How Companies Tokenize Diverse Business Owners through Supplier Diversity Programs

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This article is meant to be a quick and easy guide to help companies who are implementing supplier diversity programs inclusively expand their business practices. Read carefully, thoughtfully, and intentionally! I’m going to give you the strategies, but first I want to inform you of the problem!

Within the 21st century we have seen an increase in companies working to build supplier diversity programs. Supplier diversity is a business strategy that ensures a diverse supplier base (usually from a small business) in the procurement of goods and services for any business or organization. Usually, the small business has to meet the qualifications as an enterprise in which 51 percent of the ownership is of a designated diverse background, or even multiple diverse backgrounds. This may include women, minorities, LGBT individuals, veterans, etc. As a diversity consultant here are a few reasons we have seen companies initially invest in expanding or building supplier diversity programs:

1. They are struggling to recruit and retain staff of Color and decide to outsource their needs and want to be intentional about providing opportunities to small and usually disadvantaged business owners.
2. They are invested in economic improvement within their communities and step up to support those businesses in need, especially if gentrification is happening or has happened in the local community.
3. The down and dirty reason: A business wants to look like they are investing in the local business community or disadvantaged business owners, but will only do it if they see a long term sustainable benefit to their business. We call this interest convergence.
4. You have a need that a disadvantaged business owner is more than qualified to fulfill and you do it because it makes smart business sense. You get what you need and you support the local community.
5. All of the above

If you’re reading this article and you think to yourself, these all sound like reasons that are beneficial to the business owner, then you have a lot more to learn, keep reading. All of these reasons can and will go awry if your business doesn’t realize that the tokenization of small disadvantaged business owners is possible. In our line of work here are a few practices that we see happening that take advantage of and can harm small businesses through your company policies and practices.

1. Extended length of time for net pay periods: If you are a company who is expecting services to be delivered and it takes you more than 30 days to pay, this is a problem for small businesses. Some business owners go into debt just waiting for your slow asses to pay them on time! We have seen companies take 90–120 days to pay an invoice. This is unacceptable, especially for small businesses who have to pay for materials, travels, and that have to pay their employees. Strategy 1: You need to work with your accounting department to setup a faster processing practice of 30 days or less. Also, entrepreneurs to help get around this issue, make companies pay you a large deposit and hold it and pay yourself as you deliver services!
2. You treat suppliers like trash because your business has the privilege and or choice of growth and sustainability. You expect excellent customer service when you talk to and treat people like second class citizens. Strategy 2: Check your business privilege and power. Develop a humanized protocol for your employees who are working with diverse suppliers to help minimize bias in your interactions. Just because you are open to working with diverse business owners and you are lowkey doing us a favor, doesn’t make you our savior or entitle you to be an asshole.
3. You are practicing a check the box, one and done process for purchasing our services. If you really want to help us, be ready to invest in our services long term, even through some of the minor mistakes. Strategy 3: Develop a position or make it part of your job description and performance evaluation to maintain sustainable relationships with diverse suppliers. Write in regular short check-ins whether via email or face to face etc. to check in and make sure you are aligned. Treat them like you would a customer, or an employee, after all they are helping you meet the needs of your marketplace and ecosystem. Strategy 4: Dedicate professional development opportunities for your leadership/relationship managers that involves minimizing bias and navigating difficult conversations. You are entering a relationship with us, a business relationship, so commit to it!
4. Your leadership team/decision makers call them in and doesn’t listen to a word that they say or is unwilling to change. They just want to feel like they have done their due diligence but never had any intention of including the suppliers voice in decision making practices. Strategy 5: Work within your leadership team to make this part of their competency. You have to change the behavior first and the outcomes will follow. Also, create an evaluation for your suppliers to rate their experiences with your leaders and or relationship managers and include it in their reviews!
5. Strategy 6: This one is for business owners. Learn your boundaries, and stop giving companies answers to their problems during the screening process because you need/want the job. I get it, we usually need the account. But, set boundaries for how much you will give a company before you sign a contract. If you don’t, this practice will continue throughout your engagement. Know your worth and make sure they know it too!

My overall goal here is to help you understand that you don’t get to use disadvantaged business owners as superficial symbols for diversity if your intentions don’t include inclusive and equitable practices.