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The Power of Inclusive Procurement: How leading CPOs are building diversity and inclusion into their companies

21 October, 2020 | By Matthias Gutzmann

For our October CPO Catalyst roundtable session, in partnership with Globality, a dozen global leaders discussed the power of inclusive procurement. In a highly diverse marketplace, an organisation’s ability to deliver the economic, social and environmental impact that customers expect and demand is a key challenge, and one that businesses across every industry face. What was once viewed as important is now imperative to how companies operate and an invaluable way of certifying innovation is ingrained across the value chain for both goods and services. CPOs worldwide are increasingly focused on ensuring the value of diversity and inclusion is embedded in every business aspect.

This session kicked off with Nedra Dickson, Global Supplier Diversity and Sustainability lead for Accenture, sharing insights from her leadership of the company’s well-established efforts to maximise procurement opportunities with diverse businesses as suppliers and subcontractors within 18 countries.

Here are six key takeaways from the group’s engaging discussion:

#1: Diversity is driving the future

First, the group discussed how the current and future health of the global economy — and the companies that operate within it — is dependent on the success of smaller and medium-sized firms that provide the technology and expertise to deliver lasting change and economic growth. This is particularly true in a world dominated by digital. As one of our attendees succinctly stated, ‘Whether you factor in the pandemic or not, our world has become so digital and so virtual that the barriers to compete and to play as a service provider or a provider in general have come down so massively in so many of our spend areas’. Geographic borders are no longer a barrier; a company operating in a tiny European village can offer services to a customer in Asia or the United States as seamlessly as it could were the customer standing on its doorstep.

#2: Diversity = innovation

The digital world has opened a source of innovative ideas and strategies that would have been previously unthinkable. Whereas big companies traditionally saw buying from other big companies as the safest way to operate, that’s no longer the case. If you want fresh ideas, creativity and a shift from the standard practices of the past, then diversity is essential. ‘We all know that, if you have a diverse workforce, you’re going to get more creative ideas, you’re going to get diverse thought leadership’, said one of our speakers. ‘Why not have your supply chain reflect that as well? People want to see different and innovative ideas in their communities’.

#3: Company culture is key 

Any supplier diversity strategy needs buy-in, not only from the supply base but also from within the business. For that to happen, however, it must be embedded in a company’s culture. As one attendee explained, ‘I would definitely say that you need to leverage the employee networks to heighten this. Within our organisations, our supplier diversity champion has a direct line of reporting to procurement and to HR because we see that these things need to line up. We’re not going to ask our suppliers to do something we’re not doing ourselves’.

#4: Processes need to be flexible and free of bias

In the past, the barriers facing suppliers prevented many of them from engaging in the procurement process — especially with larger companies. Having limited access to opportunities, not knowing the process or not having an existing relationship with a company immediately meant many smaller, diverse suppliers were often overlooked or not considered. ‘If you start tweaking your processes and actually allow some of those diverse suppliers to get access to those tenders or conversations or conventions, I think they’re actually very able to compete’, said a panellist. Creating an environment where they can get to the starting line in the first place, however, is crucial. Another CPO noted, ‘Look at your internal and external processes, which have to be inherently biased because we have people touching them. For example, a certain supplier is either always favoured, selected or at least shortlisted. Look at your processes and identify biases that they carry and take steps to share and mitigate them’. Technology can also help reduce biases that people may have.

#5: Use champions to promote diversity

Some firms have a mature process, with individuals within the business dedicated to ensuring that diversity is given the focus it deserves. Although not every company has dedicated resources focused on diversity, that doesn’t mean it can’t be done. Having internal advocates or champions in the business function to work alongside the supplier is key. As one leader said, ‘If we have a supplier that’s very strong in marketing, then I go to our marketing practice, and I look for a champion in there because you want to try and match their market unit as closely as possible’. The knowledge gained on both sides of the fence can provide a platform for diversity to flourish. ‘Keep in mind that a lot of these business owners, the entrepreneurs who are coming in, most of them came from a big corporation, so they have that background as well’. With diversity champions using this new source of knowledge, they then can act as mentors to others; this is a critical element in ensuring diversity becomes ingrained in an organisation’s culture.

#6: Make your case unbeatable 

Considering the challenging year we’ve had, with the pandemic and its impact on the global economy, there are fears that diversity could take a backseat as companies attempt to survive by looking inward instead of outward — ‘diving back down a rabbit hole’, as one of our attendees put it. Regardless, putting together a compelling business case for supplier diversity must remain a priority. According to one CPO, it’s essential that any case you put forward is one that even a CEO can’t say no to: ‘Think of it from a business outcome point of view — and have a red-hot business argument that your CEO can’t argue with’. Once diversity and inclusion is imbedded in a business, the results will start to speak for themselves.

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