Companies with top-performing supplier-diversity programs develop strategic partnerships with minority-owned businesses to produce innovative solutions for key business initiatives. Yet, one of the most underdeveloped areas of supplier diversity programs is supplier-buyer innovation, according to The Hackett Group’s 2016 Procurement Executive Insights report.
Although supplier diversity has been an established part of the corporate landscape for some time, most programs aren’t engaging their diverse suppliers as collaborative partners because of the narrow and stagnate objectives that tend to define most supplier diversity programs.
Since the mid-eighties supplier diversity programs have consistently revolved around three objectives:
- Improving corporate image in the marketplace
- Supporting diverse corporate cultures and social responsibility
- Complying with regulatory requirements
Organizations with supplier diversity programs that embrace movement beyond these check-the- box requirements have experienced faster growth with increased access to new markets. McKinsey & Company surveyed more than 100 large-scale, global companies on supplier collaboration and found that organizations with advanced collaborative capabilities had double the earnings of their peers.
The key to successful collaboration is redefining the nature of your organization’s relationship with minority suppliers from one of just procurement to partnership. Watch Fifth Third Bank’s supplier diversity team discuss its commitment to forming strategic and mutually beneficial partnerships with diverse suppliers.
Fifth Third Bank has one of the most successful supplier diversity programs in the United States. During the bank’s annual Supplier Diversity Summit, it was announced that by the first half of 2017 they had already exceeded their 2016 full-year spend with certified minority and woman-owned businesses. In part, this success is attributed to Fifth Third Bank’s commitment to strategic relationships with its diverse suppliers.
In 2013, BEST began serving Fifth Third Bank employees and as our relationship continued to grow so did the benefits of our partnership. In 2014, BEST expanded its concierge service with Fifth Third, once again proving we could scale in size to accommodate their national organization. Two years later, BEST collaborated with Fifth Third to offer a new service to its employees; the Maternity Concierge program.
This strategic innovation was born after Fifth Third Bank found that female employees taking maternity leave were twice as likely to resign from the bank within a year, compared to women who didn’t have children. Chief Administrative Officer Teresa Tanner said: “We have to change the rules of the game and there are so many things that employers can do to help women to understand that pregnancy is not an inconvenience.”
Since its launch, the maternity concierge program has been covered by 30 media outlets, including the TODAY Show and The Wall Street Journal altogether worth over $4 million. This has increased Fifth Third Bank’s visibility as an employer of choice and improved their reputation as a family and women-friendly organization.
The first step in getting started is finding the right diverse supplier to form a strategic partnership with. Luckily, organizations like the National Minority Supplier Development Council (NMSDC) have already done the vetting for you by certifying suppliers of the highest caliber.
You can hear our president/CEO, Tillie Hidalgo Lima, discuss how our relationship with Fifth Third Bank led to BEST becoming a Corporate Plus® member of the NMSDC.
We want to hear from you! Has your organization pursued buyer-supplier innovation as a part of your overall supplier diversity program? If so, what were your biggest challenges and how did you overcome them?