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Seven Steps to Build, Expand, or Enhance Your Supplier Diversity Program

Recently, we sat down with our Senior Advisor for a rapid-fire Q&A session on equity and inclusion. The objective of our discussion was to provide substance and focus in support of the key areas that must be addressed in order to effect real progress and lasting change. This exert includes Angela Dowd-Burton’s full response.

LH: Angela, you ran the Office of Economic Opportunity for the City of Philadelphia for many years and also served as the Procurement Commissioner. Now you advise your clients on diversity procurement initiatives.  This is such a critical area for ensuring equity in economic opportunity.  What are some results oriented economic development strategies that others should emulate? 

ADB: I recommend the following seven steps for anyone seeking to build, expand, or enhance their supplier diversity program.

First, establish a vision that is shared widely throughout the organization. Leaders must buy into this vision and be held accountable for achieving mutually agreed upon goals and objectives. The success of a supplier diversity program is driven from the top but requires all engaged in the procurement process to be dedicated and decisive in their actions of support. Clients/customers, employees, shareholders, and other stakeholders are expecting socially conscientious organizations to take action to remedy the economic inequities plaguing our country.

Second, deploy a team of doers who will be responsible for breathing life into your vision. These leaders/doers, endorsed by the President/CEO of the organization, will be responsible for reviewing the availability of Minority, Women, and Disabled-Owned Businesses (M/W/DSBEs) with capability to deliver in areas of your historical spend patterns. This executive mandate will include a timeline of data driven milestones based on current M/W/DSBE engagement and future goals. Keep in mind, supplier diversity includes professional consulting services as well as traditional services, supplies, equipment, and public works. To aid the team in achieving their objectives, proper tools must be provided. This unprecedented surge in commitment and actualization of M/W/DSBE participation will be evident once the organization is provided with adequate resources to achieve economic inclusion. Note, a change management strategy may be required to embed diversity and inclusion strategies throughout the organization.

Barriers that have traditionally inhibited contracts being awarded to M/W/DSBE will continue to emerge and need to be addressed (e.g. prior long-standing, engrained relationships with majority firms; poor performance history of a specific M/W/DSBE; time sensitive requirements that don’t permit untested relationships; regulatory requirements that limit the number of approved M/W/DSBEs; higher prices due to lower economies of scale, etc.). Each of these barriers have appropriate solutions that should be explored.

Employees who cannot or deliberately will not comply with corporate diversity objectives are an impediment to the success of the program and the organization. Again, clients/customers and other stakeholders are expecting change. All employees engaged in the procurement process must be trained (i.e. data base of M/W/DSBEs; dashboard of contracts awarded; dollars spent; etc.) and assigned performance objectives to ensure sustainable results. Adequate financial resources are required for supplier development (e.g. protocols; systems; training; communications strategy; etc.) are essential. Those who do not adopt this mission should be disengaged from the process. The incentives/consequences should be based on the culture of the organization.

Third, tools of engagement should be put in place to institutionalize the commitment to M/W/DSBEs:

  1. Identify M/W/DSBEs capability and capacity by product/services purchased
  2. Develop M/W/DSBE participation goals based on availability
  3. Review RFP/Bid Invitations for unnecessary restrictions disqualifying M/W/DSBEs
  4. Track M/W/DSBE participation (e.g. number of M/W/DSBEs, dollars spent with M/W/DSBEs as a percentage of total spend, etc.)
  5. Revise goals as necessary to maximize opportunity
  6. Establish and sustain a prompt payment process to support M/W/DSBE cashflow and expansion
  7. Share where feasible suppliers to help improve the M/W/DSBE’s purchasing power and pricing to improve their economies of scale
  8. Provide timely feedback to M/W/DSBEs that will help improve performance
  9. Host periodic “How to Do Business”  workshops to provide clarity regarding specific actions required to take advantage of specific business opportunities, (e.g. budgets, timelines, etc.).

Fourth, acknowledge the wins and lessons learned then recalibrate goals and strategy as needed:

  1. Highlight top performing M/W/DSBEs and expand/extend contracts (multi-year) to grow their businesses on a consistent basis
  2. Highlight the departments/units that maximize the use of M/W/DSBE participation, reward performance
  3. Showcase non-traditional businesses/industries that M/W/DSBE could pursue

Fifth, initiate innovative strategies that stretch an organization’s imagination. For example, invite an M/W/DSBE to acquire a business unit that is targeted for spinoff. This spinoff could provide supplies/services to the organization or the organization could supply materials to the M/W/DSBE for distribution in the downstream market. Such a deal should be mutually beneficial for both organizations.

Sixth, include M/W/DSBE requirements in your contract terms and conditions (e.g. diversity programs, joint ventures, etc.) with your third-party contractors and service providers.

Seventh, collaborate with the Minority Supplier Development Council, the Women’s Business Enterprise National Council and other organizations like the Philadelphia Industrial Development Corporation, the Philadelphia Commerce Department Office of Economic Opportunity, and the Goldman Sachs 10,000 Small Business Program at the Philadelphia Community College, just to name a few of the advocates providing a structure of support to M/W/DSBEs in the local market.

These are just a few of the essential steps required of organizations that are committed to establishing, enhancing, or expanding their supplier diversity programs. Platitudes and pledges (e.g. visibility at trade shows, scheduling meetings with no follow through, website registrations that lead to nowhere, etc.) are worthless without the actualization of results to match the magnitude of your leadership’s commitment. With a clear vision and deliberate, energetic, and decisive leaders/doers throughout your organization, you can build and sustain a successful diversity procurement program that yields economic parity for so many struggling, viable M/W/DSBEs.

To read our full Q&A “Fostering a Substantive and Productive Discussion Around Equity and Inclusion”, click here.

 

Angela Dowd-Burton

Angela Dowd-Burton is an award winning business professional with over twenty-five years of diverse business experience and public service. She has served in global roles in finance, procurement, business development, and local government public policy. She currently serves as senior advisor to Econsult Solutions Inc.

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