In “normal” business times and especially during our ongoing global pandemic, supplier diversity is a crucial business strategy that ensures companies are always partnering and working with a diverse slate of suppliers of goods and services in order to foster innovation, equity and overall improved business. We asked leaders from a handful of the companies on our annual Top 50 Companies for Diversity list for their tips, secrets and overall best practices when it comes to building and maintaining this essential economic practice.
Organize from the top down.
“Our supplier diversity program starts from executive leadership at the top and it works entirely through the organization,” says Vickie Irwin-Avery, general manager of supplier diversity at Southern Company (No. 26 on The Fair360, formerly DiversityInc Top 50 Companies for Diversity list in 2020). “Our executive leadership, they are updated monthly and [receive] a quarterly summary on where we are towards our targets.”
Irwin-Avery also works closely with the company’s diversity and inclusion office. “We engage our suppliers, diverse suppliers and our prime suppliers in quarterly meetings so that we can share ideas and understand where there may be gaps that we can fill to ensure that we’re giving diverse suppliers and small businesses an opportunity to participate in the supply chain,” she says. “This is also with our team members. We pride ourselves on engaging in what we call strategy teams because these are influential team members in our business units that help us conduct supplier diversity. They help us vet suppliers, they help us identify them and they help us to bring them to the table.”
At Southern Company, supplier diversity is a part of new employee orientation and employees are automatically part of their “pay for performance plan goals,” where compensation incentives are rewarded for meeting diverse spend goals.
Set and track supplier diversity goals.
Wells Fargo has a three-part supplier diversity approach: diverse spend growth, supplier development and capacity building and outreach. Diverse spend growth is the methodology, strategy and tactic Wells Fargo uses to find opportunities for diverse suppliers. Supplier development is the aspect of the strategy where Wells Fargo makes it a point to invest in programs that help develop and grow diverse suppliers. For outreach, Wells Fargo partners with internal and external stakeholders to provide key information to diverse supplier communities.
“In 2019, Wells Fargo spent $1.3 billion with diverse suppliers or 11.3% of our control spend,” says Peter Lee, VP and supplier diversity manager at Wells Fargo (No. 11 in 2020). “This is the sixth consecutive year that we spent over $1 billion with diverse suppliers. How are we able to maintain and grow diverse spend? It’s because we measure ourselves against our goals and objectives that we set with our internal partners.”
Wells Fargo bases its goals on the future procurement needs, which factors in business and supplier diversity strategies. The company also holds regular meetings with stakeholders that include report cards on how diverse spend is going.
“In order to make progress and to maintain diverse spend, you have to track that and it’s also a partnership, a collaboration with stakeholders internally,” Lee says. “We plan with our internal partners. We not only look at the numbers, where we stand, but we also look at future opportunities. What are some of the future procurement needs that are coming down the pipeline?”
Salvador Enriquez, supplier diversity manager at Wells Fargo, manages the eight capacity-building programs that Wells Fargo has within its supplier diversity strategy. “We invest more than $3 million in supplier diversity capacity-building programs throughout the year where what we do is try to hit all the colors of the rainbow and meet the needs of the different types of suppliers,” he says. “That could be a startup or it could be a medium-sized [to] small-sized company.”
Wells Fargo has also partnered with universities like Stanford and Dartmouth to better understand what makes a diverse supplier an ideal match for Wells Fargo and has made a point to share their technology once suppliers have gone through Wells Fargo’s capacity-building programs.
Know your “why.”
Jalayna Bolden, director of supplier diversity at AT&T (Fair360, formerly DiversityInc Hall of Fame) stresses that each company and each level within a company should know why supplier diversity is so crucial for overall business success.
“Know your why,” she says. “Once you have commitment from the top, that next layer is very elementary. We value diversity and inclusion in our people and our supply chain and so we believe our supply chain should look like the customers we serve, and it should look like our employees. We realize that it enhances our brand. It makes an economic impact in the diverse communities. It creates customer loyalty.”
Bolden believes that being intentional about the programs is important too. “What is the community impact that we’re making and then who are these suppliers that we’re dealing with?” she says. “We want to make sure we work with suppliers who also value diversity and inclusion. We started asking them, ‘Hey, give me the DNI on your employees, your executives, your board. We want to know how many are diverse within your company.’”
Community-based work is also essential for AT&T and their supplier diversity programs.
“We have our diverse suppliers also involved in helping us in community-based initiatives. If there are job fairs, we’re asking our diverse suppliers, ‘Hey, attend, and when you attend, please be prepared to hire diverse employees,’” Bolden says. “We’re getting our suppliers involved and we’re also asking suppliers about internships. ‘What are you doing in terms of creating internship opportunities?’”
“We always like to look beyond the numbers,” says Laurinda Thomas, director, supplier diversity and vendor assurance at ADP (No. 4 in 2020) about her company’s approach to supplier diversity. “Metrics such as spend, diverse count and cost savings are needed to measure progress, but success also sits outside of those numbers. One of the best practices we try to align with is identifying opportunities for proven diverse suppliers. And how does that happen? For me, it starts with my internal procurement team to gain visibility into the current contracts that are expiring or actually find out when new sourcing opportunities become available — we are constantly reaching out to our IT and non-IT buyers.”
Thomas reports that at ADP, the supplier diversity team frequently meets with buyers and other key contacts within the procurement organization to see the areas ADP has a strong presence in when it comes to diverse suppliers versus where the company could make improvements.
“When it comes to proven diverse suppliers, we typically look at suppliers that we are currently doing business with,” Thomas says. “And once we have maximized the opportunities with those suppliers, we start to look for new suppliers. Looking beyond the numbers, we know spend alone will not capture the true impact of utilizing diverse suppliers as it relates to the business and their communities.”
Now that the coronavirus pandemic has canceled in-person events for the foreseeable future, Thomas stresses that ADP is also looking for ways to connect virtually and continue the supplier diversity strategy. “I look to see how we pivot from those on-site, in-person events that will become virtual instead,” she says. “How do we get the same impact from those [virtual events] and continue to meet new suppliers. And it all still stems back to me going beyond those numbers. Based off of the initiatives, we will see an increase in growth. We will see an increase in spend and overall be able to make bigger and larger changes to our program based off of all these great things that I hope to happen in the future.”
To find out more about the value of diversity in your supply chain, learn how to locate potential new vendors you could be doing business with and discover how business and vendor relationships of all types have changed due to the COVID-19 pandemic, join us at the Supplier Diversity: New Trends, Innovative Solutions virtual event where you’ll hear valuable insights from many of the country’s top innovators, all of whom are listed on Fair360, formerly DiversityInc’s roundup of the nation’s Top Companies for Supplier Diversity. Panelists include AT&T’s Jalayna Bolden, Hilton’s Erika Gibson, Dow’s Erica Stephens-Lynch, INROADS’s Forest Harper, Disability:IN’s Jill Houghton, the National LGBT Chamber of Commerce (NGLCC)’s Justin Nelson and many more. For information and to register for the event, click here.