Supplier Diversity
using diverse status for additional market- ing opportunities may yield results. At the same time, there is also hesitancy for most companies to promote themselves with any labels that have unjust negative impli- cations. For example, diverse company’s products/services cost more or offer most- ly inferior products/services. Like it or not, that is a real perception amongst buy- ers at large companies. In spite of efforts to eliminate this myth, it still caries false perceptions and business owners would rather stay away from this process. Less then 25,000 businesses have 3rd party certifications (from the 2 major agencies) out of over 7 million diverse owned com- panies.
These businesses also believe that large companies invite suppliers to register and to chat at trade fairs and events as a way of showing “goodwill” to the public but knowingly having no intention of provid- ing opportunities to these small compa- nies. It is proven that for the last 5-7 years all the opportunities with large corpora- tions are going to mostly well established diverse companies with annual revenues over $10 million. While it’s true that a small company doesn’t fit with current sourcing practices, large companies should be truthful and not mislead small companies into perceiving that they have the size, scoop and scale to meet their re- quirements.
How can we implement change?
One word, leadership. Leadership in
moving the industry forward is non exis- tent as practitioners have to stay focused on targets. Organizations are stuck in a time warp. Receiving “great” feedback on spend reports and how “successful” your diversity departments programs and poli- cies are doing isn’t enough. As previously pointed out, the vast amount of the infor- mation received is often overstated. As an example, it should be obvious right now that if auto company’s are claiming that they spend over $10 billion in annual pro- curement with diverse companies, why are economic conditions still worsening for diverse companies in Detroit? Are they selling more vehicles to this marketplace; has anyone check the GDP lately? This is not rocket science here; everyone is sim- ply reporting spend to the C-suite and not showing any impact analysis. Going for- ward with shut eyes on real results will eventually give senior management a rea- son to eliminate programs. New research from the Hackett Group
found that while world-class procurement organizations continue to outperform their peers in driving supplier diversity spend- ing, most companies still make major er- rors in how they operate and measure the performance of their supplier diversity ef-
forts. Most rely on overly simplistic mea- sures to evaluate the progress of supplier diversity programs, and they never truly assess whether programs are meeting cor- porate objectives. Most companies also fail to consider whether having a few large suppliers or many smaller suppliers’ best supports their corporate goals. As a result, leadership is under the im-
pression that everything is running smoothly when in reality it is all a façade. In order for this cycle to stop and for change to come, it has to start with the top. Senior management has to become aware of what is really going on and that can only be done by being more engaged with their diversity departments. This could actually involve creating and en- forcing performance measuring tools along with the department and clearly communicating what is to be expected rather than leaving it up to them alone. It may even involve periodically attending diversity trade fairs, conferences, or ex- hibits. It may also involve talking to sup- pliers or external industry experts or read- ing industry articles or journals to get outside perspectives. The information is out there, businesses are voicing their frustration, so there is no excuse for lead- ership to have a blind eye. Leadership must remember how many
small businesses that are overlooked and negatively affected by their continuance of keeping a blind eye while larger busi- nesses reap the rewards. These same busi- nesses purchase your products, stimulate demand in the market for your goods and services, which in turn increase your or- ganization’s revenue and enhance share- holder value. They are the driving force of the economy and it is sad to report, they aren’t receiving the same opportunities as you are led to believe in the spend report. The basis of this article is to bring to
light issues that are often swept under the rug and ignored. It is something to think about.
Who’s watching? The internet may prove to be the
“Great” motivator. After all, this article will be delivered to over 2 million inbox- es, hundreds of blogs and magazines.
Source:
DiversityBusiness.com 32
www.blackeoejournal.com The Black E.O.E. Journal
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