In the past, businesses viewed corporate diversity initiatives as only a form of social responsibility and a means of complying with national standards. Today, it’s becoming clear that both workplace and supplier diversity have even more potential business payoffs. Among other benefits, supplier diversity has been shown to boost innovation, improve brand perception, drive expansion into new markets, create sustainable business growth, and increase profit margins. As you look to make supplier diversity a priority for your business, however, don’t overlook its equally important counterpart—employee diversity.
Why Employee Diversity Matters
Like a diverse supplier base, a diverse workforce can have tangible business payoffs. A more diverse workforce can bring a variety of perspectives to your business and your product. This variety of perspectives can help your brand better understand and connect with your diverse customer base.
Diversity on leadership teams has been shown to give businesses a true competitive advantage. According to a 2017 study, “innovation revenue” for companies with above-average leadership diversity was 19 percentage points higher than for those with below-average leadership diversity. The same study also found that earnings before interest and tax (EBIT) margins were also 9 percentage points higher for companies with above-average leadership team diversity.
Key Challenges for Corporate Diversity Initiatives
When it comes to implementing corporate diversity initiatives (for both suppliers and employees), most companies have the best intentions but don’t end up following through. This is typically because program objectives are undefined or too vague to be actionable. If program goals and objectives are undefined, it’s impossible to create an implementation plan or report on performance.
In some cases, the goals of diversity initiatives are clearly defined, but they aren’t aligned with overhead company objectives. This is often the case when businesses try to replicate programs that have worked for other organizations without customizing their approach to their unique business goals and constraints. If the program doesn’t clearly connect the dots between supplier diversity initiatives and C-suite goals, then it’s next to impossible to gain company-wide buy in.
Another key challenge to implementation is a general lack of resources. Supplier and employee diversity programs need adequate personnel, company support, funds, and experience in order to thrive. If you ask your HR or procurement departments to champion diversity initiatives on top of their existing responsibilities, they’re bound to remain on the back burner. To see the benefits of these initiatives, you need to justify some up-front investment. Lastly, recruiting diverse suppliers and employees without any clear qualification criteria or source can be a dead end—even if you have the resources and drive to succeed. As part of your implementation plan, make sure to address how you’ll attract and select qualified candidates.
Overcoming Corporate Diversity Program Barriers
The good news is that all the challenges listed above have straightforward solutions. To get your corporate diversity program off the ground, start by building a business case for its implementation. Doing so will help you in a couple of key ways.
First, your business case will work to guarantee C-suite and stakeholder buy-in. This executive support will ultimately help you gain access to the resources and internal momentum you need to get started. In addition, creating a business case for your diversity program will give you a clear sense of what short- and long-term goals to focus on (and what corresponding metrics to use to track your performance). For instance, if a key company objective is to break into new marketplaces, then your business case should explain how your diversity program will help further that goal. To track your performance, it would make sense to track your market share in different sectors. Along with deciding on key performance metrics, make sure to establish a baseline of comparison by pulling existing data.
After you’ve created a business case and identified your goals, it’s important to define the scope of your program. In other words, what diverse group will your program target? How will you seek out potential candidates? Establishing clear hiring/procurement policies will give you a framework for success. By standardizing the recruitment and selection process, you’ll also help align different departments behind the same overhead objectives.
In addition to outlining this process, make a communication plan to keep everyone in your organization on the same page. That involves deciding how often you’ll report on program performance and how you’ll educate your entire organization on your progress. To ensure that your program remains a true company-wide priority, you may need to host internal seminars, events, or training programs on the value of new diversity initiatives.
Part of your communication plan may also require adopting a tech solution to keep everyone organized. The right tech solution will provide cross-departmental visibility into program metrics, contracts, and candidates. It can also help you source new diverse suppliers and centralize communication with your existing supplier base.
Finally, don’t forget to leverage the right support. Using a diverse supplier database or hiring a strategic partner can help you target diverse suppliers in your industry that correspond with your program criteria. To locate diverse job candidates, reach out to local organizations, cultural institutions, colleges, and nonprofits like the National Urban League. By posting job openings in these diverse communities and using databases like DiversityWorking.com, you’ll help diverse candidates find your program and drive sustainable growth.
The Bottom Line
When it comes to creating and executing diversity programs, it’s better to put in the work early rather than jumping ahead before you’re ready. If you don’t have the time, internal resources, or expertise to go it alone, don’t be afraid to leverage a strategic partner. The right partner will help you create the strategic framework you need to drive measurable results.
To discover more supplier diversity best practices to use when championing your new program, simply download our e-book below.