Launching a new supplier diversity program is a significant responsibility, one that can easily feel overwhelming if you are the person tapped to lead the effort. There are so many things to be done at once that setting priorities and ensuring no opportunities are overlooked is a serious challenge.
The first six months of a new program are particularly critical. This is the time during which roles and responsibilities are determined, and the internal brand associated with the effort comes into focus. Newly appointed Supplier Diversity leaders - whether they fill the role full-time or in addition to other responsibilities - often don’t have applicable prior experience. They may not have run this type of program before, let alone know how to build one from the ground up. Regardless of past experience, it is understandable that any leader would feel the weight of the responsibility they have been given.
Fortunately, supplier diversity programs are well established, dating back to the 1960s and 70s. Each new program has the opportunity to build upon the progress made over the last 60 years, adding their company’s specific objectives and taking their unique culture into consideration.
New supplier diversity managers will face plenty of challenges in their first six months. If you have been assigned responsibility for a new supplier diversity program, the following recommendations and proven best practices will help you plan and lay a foundation for long term success.
- Establish a Baseline: Determining where you want to go has a lot to do with where you start. While most companies are already doing business with diverse suppliers, knowing who they are and how much spend you have with them is the first step. Even if this information doesn’t currently exist in supplier database(s) and ERPs system(s), companies can contact suppliers to determine their diversity status or use a third-party data enrichment service to add diversity attributes into existing systems. The baseline will shape the initial program messaging and serve as the basis for an early definition of success. Keep in mind, too, that the diverse suppliers you are already working with will be key supporters and partners in your ongoing efforts.
- Set Goals: Once you know your starting position, you will want to establish a quantitative target and work towards it. This first set of goals don’t even have to be spend related – they can include milestones in setting up your program. However, setting a spend goal at the start sets the right tone for the program. If you are struggling with what goals to set, it is best to look at your current spend levels and set incremental spend increases. These increases don’t have to be earth-shattering; Rome was not built in a day and your initial goals do not need to put you into the top tier, or even the average of your industry for diversity spend. But they should be measurable and achievable. Goals should focus the diversity program vision around specific actions for the sake of building momentum. Over time, you will make use of reports to provide regular internal and external updates about the status of the program. This first goal puts you on the path to success and will expand as your program matures.
- Communicate: If others understand why your company is investing in supplier diversity, they will be better positioned to support the effort through their own actions and bring additional stakeholders and contributors on board. The tone you use to discuss the program vision, results, objectives, and contributions to culture and community should be consistent and purposeful. Doing so will make clear that the program is a long-term commitment being executed with professionalism. Updates don’t have to be overly frequent, but they should be regular, anticipated, and stick to the schedule laid out in advance.
- Make Your Program Unique: Wanting to increase the diversity of your supply base is a worthy mission, but objectives that tie directly to your company’s value proposition and competitive advantage will elevate the supplier diversity program itself. Supplier diversity champions should look to the customer base for guidance, whether you are in a B2B space or B2C.
- How does having a more diverse supply base contribute to how your current customers value your corporate brand?
- Can that added value be translated into new customer acquisition, existing customer retention, or increased market share?
- In the case of B2B customers, can your investments in diversity help them achieve their own supply chain diversity targets?
- Does having a Supplier Diversity program align with your company’s diversity and inclusion values?
- Build Cross-functional Bridges: Supplier Diversity leaders don’t always report to the same point in the org structure. Regardless of where you report, you will need to have relationships with many functions, including procurement, finance, marketing, operations, and sales. Be able to understand the value of increased supplier diversity to each, and articulate that value using their own terminology. Keep in mind that you are not just selling them on the importance of the program; you are recruiting them as allies who will play an active role. Brainstorm what each function or individual point of contact might be able to contribute so that once they see the vision, they are immediately made part of the solution.
- Digitalize Your Supplier Diversity: One of the advantages of building a supplier diversity program now versus a decade ago is the proliferation of digital tools and information sources. Tools amplify the results of your efforts. One of the key roles of a supplier diversity program is making it easy for others in the company to find qualified diverse suppliers quickly. It should be easy for buyers to find, include, and track spending with diverse suppliers. It will be nearly impossible to achieve meaningful results at scale without supporting technology, so include it early in the process.
These six tasks will put your supplier diversity program on the road to success by making the most of the first six months. And while your company’s journey is sure to be a unique one, absorbing proven best practices early will accelerate your traction and time to results.
supplier.io is the leader in supplier diversity and has been helping companies large and small for over 20 years. If you would like to talk to one of our supplier diversity experts to help answer any questions or get advice on starting your program, schedule a time to meet with us.