The Business Case for Supplier Diversity

The National Minority Supplier Development Council had its annual national conference in beautiful San Diego, CA from Oct. 18-21, 2015. As an advocate and trainer for small businesses, I am passionate about growing the pipeline of minority entrepreneurs and was intrigued to see the theme of this year's conference: "Economic Impact: Redefining the Business Case". This age old question of the value of supplier diversity programs and the metrics associated with that resurfaced again and again throughout conference discussions. One poignant moment was within one of our breakout sessions focused on aligning with business objectives and engaging leadership in the process of developing the supplier diversity program at corporations. One attendee passionately stood up in front of the audience and asked the entire room, not just the speakers, these questions: "What 'proof points' really are there for the value of supplier diversity? I don't mean just because it's 'the right thing to do'. What positive impact do diverse suppliers actually have on the bottom line, that makes them more of an advantage over any other supplier we are already using? How can this impact be quantified? I'm not talking about success stories or testimonials - I can get those anytime. What can I take back with me, to prove the value of these programs?".

Conversation stirred around these questions. The panelists as well as other attendees made reference to the powerful report (downloadable here) by Scott Vowels and the NMSDC recently launched that strongly highlighted the economic impact of certified minority owned enterprises on the U.S. economy. Some discussion ensued about metrics and measurement, and the traction a supplier diversity professional can have when showing progress over time. Great points were made, but I really wish this attendee had sat in on another session I participated in, that hit really hit the answer out of the park. For your reference, I will share those points here -

In another session, Tarrance Frierson, Manager of Supplier Development at Southern California Edison spoke about Making the Business Case for Supplier Diversity Development. I was fortunate to be seated next to him at the International Luncheon and learned how much thought he put into his presentation - which really showed. The key points he shared in his workshop highlighted 4 overarching points with relation to the impact of supplier diversity: 1) Brand loyalty, 2) Diverse perspectives and flexibility, 3) Productive partnership, and 4) Reduced costs.  The loyalty piece relates to brand affinity as consumers become familiar with the corporation and associate this positive relationship with its products or services. Small businesses can deliver tailored solutions and innovating thinking that can meet larger corporations needs. This agility can lead to more productive partnerships, and overall reduced costs, that also address the corporation's bottom line.

These four key areas mentioned are tremendous drivers within any corporation. I would recommend supplier diversity or diversity & inclusion specialists to carefully consider these four areas within their own companies, and start mining existing company data or begin new tracking mechanisms that are directly related to how supplier diversity spend can help with overall business objectives. These are the "proof points" that we need to be mindful of, and report on, in those key stakeholder meetings.

The key to a successful supplier diversity program is commitment...and as Tarrance also says, "strong internal commitment starts at the top, and is cascaded through the organization".  The power of supplier diversity is at our fingertips. Let's leverage all of this and make business happen.