The Current State and Future Potential of Supplier Diversity

Since December of 2021, I have been interviewing people, hosting events, writing, and sharing multi channel content about supplier diversity for the first ever LinkedIn Creator Accelerator program.

As I pull all everything into one cohesive summary, one thought stands out: talking about diversity is hard.

Discussing personal issues like race, gender, and disability is a very delicate matter. Put it in a corporate context and add the complexity of supplier frustration and diversity box-checking, and it becomes practically nuclear. I quickly learned that a combination of being prepared and letting my guests take the lead in each exchange was absolutely essential.

Supplier diversity is an important initiative, but it isn't going to happen on its own. We will have to work tirelessly in order to achieve the intended vision. My key takeaways are:

• Supplier diversity managers are expected to be superheroes - they have limited resources, no formal influence, and many minds to change. They should continue to build tight knit communities where they can recharge, share best practices, hold each other accountable, and learn from everyone's successes and failures. Be loud when needed, but don't ever forget to be strategic and relationship-oriented, both internally and in interactions with suppliers.
• Diverse-owned businesses cannot expect certifications to help them grow or even get a foot in the door. They still have to compete on cost and value proposition, but should absolutely speak out if they believe the treatment they are receiving from corporations is unfair.
• Supplier diversity programs are in danger of being absorbed and watered down to the point of nothingness. If this is allowed to happen, it will be keenly felt by minority business owners, who have led the way on many fronts. Minority owned businesses are tucked into overall supplier diversity, which is being folded into Diversity, Equity, and Inclusion (DEI), which is being rolled into Environmental, Social, and Governance initiatives (ESG). CAUTION!!

If you are interested in more detail about what I learned during the program, watch my LinkedIn CAP 'exit interview' here...

Advice for Corporations from the National Minority Supplier Development Council

Earlier this week, I shared a quote from Constance Jones, Senior Director of Network Delivery Services at NMSDC. There was so much more from her interview that I wanted to share... the first part is here, and the second part will release as podcast audio on Dial P for Procurement on March 24th, so stay tuned!

I was taken by Constance’s ability to balance her passion for minority business development with the business opportunity that exists for everyone participating in the supplier diversity movement. I asked what advice she would give to procurement professionals and supplier diversity managers, and here is a summary of what she said:

“In order for minority business development to be effective over the next 50 years, it has to become a BUSINESS diversity problem and not just supplier diversity. These programs have to get out of procurement and get into the different lines of business.

Decision-makers need to stop seeing minority-owned businesses as suppliers and start seeing them as partners.  

Companies also need to start thinking differently about why it is so hard to find minority-owned businesses in certain categories.

We have to start looking at some of the markets where there are no minorities or little to no minorities and have a discussion about why. Why aren’t there any/more manufacturers or service firms for the things I need that are owned by minorities? What needs to change so that minorities can engage in those markets? Is it access to capital or barriers to entry?

Fixing this larger problem will take an even bigger commitment than doing business with minority-owned businesses that are already established. Not only are you looking at supplier diversity teams to help you in general market areas, you're saying, ‘Let's really look at technology, and marketing, and finance, and all of these other pieces. Where do we go from here?’”

The E in Equity as a Saving Grace: Interview with Nikki Lanier, Corporate Racial Equity Strategist

A few weeks ago, I interviewed Nikki Lanier, a Corporate Racial Equity Strategist and the CEO of Harper Slade, LLC. Given her focus on racial equity, I wanted to understand her perspective on how the tendency of corporations to fold race into overall diversity affects their ability to achieve the kind of change results she and many others are looking for.

Click here for the full article.

#Trending in Supplier Diversity

For my final weekly poll, I asked what people expect to be the forward-looking trend for supplier diversity programs and initiatives. The results are clear: most people expect supplier diversity to be folded into ESG as suggested above.

If that is to be the case, the assignment for procurement teams in general and supplier diversity managers in particular will have to change as well. Critical decisions will have to be made around data and accountability. Will all of ESG have one metric or one set of goals? Will there be specific targets and measurements for diversity versus sustainability? The choices companies make about KPIs will undoubtedly impact how successful they are.

I also discussed this on my LinkedIn LIVE Audio event. I was joined by Helen Mackenzie, Canda Rozier, Heather Fotch, Jason Roberts, and Stephany Lapierre. Click here to listen. The general consensus was that it will do more good than harm for supplier diversity programs to be incorporated into ESG initiatives... with some interesting variances in their observations:

• Helen pointed out that procurement has to be able to respond to all of these ideas, that we've reached an 'evolve or die' state. Fortunately, our digital options have expanded as well, and now many of the competing objectives procurement has been tasked with satisfying can be addressed through technology.
• Stephany talked about the potential cross pollination and increased maturity that may result from diversity and ESG coming under the same umbrella. As she pointed out, supplier diversity is more mature in North America and sustainability is more mature in Europe. If the two groups cross, and start addressing business challenges by learning about potential approaches to data and validation, the opportunity for advancement may be significant.
• Canda offered us a CPO's perspective, stressing that any program procurement takes on must be fully integrated into process, technology, and mindset in order to be effective. Everything needs to be built into our DNA and become part of how we work. There should not be significant differences in execution for sustainability and diversity.
• Jason introduced the idea that ESG further encourages the evolution of procurement by further removing barriers to working with certain suppliers. If we want to form deeper partnerships with our suppliers, we will have to think about both their ability to contribute to diversity and sustainability goals and also form an understanding of whether each supplier 'needs' corporate help.
• Heather brought in the supplier's perspective and mentioned that moving diversity and sustainability closer together in the U.S. might open the door to private industry learning from the Federal government's approach to sustainability certifications, emphasizing overall compliance instead of individual certificates.

What's up for next week?

The Procurement Buzz will continue to run each week even though the LinkedIn Creator Accelerator program is coming to an end. The content will be more varied... some will be focused on procurement, some supply chain, and some none of the above! Stay tuned for articles, events, podcasts, and more!

☎️ Join me on March 24th at 12n ET for a Dial P for Procurement livestream featuring Koray Kose from Gartner and Rik Vera from KD29. Click here to learn more.

Follow me on LinkedIn or subscribe to The Procurement Buzz to continue being part of the conversation!