Category Management: Supplier Diversity

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As you can well imagine, the interest and focus on Supplier Diversity has increased significantly given the current socio-political climate.  We have been responding to many queries and as a result have recently updated  and revamped our Supplier Diversity Readiness Risk Assessment and I thought I would get all of you to offer your opinion on it before we roll out this new and improved version.

We have expanded this tool and now have 10 dimensions.  What we were finding was that some attributes were not getting enough focus and attention because they were embedded into another domain. For example, a “Value” focus was part of Stakeholder Engagement but the message around Value was being lost when discussing with clients.  To make our jobs a bit easier, we decided to separate those two out.  Similarly, Governance was part of Change Management but is so critical to the success of Supplier Diversity that we pulled  it out.

What we are finding is that this new version allows us to highlight the various gaps that the client has in a more granular fashion and allows the client to ensure that they bring sufficient focus as they are rolling it out. 

Our key messages remain the same and here are some of them:

  • Launch: How you launch SD is critical.  Your success will be determined during this phase.  While execution is critical and the hard work comes post launch and it is a critical phase, the launch party still remains the most important phase.
  • Adoption: Putting the “program” together, while challenging, will not post the most risk.  Having the infrastructure,tools, processes, metrics, IT etc. are absolutely critical. Adoption will determine success and most clients under invest in this phase.
  • Need: If SD is a “want” and not a “need”, the chances of it’s success diminish significantly.  Having worked on this issue for decades since my days in banking (where regulators pay attention to this bigly), I have learned that feel good SD initiatives rarely succeed and any success is temporary in nature.  You can’t do this if you’re doing it only for social good – it has to be tied into your Strategic Value Drivers, your bottom line.
  • Sustainable: Short term impact vs. long term sustainable impact are two different things.  Engaging suppliers initially and then developing them into long term viable suppliers requires different approaches.  The track record of minority suppliers who have grown after getting the initial entry is spotty at best.
  • C-level commitment: This is the most obvious but the most misunderstood one.  Getting this commitment is easy if you define it as making the announcement, signing the memo, appearing in the video etc.  We ask clients to define it differently and lets see if you agree.  We call it the 90 minute test.  Will the CEO commit to putting SD on the Executive Team’s agenda for 5 minutes every month for the next 6 months and every quarter after that?  Will she commit to 2 minutes on the agenda for the BOD every 6 months?  This time slot is for one of her direct reports to present updates on SD to the Executive Team and for her to present updates to the BOD.  If she will agree to that , then we know that we have her commitment.  That is but one example of how we have developed these Adoption tests to help clients realize whether they have Adoption across all those dimensions.

Obviously, as a result of this Assessment we still deliver a detailed Roadmap for the client to follow to reach their objectives.  There are about 75 questions that allow us to identify the gaps and most importantly create alignment within the client around those gaps and what is needed to close them.  Without getting this agreement and alignment amongst the various stakeholders, we would all agree that it would be impossible to make any progress?   Now, the Roadmap is a bit more detailed which makes it easier to Adopt by the client 😊.  Stay safe my friends.

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.

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