"It is high time we put to bed the myth that diversifying a company’s supply chain means sacrificing business results,”- Radhika Batra
The above quote reflects that despite racial equality and justice being one of the major goals of supplier diversity programs by big organizations and corporations world-wide, black businesses are likely not benefitting from the program in a way that impacts their businesses and translate to better opportunities for black communities. This is because some organizations still believe in the myth that supplier diversity may equate to sacrificing business results.
A relatively large percentage of black businesses ordinarily fall within the classification of diverse supplier. This is by virtue of the fact the businesses are in the class of underrepresented and undeserved category of business. According to the Federal Reserve Bank of Richmond diverse supplier is a business operated at least 51% by small business enterprises, women based enterprises, minority owned enterprises, persons with disabilities, veterans, members of the LGBQT community, etc.
There are indications that lots of organizations are unable to live up to the expectations of effective supplier diversity, especially in the area of support to black business owners. A report by Denise Hamilton, an Inclusion strategist, revealed that more than half (53%) of Black business owners report that their revenue dropped by at least half since the pandemic began, compared to 37% of white owners. This is not totally unrelated to the problem of the failure of companies to keep their promise to support and promote black businesses through improved Diversity, Equity and Inclusion policies, particularly the supply diversity program.
This article highlights ways in which companies can address the problem of ineffective supplier diversity programs for black businesses.
One is by creating long term strategic sourcing event and not approaching the concept of supplier diversity as a single or one-off initiative. There is need to create a platform that develops a steady line of diverse suppliers. This comes with the need to take the company’s supplier diversity goals beyond just Tier 1 procurements and suppliers, so as to enable the company maintain a diverse supplier chain that is sustainable and effective.
Another way is to ensure a firm commitment to the supplier diversity program from the Csuite. This should be followed by setting key performance indicators that will allow for the measurement of the program’s success rate. This is because a company’s different business units may require the company management’s mandate to ensure that supplies are channeled to a new set of suppliers in line with the organization’s supplier diversity goals. It will also give a clear of the organization’s supplier diversity goals.
In addition to the above, black business owners may not require teachings that a majority of the supplier diversity programs offer. It is therefore pertinent not to adopt same approach for all diverse supplier groups. It seems generally that what may be more effective is actually getting customers to patronize their businesses by awarding supply contracts. This may be better suited to their peculiar circumstance than organizing events aimed at teaching them.
If you are interested in creating an effective, unique and innovative supplier diversity program that takes cognizance of the peculiar needs of the target diverse supplier group, then Thinkzilla’s Diversity expert team in Scottsdale, Atlanta, and Houston will design and implement a program that fits perfectly into your company goals.
Click here to learn more about Thinkzilla’s DEI consulting, high-impact marketing programs, and supplier diversity development programs in Scottsdale and across the US.