Supplier diversity, much like duty of care, is becoming a central pillar to the growth and development of many organizations. According to Reginald Williams, a supplier diversity consultant, over 80% of American corporations are practicing supplier diversity. However, in practice companies often fall short of the high standards they aspire to achieve.
Of course, the majority of organizations want to prioritize supplier diversity and do so successfully. It’s a commitment Richard Powell, chair of Sequential Technology International (STI), believes will continue. “The corporate leaders that I interact with are not just embracing but are trying to be proactive in addressing DEIB (Diversity, Equality, Inclusion, and Belonging) within their organizations,” he told Christa Ancri, Vice President of Marketing at Everbridge, during DiverseCon, a recent B2B virtual conference for DEIB.
So, how can businesses ensure a continued prioritization of supplier diversity and successfully hit the goals they are committed to achieving? Furthermore, how can supplier diversity fit within an organization’s overarching plan to become more resilient? The key lies in:
- Implementing initiatives geared toward establishing an environment in which a supplier diversity program can flourish
- Aligning your purchasing strategy to your business goals, in this case prioritizing supplier diversity while simultaneously enhancing overall organizational resilience
In this blog, we will discuss both of these key points, define what exactly supplier diversity means, and provide insight into how companies can successfully diversify their supply chains while bolstering their own organizational resilience.
Defining Supplier Diversity
According to The Hackett Group, “Supplier diversity is a business strategy that ensures a diverse supplier base in the procurement of goods and services for any business or organization. It emphasizes the creation of a diverse supply chain that works to secure the inclusion of diverse groups in the procurement plans.”
For example, choosing to supply through small businesses, as well as minority- and/or women-owned businesses can qualify as a diverse spend. However, one of the major challenges for organizations is getting their supplier diversity program off the ground. How do companies who are successfully deploying supplier diversity programs make it work?
Make Supplier Diversity a Collaborative Effort
Companies that are highly successful in achieving supplier diversity do so through a “focus on behavioral change in alignment with their organizational protocols,” says Reginald Williams. It’s about creating consensus around the mission and incentivizing commitment toward diversity initiatives.
While the executive leadership will be responsible for setting the vision, it is often left to other teams who have strict budgets and tight deadlines to ensure implementation. It is vital that procurement teams understand they have the support of their leaders, dedicated time for research, and specified budgets in order to begin developing valuable relationships with new suppliers.
Additionally, supplier diversity must be heralded as an organizational-wide priority by all employees, regardless of title. If the importance of a diverse supply chain reverberates across the company as a whole, it will naturally become a critical part of how the business operates.
When thinking about the steps your organization can take to create an environment in which supplier diversity is championed, Williams outlined four initiatives best-in-class companies have employed:
- Launching a Supplier Diversity Advisory Council
- Adopting a Rewards & Recognition Process
- Appointing Departmental Champions
- Establishing Performance Incentives
These key initiatives will help establish a strong supplier diversity program and enable its continual prioritization. Furthermore, they will help drive value to your organization far beyond compliance with quota fulfillment.
The Benefits of Diversifying Your Supply Chain
It is outdated and incorrect that the practice of diversifying your supply chain is simply a box that companies must check. Committing to a diverse supply chain, according to The Hackett Group:
- Promotes innovation through the entrance of new products, services, and solutions
- Provides multiple channels from which to procure goods and services
- Drives competition (on price and service levels) between suppliers
- Displays an organization’s commitment to doing business in diverse markets
- Showcases the company’s commitment to the economic growth of all communities
Additionally, expanding your supplier diversity spend can enhance brand image through recognition as a Supplier Diversity industry leader. Once certain criteria are met, it can even propel organizations to be placed alongside established “World Class” corporations in supplier diversity such as Apple, IBM, Johnson & Johnson, JP Morgan Chase, Microsoft, and Walmart who are all members of the Billion Dollar Roundtable.
The Billion Dollar Roundtable (BDR): Who They Are & What They Achieve
BDR’s vision is to lead, influence, and shape supplier diversity excellence globally. The mission is to drive supplier diversity excellence through best practice sharing and thought leadership. BDR develops and publishes pertinent supplier diversity information on an annual basis. In discussions, the members review common issues, opportunities, and strategies. Often the practices of BDR members set precedent for supplier diversity program management by developing and identifying emerging ideas/trends to sustain the supplier diversity initiative.
Once an organization has united its leadership and employees in prioritizing a diversity supplier program, strategic purchasing becomes the next consideration. What should an organization be looking for through a diversity supplier spend? While there are countless options, investments in solutions that enhance your organizational resilience are becoming increasingly necessary.
Strategic Purchasing: Enhancing Resilience Through Supplier Diversity
If an organization can align its business need for enhanced resilience with its mission to commit to supplier diversity, it becomes a win-win situation. With Everbridge and STI, organizations can do just that – receive the help they need to protect their people, assets, and facilities through a diverse supplier.
Watch the full interview with Everbridge CRO, Vernon Irvin, and Richard Powell, chair of Sequential Technology International
Read more here to learn about enhancing resilience through critical event management through a diverse supplier.