Corporate America is increasingly recognizing the value of diverse suppliers, from the way they help drive innovation and competitiveness to their powerful impact on the economy and customer approval.
But not all industries have embraced supplier diversity to the same degree. For example, whereas the automotive industry has long championed the benefits of working with diverse suppliers, the outdoor recreation industry is only now beginning to recognize the benefits of embracing diversity in the workforce and the supply chain.
Sometimes we become immersed in our own supplier-diversity bubble, focusing on our work and assuming that at least the concept of supplier diversity is universal. But when we step back and take an industry-level view of supplier diversity—by reviewing reports and lists that recognize companies excelling in that space—a clearer picture emerges of the many areas where diverse suppliers continue to face inequity and lack of opportunity.
A number of publications and organizations recognize excellence in supplier diversity with annual lists and award ceremonies. Through reports from such groups as DiversityInc, the Human Rights Campaign, the Women's Business Enterprise National Council, BEQ Pride, and the National Minority Supplier Development Council, we know which industries and corporations have best-in-class supplier diversity programs that deliver value to stakeholders and customers alike.
The healthcare and pharmaceutical, telecommunications, automotive, tourism and hospitality, utilities, and financial services industries are well-represented on these lists. Year after year, we see companies such as CVS Health, AT&T, Toyota, Marriott International, Pacific Gas and Electric, and Prudential Financial, among others, receiving awards for moving the needle toward business equality.
But if we look at those same lists from a different perspective, we see what isn’t there—that is, the industries without a strong presence. These include outdoor recreation, entertainment, fashion and apparel, real estate, home furnishing, education, and waste management. All are underrepresented when it comes to recognizing best-in-class supplier diversity.
Of course, there are exceptions. Just as not every company in the financial services sector or the utilities industry is excelling in supplier diversity, a few companies in the industries we called out above are prioritizing supplier diversity and reaping the benefits. For example, Sony, HBO, and Comcast NBCUniversal (again, among others) have robust, award-winning supplier diversity programs.
The underrepresentation is noticeable, however, not just to those of us who pay attention to these lists but, increasingly, to our customers. How often have we witnessed a marketing campaign lambasted by consumers because the marketing team didn’t include diverse talent that could speak to whether or not a concept was offensive? How often have we heard a complaint that a specific product doesn’t meet the needs of a particular demographic—usually women—and traced that complaint back to a lack of diversity in the supply chain? How much revenue has been left on the table because a minority supplier with a game-changing product or service wasn’t given the opportunity to pitch?
Companies looking at long-term growth and success have already established supplier diversity programs to find those new ideas and products. How can the rest of us catch up?
- Recognize the value of diverse suppliers. This is a basic but crucial first step. Supplier diversity is not a social initiative—or rather, it's much, much more than a social initiative. Supplier diversity is a means of intentionally opening your supply chain to incredible innovation, diversity of thought, and unrealized value that can propel your company ahead of the competition.
- Gain C-suite buy-in and change corporate culture. Embracing supplier diversity may mean changing minds at all levels within your company. Entrenched beliefs and ways of doing business (a.k.a. the status quo) can be difficult to challenge, but now more than ever companies are realizing that diversity is the future. With the demographics of the United States changing so rapidly—minorities will make up the majority of the population within the next 25 years—your customer base is also changing rapidly.
- Study the best practices of leaders in your own and other industries. We now have 50 years of supplier diversity history to draw upon for insight and guidance. AT&T, General Motors, and IBM were among the first corporations in the United States to implement supplier diversity programs in the late 1960s. Those programs have grown and been reimagined in the past five decades, setting standards for successful initiatives and programs. Much can be learned by examining their respective approaches.
As already mentioned, multiple annual lists are released identifying leaders, innovators, and advocates in the supplier diversity space. What can you learn from the programs and the people running them?
- Put available tools to use. Starting a supplier diversity program may seem daunting, but odds are you have several resources already available to make it easier.
Supplier management tools such as ASCEND powered by CVM Solutions enable you to review your current suppliers and discover which ones are already certified as diverse, help you identify potential new diverse suppliers and route them to the correct buyer, track spend in all diversity categories, and generate detailed reports.
We still have a long way to go toward business equality for everyone, but the way forward is clear. As more and more companies come to recognize the value of diverse suppliers, utilize the best practices and tools available, and prioritize supplier diversity, we all reap the benefits of a stronger economy and more vibrant marketplace.