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Published by Niche Marketing & Planet Mogul, 2017-04-08 19:51:15

Advancing Supplier Diversity by Andy Butler

Supplier Diversity

Billion Dollar Roundtable Learning: Advancing Mature Supplier Diversity Programs
Andy Butler, Corporate Supplier Diversity Manager, The Procter & Gamble Co.

This article represents the perspective of the author, not necessarily Procter & Gamble or The Billion Dollar
Roundtable.

Purpose:
The Supplier Diversity industry provides tremendous training and guidance on how to build a new

Supplier Diversity program – but what happens when there is a leadership change or major strategic shift at a
company with a mature Supplier Diversity program in place? As the industry shifts, it is imperative that new
leaders come in to continue to drive Supplier Diversity excellence forward. But even more importantly, it is
critical that we take advantage of these shifts to refresh, innovate, and evolve to advance Supplier
Diversity. This paper lays out a process to advance a mature Supplier Diversity program, such as one of the
Billion Dollar Roundtable (BDR) member programs, by addressing seven key factors critical to the success of your
program. This process is intended to enable innovation and transformation so that mature programs can be
improved. While this paper is targeted at new Supplier Diversity managers like myself, my hope is that this can
be a guide for new or existing Supplier Diversity leaders as they seek to increase the value proposition of
Supplier Diversity at their company. Our predecessors have been trailblazers, and we have both the opportunity
and responsibility to build on their foundation to transform Supplier Diversity for the future. Taking over a
mature program is not about controlling and maintaining – it is about having the courage, the platform, and the
ability to create more value with Supplier Diversity.

Background:
In July 2014, I took over the Procter & Gamble (P&G) Corporate Supplier Diversity program. P&G

already has a strong, world-class program as evidenced by our participation in the BDR since 2005, numerous
external awards at the local and national level, a “Level 5” rating on the RGMA scale, and five consecutive years
of spend growth with diverse suppliers. At P&G, we believe that innovation in everything we do is the lifeblood
of our company. While changes in leadership, markets, and industries are not always easy, they offer an
opportunity to evolve and advance. By continuously seeking to innovate, and by viewing every shift as an
opportunity to make an impact, we can look at an area like Supplier Diversity through a different lens and seek
to leverage the maturity of our program instead of becoming complacent. This paper proposes a process for
evaluating and advancing your Supplier Diversity program, whether you are new or senior.

The Key Elements:

When seeking to advance a mature program, there are seven key elements that you must prioritize,
understand, and address. Some of these elements will remain the same as you advance your program, but
others will need to be changed.

• PVSO: Your company’s Purpose, Vision, Strategy, and Objectives for Supplier Diversity;
• Structure: Reporting structure, leadership engagement, and team makeup;
• Data: Current data on spend, suppliers, and other relevant data;
• Internal Resources: internal business needs, sourcing strategies, and key resources;
• Supply Base: Your key existing and potential diverse suppliers;
• External Resources and Participation: Your external council and program participation; and
• Budget: What money you have to spend and where.

Purpose, Vision, Strategy, and Objectives (PVSO) for Supplier Diversity:
Understanding and potentially revising your company’s Purpose, Vision, Strategy, and Objectives (PVSO)

for Supplier Diversity is one of the first key steps and will enable the other elements. Without clarity on your
PVSO, everything you do is reactive. In many cases the PVSO may not have been updated for several years and
needs to be revisited; in some cases, your program may not have a clearly documented PVSO at all.

Your purpose should be a brief, clear statement that answers the question: “Why does our company
have a Supplier Diversity program?” This becomes the baseline rationale to invest resources, money, and
leadership time in the program. Your vision should be an equally brief and clear statement that answers the
question: “What does the ideal state for Supplier Diversity look like at my company.” The purpose becomes the
foundation for your program and the vision becomes the “lighthouse” you are trying to reach. The strategy,
actions, and goals should be steps on the path to achieve your vision. Every strategic decision and objective you
have should move you closer to the vision; every action you take should be consistent with your strategies and
objectives.

Your objectives should be clear and measurable goals that will help you understand if you are achieving
your vision – items like spend with diverse suppliers, savings delivered, employee engagement, etc. The
strategy should be a statement or series of planks that are clear, conscious decisions you are making to achieve
your vision and objectives. Strategy is just as much about deciding what NOT to do and as it about deciding
what to do. With your limited time and resources, you must determine where and how to invest to achieve your
vision and objectives.

