A Major Paradigm Shift is Needed for Supplier Diversity to Survive

There is an interesting dichotomy in the supplier diversity industry. Small business owners want to do business with corporations and other large organizations and those organizations want, and in many instances need, to do business with small business owners. However years later, and despite great progress, what seems to be a simple equation still lacks a simple solution…

The Issue
Small business owners report that they have a difficult time getting business and beating out incumbent suppliers. Procurement and supplier diversity professionals express that they struggle to find quality suppliers who can both offer what they need AND who are “business-ready.” Each of these challenges plus many more we could add to the list create an environment that can make collaboration difficult, decrease the flow of innovation, and prevent all parties from reaching optimal performance.

The Solution
So why is it so hard? It seems simple—we want to play together but can’t seem to find a way to meet in the middle of the sandbox where the toys are. In order to overcome these challenges and create an environment where everyone involved can play together well in the sandbox small business owners and procurement and supplier diversity professionals must be willing to take responsibility.

So exactly what IS the responsibility at hand? Most are familiar with the famous quote by Gandhi to be the change we wish to see in the world. In order for supplier diversity to evolve and move forward there is a responsibility to develop ourselves and there is a responsibility to be willing to develop others.

Small business owners’ responsibility is to focus on constant growth and development because it is critical to the success of business growth and sustainability. Let’s just be real, many business owners produce a stellar product or service but quite frankly most are not great CEOs.

More importantly, corporations are looking for suppliers who can grow with them and even compete globally. The only way a business can compete at that level is to strengthen the core areas of business that creates sustainable growth. There are 4 pillars of business that can be illustrated by the legs of a table. The pillars are sales, marketing, operations, and finance. If a business is not running at optimal levels in all 4 of those areas equally the table will be wobbly.

If you know there are areas of your business that need a tune up, get the help you need. Don’t go it alone or try to figure it out on your own. Consider contacting SCORE or working with a business coach. Most businesses see a 5x ROI when they work with mentors or coaches.
Procurement and supplier diversity professionals also have a responsibility to be willing to take a proactive approach to develop suppliers. Many corporations may have a mentoring program where their internal staff works to develop a handful of suppliers at a time but not much more than that. In fact, many corporations don’t feel it’s their responsibility to provide opportunities for suppliers to work “on” their business.

Question–at what point does it become your responsibility because lets face it, if a supplier drops the ball somewhere during the process your end customer is likely to view it as your company dropping the ball! The simple truth is many small business owners have significant opportunities for improvement that if seized would make them even more valuable partners to your organization.

Consider offering 1-day workshops where you bring in outside experts to provide opportunities for growth in business development. This can be a great add-on to a vendor fair or other event you currently put on. You can also make webinars available to your suppliers.

It can look many ways but in order to achieve maximum results it is critical that you do 3 things:

1. Don’t overlook core business development. Training on how to do business with your company isn’t enough. Neither is only focusing on quality, process and delivery improvement.

2. Have a plan to attempt to develop the majority of suppliers, not only a select few. Doing so prevents smaller suppliers from ever having an opportunity to become a strategic supplier.

3. Leave training and development to the pros. It’s likely not in your wheelhouse and how many have space for one more “thing” to be added to their plates?

In an effort to bring both sides together an action plan is required to create a solution to the problem. In looking at the challenges and responsibilities where do you see opportunity for growth and what do you most need next to make it a reality? Further, what is something you can do in the next 7 days to start the ball rolling? Do you need to get support and guidance in one of the 4 pillars of small business development or perhaps you need to implement a quarterly webinar for suppliers?

A major paradigm shift is required if the supplier diversity industry is going to keep up in this globalized economy. Additionally, corporations and small business owners alike are going to have to be willing and courageous enough to step away from “what the industry has always done,” and move forward toward “what the industry needs.” That is the only way we will achieve different results.

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