The benefits of having a diverse supply chain have been well-studied and documented, proving its positive impact on business success. Supplier diversity drives growth and profitability while contributing to a strong, organization-wide commitment to diversity, equity, and inclusion (DE&I).
People—whether they are potential customers, employees, or vendors—feel more positively about and are more likely to choose brands that align with their values. In spite of this, the value of DE&I is often questioned. When it comes to procurement and supplier diversity, it can be challenging for program managers to obtain the budget and support needed to operate at a highly effective level.
However, supplier diversity programs are incredibly important to MBEs. We’ve experienced the difference they can make first-hand. ATR started as a small, two-person operation—which is how most businesses begin—35 years ago. Along our journey, we were fortunate to work with many large businesses (including Fortune 500s) that had supplier diversity programs, which proved instrumental in helping ATR grow into the company it is today. These corporations were committed to our success, and they put that commitment into action.
Our experience working with corporate diversity programs across the spectrum of industries has helped us identify what makes these initiatives successful for both parties. These are three key supplier diversity program best practices we’ve encountered.
The best supplier diversity programs help MBEs become better businesses. Companies have high standards for their suppliers, as they should, and want to do business with well-managed, successful companies. Effective programs offer assistance to MBEs to help them meet these standards.
For example, supplier diversity programs can help MBEs become certified and implement appropriate systems and processes to ensure stability and long-term growth. Companies may offer seminars on their procurement processes and how to do business with them, which makes global procurement feel less daunting.
Some supplier diversity programs even provide educational opportunities for MBE leadership, sponsoring them in formal executive and business management programs. Organizations that adopt this practice understand that investing in MBE executives helps them grow their business and become stronger companies, which ultimately makes them better business partners and more valuable members of the company’s supply chain.
Networking and Leveraging Connections
I was reminded of the value of connections when I attended a recent diversity conference. One of our large financial services clients included ATR in a networking event, during which they introduced us to people from companies in their business network that might need our services. An introduction like this is amazing. Give us the opportunity, and we’ll do the rest!
Seriously—helping MBEs connect with potential clients makes a real difference. New clients lead to more experience, which allows for improvement and growth.
Encouraging Tier 2 supplier diversity within your organization—whether informally or, even better, through a formal program—is another good idea. For MBEs, a Tier 2 role can be an effective starting point for their path to Tier 1 status.
Committing to the Relationship and Frequent Communication
Communication is the key to any good relationship, and that holds true in business as well. Companies with effective supplier diversity programs remain open, honest, and committed to working with MBEs for the long haul.
One way supplier programs optimize their relationship with MBEs is by bringing firms on in stages, either with smaller buys or a focus on one division at a time. They recognize that no supplier jumps headfirst into a huge contract on Day One. This is especially true for MBEs, which tend to be newer or smaller businesses—though I would stress that not even an established firm like ATR does that in a complex global environment.
By allowing time for a “getting to know you” phase, the best supplier diversity programs give MBEs a chance to get to know the company better and establish early success to build on.
This strategy should be coupled with open and frequent communication, which helps an MBE understand the nuances of your company and how best to work with your buyers and procurement program. Programs that encourage more intimate supplier relationships have helped us develop extremely successful partnerships.
Develop a Strong Supplier Diversity Program
We are grateful for the amazing people we’ve worked with in supplier diversity programs over the last 35 years. Working with these corporate partners has been critical to our growth and success, and I encourage any rising MBE to seek out good corporate programs. If you are willing to listen, learn, and do the work needed to improve your company, the rewards will follow. These programs provide critical assistance to small companies and MBEs trying to break into the corporate supply world, so I also encourage leaders to continue to invest in and support these efforts. It’s not just the right thing to do; it’s also the smart thing.