Your PVSO should be clearly documented in a way that can be easily shared to calibrate key
stakeholders on what you are trying to accomplish. I will refer back to the PVSO throughout this paper. If your
PVSO does not exist, or if it is out of date, developing a new one is essential. I would recommend using the
existing one as a baseline as this has enabled success already – perhaps it does not need to be changed at all,

but it needs to be the foundation for your program. This should not be done in a vacuum – development should
include input from key internal stakeholders and external stakeholders. For example, in my first 30 days as
Corporate Supplier Diversity Manager I brought all of my Supplier Diversity advocates together at P&G for a half-
day session to renew the PVSO; out of this meeting, we developed key concepts which I consolidated into the
PVSO statements and then reviewed with Purchases leadership, C-Suite leadership, and several key external
stakeholders (councils and partners) for input and alignment. This became the basis on which I structured my
work plan, team, and internal/external engagement. Having a clear, aligned PVSO document is critical to
successfully advancing a mature program; it is the heart of the innovation that you will drive.
Key Action – Renew, document, and align for PVSO for Supplier Diversity.

Structure:
It is critical to understand how you are resourced and supported internally when advancing a mature

program, as this structure will enable you to innovate. Create a clear organization and reporting line chart if one
does not already exist. Ideally, you should report directly to the Chief Purchasing Officer, or the head of the
function you belong to (Diversity & Inclusion, Sustainability, etc.). If this is not the case, a role or industry
transition may be a good opportunity to recommend a change. Having a direct reporting relationship with the
CPO is essential and joining up with this individual in the first two weeks is key to begin building and fostering
the relationship. Next, determine what your team looks like – do you have dedicated resources, advocates
embedded in the organization, or both? Meet with the entire team that impacts Supplier Diversity in the first
two weeks (even if it’s for a 30-minute phone call) to share that your company will continue to prioritize and
advance Supplier Diversity. Prepare key expectations and message track items to share with your team so folks
see change as a seamless transition that will enable better results. This is the first key group you need to
convince that despite the maturity of the program, you can take it to the next level. You are creating a culture
of continuous innovation and this will require everyone’s engagement.

Determine if the current structure enables you to successfully execute your PVSO. In my case, our
Purchases organization was set up for success, but our renewed PVSO called for more direct engagement across
disciplines and levels, so I requested several changes using our PVSO as rationale. Get very clear with your
entire organization on how Supplier Diversity fits into their work plan and ensure it is documented with their
goals and reward structure.

Finally, you must engage with and seek support at the C-Suite level. Ensuring your CEO and other key
executives understand and are aligned with your PVSO is key, as this will have a major impact on the rest of the
organization, especially in light of a change in Supplier Diversity leadership. Meet with the CEO personally
within the first 100 days (with your renewed PVSO in hand) and clearly articulate how you will bring incremental
value with Supplier Diversity above and beyond what has been delivered in the past.

Key Action – Map out team structure and meet with team immediately to share expectations and goals; Meet
with CEO in first 100 days to seek support for renewed PVSO.

Data:
This is about understanding what you measure, why you measure, how you measure, and who you

report data to. While this may seem tactical, it is critical that you understand how your data is derived so you
can make and respond to challenges from other people, both internally and externally. Understanding data is a
key part of the process to enable innovation, as it will help you prioritize your actions.

First, determine what you measure. Start with your scorecard for Supplier Diversity. If you don’t have
one, you need to create one (the National Minority Supplier Development Council (NMSDC) had a good list to
use as a starting point). The primary metric many companies use is spend. Do you measure 1st and 2nd Tier?
Do you count women- and minority- spend, do you also count veteran- or gay/lesbian-owned as well? Do you
require certain certifications (NMSDC, Women's Business Enterprise National Council) or do you accept other
affiliation certifications? Note that some organizations (for example the BDR) only acknowledge certain
certifications due to the rigor required in some of the processes. This is also a good opportunity to ask why you
measure some items, but not others. You will be frequently asked internally and externally why you do or do
not measure specific items and it’s important that you have a clear understanding and explanation linking back
to your PVSO.

Next, determine how you collect spend – Who collects it (do you collect it, does a team member collect
it?), who provides it (individual buyers, points of contact in Purchasing, pulled directly from an ERP system),
what is the source data (ERP system, manual spreadsheets, etc.), how often to do you collect data (quarterly,
semi-annually), and who do you report to (Quarterly Letters, scorecards, etc.). Create a 1-page work process
and workflow document so you understand how reporting and data collection works today.
Key Action – Create (or compile) a single document for reference with all of the key data points you have today
and where they come from.

Internal Resources:
You must identify and build relationships with your key internal contacts. This should take priority over

new external relationships (as Reginald Layton from Johnson Controls told me, “You can’t talk to WMBEs about
their capabilities if you don’t know what capabilities you need”). Determine who makes the ultimate sourcing
decisions and who owns the supplier relationships. These are the most important people for you to build
relationships with upfront, as they will be key partners and contributors on your journey. Meet with these
individuals and their managers to educate them on your PVSO and how you will reward and recognize them for
the work they do. Remember that this process is about advancing Supplier Diversity, and getting your internal

counterparts onboard early will expedite the process. Helping them understand the purpose and goals they will
be held accountable for early on will make later discussions much easier. I would recommend reviewing every
sourcing strategy with the buyers for understanding and integration – this will enable you to participate in the
sourcing strategy development process later on as well.

