When you think of supplier diversity, what is the first action that comes to mind? If it is tracking or counting, you might be selling your program short. Like other strategic initiatives, your supplier diversity program should have a dynamic plan that morphs, grows and evolves — all while delivering business value. To develop such a program, you need to set the trajectory, ensure stakeholder buy-in and manage expectations.
Organizations have different motivations for having programs that measure their use of diverse suppliers. Some see measurement as the program’s only purpose; others have a vision that extends beyond the numbers. No matter the motivation, the first step for any new program is identifying your diversity-spend baseline. Take the time to learn about your supply chain, discover which of your suppliers are diverse, and what products/services they provide.
A successful program should be designed to fit your company. Be mindful not to leave the business value to chance. A common problem faced by companies rushing to implement a program is failing to articulate the business case for supplier diversity.
Think of program development as a journey, with business value at its heart. It should be a shared strategic collaboration that involves procurement and business partners and depends on senior leadership support.
Customization. Supplier diversity programs can provide greater economic impact by growing your customer base as well as generating innovative ideas and cost savings. The financial benefit is different for each company; it must be defined, nurtured and personalized. Most importantly, the benefits don’t just happen, they require a strategic vision supported by leadership. Tailored solutions can maximize value when they are integrated and inclusive, fitting seamlessly with existing processes and procedures.
Customization makes your program unique, value driven and aligned to your objectives. This elevates supplier diversity from being another compliance obligation to an exciting strategic initiative with bottom-line impacts. Your program should be positioned to continually grow, evolve and intertwine with procurement and strategic sourcing.
A strategic initiative. Supplier diversity should be a component within the CPO’s toolbelt, positioned as a strategic initiative, with a growth strategy, ambitious targets, and a well-articulated business case. Like any initiative, it should be managed rigorously and aggressively.
Supplier diversity is a business strategy which has the ability to deliver results. If you don’t immediately see the value of your program, revisit the basics. Did you frame the program correctly? Are you incenting the right behaviors? Who is your program designed for?
Know your why. Every organization has its own reason for creating a supplier diversity program, so make certain the vision is constantly communicated and reinforced across stakeholders. This will keep your program vibrant in spite of competing priorities.
Make sure your program is living up to your expectations and reaching its potential. If your expectations are not being met, your program needs a tuneup.
Have it all. It’s important to infuse the power of inclusion into your supply chain by (1) focusing on business results, (2) finding the best and brightest solutions providers, (3) making it a priority to include diverse candidates, (4) collaborating with your suppliers and thinking out-of-the-box and (5) taking time to measure value.
Supplier diversity begins by understanding your organization’s needs, the marketplace, and visualizing the road forward. Supplier diversity programs can come in all shapes and sizes, so move forward slowly and purposefully. Develop a program that fits your needs. The only mistake a company can make is not taking the first step.