A New Value Proposition for Supplier Diversity

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I think it is safe to say that most entrepreneurs are not looking for a handout.  Small business owners want to sell products and services so that they can pay their bills, pay their employees and earn a decent wage to compensate them for the risks that they take every day as self-employed people.

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Supplier diversity sourcing – the business program that encourages the use of: minority-owned, women owned, veteran owned, LGBT-owned, service disabled veteran owned, historically underutilized business, and SBA defined small business vendors as suppliers – was designed to provide opportunities for legitimate business growth to up and coming, qualified entrepreneurs.  It was not designed, as many think, to provide a handout – a freebie – to the underutilized small business community.

Do Major Corporations Care About Supplier Diversity Initiatives?

Some do, but many don’t appear to care. They publicly pay lip service to the idea of supplier diversity but don’t provide support for the professional, efficient management of programs in place to support the intended goals.  Try searching the top food manufacturing web sites in the US – how many of them have a direct program link to a diversity initiative that is easy to find and encourages participation by small business owners?  Out of the top 50 companies, maybe 10 of them?

Many times, the supplier diversity “program” link is an email to [email protected] – a blind email box that is never answered or that can’t accept any more email because it is so full.  The instructions are (paraphrased) “attach every bit of information about your company and email it – blindly – to [email protected] and we will contact you if there are opportunities”.  Is it even good business practice to send confidential documents through email, especially if you don't know where they will end up?

Supplier diversity programs are intended to encourage promising entrepreneurs to learn and participate in the market through modeling and potential mentorship opportunities.  I wonder how many corporate CFO's would instruct their staff members to send proprietary corporate documents and financial statements to a blind email address in order to generate business for the company?

What is the Goal of a Bad Program?

Major corporations need to show some level of commitment to supplier diversity to maintain eligibility for government contracts. As a result, most design a program that ticks the required “ethical and legal” boxes but has no chance of actually producing sustainable results.  What is the goal of program that is designed for failure?

When the intended audience can’t find the information needed to participate in the initiative, the corporate messaging is simple: We don’t care about this program.  We don't care if you apply for it.  We expect you to waste your time and continue to jump through hoops before we will speak with you.  We want to see how serious you are before we waste our time on you.

In the past few weeks, while researching this post, I have called the corporate offices of over 140 companies with stated supplier diversity goals.  These companies had no supplier diversity program links on their corporate web sites.  Out of over 140 companies, not one individual has called me back.  Not one company rep has returned an email.

I left messages with designated “supplier/procurement” people who “handle” the supplier diversity program.  If I accidentally reached anyone, they were generally condescending and rude and disinterested in my questions.  They didn’t know where to transfer me and had no answers themselves.  It was a total waste of my time, as they assumed that I wanted a handout, or a grant, or something else – not an opportunity.

Is the supplier information difficult to find and access because corporations don’t care if their initiative succeeds?  There are probably easier ways to retain corporate eligibility for government contracting.

Creating Value for Viable Programs

For those executive officers of major corporations who genuinely seek to keep legitimate diversity programs in place, consider some of these changes when you are creating or restructuring your program. 

    • Increase Program Visibility Place a hyperlink to your supplier registration portal in a visible location on your website. The entrepreneurs are the ones who need the information, not your investors and industry peers.
    • Create Actionable Goals – Not Talking Points Talking points are great to generate support for a plan.  But, when you are advertising that you already have a plan, make sure that it works.  Program significance can only be measured through meaningful interaction with those who can benefit from your program's efforts.
    • Respond to Phone Calls and Emails  Educate your staff so that they know how to responsibly answer calls and emails from entrepreneurs who are interested in the opportunities that you offer.
    • Hire Human Beings  Designate a real department with real people to respond to these inquiries.  Get rid of the generic email boxes and opt for human interaction.  If the supplier diversity initiative means anything to your company, it should be worth staffing with human beings.
    • Educate Entrepreneurs  Help small businesses learn which attributes comprise a good procurement risk to a corporate buyer. Develop internal education programs and webinars for this purpose.  Treat your prospects like potentially viable future partners and tell them what it will take to earn your business.

A good supplier diversity program is responsive to its intended audience.  Through intentional interaction, education and opportunity development between small business and large corporations, economic value and good will can be created that will ultimately benefit both types of entities.

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