11 May Top Ways to Strengthen Your Supplier Diversity Efforts
The world of work has changed rapidly in many ways over the past several years.
Not only have more organizations embraced more flexible and remote ways of working in response to the pandemic; we have also seen a higher demand than ever for robust efforts focused on diversity, equity, and inclusion that go light years beyond the lip service that too many organizations settled on for too many years.
DE&I has moved out of the silos and into the center of the conversation, especially for Gen Z and Millennials, who are increasingly “voting with their feet” by seeking out employers who demonstrate a meaningful commitment to building pipelines of diverse leaders and ensuring that all voices are included at the table.
One area of focus for corporate leaders seeking to achieve greater diversity is through their suppliers and professional services contracting.
It may sound like an easy win to deliberately choose more diverse partners to work with.It certainly may be a more easily achievable task than re-orienting a company culture around true equity and inclusion. But it can be a significant challenge in its own right to diversify your corporate supplier efforts. I’ve seen it firsthand as a woman and minority entrepreneur and an advisor to leading companies on supplier diversity.
Here are some steps you can take to ensure that your efforts to achieve greater supplier diversity aren’t in vain.
- You can’t just talk the talk. You run into significant reputational risks if your company boasts of having a supplier diversity program but lacks robust policies and practices internally to effectively implement it. I’ve seen it many times; a company names a person to be the liaison on supplier diversity and sends them out into the world to meet suppliers stressing their diversity bona fides, such as minority, women, and veteran-owned businesses. But when the would-be partner is sent to the company portal to register, they find themselves essentially in a black hole with little support. It’s a structural challenge with these portals; in my years of owning multiple businesses, I have never been approached for even one opportunity or contract because I was found in a portal. My success has almost always depended on building relationships; that’s what an effective diversity liaison needs to do.
- Be sure you’re walking the walk before you brag about the strength of your diversity focus. Many companies find themselves scrambling – in preparation for a keynote address or an annual report – to quickly identify some wins they can put on the point regarding DE&I. But you open yourself up to far more reputational risk if you tout a robust supplier diversity program if it doesn’t have real teeth in it – and if you aren’t addressing racial and other inequities in a meaningful way.
- Kick the tires to consider whether your program is really diverse. It’s not enough to award contracts to diverse partners if you’re not carefully thinking about your policies. Have you looked at your company’s payment terms – think “net 90” – and considered if you may actually be borrowing on the backs of a small business while requiring them to execute on a contract in a much swifter timeline than they can expect to be paid? That’s an untenable situation for many small firms. Luckily, more corporations are making welcome moves to expedite payment terms for diverse suppliers, including Toyota – viewed as the gold standard in expediting payment with net 15 and net 30 payment terms.
The take-away is to consider what obstacles and biases within your corporate processes – whether in payment terms, insurance policies, or other matters –may make it difficult for small firms to do business with you.
What steps has your company taken to diversify your supplier efforts? And what potential obstacles may be holding you back from greater engagement and partnership with diverse firms and teams doing amazing work?