Investing in a diverse supplier base is a strategic imperative for competitive differentiation, innovation, and sustainability. For companies that do so successfully, the journey towards diversity should become part of everyone’s responsibility – from the C-suite to individual contributors.
Having the active, vocal support of the executive team can make a huge difference regardless of where the supplier diversity program sits in the organization. The supplier diversity manager can get company executives involved – and keep them engaged – by following these 7 best practices.
1. Present a Business Case
Most people will agree that supplier diversity is important, but taking the time to articulate that fact and support it with data is the first step to cementing executive support for the long haul. Highlight how working with certified diverse suppliers can drive innovation, expand market share, enhance the company’s reputation, keep the company in compliance with regulatory requirements, and improve financial returns.
Also be sure to elevate real-world examples of companies (ideally in your industry or vertical) that have benefitted from their investments in supplier diversity. This should inspire the leadership team and help them envision the potential of this key corporate social responsibility initiative.
2. Align with Company Goals and Values
Each company has different targets and objectives, so aligning your supplier diversity program with your organization’s specific goals and values is key to securing executive support.
For instance, if your company emphasizes innovation, explain how diverse suppliers offer unique ideas and fresh perspectives. If social responsibility is a core value, either for customer loyalty or employee retention, discuss how supplier diversity supports economic growth in underrepresented communities and puts the company’s beliefs into action.
3. Demonstrate ROI
Quantifying the potential return on investment (ROI) of supplier diversity initiatives can be influential with executives who require a little extra persuasion or who are driven by operational metrics.
According to the 2022 State of Supplier Diversity Report, 38 percent of companies track the impact of their supplier diversity program through savings, and 34 percent track its impact on sales. As your efforts progress, be sure to highlight instances where supplier diversity leads to cost savings, risk mitigation, and market expansion opportunities, all of which directly impact the bottom line as well as the top.
4. Show the Competitive Landscape
Executives are often highly attuned to what their competitors are doing. There are likely to be other companies with high-profile supplier diversity and/or ESG programs in your space. Make sure to brief the executive team on their activities and communication strategies, positioning your own program as a necessary commitment. If your industry peers have seen significant benefits from their programs or received public recognition for their efforts, it might encourage your executives to consider adopting a similar approach.
5. Offer a Clear Roadmap
Provide a step-by-step plan detailing how you intend to implement and manage the supplier diversity program. This should include key milestones, potential challenges, and strategies to overcome them. Ensure that any direct involvement on their part is called out and positioned as a strategic opportunity to support this important – and high visibility – initiative.
6. Highlight Potential PR and Branding Opportunities
Many consumers decide to work with brands that align with their values, so a robust supplier diversity program can be a powerful public relations tool. This statement is just as true in the B2B space as it is in the B2C space.
Highlight how having a supplier diversity program or purchasing from minority-owned businesses can boost the company’s brand image, attract socially-conscious customers, and enhance community relations by involving diverse-owned businesses in the sourcing process.
7. Engage Champions
Identify champions within your organization, those who already understand and support the benefits of supplier diversity. They can be instrumental in persuading others and fostering a culture of diversity and inclusion. This internal support can be particularly influential in obtaining executive buy-in across functional lines based on pre-existing relationships.
Securing and maintaining executive buy-in for supplier diversity may require strategizing and persistence – but everything worth having does. A diverse supply chain isn’t just good for underrepresented businesses and communities, it is good for the businesses that invest in it as well.
Make your case, outline your plan, and work to ensure your corporate culture champions diversity and inclusion from the top down.
LEND YOUR VOICE