With small and minority-owned businesses still struggling as a result of economic shutdowns due to COVID-19, the crucial aspect of investing in them is more apparent than ever. Through supplier diversity programs, large organizations can use their power and economic and social influence to support businesses that are essential to the economic, social and cultural fabric of the U.S.
Supplier diversity programs are proactive in ensuring large corporations use minority-owned, women-owned, LGBTQ-owned and other underrepresented businesses for their procurement. These programs ensure corporations work collaboratively with businesses that empower all communities. These relationships are symbiotic because both the suppliers and corporations reap the benefits of diversity.
Supporting small and minority-owned businesses supports the communities they work in.
Diverse suppliers often work within the communities they represent. When your company invests in them, it invests in the community. Small businesses are important to local economies, and local economies are important to the economic empowerment of people of all backgrounds. Especially in a time of such dire economic need, investing in small businesses could, in turn, promote job creation on the local level.
Diversifying suppliers means diversifying the customer base you appeal to.
The more diverse people and businesses contribute to your corporation’s products and services, the more diverse the end result will be. Appealing to various populations with your products, services and advertising is essential. For example, during Black History Month, Nielsen (No. 20 on 2020 DiversityInc Top 50 Companies for Diversity) released metrics on the importance of appealing to the Black community in advertising. This group has $1.3 trillion in annual buying power. The multicultural population as a whole is growing faster than the non-Hispanic white population in the U.S.
“If you don’t have a multicultural strategy today with your brand in 2020, chances are, you’re not going to be around in 2030,” Cheryl Grace, U.S. SVP of strategic community alliances and consumer engagement at Nielsen, said in a February interview with DiversityInc.
Suppliers who come from these communities will diversify your product, and therefore empower and engage a diverse audience.
Diversity drives innovation. Diverse suppliers will provide you with diverse products and ideas.
Research shows that diverse teams lead to better problem solving, innovation and connection with clients. Seventy-six percent of all diverse suppliers met buyers’ expectations and another 23% exceeded them, according to findings from The Hackett Group. Diversity is both a moral and business imperative, and diverse suppliers will help your organization exceed its goals.
Related: Meeting in a Box: Supplier Diversity
Supplier diversity facilitates practicing what you preach.
If you practice diversity internally, putting your money where your mouth is to support diverse suppliers is important, especially as consumers become more informed and willing to hold corporations accountable.
Large corporations should utilize their budgets to empower small and minority-owned businesses. Diversity and inclusion is not just an HR practice. It should permeate all areas of your organization. As customers become more in tune with where what they consume comes from, utilizing diverse suppliers will demonstrate your company’s commitment to corporate responsibility and ethical sourcing. Leading by example will create higher standards throughout the corporate world.