Thoughts on Supplier Diversity
It is almost spring, that time of year when many supplier diversity systems send out emails about updating records and providing copies of recently issued or re-issued certifications, again. I’m not sure whether our targeted clients understand how disheartened a SDMWVBE (Small, Disadvantaged, Minority, Women or Veteran Business Enterprise) can become when we’ve taken great care to research and prepare presentations to show them how we, the SDMWVBE, can assist them with a new strategy, service or product that is designed to reduce their costs, increase their customer satisfaction or improve their productivity … and never get beyond supplier diversity web site registration. It’s hardly a question you can ask of them, because they have their own goals and objectives. They certainly aren’t in business just to purchase goods and services from SDMWVBE providers!
Even with terrific value added solutions, when we SDMWVBEs are fortunate enough to get an audience with supplier diversity representatives, it can be difficult to obtain guidance on how to actually sell these services or products to the client. It seems that we generally discover the company uses its supplier diversity database to request an occasional competitive proposal when their existing providers aren’t meeting their needs. And, when we try requesting metrics on how often that might occur, small businesses often find it difficult to gather meaningful information. Alternatively, supplier diversity often suggests the SDMWVBE business should seek second tier supplier opportunities.
For those of you unfamiliar with the terminology, this phrase is used most often when your targeted client already has preferred suppliers of the goods or services you sell. Essentially, we (the SDMWVBE business) are advised to sub-contract to our targeted customer’s prime vendor Using this strategy, both the prime and the end client can reach their diversity spend goals. It is not a perfect solution, but it certainly beats being told to go away. Personally, I am less excited about second tier than I used to be; I think my disillusionment stems from how often we have approached designated primes only to be told they have no plans to add new suppliers to their own prime vendor list … and then they suggest I contact their prime. At this point we are now three steps away from our targeted client. And, it often seems nobody is particularly interested in having yet another SDMWVBE company knocking on their door.
How can we, as the SDMWVBE community, address this issue? The Billion Dollar Round Table has an organizational mission “To drive supplier diversity excellence through best practice sharing and thought leadership.” The group publishes statistical information about its member’s supplier diversity initiatives and offers policy papers on expanding supplier diversity. The current statistics, however, are fairly old. It would be interesting to compare these 2009 stats with more recent survey information to explore trends in diversity spend at both Tier 1 and Tier 2 levels.
SDMWVBE business owners tend to be a pretty independent group of people, but since there seem to be few opportunities to do direct business with these large companies, perhaps we might band together to encourage more direct Tier 2 involvement? See if we can interest NMSDC and WBENC in a “bring your primes” to the next several matchmaking sessions so prevalent at supplier development events? What do you think?