What You Thought You Knew About Supplier Diversity Has Changed

Part 1 of a 2 part series on the New Business Case for Supplier Diversity.

It has been said that there are three certainties in life; birth, death and taxes. I would argue that if you have spent any time in the Supplier Diversity arena, we can add another certainty to that list. That is that at some point you will have come face to face with the great Holy Grail of the industry also known as the Business Case for Supplier Diversity.

Why the Holy Grail? I believe it’s because everybody knows it exists and a few people even claim to have seen it. At most conferences I attend there is at least one session titled “The Business Case for Supplier Diversity” in which an icon of the industry (or aspiring icon), leading academician or self-proclaimed guru will be presenting “the” Business Case to attendees.

The Old Business Case…

The information is often similar, regardless of who is conducting the seminar. In fact in most presentations about the Business Case for Supplier Diversity you can be guaranteed to hear all or some combination of the following points:

  • By 2050 the US will be a minority majority country
  • All good SD programs have:
    • top Executive (i.e. CEO) support
    • dedicated SD staff/budget
    • numerous SD awards
    • active participation in SD events
  • Civic Duty/Good Corporate Citizenship/Right thing to do
  • Customer Requirement

All Good, But Not A Business Case

I freely admit that I have eagerly attended numerous sessions, which although informative, often left me feeling a little empty. Like everyone else I took notes and nodded my agreement, but internally questions were blaring in my mind. Was I the only one thinking that this is great information, but

 It is not the Business Case for Supplier Diversity!!

Now, I know in the industry in which I make my living such a statement is tantamount to blasphemy, but before I am stoned and voted off the island for writing such things, please hear me out.

The utilization of a “business case” as a means of validating certain practices and behaviors is not exclusive to the Supplier Diversity industry and there are elements that all “best in class” business cases have in common. However, a key element missing from the traditional Supplier Diversity business case is empirical evidence that supports the case. In other words a compelling business case adequately captures both the quantifiable and unquantifiable characteristics in support of its argument.

There is nothing empirical or quantifiable about the generally accepted elements of the Supplier Diversity business case. At best the elements have been anecdotal (minority/majority population statistics) or worse, a listing of tactics that a company uses to execute its Supplier Diversity initiative. Again, this is all good information, but it is NOT the Business Case for Supplier Diversity.

The New Business Case for Supplier Diversity

Acknowledging that individual companies may need to tailor the new Business Case for Supplier Diversity to meet their specific needs, if we are to move towards a true business case for the Supplier Diversity industry, there are three elements that must be included in every business case going forward. Those elements are:

  1. Economic Impact
  2. Revenue Enabler
  3. Customer Requirement

Each of these components is essential to the New Business Case for Supplier Diversity and in my next post I will expound on what each of these elements are in detail. You may think you know what these elements are, but I promise you I am going to present them in a way that, when examined in total, will provide you with indisputable, empirically based evidence needed to make Supplier Diversity a true business imperative. In other words I will lay out the New Business Case for Supplier Diversity!

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