Supplier Diversity is not new; it’s been a best practice for many years in Procurement. And yet, many companies have only recently begun to focus on it as a strategic imperative.
Canda: Lamont, what’s the business case for supplier diversity; why should companies embrace it?
Lamont: Supplier Diversity is an initiative for public and private sector entities to focus on purchasing products and services from companies owned, operated and controlled by minorities, women, veterans, LGBTs and disabled individuals and groups. The efforts were spawned from an executive order in 1969 by then President Nixon to develop, coordinate and facilitate a national program for minority business enterprises. The initiative evolved over the next 50 years from a mandated program to one that has an economic imperative. There are a myriad of reasons why organizations establish supplier diversity programs, which could involve any combination of the following: a focus on communities the organizations reside in, the support of supplier diversity by their competitors, desire to control costs, adherence to a governmental compliance, ability for diverse suppliers to customize solutions much faster than larger suppliers, or responding to a directive by a public or private sector client.
Canda: What lead to your passion for supplier diversity?
Lamont: My upbringing in a poor, violent, drug-infested neighborhood on Chicago's west side set the stage. Although the neighborhood was 100% Black, there were no local and established businesses that were owned by Blacks. Whites, Middle Eastern or Asian business owners enjoyed the neighborhood's commerce. Once I realized that Blacks could actually own businesses, I made it my life mission to become a business owner myself. Initially, I thought ownership would come through a career in accounting, and then procurement before ultimately discovering supplier diversity. Once that discovery happened, I knew that I was well on my way towards that goal. Supplier diversity fascinated me because it involved a plethora of skill sets in marketing, procurement, operations, finance, legal and sales. Attending supplier diversity conferences further cemented my passions as I was able to hear stories of how diverse business owners launched their successful businesses as well as how supplier diversity professionals built their global programs. Once I started realizing personal success in the profession, I knew that I had found my home.
Canda: How is the current environment relevant for supplier diversity?
Lamont: In many ways, the double blow of Covid-19 and tension from racial injustices created a significant platform for supplier diversity. Covid-19, unfortunately, negatively impacted businesses as commerce came to a screeching halt. Many of the corporate businesses negatively impacted by the pandemic are deciding against hiring full time staff to support its supplier diversity efforts, and instead opting to hire outside consulting firms like mine to create blueprints for them to build their own programs, or deciding to outsource their efforts completely. When the social media focus on racial injustice became widespread, diversity became the hot topic and desire for many corporations as a way to create a level playing field for their supply chains. Supplier diversity allows organizations to improve their support of diverse businesses while creating an ecosystem that creates jobs, educates current and future entrepreneurs, and building independent wealth among diverse populations across the world.
Canda: So what’s the future for supplier diversity and its impact on procurement?
Lamont: I truly believe supplier diversity programs will be spread across all Fortune 500 corporations and there will be an increase in legislation to support those types of businesses. I also believe the evolution of supplier diversity will lead to the establishment of business units, not just departments, with direct reports to corporate CEOs. I truly believe that instead of just focusing on driving spend with diverse suppliers, organizations will look to their supplier diversity programs in the same manner as traditional business units to drive revenue, influence organizational change, control costs, and establish educational programs to support internal and external constituents. This holistic paradigm shift will influence an even greater need to develop supplier diversity leaders with well-rounded skill sets. I also believe there will be a greater focus in academia to educate students on the true business case of supplier diversity, which should lead to an increase in interest and demand for future supplier diversity professionals.
Accenture nicely summarizes the benefits of a robust Supplier Diversity program, “by incorporating diverse businesses into our supply chain, we gain access to innovative, responsive, and cost-competitive supply solutions for our clients.” As companies look at what matters for Procurement, Sourcing, and Supply Chain for 2020 and beyond, Supplier Diversity should absolutely be part of your plan and roadmap!