Sourcing’s diversity power

Sourcing is traditionally about great value, but a significant part of the value equation is also about delivering change. Marketing procurement can contribute more broadly to a company’s wider goals on issues such as diversity and inclusion. With that in mind, WFA’s Global Sourcing Board recently held an online session to allow members to discuss smarter strategies for ensuring supplier diversity. 

Attended by 75 experts from 39 WFA member companies, the aim was to inspire sourcing teams to become the prime movers in helping their firms broaden their approach and drive meaningful change beyond the company payroll. Polled at the start of the session, attendees were relatively evenly split, with 43% saying they had just started on the journey and 41% saying they had been working on these issues for more than five years.

Common challenges identified by WFA members participating were around measurement (47%), identification of diverse suppliers (44%) and not knowing where to start (38%) when participants were asked to name three key issues that impacted on their efforts to date.

The Global Sourcing Board tried to offer solutions.

1. Measuring progress made in relation to supplier diversity  

On measuring progress, the Board pointed out that supplier diversity is not just about target numbers and KPIs. It’s first and foremost a question of mindset. Brands needed to move from simply measuring spend with diverse suppliers to championing real equality and inclusion within their supply chain, as this is what will truly move the needle from both a business and societal point of view. This means ensuring inclusion forms part of the everyday way of operating.

An effective approach can be focused around in-progress performance measures (rather than outcomes measures). This might mean creating a dashboard of progress for each market covering metrics such as at least one opportunity for a female director in every production bid or the percentage of diverse leaders at agency partners.  

However, procurement teams should also go beyond hard data and consider diversity and inclusion in both the ownership and leadership when it comes to their external partners, this includes representation of diverse talent working on the client account at all levels, visiting agency offices to “spend time with your partners and be attentive to who welcomed you, who served you coffee and how many people you can see on the exec floor…” 

The goal is for brands to create more opportunities for diverse suppliers while at the same time helping existing suppliers to improve on their diversity, rather than delivering hard KPIs as there is no best in class (yet) to achieve. The Sourcing Board said teams needed to be reassuring with existing agency partners, as many may not have solid D&I practices in place yet: “It’s ok for them to come clean, but they should really be transparent and tell us where they currently stand so we can help them improve.”

2. Finding diverse suppliers

The second biggest challenge was finding diverse suppliers. In this area, however, the board said it wasn’t simply a question of working with new people but also about enabling change within existing suppliers. Start with your own rostered agencies and work with them to develop their D&I strategy and raise their overall level. You could, for instance, run ‘a yearly citizenship survey’ across all incumbent agencies, as one Sourcing Board member suggested. 

Companies can also include Diversity and Inclusion questions in tender documents and track given opportunities as well as actual wins. Brands should work closely with the legal department and get approval on the language used when asking agencies to disclose D&I data.

The panel also highlighted a list of partners, industry associations or NGOs who can advise*.

3. Getting started

The third challenge mentioned was where to start. The Board argued that the best idea was to ask why your company is doing this. If the answer is something along the lines of “we want to be a force for good and a force for growth”, then you are much more likely to secure company-wide engagement. Once you are agreed on the WHY, the HOW is somewhat easier. As one WFA member put it, “do not try to boil the ocean”, start with what you think will be impactful for both your business and the society wherever you are in the world – and acknowledge that there can be regional differences.

4. Broadening efforts outside of the US

One final issue raised by a significant number of participants was taking diversity efforts global. One factor that makes it easier to take action in the US, for example, is the ease with which you can collect personal data. But, as one Sourcing Board member put it, not having access to data is not such a huge issue as “we are not doing this to create a database of individuals” – the goal is to make improvements.

The panel advised that the overall strategic ambition should be global and not feel any different in any given geography. Start with what is important in a market and what you can realistically do. If there isn’t enough ‘supply’ to have 50% female directors in production or a lack of data to identify minority-owned businesses, instead focus on a different vector of equality and inclusion, such as accurate portrayal or equal pay first.

All of these challenges can be overcome. Many studies show that being diverse and inclusive, as well as more progressive in the work it produces, will deliver better ROI for the company.

It’s certainly not more expensive to work with diverse suppliers. In fact, by involving more diverse suppliers, you’re creating better competition. And that’s without including the benefits of gaining a more diverse set of perspectives that could help ensure brands don’t alienate specific groups or cross cultural lines.

*Partners and NGOs mentioned by attendees include:

• Free the Bid
• WBENC: Women’s Business Enterprise National Council
• NGLCC: National LGBT Chamber of Commerce
• WOSB: Woman-Owned Small Business
• MBE: Minority Business Enterprise
• NMSDC: Working with ethnic minorities 
• WBE: Minority/Women Business Enterprise
• WEConnect: International Women-Owned Business
• SBE: Small Business Enterprise
• SDVOB: Service-Disabled Veteran-Owned Business

WFA’s Diversity & Inclusion Task Force is working on compiling a comprehensive list of external partners that can help brands and agencies navigate this journey, so if you would like to share your recommendations please let us know by emailing me at l.forcetti@wfanet.org or camelia@wfanet.org