So he eventually began prototyping a solution himself.
Robinson debuted his supplier management platform, ConnXus, in 2010. With customized data analysis and access to a database of nearly 2 million vetted supplier certifications, large companies can begin to build more inclusive, transparent, and compliant supply chains made up of small businesses that match their values, he tells Conscious Company.
And while ConnXus didn’t start with a mission to change the world, it may be on track to. As Donnella Meadows writes in “Thinking In Systems,” one of the classic studies of how systems change, “Information is power. … You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.” As consumers increasingly demand that companies account for their impact on the world and ConnXus begins tracking more and more supplier characteristics, ConnXus and businesses like it could be important players in reshaping business’s role in society, simply by helping companies connect. Already, its service promotes opportunities among minority-owned businesses, fostering growth and development on an equitable scale that has for too long been systemically impeded. The platform also enables businesses to ensure that their suppliers are in turn doing their part to hire a diverse workforce, which is another way of promoting opportunity equity among members of minority groups.
We spoke with Robinson to find out more about supplier diversity and how platforms like ConnXus can help change the world.
ConnXus at a Glance
• Location: Mason, OH
• Founded: 2010
• Team Members: 30 full-time
• Traction: ConnXus has attracted $10 million in venture capital, including from Techstars Ventures, Impact America Fund, and Serious Change LP; revenue grew 120% in 2017; customers include Coca-Cola, Cummins, Fifth Third Bank, and McDonald’s Corp.
• Impact: In 2017, nearly 1,100 companies reported $82 billion in spending with disadvantaged businesses via the ConnXus platform.
• Awards: Named Early Stage Company of Year by VentureOhio and a Best Places to Work finalist by the Cincinnati Business Courier; in 2012, Ernst & Young Rod Robinson a regional finalist for Entrepreneur of the Year
• Structure: Private for-profit
• Certifications: Certified minority-owned business enterprise by the National Minority Supplier Development Council, Canadian Aboriginal & Minority Supplier Council, California Public Utilities Commission, and the State of Ohio; pursuing B Corp certification
• Mission: “Enable corporate buyers to achieve responsible, sustainable, and inclusive strategic sourcing goals.”
ConnXus landed its first big corporate client, McDonald’s, in 2012. For those of us who haven’t worked in corporate procurement, can you describe how platforms like yours can help a company like McDonald’s better understand its supply chain?
Rod Robinson: Our product provides companies like McDonald’s with validated data enrichment. Essentially, we scrub their vendor records to better understand their suppliers. For example, let’s say McDonald’s has 100,000 vendors. With our software, we can go into their system and identify any third-party certification each of those 100,000 vendors may have, including diversity and sustainability certifications. We then report to the company what we find.
Additionally, companies often require their top vendors to complete Tier II reports on diversity spends — meaning the money those vendors spend with smaller diverse suppliers. When I was a chief procurement officer, I had people sending out spreadsheets and doing manual processes to collect data from our top suppliers — it was a big pain. Automated solutions like our Tier Tracker make it much easier for companies to aggregate data from their suppliers and gain more visibility down the supply chain.
Companies can also find new suppliers through our search database. If you’re looking for a woman-owned print company in Dayton, Ohio, for example, you can search on that basis. At first, we focused solely on diversity, but now we’ve incorporated other elements of a supplier’s sustainability — including financial stability, sustainability ratings, and business risk.
What do you see as the role of business in solving social problems and creating a better world? How does ConnXus fit in?
RR: I didn’t think of us as a mission-driven, socially responsible company until I worked with impact investors who helped me see that we are. I take pride in the fact that the ConnXus platform not only enables small companies to connect with corporate buyers, but also helps large companies tell their story about how their procurement dollars impact the communities where they do business.
How would you describe the culture at ConnXus?
RR: It’s almost as good as being at home. We have a very inclusive, entrepreneurial culture, and we want everyone to feel like this is their company. I may have started it, but it’s not my company; it’s our company.
Since our initial focus was diversity, we also felt it was important to walk the walk. Our employees are 40 percent women and 30 percent minorities, and we were fortunate enough to find people who matched our values. When you attract an early core group of people who reflect the values and culture you want to build, they tell other people. They help you recruit, and that’s what happened for us. Everyone continues to be involved in the recruiting process.
What do people most often misunderstand about what you do?
RR: People often interpret supplier diversity as something different than what it is. It’s just really good procurement. One of our clients, Procter and Gamble, will talk all day about how their diverse suppliers outperform their general market suppliers by a large margin, and there’s a lot of data around that.
With our data, we can actually show how women- and minority-owned businesses perform at high levels and bring higher levels of service to the table. Leading companies notice this, too, and they’re pushing diversity requirements down their supply chains because they get it. Supplier management, risk management, and supplier diversity should all be a part of corporate strategy and integrated into day-to-day procurement activities. We’re finally getting there, and my goal is for our technology to continue to be a catalyst in making that happen.
You became somewhat of an accidental founder and CEO in response to a problem. What’s the best leadership advice you received along the way, and what does being a good leader mean to you?
RR: The best leadership advice I ever received is, “Hire people who are smarter than you, and create an environment where they can do their best work.” Great leaders want to work themselves out of a job. Whenever I hire someone who will report directly to me, I look for someone I’d want to work for. I want people who want my job and people who could do my job.
Once I made a couple of hires who complemented my blind spots, I realized how much the right people enabled me to truly be a CEO. I’ve been fortunate to surround myself with great people, which frees up my time to work outside the business, focus on thought leadership, and think about where I see the market moving in five or ten years.
What’s your number one piece of advice for up-and-coming small-business owners?
RR: Focus on differentiation. Continue to be innovative, and think about what sets you apart from your competition. A lot of small businesses are reactive. They follow the market as it moves, but they don’t stay ahead of the market — and it’s so important to focus on where the market is moving.
That gets back to surrounding yourself with smart people. Small-business owners often try to wear too many hats and never give themselves time to think strategically about building a scalable business. They think, “I’m engaged and excited when I wake up in the morning, but then I get so exhausted because I have so much to do.” In that sense, there’s really no substitute for hiring great people, because when you know the day-to-day is taken care of, you can make more strategic decisions about the business you want to build.
Relationships are also very important. When I was a chief procurement officer, I noticed that the most successful suppliers were the ones who reached out to me before there was an RFP. They were trying to build relationships before they needed business, and often small businesses don’t focus on that relationship piece enough. People want to do business with people they know and trust — that goes for suppliers, banking, financing, or anything else.
What’s giving you hope?
RR: This next generation of corporate and procurement leaders cares about transparency. They want to know their suppliers and what their social and sustainability practices are. They want to know their supplier network operates ethically, hires diverse teams, and isn’t tied to slave labor, racism, and other social ills. Given the times we’re in today, it’s encouraging to see these trends in transparency growing stronger among young leaders.