Harley Davidson is Dumping Supplier Diversity There is a tremendous amount wrong with supplier diversity metrics today. I live and work in a Qualified Opportunity Zone (QOE). I even invested in a QOE fund in my zip code to support the local market. Yet, as a white male (Jew), if I were to launch a Harley parts supplier in Gary, Indiana (and I maintained majority control) and I hired local residents, it would not be considered a diverse business, despite the fact my zipcode's average income is $32K per year and the population is 76.7% Black. However, if I worked with a Black friend and set up a business on the North Shore of Chicago (or downtown), it could qualify as a diverse supplier, even if we did not hire any minorities, provided he owned 51% (even if I fronted the capital). Given the National Minority Supplier Development Council (NMSDC) and other certifying authorities generally benefit from keeping the status quo with their certification programs, my two cents is that it will take radical steps like Harley Davidson's to fix supplier diversity programs to focus on metrics that matter such as providing well-paying jobs to those most in need (especially second chance workers) and union and non-union apprenticeship programs in the trades, manufacturing and service sector where economic blight persists. Procurement has tremendous power to do right here, not just tick a box. Perhaps this starts with stopping the ticking of boxes that do little more than virtue signal. What do you think? Please feel free to disagree completely! Debate is sorely needed on supplier diversity to align on a new set of metrics that correlate with better outcomes for employment, income, job training, the local economy, and innovation in the areas of the US that need it most. #supplierdiversity #procurement #innovation
We know owning equity is far more significant to have generational impact to ones family and community than being salaried. Isn’t that why diversity is designed on OWNERSHIP than whose employed. Thoughts?
Dawn Tiura
3mo
I volunteered for a few years to certify businesses as WBENC and the corruption I saw was huge. People went out of their way to set up sham female owned corporations, so I know this issue is real and needs to be cleaned up. However, I feel sad that politics would force a business to drop their programs. Even if the results are not perfect, at least they paid attention.
Lisa Reisman
3mo
And just commenting as a woman owned business, the reason I have never gone for WBE certification for this company (I have for other companies I’ve owned) is that the process for doing so is incredibly tedious and time consuming for questionable if any benefits. If a customer was going to pay me 7 figures for our solutions, it might be worth the effort but probably not worth it for anything under that. I don’t need a bunch of three letter acronyms after our company name anyways. #merit
Dave Baldwin
3mo
Ever notice how many construction companies are owned by women? Not all (I know of a few that were actually started by women, and at least one that a woman legitimately took over from her father) but many are set up with the husband owning 49% and the wife owning 51% specifically so as to be able to bid for contracts as “minority or woman owned”. In other words, it’s essentially a scam. The people who created minority set-aside programs meant well. In some instances, those programs have made a huge difference in communities. Looking at the not-so-distant past, there’s plenty of justification for leveling the playing field, making up for past sins, and the like. It seems, though, that we need to find something better.
Kristin Malek
3mo
I just did a talk on this - A re- look at the metrics as you shared it - “Debate is sorely needed on supplier diversity to align on a new set of metrics that correlate with better outcomes for employment, income, job training, the local economy, and innovation in the areas of the US that need it most. “
I agree and disagree from different perspectives. As someone building a supplier diversity solution, I've conducted research and interviews with both certified and uncertified businesses. It's unfair for those unfamiliar with these communities' socioeconomics to decide how funds should be allocated. If supplier diversity were process-oriented and prioritized socioeconomics by geography, DEI would improve. However, using the Black population as a framework still limits diversity to a racial perspective. For example, when LVMH brought on Fenty as a supplier, Fenty employed 70% women from diverse backgrounds, benefiting both DEI efforts and LVMH’s financial performance. While systems are important, many successful non- certified diverse suppliers, making $200k+ ARR in their cities, are only aware of public sector contracts and grants, unaware of opportunities with companies like Harley-Davidson and out of the corporate loop. This highlights a major awareness gap. It’s more than metrics; it’s about those who are defining them. Many decision-makers lack an understanding of the communities they serve from a broader lens. The issue on both sides is access, awareness, education. I've done 1200 interviews with both sides.
Vikas Shah
3mo
Couldn't agree more Jason Busch. I can't even begin to explain how many supplier diversity officers and chief procurement officers we've spoken to at large corporates in the recent years, who continue to provide lip service on #DEI. Many of whom conduct lots of speaking engagements at industry events and don't influence much change. In our corporate spend analysis, we continue to unearth shell companies masked as #DEI suppliers, while corporates continue to ignore this behavior in favor of PR and metrics reporting.
Peter Smith
3mo
for a change... I totally agree with you Jason. Suppleir diversity programmes can be effective - and provide compeitive advantage for the buyer - but have to be done very thoughtfully. and you raise an interesting point about ownership versus employee profile. I need to think about that further.
Jason Busch can't disagree since almost every promoter of DEI has warped the definition to mean "outcome" and not "opportunity", "visibility" and not "impact, etc. etc. etc. what it was supposed to be and what it is are two different things :-(
Software company Investor and Advisor
3moI realized a lot of Diverse Spend reporting was fraudulent when a client told me they could classify their multi-million pound Microsoft contract as 'diverse' because it went via a woman-owned reseller, whose cut would have been a couple of %. However, good CPOs should strive to make their company a good local citizen that spends money in its community. That requires: 1. setting sourcing strategies that favor small, local firms (including local divisions of larger firms), for categories where its possible to do that without significantly reducing VFM. 2. eliminating bias in sourcing processes and RFXs, such as, inter alia, language that disadvantage bidders who havent had the sort of education that teaches them what inter alia means.