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The most practical way to promote diversity and inclusion isn’t what you think

Your supply chain is an overlooked, business-essential area to improve diversity and inclusion.

5 min read


The most practical way to promote diversity and inclusion isn't what you think


Diversity and inclusion are issues that every leader in business should address with an open mind and a deep level of commitment. However, the way to think about them is certainly not in terms of just meeting quotas. The push for diversity may seem like a burden in the short term, especially where it requires addressing longstanding business practices or personal biases, but the reality is that inclusion equals opportunity.

We aren’t just talking about opportunity for a few individuals, either, but opportunity for every one of an organization’s stakeholders and for the organization itself. If that sounds like a stretch, consider the following research:

This is hardly even the tip of the iceberg, but it’s enough to demonstrate a clear theme. Socially conscious companies stand to grow and profit more than their competitors, making diversity a win-win for those it is intended to serve and for the businesses willing to take it seriously.

This isn’t news for the majority of C-level executives. Countless articles, books and research papers have dug deep into the benefits of D&I over the course of many years. And, to be fair, many companies have capitalized, reaping those benefits. Yet, the most practical, reliable and impactful way to promote widespread diversity is still underutilized.

Before explaining what it is, let’s briefly mention what it’s not — memos, worksheets, seminars, sensitivity trainings or diversity officers, to name a few.

There’s nothing wrong with any of those, but they are inherently restricted in what they can accomplish. Their focus is internal, on a limited number of people (however large the organization), and they often give company leadership a sense of having fulfilled an obligation, by placing the responsibility on one person’s or team’s shoulders, despite being only a first step.

What’s the alternative, then?

The massive impact of diversity in procurement

A genuine commitment to diversity — and a profitable one, as we’ll see — goes beyond the walls of a business. It extends to the supply base, where diverse suppliers are given preference. Companies that embrace inclusive hiring practices are certainly deserving of a pat on the back, but paving the way to real social change can be done much more efficiently through maintaining diverse supply chains.

Consider that a single medium-sized enterprise may require having several hundred suppliers in its procurement network. By choosing to only do businesses with those that are diversity-minded, the effects of an inclusive business ethos can be increased exponentially.

Again, we’re talking about something that is not only the right thing to do but is also clearly supportive of the bottom line. There is evidence that companies with diversity-focused suppliers experience a much higher ROI in terms of procurement while simultaneously spending less.

Market leaders understand this well. Wal-Mart, UPS, Google, IBM, Target and other large businesses collectively spend tens of billions of dollars annually to promote diversity and inclusion across their procurement networks. Most companies don’t have that kind of spending power, but the ripple effect of a commitment to diverse supply by even a small organization can still travel a long way.

Despite being straightforward, the task is not necessarily a simple one. A number of challenges are associated with building a truly inclusive procurement strategy. Particularly for cash-strapped companies and those with niche supply needs, options in the short-term may be limited. This makes it all the more important for companies that are capable of making a commitment to actually do so, creating a positive force for social change while also supporting their long-term goals. 

Stephen Day is chief procurement officer at Kantar and an accomplished international executive with expertise in operations management. He specializes in supply chain, purchasing, multi-country transformation, and change, having led a number of operational transformations and new business model developments to support enterprisewide evolution from products to services and software revenue models. His experience with the implementation of innovative approaches to existing business models has allowed him to create new growth opportunities and service improvements, all through the power of the supply chain.

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