By: Tawanah Reeves-Ligon
There are some common misconceptions regarding supplier diversity (SD) programs and how to get started the right way. Among those are the costs associated with a new SD program as well as the quality of services received and the product. However, studies have shown that a properly organized and managed program can not only increase a company’s ROI, but still create ample competition amongst qualified suppliers.
With that being said, supplier diversity does not mean ‘hand out’ or ‘give me’ program. The suppliers must still be inventive, tech-savvy and proficient enough to be able to compete for your business.
So, how do you get started? Here are our top 4 tips:
Preparation is key to any successful endeavor. Beginning your supplier diversity program is no different. Is their support from the top echelon of the company all the way to the bottom rung of the structure? Take a step back and self-evaluate for a moment to make sure you’re the right company to begin a supplier diversity program. Is diversity and culture something reflected already currently reflected in your business and values? Next, identify where a lack of support exists and then determine how to bolster enthusiasm, or at least, understanding and expectations in those areas. Supplier diversification is going to be a boon to every area of your business, so highlight the reasons why this decision should and is being made.
Also, talk about how each team can assist in making the transition a success so that there isn’t confusion regarding expectations or the roadmap that’s been chosen. This might look like new training procedures, unconscious bias programs, securing cross-functional ownership of the process and communication with stakeholders. Also, don’t forget to establish your baseline spend with diverse suppliers — this is critical to keeping track of your progress as things move forward. We’re going to touch on this again in the Evaluation step.
A common question from and challenge for companies beginning their first supplier diversity program is, “How do I find quality, competitive diverse suppliers?” The answer is simpler than you’ve believed and actually quite easy. There are multiple avenues one can use to find suppliers who from underrepresented groups. For example, tapping into groups that cater to diverse suppliers in your area like a local chamber of commerce, minority business council or diverse supplier organization.
Of course, some great organizations to start your search would include, but are not limited to, the National Minority Business Council, Inc., Disability:IN, Women’s Business Enterprise National Council and, of course, the National LGBT Chamber of Commerce. They focus on advocating and expanding opportunities for their respective underserved communities. Another great option is, once you find a supplier in your area, ask them what organizations or groups they are a part of or partner with, so that you can increase your network. Also, if someone in your network has a diverse supplier program already that’s thriving, seek assistance. Finally, publicize your efforts to be more diverse and this will most certainly attract suppliers to you and your program.
Don’t fall into the trap of failing in organizational change management. Integrating new processes or partnerships can be rocky. The seeming contradiction to remember here is that sometimes the fastest way to hit the end goal is take things slowly and at a measured pace. Be prepared to repeat steps and recommunicate with as well as reeducate teams and stakeholders about their commitment to common goal. Very few steps in your process are going to be one and done scenarios.
Identify a key member, hopefully someone trained or reeducated in diversity, equity and inclusion, to head up your new program and be in charge of not only implementation but tracking as well. Recruited other like-minded individuals to the new department as well to help bolster these new efforts. Be prepared to make a technology investment along with these personnel changes to help streamline your process through analytics, supplier tracking or further training. You might also consider supplier development in your integration plan.
The most important step to any implementation is evaluation. By measuring where you are against where you started and where you wanted to be, it becomes easier to assess what is working and what could work better. This might look similar to the processes already in place in your organization: assessing how well the supplier has overall met your requirements. Did the cost, service, quality and capacity of the needs met for your organization add up in a satisfactory fashion? How much contribution was made to innovation, mitigating risks and losses, as well as sales and marketing growth? What was the savings? Was there an impact to your engagement with customers or the markets you serve? Using these questions and any qualifiers you already use as a guide can help you better assess where your program is and where it can go.
Worthwhile change takes time, effort and intentionality. Be steadfast in the process, and you will see the fruits of your labor. “Rome wasn’t built in a day,” as the saying goes, and neither will the best parts of your program be built all at once. Continue to work as a team and communicate openly about questions or ideas. Together, your program can take your business one step closer to your goals.