Aside from the buyers (or sourcing decision makers), you also need to identify who your other key
internal stakeholders are. Consider creating a quarterly newsletter that you send internally to all of these
people. These are individuals who can help you promote, drive, and advocate for Supplier Diversity; embedding
Supplier Diversity across the organization holistically will make your job easier and more seamless. Make a list
of all the individuals and disciplines you want to build relationships with and tie it back to your PVSO – I would
recommend Diversity & Inclusion, Communications, Community & Government Relations, Marketing, Sales
(particularly if your customers require 2nd Tier reporting), and Finance (particularly if Mergers & Acquisitions is
housed in Finance). As you join up, have a clear message track and plan. There may also be internal barriers or
detractors that you want to meet and listen to as you seek to build the relationship.
Key Action - Create a join-up list of key internal stakeholders; review all sourcing strategies with the sourcing
buyers.

Supply Base:
Surveying, understanding, and building relationships with your existing Supply Base are the next steps in

advancing your program. Your existing partners are your starting point for growing spend and value, receiving
transparent feedback on your program, and advocacy to the external world. Your current diverse suppliers (and
prime suppliers who are driving 2nd Tier spend) will be great allies as you navigate your role and seek to build
credibility both internally and externally.

Determine who your key suppliers are – this could be by spend, rating, strategic tier, or growth
potential. For example, you may consider creating and maintaining a list of your Top 20 WMBEs as a reference.
Looking at spend only is not always representative of who the key suppliers are, so use the data you have to
create your initial list – for example, we maintain a list of our top-rated WMBEs based on the annual rating
criteria P&G has. Create or identify a document with all of the key metrics for these suppliers – total spend,
savings delivered, internal relationship owner, growth opportunities, etc. Schedule join-ups with your key
suppliers and consider sending an introductory letter to all of your diverse suppliers via a Supplier Portal or via
the Purchasing Relationship Owners. I met with many of our key suppliers in person during my first 100 days,
and sent a letter to the remainder afterward. Make sure you have a clear message track to these suppliers as
you meet with them.

Finally, I recommend engaging the relationship owner (RO) for existing suppliers when you speak with
them. You may not always meet with the supplier and RO together, but ensuring you are coming to the supply

base as one company, not Supplier Diversity and Sourcing separately, is a critical precedent to set or you may
end up with confusion and lack of engagement on both sides. In general, anytime you engage externally, take a
step back and say, “Who owns this relationship at my company?” If the answer is “me,” then you are fine
(which it will likely be with prospective suppliers, councils, etc.), but if you are not sure, I would recommend
getting the right individual in the loop to ensure consistency and to help appropriately distribute the workload.
Key Action – Identify and meet with Key Diverse Suppliers in your first 100 days to build the relationship,
advocacy, and to learn where there are opportunities.

External Resources and Participation:
Determining who your key external resources are, what organizations you participate in, and how you

want to engage going forward is also an important element in advancing your program. Most mature programs
have many important touch points externally – both locally and nationally with organizations supporting
minority-, women-, LGBT-, veteran-, disabled-, and other diverse-owned businesses, in addition to various
government programs. All of these organizations will seek your time, and if you are not careful, you can easily
find yourself spending 40 hours per week in meetings with external councils. Conversely, if you actively
disengage while you are starting, this can be just as damaging – you need to be selective, but also proactive.
While each organization brings value, you need to be intentional about who you engage with and why. It comes
back to the PVSO – what is your vision and strategy, and how does active or passive participation in any of these
organizations enable that.

I recommend starting with the organizations you are already part of as a baseline. Meet with your key
contact at each organization to understand how you have participated in the past, what value the organization
brings, and what future opportunities may be. Determine what organizations your peers participate in that your
company does not work with today and benchmark with those organizations as well. This may be a 6-12 month
process as you attend events and conferences, but it is important to be clear about which organizations you
support and why.

As part of your PVSO, determine if there are organizations you either want to step away from or step
into (for example, perhaps you want to engage more with women-owned businesses globally) to enable your
vision. I received dozens of call during my first few weeks asking me to join new groups, sponsor new events,
and take on new responsibilities in existing organizations. I said yes to some of these requests and no to many
of them – but everything tied back to my PVSO.
Key Action – Link PVSO directly to which organizations you engage with; meet with leaders of each organization
to understand purpose and align on a plan going forward.

