How to Create a Supplier Diversity Program

July 1, 2020
How to Create a Supplier Diversity Program

Debi DurhamWritten by Debi Durham, Executive Director — Iowa Economic Development Authority and Iowa Finance Authority

Take advantage of unrealized potential.

Supplier diversity ensures the purchase of the variety of goods and services your business or organization needs from a diverse group of businesses. Not only is it right to do, but it is a sound business strategy that helps promote innovation and drives competition (on price and service.) Supplier diversity programs are an untapped resource that help organizations better realize the potential of a highly optimized supplier base while also demonstrating a commitment to doing business in diverse markets.

Invite change into the process.

Review current purchases and processes and ask yourself a few questions: What items are you buying? What is your typical sourcing process? Do you have any policies in place surrounding procurement practices? Be sure to include any type of purchase, from buying food for a lunch meeting to your work with a local contractor for ongoing building maintenance. Do you have any upcoming projects? Do you work with any existing diverse vendors? Use this information to guide potential changes that could invite more opportunity to connect with a diverse supplier base.

Aim higher.

Like any other area of the organization, once a goal is set, verify whether your activities and practices align. Consider conducting surveys or focus groups to facilitate ongoing communication between your organization and participating vendors. If you found success in your first year, consider increasing goals the next, or set micro goals, such as increasing your work with a specific population. In addition to purchasing goals, be sure to review the outreach plan and whether you are supporting and participating in diverse organizations and events. Start from the top down. As a leader within your organization, show personal support for supplier diversity goals and metrics. It can take time for your team to embrace a new practice or process in purchasing, and for staff to connect and build relationships with new vendors. Change is not easy, but it is essential. When all leadership gets engaged in promoting supplier diversity as an organization-wide expectation, it becomes ingrained in your mission. 

Look to buy local.

The State of Iowa has a certification program for businesses that are 51% or more owned and actively managed by women, minorities, individuals with disabilities and service-disabled veterans. With more than 475 companies in our online public directory, it is easy to source your purchasing needs from a locally based diverse business. Certified businesses range from construction contractors to caterers and consultants – all headquartered within Iowa. Maybe, like me, you’ll find yourself shopping these diverse businesses for your personal needs as well!

Be relationship builders first.

Get to know your vendors and understand the scope of work they provide. Invite them into the early stages of idea or project development so they may provide best practices or innovative solutions. Start with smaller projects and build to larger projects, if hesitant to work with a new vendor. By getting to know a business owner better, if an issue were to arise, you’ve created a trusted relationship and the customer service you receive is often delivered on a personal level.

Go outside your “conference” zone.

Small business owners are busy. Although you may be providing sponsorship for, or attending, larger conferences to meet with vendors, small business owners often wear many hats and don’t always have time to step away for outside events. Instead, make time outside the typical conferences and events to connect with small business owners at local networking events or chambers of commerce meetups, or host your own event specifically geared toward connecting with diverse small business owners.

Establish internal champions.

Consider implementing a “champion” within a department, floor or team who will help lead the supplier diversity effort within their sphere of influence. Champions can help raise awareness about the importance of supplier diversity, keep an eye on upcoming projects needing external vendors and connect with potential small business owners. These individuals also can help translate supplier diversity policies and processes, educate others within the company and help answer questions, such as “What is the business case for supplier diversity?” and “What is the value of supplier diversity to our organization?”

Integrate diversity efforts throughout your culture.

This isn’t only about your diverse supply chain, this is about promoting and supporting inclusion throughout your organization. In addition to reaching our supplier diversity goals, the Iowa Economic Development Authority is engaging in a culture audit to ensure our organization, as a whole, is supporting our mission and vision, including efforts to embrace diversity and inclusion. IEDA is working with a diverse-business owner in our Targeted Small Business program to lead this project.

Originally printed in the Des Moines Business Record 90 Ideas in 90 Minutes October 2019 publication. Reprinted with permission from the Des Moines Business Record.