Unlocking Potential: Strategies for Advancing your Supplier Diversity Program

Executive Summary

Supplier diversity is a critical yet underexamined facet of a credit union’s Diversity, Equity and Inclusion (DEI) strategy. Filene Fellow Dr. Quinetta Roberson and Terri Quinton, President of Q2 Marketing Group and a diverse supplier of 15 years, share their knowledge and expertise about supplier diversity programs for financial institutions in this second installment in the DEI video series. Commitment to supplier diversity contributes to fulfilling a credit union’s social responsibility and community development efforts. In this video, Dr. Roberson and Terri Quinton cover what a supplier diversity program is, the benefits and impact to both the credit union and community, and how to build a successful and sustainable supplier diversity program. Watch their conversation below and continue reading to learn about strategies, as well as potential pitfalls to avoid, for building a successful supplier diversity program.

Strategies for Building a Successful Program

A supplier diversity program can have a positive, long-term economic impact on a credit union’s community. However, building an effective supplier diversity program requires intentionality and having defined goals. Below are some of the key takeaways from the video to developing a successful supplier diversity program.

• Ensure alignment with your credit union’s goals and values. Credit unions should have a clear and quantifiable policy and plan for supplier diversity that aligns with their values and goals. They should also have top-level commitment and recognition for the program.
• Identify and track diverse suppliers. It is essential to collect data on current and potential diverse suppliers, such as through the use of a portal or database and by reaching out to suppliers and asking them to self-identify as diverse. This allows credit unions to better understand who their suppliers are and to track spending and performance metrics.
• Partner with organizations that support diverse suppliers. Credit unions should collaborate with local, regional, and national organizations that advocate for and certify diverse suppliers, such as minority business councils, women's business councils, LGBTQ councils, and veteran councils. These organizations can help credit unions find and connect with diverse suppliers in their communities and industries.
• Include diverse suppliers in every RFP opportunity. Credit unions should make it a standard practice to include at least one diverse supplier in every request for proposal (RFP) opportunity, and evaluate them using the same criteria as other suppliers. They should also communicate their supplier diversity policy and expectations to their prime suppliers and encourage them to subcontract with diverse suppliers.
• Provide financial education and access to capital. Credit unions should leverage their products, services, and expertise in financial literacy to help diverse suppliers grow and succeed. They can offer free seminars, webinars, or workshops on topics such as financial reports, cash flow management, loan programs, and credit scores. Credit unions can also provide access to capital and favorable lending terms for diverse suppliers.
• Develop and mentor diverse suppliers. Credit unions should not only purchase from diverse suppliers, but also invest in their development. They can provide feedback, coaching, training, and networking opportunities for diverse suppliers to help them improve their quality, innovation, and competitiveness. They may also facilitate peer mentoring and collaboration among diverse suppliers.
• Use metrics and analytics to evaluate and improve the program. Credit unions should measure the progress and effectiveness of their supplier diversity program. They can track indicators such as the number, percentage, and industry of diverse suppliers; spending and cost savings; quality and performance; and the impact on the community and the credit union. This data can also be used to identify challenges and opportunities for improvement.
• Market and communicate the program internally and externally. Credit unions should market and communicate their supplier diversity program to their internal and external stakeholders, such as employees, members, their board, regulators, media, and community. They should use various channels and platforms, such as websites, newsletters, social media, and events, to showcase their achievements and best practices. They should also highlight the value added through stories and testimonials of their diverse suppliers.
• Engage employees and members in the program. Credit unions can raise awareness of the benefits and importance of their supplier diversity program by:
  • Providing training and education for employees on how to source, evaluate, and work with diverse suppliers.
    
  • Encouraging employees and members to purchase from diverse suppliers in their personal and professional lives.
    
  • Recognizing and rewarding employees and members who contribute to the program.

• Review and update the program regularly. It is important to review and update a supplier diversity program regularly to ensure that it is aligned with shifting needs, goals, and overall environment. Credit unions should solicit feedback from their diverse suppliers, employees, members, and partners on how to improve the program. They should also benchmark their program against industry standards and best practices, and adopt new strategies and technologies to enhance their program.

Potential Pitfalls of Launching a Supplier Diversity Program

While many credit union leaders are aware of the importance of supplier diversity, there are several obstacles that may prevent credit unions from successfully launching a supplier diversity program. Below are some of the common pitfalls credit union leaders encounter and strategies to help overcome them.

• Limited awareness and understanding: There may be a lack of awareness of the importance and benefits of including diverse suppliers in procurement processes. Education and advocacy are essential to overcome this barrier.
• Traditional procurement practices: Existing procurement practices often favor established suppliers, which can hinder the inclusion of diverse suppliers. Encouraging flexibility within procurement processes can help diversify the supply chain.
• Cost concerns and perceived lack of capacity: Diverse suppliers might be wrongly perceived as too costly and/or lacking the capacity to meet demands. It is important to do the appropriate research in order to avoid these kinds of preconceived notions and biases.
• Resistance to change: Employees and stakeholders who are comfortable with the status quo may resist efforts to diversify the supply chain. Effective change management strategies are necessary to address this resistance.