When the economy is in growth mode, there are plenty of resources and opportunities to go around. When inflation and recession take over, businesses are forced to revisit their priorities. One of the most important considerations a leadership team will make is how to support their closest supply partners without putting their own financial stability at risk.

Last month, new research was unveiled in a Harvard Business Review article that has the potential to completely transform how we talk about supplier diversity.

"We're at our best when our priorities and actions reflect the needs of the communities we serve. We'll continue to feature the brands and trends that speak to the diversity of our customers while simultaneously offering the value, innovation, and trust they expect from the products across our aisles."

• Andrea Harrison, VP of Merchandising, Beauty & Personal Care at CVS Health

Companies are facing multiple challenges in parallel today. The economy is slowing, supply chain disruptions persist, and labor shortages plague all industries. Remaining profitable is priority No. 1 for executive teams, and this is a natural response. At the same time, it may jeopardize the progress and commitments made to increase spend with diverse-owned businesses.

In 2020, there was a surge of new supplier diversity programs. A broad desire for social change served as the catalyst for many companies to create programs, and their commitments to suppliers, consumers, investors, and the public were visionary and optimistic. 

Now, two years later, we find ourselves working through very difficult economic conditions. Inflation is at 40-year highs, and the Federal Reserve is taking a measured response, one that will hopefully reduce inflation by increasing the cost of capital but may also lead the country into a recession.

“We should be investing in diverse businesses because it supports the strategy of the organization, not as the responsibility to ‘do the right thing.’”

—Senior Commodity Manager, a participant in the 2021 State of Supplier Diversity Report

Procurement teams have often been accused of pursuing savings at all costs—above value, supplier relationships, and stakeholder preferences. And while this dynamic is usually driven by the key performance metrics assigned to them by the corporate leadership team, there have been enough years of pushback and emphasis on value creation to turn the page.