For years, decades even, supplier diversity was seen as only a social responsibility issue. A means for corporations to address social injustice through increased opportunities for minority and underrepresented business owners.
But we know that supplier diversity is more than social responsibility. “Diversity is good for business!” we tell stakeholders and C-suite decision-makers. We know through independent research and results within our own programs that supplier diversity is a business strategy that, when planned and executed well, is a powerful resource for increasing innovation, efficiency, competitiveness, and cost savings in our supply chains.
Yes, diversity is good for business, but we can't lose sight of the fact that supplier diversity and corporate social responsibility should go hand in hand. Supplier diversity is both “good for business” and “good for society.”
Corporate Social Responsibility Is a Driver of Supplier Diversity
As a quick refresher, let's define the two terms we're using today.
The goal of corporate social responsibility is for companies to take “responsibility for their impact on customers, employees, shareholders, communities, and the environment in all aspects of their operations.”
One definition of supplier diversity is “the commercial tactic to present diverse suppliers with equal access to commercial sourcing and purchasing opportunities...to improve business efficiency and as a means to obtain more competitive pricing.”
One is a sort of watchdog overseeing the effects of doing business on the world around us, while the other is a business strategy meant to build a stronger, more efficient supply chain. These two objectives may seem counterintuitive, but here's the magical thing about prioritizing inclusion and diversity: It benefits our customers, our employees, our shareholders, our communities, and our environment because our companies are stronger, more competitive, creating jobs, and investing in communities.
If that sounds familiar, then you've probably been hearing a lot about “economic impact” recently. This emerging metric in supplier diversity measures how doing business with small and diverse companies generates revenue and income, how it creates jobs, and how that activity impacts the local and national economy. It's corporate social responsibility through an economic lens.
Aligning Corporate Responsibility with Supplier Diversity
Wouldn't it be great if you had another department in your company working toward the same goals, advocating on your behalf, sharing information and resources? Imagine how much more productive you could be! A strategic alliance between the corporate social responsibility team and your supplier diversity team can enhance the effectiveness of both agendas. With a little effort up front, you can set your company up for big wins.
Align goals and agendas: It's easier to work together when your sights are set on the same goal. Sit down with your corporate social responsibility counterparts and review your goals and agendas. Rework them to clearly align with one another and with your company's values—then build on that communal foundation.
Interdepartmental communication: Communication is everything in business, and in this case, it can be an enormous strategic advantage. Consider sharing information such as diverse suppliers who could help meet a specific corporate social responsibility goal. Or, maybe that economic impact analysis you’ve been working on could benefit from input from your corporate social responsibility counterpart. Even something as simple as assisting in broadcasting information about upcoming initiatives or needs can bring your two departments into alignment and a mutually supportive relationship.
Promote stakeholder buy-in for both agendas and goals: We all need a cheerleader in our corner, so why not advocate for one another to achieve our goals? Present a united front, support one another's initiatives and proposals, demonstrate synergy between your proposals and your results. Imagine meeting with stakeholders to present an initiative that moves the company forward on both corporate social responsibility and supplier diversity goals through the use of resources that can be obtained once and used twice. Win-win!
We make the business case for supplier diversity constantly, arguing for the bottom-line impact because stakeholders respond to those kinds of results. But we cannot forget that supplier diversity is about inclusion; it's about people and the positive impact our company can have on the world around us. Aligning supplier diversity with corporate social responsibility to work toward common goals strengthens the supply chain, strengthens our communities, and strengthens our companies.