In most organizations, DEI (diversity, equity, inclusion) efforts show up in multiple facets of the company. We often see enterprise-wide initiatives led by HR or DEI teams that focus on workforce representation and behaviors. And many companies also have Supplier Diversity programs that sit within Procurement, geared towards finding and providing opportunities for qualified small and diverse businesses.
At Nova, we started our business based on a passion for workforce D&I — the pursuit of equitable organizations and workspaces for all people. Our area of focus has widened and we now work with Supplier Diversity functions – helping them to build strategies, communicate effectively both internally and externally, and improve program performance. And we have come to believe that you can usually tell where an organization is on their overall DEI journey by examining their Supplier Diversity program.
Workforce D&I, with it’s ERGs, commitment statements, and feel-good initiatives have pretty much become another cost of doing business for F1000 companies. For many organizations, Supplier Diversity and a tangible financial commitment to put money in the hands of small, veteran, women, minority, and LGBT business-owners isn’t a well known program throughout these F1000 companies.
It’s truly a question of putting your money where your mouth is.
It’s where the rubber meets the road.
We can keep coming up with cliche (but accurate!) analogies. Don’t test us.
We believe that a truly great DEI organization has close ties between their workforce D&I and Supplier Diversity initiatives. In fact, we believe that the HR side of the house could even learn a thing or two from the Procurement folks!
Here are 3 elements of successful Supplier Diversity programs that workforce D&I teams could use:
We often see workforce D&I teams trip themselves up as they work to determine what defines “diversity”. Certainly gender, race and ethnicity always make the list — but individual identities and experiences are not limited to these “skin deep” attributes. Religion, ability, socio-economic status, ways of thinking, upbringing…all of these elements create ‘points of difference’ (dictionary definition of diversity) between individuals.
But we have to take a stance somewhere – the idea that “everyone is diverse” can quickly mean that “no one is diverse”. (side note: no one is diverse. Groups are diverse. More on that in another post).
In a procurement world, this won’t work. While the spectrum that defines diversity is broad, the accounting teams of the world need to ultimately be able to check a Y/N box at the end of the fiscal year – forcing their hand to put guardrails around what qualifies someone as a ‘diverse supplier’. Supplier Diversity programs have worked with national, state and local 3rd party organizations to develop certifications and specs for business owners.
For example, your business is considered “minority owned” if at least 51% of the business is owned and controlled by a minority (not our favorite word to describe race or ethnicity, but again – another blog post for a later date). “Ah-ha!” you say, “But how do you define minority?”. Glad you asked.
For the purposes of certification, most entities define “minority” as a person who is at least 25%:
- Black American: any Black racial group originating in Africa;
- Hispanic: origins in Mexico, Puerto Rico, Cuba, Central and South American, or other Spanish or Portuguese cultures;
- Native American: a Native of Alaska or Hawaii, or certified member of a federal or state recognized Indian Tribe;
- Asian Pacific: origins in the Pacific Islands, China, Taiwan, Korea, Japan, Thailand, Burma, Cambodia, Vietnam, Malaysia, Indonesia, Singapore or Philippines;
- Subcontinent Asian: origins in India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal or Sri Lanka.
Does it feel weird to start parsing people into groups of ethnic and racial differences? Probably. But the members of these groups are being parsed out every day in our society, whether we care to make it official or not. We have to get real about which people from what backgrounds and access to which resources are most often marginalized in our business culture, and then get specific about how we intend to achieve different outcomes.
Which leads to our next point.
2. Tangible Goals & Accountability
There’s nothing like accounting and procurement teams to take a complex societal issue and make it all about the numbers. In corporate culture, this is actually a refreshing development: true measurement of our progress instead of perceived lip service and empty commitment statements.
Supplier Diversity teams are able to set real goals that can be tracked and accounted for. In our experience, many Supplier Diversity departments set goals based on their current annual spend and benchmark against best-in-class organizations in their industry. The teams then work backwards to assess what gaps they have in their supplier lists, and take a 360 approach to identifying qualified suppliers that can be considered for business opportunities.
At the end of the day, a Supplier Diversity practitioner is held accountable to many goals and outcomes. Ultimately they will be judged on how much their diverse spend increased within a given year. Don’t mistake the clarity of goals for a simple job function — accomplishing an increase in diverse spend takes a lot of fact-finding, myth-busting, relationship building, marketing, communicating, and data collecting/reporting both internally and externally. To be a Supplier Diversity professional is to have 100 jobs and 1 title.
3. Development & Mentoring
Another reason we love Supplier Diversity programs is the commitment to outcomes. In this world, you can’t just throw your hands up at the first roadblock and say “We tried to find minority (or veteran or women-owned or LGBT+) businesses, but there just aren’t any!”. Your boss is going to send you back to the drawing board.
If you can’t find any, look harder.
Ask other folks in the industry.
Call someone at NMSDC (national minority supplier development center).
Look for suppliers who might need mentorship.
Ask your non-diverse suppliers what kinds of Tier 2 programs they have.
We would love to see this commitment to development, mentorship and, ultimately, outcomes in the workforce DEI world. Because change can be so hard, we tend to find a multitude of reasons why it hasn’t worked, or won’t work or can’t work. People who work in Supplier Diversity seem to have a clearer directive – make it work. They host “Supplier Diversity Summits” that bring together qualified diverse suppliers to learn more about the needs of the business. They partner larger suppliers with smaller or newer suppliers so they can get hands-on mentorship. They coach small and diverse suppliers through their RFP process, so they are set up for success. They focus on finding solutions, resources and win-wins.
All of these elements need to work in lockstep in in order to be successful. You can’t have development and mentorship unless you have clear goals – otherwise, who are you developing? What are the needs? And you can’t have clear goals until you get specific about your gaps.
An organization with a clear DEI path has the hearts, minds and wallets of the company all working towards the same goal – true equity at every level of the enterprise.
Not an easy journey, to be sure – but a very, very worthy one.