Every successful supplier diversity program was born out of a comprehensive strategic plan. Creating this framework up front will help you align your organization behind common objectives and empower the growth of your supplier diversity program down the line. But where should you begin? And what should your strategic plan include? Below, we’ve outlined seven key steps to follow to set your organization up for success.
1. Develop a Business Case for Your Supplier Diversity Program
In order to earn organizational buy-in on supplier diversity initiatives, you need to create a strong business case for the program. In other words, what areas of the business will the program benefit? What resources will it require in order to succeed?
There are a variety of ways that a supplier diversity program can benefit your business. It can promote innovation, improve brand perception, positively impact local economies, drive vendor competition, and improve your company’s bottom line (just to name a few).
Before you can build a strategic plan, you need to identify what business drivers are most important to your company and how your supplier diversity program might influence those drivers. A business driver can be a resource, a condition, or a type of activity that is integral to your company’s performance. For instance, a business driver might be the price of the materials that are used to create your product or customer demand.
By aligning supplier diversity goals and initiatives with overhead business objectives and known business drivers, you’ll earn the confidence of the C-suite and stakeholder buy-in. Gaining this support and establishing this connection early on will make it easier to gain support for new initiatives and access the resources you need to run your program.
2. Define Your Program’s Scope and Certification Policies
In an effort to move things along, this vital step is often overlooked. But failing to define your program’s scope and policies up front can result in unnecessary headaches down the road.
On a basic level, defining the scope of your program means identifying what diverse categories your program will focus on. For instance, you may choose to focus specifically on women-owned businesses, ethnic minority-owned businesses, veteran-owned businesses, or some other diverse supplier group. Eventually, your program might grow to encompass many different groups, but defining a clear starting point will help you get things off the ground. As you attempt to choose your focus, think about your organization’s goals, values, and supplier industries and pick diverse categories that best align with those factors.
Once you’ve defined your program’s scope, it’s important to outline your certification policy. What types of certifications will you accept? What will the search and selection process look like? What guidelines and metrics will you use to differentiate between potential diverse supplier partners? Documenting the procurement process, establishing clear guidelines, and outlining best practices will set your company and your suppliers up for success.
3. Set Clear, Actionable, and Measurable Goals
Remember the key business drivers you established in step one? Use those factors as a guide for setting your program’s short- and long-term goals. For instance, if one of your main business drivers is brand perception, your goals may involve showcasing your new supplier diversity program in your marketing and PR efforts. Specific, attainable, and measurable goals will help organize your program staff and drive progress. In contrast, overly vague or lofty goals (e.g., “partner with only diverse suppliers”) can be immobilizing because they don’t provide clear direction or parameters for success.
4. Create a Reporting Framework
Once you’ve identified clear goals, it’s time to start thinking about what metrics you’ll use to report on your progress. If your goal is to increase your diverse spend by 5 percent by the end of the quarter, for example, you’ll want to track the number of diverse and non-diverse contracts your company earns. If you’re unsure where to start, research popular metrics used by successful supplier diversity programs.
In addition to identifying what metrics to track, lay out how frequently you’ll report on your progress and how you’ll go about sourcing the data you need. For instance, if you’re planning to report on tier 2 diverse spend, how will you get this information from your suppliers on a routine basis? As you establish a reporting framework and guidelines, make sure to keep these best practices in mind.
5. Establish a Baseline of Comparison
It’s impossible to understand how far you’ve come if you don’t know where you started. Although it may sound obvious, if you forget to establish a reporting baseline up front, it will be hard to gauge your progress down the road.
Examine your existing contracts and record current metrics for diverse count, diverse spend, market share, and other key metrics to serve as a baseline of comparison. Then, compare your current numbers to industry benchmarks. Doing so will help you identify clear areas for improvement and allow you to gauge whether the goals you set are realistic (and adjust accordingly).
6. Outline a Communication Plan
Your program may be run by a few individuals, but you need a means of communicating and collaborating with your entire organization. Creating an internal communication plan will help you keep everyone in your organization on the same page with regard to program goals, initiatives, and current challenges. This may mean setting up regular cross-departmental meetings and/or training employees on how to use a supplier diversity software platform.
Along with laying out a clear internal communication strategy, consider how you’ll communicate with your suppliers, both current and future. As your program grows, maintaining clear and consistent communication with your supplier base will become more important (and more complex). To set your program up for success, create a plan for how your communication process will evolve as your diverse supplier network expands.
7. Enlist the Help of a Strategic Partner
If you don’t have experience creating a supplier diversity program, it can be difficult to know what you’ve missed until it’s too late. A strategic partner will guide you through each step listed above and ensure that you create a world-class supplier diversity program. The right partner will also help you build on that foundation after it’s been established so that you continue to evolve in the right direction.
For more tips on how to build a successful supplier diversity program, download our latest whitepaper below.