Black Business Month’s Bold Economic Statement

The Gist

• Economic impact. Black-owned businesses have seen a significant revenue increase from 2017 to 2021, demonstrating their growing economic influence.
• Communication importance. Effective messaging and alignment with customer values are crucial for the success and support of Black-owned businesses.
• Diverse representation. Maintaining diversity in technology and business partnerships is essential, especially as organizations adopt new technologies like AI.

In 2020 I wrote about Black Business Month, explaining its origins and burgeoning investment interest. Established by historian John William Templeton and engineer Frederik E. Jordan Sr., Black Business Month is meant to celebrate the economic progress of black-owned businesses and how the impact is being formed. 

I thought another look at the latest trends would be beneficial for celebrating Black Business Month in 2024. One trend that seems to be emerging is better alignment of measuring progress and messaging that progress.

Keeping Doors Open

The outlook the month has created is a shifted attention toward sustained investment, as many firms are recognizing the economic impact Black-owned businesses have. The Pew Institute noted an increase in the number of Black-owned firms between 2017 and 2021, from 124,000 to over 161,000. While many are small in employee count — two-thirds of the businesses have 10 or fewer employees — collectively, revenue soared from an estimated $127.9 billion in 2017 to $183.3 billion in 2021. That’s a 43% increase.

The major challenge facing black business owners and partners is maintaining the momentum. 

Downturns in business investment mean a lost opportunity to understand a given customer base. Businesses are increasingly operating as a platform or have an association with one that does operate as a platform. Platforms in general are a means or opportunity to communicate ideas and information to a group of people. 

Protecting Messaging Plays a Vital Role in Conveying Support

Thanks to the adoption of digital solutions and internet communication, businesses are increasingly communicating their ideas to their intended audience — namely customers. The communication is often focused on the benefits of a product or service. These days, communication also focuses on values.

Customers are insisting that brands demonstrate alignment to their values, so businesses have to speak to it. Specifically to black businesses, communication has been a part of helping customers discover where to find services. I noted the history of that messaging and the emergence of African-American consumerism in a presentation for Juneteenth.

Messaging is vital for all businesses that establish partnerships with Black-owned firms. This means having agencies and suppliers who can help craft the right messages. The lack of such agencies can negatively impact the opportunities to get the message right. For example, the Association of National Advertisers conducted a survey and discovered a downturn among minority advertising agencies. It noted that ethnic diversity in the advertising/marketing industry declined from 32.3% in 2022 to 30.8% in 2023, a significant step away from the 42.2% ethnic diversity of the US population.

This decline implies fewer opportunities for agency teams to craft messages that can resonate with customers the right way. It is a different and worrying tone compared to the significant pledges I noted back in 2020. Messaging is an essential part of the customer experience.

Related Article: Do Your Brand’s Values Align With Those of Gen Z?

The Value of Diversity in an Organization

Managers are increasingly recognizing that having a diverse supplier base is a strategic value. Gartner noted that the data of a recent supply chain diversity study indicated strong gains of alignment between diversity and broader business objectives. The survey data revealed the percentage of full-time employees of an underrepresented race or ethnicity within the evaluated supply chain organizations increased from 32% to 48%.  

Customers also desire brands to make transparent demonstrations of their values. Other research demonstrates how brand value is cherished. Ad Age noted in a 2021 survey by Numerator that black consumers are convinced to support brands that support their values and maintain diversity practices. The survey also revealed similar considerations for Hispanic and Asian consumers.

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Given the enormous buying power among African American consumers, brands must pay attention to every contributor to brand value. Investment in working with minority-owned businesses is a significant contributor to that brand value.

Representation Is Also Vital as AI Is Adopted

The tenets of maintaining diversity also weighs into the technology adoption organizations now face. AI models must accurately represent the people being included in their modeling. Black professionals and organizations have raised concerns that planning for that representation is needed now.

I listened to one terrific example while attending the Black Is Tech conference this month in Houston. I enjoyed a keynote presentation from Janeen Uzzell, CEO of the National Society of Black Engineers. Uzzell has spoken in many thought-provoking or game-changing conversations on tech justice, global leadership and investment in the community.

She shared the experiences of her father, who, with his cousins, formed a soul group who did not receive their full royalties, to illustrate two significant points to the audience. She noted a knee-jerk reaction among black professionals that, given the history of discrimination, “culturally we were not trained to tell our story.” 

Yet Uzzell also encouraged that with the increasing digital access, such as that for AI, “We have an opportunity to make sure the data shows up in the space.”    These tremendous insights on inclusion are also essential as partnerships with Black-owned businesses are built on a digital foundation, be it through media or software development. 

Related Article: 5 Ways Diversity and Inclusion Impact the Customer Experience

Using OKRs for Supplier Diversity Plays Into Customer Experience Messaging

With all this in mind, brands must find ways to communicate their progress behind public investment in measurable ways… literally. The right way to provide that messaging often comes as an Objectives and Key Results (OKR) framework.

OKRs are a goal-setting framework organizations use to guide teams toward goals and track related outcomes. To form an OKR, a high-level objective must be identified and described as an intended goal, while the key results are supporting metrics described in terms of “how much of that intended goal will be accomplished.”   

A well-chosen objective is an explicit description of what the team wants to achieve over a defined period. To measure progress, each objective should have a few corresponding key results. The key results are always expressed as a metric. A scoring value or a percentage change in a metric are examples. 

Using OKRs enhances a diversity effort with a strong alignment towards company objectives through improved performance as well as sending a message to attentive customers that businesses are moving forward. 

Customers in general have wider access to information regarding a company’s investment choices. Moreover, they can judge the progress a company is making based on those choices. Thus, investment in Black-owned businesses must measure progress, not just reflect a collection of surface pledges. Doing so ensures success in building viable customer experience messages, leading to consistently retaining customers instead of increasing customer churn.

Celebrating black-owned businesses may be only for a month, but framing investment and operational progress through OKRs ensures that the investment goes beyond the month.

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