Budget:

You must understand, actively manage, and advocate for your budget. Start with your budget for the
current year – you should have a clear breakdown of how much money you have in different buckets and what
is accounted for. If this doesn’t exist, or even if it does and needs updating, identify the key person in Finance or
Human Resources who can help you understand and determine your budget. How much money you have to
spend and where will be a key driver for your work, but can also be an inhibitor if you do not understand it
upfront and plan accordingly.

Separate your budget into clear sections – travel, dues/memberships, sponsorships, program and
conference participation, outside professional services, etc. This will help you determine where you are
spending your dollars and where your budget is tight versus on-track. Determine how you will manage and track
your budget (will it be you, a team member, an administrator, etc.) and create a drumbeat checkpoint to stay on
track.
Key Action – Review your budget with the person who best understands it and create a clear drumbeat process
for approving new costs and reviewing on a monthly (or more frequent) basis.

General Advice, Thoughts, and Watchouts:
• Remember that this is a Process to Advance your Program – Successfully innovating is predicated on
having a clear and robust process for generating new ideas, bringing them into reality, and maintaining a
strong baseline so new ideas can become sustainable. This paper is not intended to be all-
encompassing, it is intended to lay out a potential process that will enable you to continuously
transform your program to create greater value.
• Be Bold, Be Courageous, Be Transformative… – When you take over a mature program, you have two
options: 1) Put things on cruise control, or 2) Leverage your excellent platform to be transformational
for your company, the industry, and the community. Strong, mature programs have both an
opportunity and responsibility to take Supplier Diversity to the next level but innovation is required.
Focus on developing your strategy and determining what’s next (but don’t let the baseline that has
gotten you to where you are falter). Change is essential but must be leveraged appropriately. What are
the 2-3 major, value-add things you will do in your role, particularly in the first 100 days? How will you
talk about them to inspire a shared vision and enable others to act on that vision? You must be bold,
courageous, and transformative in your thinking – even if you fall short, you may change the world.
• …But Balance this with humility – You also need to recognize the history of your program. Your
predecessors did a lot right and broke down many barriers to put you in a position to succeed. Being
humble and recognizing the great work that came before you is important as you advance your
program.

• “I’m New” is a Reality, “I’m New” is not an Excuse – Push yourself to achieve and accomplish clear and
major goals early in your role. There are always personal and professional conflicts and unexpected
challenges that happen – you must rise above these to be transformational. Learning and absorbing
before you act is certainly important, but moving quickly and setting the tone early on is just as critical.
Seek and talk about early wins; listen to and accept feedback on things you are still working towards.
Never let “I am new…” be a reason you don’t know or don’t do something.

• Have a clear and dynamic message track – You want people to walk away from their first interactions
with you knowing that you are here to advance the program further. I would recommend you have a 1-
2 sentence message track that you can share with anyone you meet.

• Set Clear, Achievable Expectations – Both internally and externally, set clear and manageable
expectations when talking about your new program. For example, when an eager prospective WMBE
introduced herself to me at my first event and talked about following up, I explained that my focus to
begin would be on understanding our internal needs (so I was explaining a rationale), and thus I would
not be in a position to have a productive discussion for at least 60 days. Setting a clear expectation will
prevent you from being unnecessarily bombarded with internal and external requests, and will also
begin to build credibility with your key stakeholders.

• Create a Calendar – Managing all of the internal, external, and conference meetings (even the ones you
are not attending) can be a challenge. Perhaps you are used to managing your schedule (or having your
assistant manage your schedule) on Calendar software, but I would recommend creating a separate
calendar with all of the key external events so you can take a holistic view of how much time you are
spending internally versus externally. This also allows you to share quickly with peers and leadership
where you are investing your time.

• Use Your Resources – There are plenty of great resources, including people and documentation, that
can help you on your journey. Transformation does not have to (and should not) be done alone. The
BDR book Supplier Diversity Best Practices is a great place to start.

Summary:
There is not one right way to advance a mature Supplier Diversity program, but these principles define a

process that I believe will enable you to set your program and your company up for long-term sustainable
success, and for breakthrough innovation in Supplier Diversity. While this process is focused on new Supplier
Diversity managers, existing Leaders may also be able to take elements of this process to advance their mature
programs as well. I cannot overstate the importance of developing a clear, aligned PVSO to guide the actions
you take. Your PVSO will likely evolve and will need to be revisited at least once a year. Putting this in place
upfront will direct your energy and build strong credibility both internally and externally with key stakeholders. I

also want to reinforce the opportunity and responsibility we have as mature Supplier Diversity programs to be
bold and courageous in our thinking. We have been offered an opportunity to change the game and take
Supplier Diversity to the next level. It is incumbent upon each of us as the leaders of our programs to inspire,
enable, and model the commitment and behavior necessary to make this a reality.


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