In 2012, a Wall Street Journal article cited a study that found that approximately 60 percent of Fortune 500 companies had a Chief Diversity Officer (CDO) or an executive role designated with overseeing diversity within the organization. While most of the discussion about the role of CDOs revolves around attracting and retaining minority talent, a CDO can and should be involved with supplier diversity as well.
According to the Institute for Diversity Certification, a CDO "proactively engages in a process of steering an organization toward sustainable, long-term success through inclusion, cultural competence, market segmentation, and equitable service.” In other words, the CDO should have a holistic focus on diversity throughout a company, not just as it relates to hiring decisions.
Supplier Managers vs. CDOs
You may be wondering why you need a CDO when you have capable Supplier Managers already in place. That is because these positions have two entirely different purposes within your organization: As is the case with any C-level executive, the CDO is looking at the big picture and providing leadership in order to achieve business objectives. By hiring a CDO, you are sending a clear message that diversity is a key driver for the long-term health and success of your business.
On the other hand, SD Managers are responsible for the day-to-day operations of your Supplier Diversity program, building relationships with suppliers and moving the program toward your organization’s goals. In fact, you may find the perfect candidate for the CDO position within your current Supplier Diversity team.
What a CDO Can Do for You:
- Lead diversity and inclusion -- including supplier diversity -- initiatives company-wide in order to insure compliance, maximize potential growth, and improve competitive positioning.
- Lead the creation or transformation of a Supplier Development program to be efficient, effective, and in alignment with business objectives.
- Develop a strategy to identify, manage, develop, and grow diverse suppliers in order to strengthen the company's supply chain, harness innovation, and encourage supplier competition.
- Develop initiatives designed to help diverse suppliers build capacity in anticipation of future business needs and objectives.
- Establish benchmarks and goals for your supplier diversity program.
- Track metrics and generate reports to demonstrate the success of supplier diversity initiatives and to establish best practices.
- Analyze your competitors' diversity and inclusion efforts, assess how well they are tapping into and serving diverse market segments in comparison to your organization, and identify areas where your company can improve—or take advantage of a gap left open by your competitors.
- Advance your organization's understanding of diverse markets and increasing minority buying power.
- Embed supplier diversity into every part of the procurement process.
- Increase visibility of the supplier diversity program internally through executive buy-in, procurement training, and awareness campaigns.
- Establish your organization as a thought leader within the industry by serving in external leadership positions such as with the National Minority Supplier Development Council or the Women's Business Enterprise National Council.
Can you have a supplier diversity program without a CDO? Sure, but as with any strategic business segment, without leadership, you run the risk of wasting resources through inefficient, ineffective practices. A CDO helps focus supplier diversity initiatives to ensure that the program is in alignment with business imperatives. Executive oversight reduces wasted time and money on ineffective initiatives, freeing up resources for growing a supplier diversity program that positively impacts both the top line and bottom line.
So the real question is, why wouldn't you hire a CDO?