Why Supplier Diversity Equals a Win-Win

Fred Lona

As Hilton Worldwide’s senior director of supplier diversity, Fred Lona makes sure the hotel chain and its vendors get exactly what they need

Fred Lona defines a change agent as someone who uses creativity and experience to solve problems; someone who looks outside of the box and always sees the bigger picture. According to this definition, Lona is a change agent for Hilton Worldwide Inc. For six years, he has led the hotel corporation’s supplier-diversity program, transforming it from an HR function into a program that is seamlessly integrated within the procurement process. The end goal? A supply chain that reflects the Hilton’s diverse clientele. Here, the director outlines the steps he took to achieve just that.

1

Diversify Procurement Process
Instead of treating Hilton’s supplier-diversity efforts as a separate program, Lona worked hard to integrate them into the overall procurement process, ensuring that diversity is ingrained into Hilton’s sourcing from the start.

Up Close & Personal

Getting to know Fred Lona

What did you want to be when you grew up?
I wanted to be an airline pilot, but then I realized you don’t have to be a pilot to go all over the world.

Where did you grow up and what do you miss most about your hometown?
I grew up in Lakewood, CA, and the thing I miss most is being close to family and old friends.

What are your hobbies?
I love traveling, which makes my job a lot easier because with Hilton I have to do a lot of traveling.

If you could live anywhere, where would you choose?
I’d choose the Bay Area, in San Francisco specifically. I spent 20 years there and fell in love with it; it’s so diverse and close to so many other interesting places.

What was your first job?
I was a Texaco marketing manager in East LA. My family worked hard to move me out of the barrio and Texaco put me back in it because I could speak Spanish!

“We’re actively looking to include diverse suppliers into the process,” Lona says. “All suppliers are rated using existing criteria, so the best supplier who provides the best value gets the job. It’s a win-win for Hilton and the suppliers: we get the best there is and the source gets to develop a better understanding of the market and how they can better their practices and services.”

2

Implement a Second-Tier Diversity Program
“This isn’t just about Hilton; this is about encouraging and promoting diversity in business. We want our prime suppliers to seek out diversity as well,” Lona says. The senior director asserts that it’s been a learning process, but Hilton’s outreach demonstrates the company’s commitment to affecting real change when it comes to championing the businesses of minorities, women, veterans, as well as lesbian, bisexual, gay, and transgender-identified individuals. Now, because of the second-tier diversity program created by Lona, first-tier suppliers are being encouraged to implement diversity programs into their own sourcing. “We’re well beyond thinking this is just ‘the right thing to do,’” Lona says. “This is about smart business.”

 

3

Focus on Growth
Moving forward, it’s Lona’s goal to increase the percentage of diverse suppliers and not necessarily the dollar amount spent on the program. Increasing the percentage is a more reliable way of measuring the company’s goals and metrics because if there’s another economic downturn, the program can still continue to grow. “It’s not about the number of dollars being spent; it’s about the growth we can measure,” he says.

4

Provide Educational Opportunities
Initially, what really drew Lona to Hilton was that the company provided him with his first real opportunity to give back to a diverse community. Lona’s position enables him to help diverse businesses grow by providing suppliers with educational opportunities to support their business goals, as well as management, leadership, and business training. For example, the owner of a housekeeping company that Hilton contracted with was going to retire and he had no real succession plan in place, other than handing over his company to his daughter, who was not prepared to be CEO. Lona didn’t want to lose the company as a supplier, so he arranged to have the owner’s daughter attend Northwestern University’s Kellogg School of Management as part of the school’s advanced management program, providing her with a mentor and one-on-one coaching, which would give her the skill set she needed to grow the company when it came time to take over.

Lona routinely looks for opportunities and businesses that will benefit from the educational opportunities. Suppliers are given scholarships to enter management and entrepreneurship programs at the University of California—Los Angeles, Pepperdine University, and other top-notch universities. “Of everything that I do, this is dearest to my heart,” Lona says. “Helping other people, providing them with educational opportunities, teaching them how to improve and grow their businesses for their families and for the next generation, that’s what I love most about what I do.”