A distinct trend emerges among the top 20% of supplier diversity organizations based on spend—they outperform their industry peers by 2-3 times. Interestingly, the success of these programs doesn’t depend on the age of the programs, staff size, or budget but rather on data-driven, proactive, and collaborative strategies.
Leverage Data at the Business Unit Level
Best-in-class companies like M&T Bank and Capital Group distinguish themselves by leveraging data as a powerful tool. Mapping detailed data to individual business units or locations allows organizations to paint a more accurate picture of the supplier diversity ecosystem that becomes both real and relevant to the business. Additionally, top-performing companies integrate supplier diversity metrics into business unit dashboards and set specific targets, goals, and forecasts to ensure accountability. They also use this data to provide constructive feedback.
Not every business unit will have the same goal, so it’s important to set realistically quantifiable goals based on available data. Supplier.io’s market analyzer gives you data on supplier diversity spend areas. Simply input a commodity such as construction and receive a detailed breakdown of diverse suppliers in that category. The tool provides information on diversity categories, business size, location, and revenue. By leveraging this data, companies can better determine their targets and goals and improve supplier diversity initiatives.
Be Proactive
Supplier diversity top performers adopt a proactive stance and integrate diverse suppliers early on in their decision-making processes. When new commercial offerings are WORD, these organizations are already thinking about what suppliers can help make the new offerings successful. Successful supplier diversity programs also engage in category planning with procurement and the business 18-36 months ahead of projects to ensure diverse suppliers are considered early in the process.
Take a page out of Ford’s book and make it easier to have diverse suppliers on deck by building a list of prequalified suppliers. Create your list with a supplier registration portal and design questions like whether the supplier is a reseller or what customers they currently serve to vet suppliers and gain intelligence. The goal is to have a deep bench of diverse suppliers capable of meeting your organization’s requirements. The more preparation you do upfront with diverse suppliers, the easier it becomes to grow the supplier diversity program.
Connect to the Business and Collaborate
Lessons from supplier diversity leaders emphasize a shift from merely checking a compliance box to tying supplier diversity directly to the organization’s values. These leaders secure a seat at the table, find advocates in the business, and build relationships with leaders outside of finance and procurement. Scaling the program across teams and maintaining communication ensures supplier diversity is a collaborative effort that serves both the company and the suppliers.
Measure ROI Beyond the Organization
As you build a supplier diversity program, it’s important to look beyond your organization to the impact of your program on the communities in which you operate. Generate an economic impact assessment to measure how many jobs you created, your tax impact, and the wages earned. These assessments help you celebrate wins internally and externally, and you can use this data to showcase your program’s positive community contributions.
Conclusion
Supplier diversity leaders achieve best-in-class results by embracing a data-driven approach that transcends compliance and drives collaboration. These strategies provide a roadmap for others to follow, illustrating that supplier diversity isn’t just a program; it’s a strategic imperative that aligns with the values and goals of the entire organization.
Download the Supplier Diversity Top 5 Best Practices for 2024 for more actionable insights from the top supplier diversity programs.