Earlier this month, Black Entertainment Magazine released its 2012 list of the top companies for diversity. This year, BE Magazine said, their focus would be on supplier diversity.
Cliff Hocker, writer at BE Magazine, explained, “This year BE focused on supplier diversity, because winning contracts to provide products and services is the lifeblood of most businesses. Corporations spend hundreds of billions of dollars a year purchasing an array of goods and services from suppliers. Although diversity among suppliers has come a long way, it still has a long way to go.”
The companies on the list were rated on four measures: supplier diversity, senior management, board involvement, and employee base. BE Careers and Lifestyle Editor Sonia Alleyne explained, “In developing this year’s list, we wanted to make sure we identified companies that viewed diversity as a business imperative.”
She continued, “In fact, several of the 40 Best Companies for Diversity excel in all four categories we surveyed, including Denny’s Corp., Fannie Mae, McDonald’s Corp., and WGL Holdings Inc. A varied pool of senior managers and suppliers at these companies, along with their strengths in developing a diverse workforce and corporate board, will enable them to be even more competitive on a global scale.”
A commitment to supplier diversity indicates that a company truly values diversity, supporting minority business owners and communities. Hocker noted that in the decade between 2001 and 2011 spending with certified Minority Business Enterprises by members of the National Minority Supplier Development Council increased from $63 billion to $100 billion. But, he said, companies are still underperforming when it comes to supplier diversity, with a disproportionate amount of contracts going to non-minority owned businesses.
Nevertheless, many companies are working to do better – and these were the companies highlighted on this year’s Best Companies For Diversity list. Hocker praised companies that have established programs on developer education and mentorship, as well as initiatives to better track spending with minority owned businesses.
Next Level Supplier Programs
BE Magazine shone a spotlight on companies that are going above and beyond to provide training and business development programs to minority suppliers.
Bank of America was noted for its Small Business Credit and Supplier Development Opportunity Seminar, which “…brings together Bank of America’s Small Business Banking team, the Small Business Administration, and community development financial institutions to provide information about credit options and technical assistance. Also, Bank of America sourcing teams are brought in to identify and review potential suppliers for upcoming proposal requests.”
BE Magazine also noted Ford’s program, which encourages its suppliers to partner with minority suppliers even farther down the chain. “Part of the automaker’s supplier diversity development program has been encouraging Tier 1 suppliers to spend at least 6% with minority-owned Tier 2 suppliers, 3% with veteran-owned Tier 2 suppliers, and at least 2% with women-owned Tier 2 suppliers. In 2011, Tier 1 suppliers spent $1.6 billion with minority firms, up from $1.2 billion in 2010,” Hocker explains.
Spending on diverse supplier contracts had increased at a number of the companies named on the list. For example, Kellogg, one of the noted companies, just announced its supplier diversity program has grown for 13 consecutive years, passing $350 million.
Mark King, chief diversity officer for Kellogg Company, said, “Along with our supplier diversity initiatives, we’ve also made significant strides in reaching that objective by embedding diversity and inclusion throughout all levels of our organization.”
He added, “We’re working to build a stronger Kellogg by fostering an inclusive culture that leverages diversity as a competitive advantage.”
Similarly, Verizon was also honored in part of its commitment to supplier diversity, having spent $3.8 billion with minority owned businesses last year. Magda Yrizarry, Verizon’s chief talent and diversity officer, remarked, “When competing in an increasingly diverse marketplace, Verizon’s diverse workforce and network of suppliers, and its inclusive culture are a big part of what helps make us the best in our industry.”
By partnering with suppliers of diverse backgrounds, companies show that they are working to support diversity not just in their own companies but in the greater business arena as well. By seeking out suppliers from a broad range of backgrounds, companies are also able to make sure they are working with the best companies to meet their needs.