Communicating the benefits of supplier diversity programs and initiatives to your C-suite is essential to your program’s success. But how do you convince a numbers-oriented executive, like your CFO, to buy in to your program? You can bring them charts and graphs reporting the tangible benefits of supplier diversity, such as a stronger supply chain and increased revenue, but what about the intangibles? What about those unmeasurable ROIs that come from having a best-in-class supplier diversity program?
Here are some of those intangible benefits you can present to your stakeholders.
Reputation—Your company’s reputation is one of its greatest assets, but talk is cheap. A supplier diversity program helps build your corporate reputation as an incubator and supporter of innovation, inclusivity, and diversity of thought. Tie the benefits of supplier diversity to your company’s core values and create messaging to let potential partners and consumers know that you are walking the walk.
Leadership—Develop best practices with proven results and couple them with your strong corporate reputation to become a thought leader in the supplier diversity space both in and out of your industry. Publish white papers and speak at conferences to further cement your position—and promote your company’s initiatives.
Relationships—Establishing relationships with diverse suppliers and other corporations’ supplier diversity program staff can lead to mutually beneficial partnerships. Perhaps a supplier you captured through your supplier portal and communicate with regularly sees a bid opportunity and brings you a cutting-edge solution that volleys you ahead of the competition. Or a supplier diversity manager at another firm meets a supplier and sees how it can help you with a need. Relationships can have wide-ranging, unexpected benefits.
Adaptability—Because diverse businesses are usually small and often use leading-edge processes, they tend to be more agile than their traditional-minded counterparts. Partnering with diverse suppliers gives your company an advantage when it comes to adapting to the marketplace. Imagine you have a product that, after consumers make a slight modification, suddenly catches broader public interest. Celebrities are tweeting about it, late night talk shows air segments about it. To capture that revenue, you need to modify your design—or offer the tool(s) for consumers to do so on their own—and ramp up production quickly. Can your supply chain handle an increase in production? Can your current suppliers help you get the modified to consumers fast?
Compliance—For companies that contract with the federal government, supplier diversity is more than a good business practice—it’s mandated in the contract. The U.S. federal government requires that a contractor whose contract for goods and services is expected to exceed $700,000 ($1.5 million for construction) must set and meet aggressive goals of subcontracting spend with underrepresented small businesses from specified categories. Eligibility for federal contracts can lead to a major boost for your bottom line, which is a tangible benefit directly connected to your successful supplier diversity program.
In addition to the quantifiable metrics you bring to the table, take some time to prepare a list of the intangible benefits of supplier diversity. You will give stakeholders a bigger picture of the impact a supplier diversity program can have on your organization and beyond.