Top Supplier Diversity Programs Broaden Value Proposition To Drive Increased Market Share…

The Hackett Group Research Also Shows That Virtually All Diversity Suppliers Meet or Exceed Expectations

IBM, American Red Cross, and WEConnect All Spotlight the Value of Supplier Diversity Programs

MIAMI & LONDON, February 16, 2017 – Virtually all diversity suppliers meet or exceed expectations, and top corporate performers in supplier diversity experience no loss in efficiency, according to new research from The Hackett Group, Inc. (NASDAQ: HCKT). In addition, they see improved quality and often extract other benefits, including increased market share and access to new revenue opportunities. The research challenges the attitude of many business leaders, who worry that dedicating resources to supplier diversity will divert attention from other strategic activities.

To truly unlock the full potential benefits of supplier diversity efforts, The Hackett Group recommends that companies consider expanding beyond traditional goals such as complying with regulations. Top performers in supplier diversity recognize the value of objectives such as the ability to gain access to new markets and improve supplier partnerships. In addition, companies should look beyond basic measures such as the percentage of spend with diverse suppliers and calculate the true value of supplier diversity by using more sophisticated performance metrics such as satisfaction levels and other secondary metrics that are aligned to long- and short-term plans and objectives.

Companies with top-performing supplier diversity programs focus on several areas to make the most of their efforts, and go beyond the basics, the research found. These companies develop supplier partnerships, mentor local suppliers, collaborate with suppliers on product innovation, and share their experiences with other companies. They use supplier diversity as a reputation-builder to help increase market share and retain talent, and rely on social media to develop customer and brand awareness. They also actively educate internal stakeholders on the value of supplier diversity, and interact with local communities of suppliers and consumers to better understand the market, establish relationships, and share supplier diversity goals.

While most supplier diversity programs have a domestic focus, The Hackett Group’s research found that more than 40 percent of all global companies with a U.S. supplier diversity program plan to expand globally within the next two to three years. The Hackett Group recommends that companies manage U.S. and global programs as a single initiative, where appropriate. Partnering with corporate diversity groups, which manage workforce diversity, is also highly advisable, as is working with third parties that can help companies connect with diverse suppliers.

“Supplier diversity is evolving from a check-the-box corporate social responsibility requirement to a strategic enabler providing access to innovative products and increased market share in new and developing communities,” said The Hackett Group Research Director Laura Gibbons. “Top-performing organizations are taking advantage of this opportunity, and applying the tenets of social diversity to new areas such as supplier partnering, reputation management and global expansion with exceptional results.”

“There are certainly challenges that need to be overcome,” cautioned Ms. Gibbons. “It can be difficult to obtain the necessary support to invest in supplier diversity programs. Business leaders often worry that dedicating resources to this will impact procurement savings or even quality. But our research clearly shows that this is not true. Top performers are not seeing losses in efficiency, and quality often improves. Overall, the risks to focusing on supplier diversity are quite low, and the potential upside is significant. In fact, up to 10 percent of sales come with supplier diversity requirements, suggesting that the lack of such a program can even result in lost revenue.”

According to Michael Robinson Program Director – Global Supplier Diversity, IBM, “At IBM, we’ve been leading the way in corporate supplier diversity efforts for nearly 50 years. Today, we’re the only company, that we know of, which has a diverse supplier requirement in every country where we operate worldwide. We count on our supplier network, and ask the same thing of our women- and minority-owned suppliers as we do of our majority suppliers… that they help us provide value to the customer, strengthen our brand, understand our markets, and identify what’s coming next in the world of technology. It’s in our best interest to find the best suppliers, and a focus on supplier diversity is an important part of how we do that.”

According to Jillnell Joiner, Senior Supplier Diversity Manager, American Red Cross, “At American Red Cross, we’ve been very focused on expanding our supplier diversity efforts over the past few years, and communication has become a key best practice for us. We want to make sure suppliers, including minorities, women and veterans, understand that the door is open.”

“Some things are simple… if a supplier reaches out to us, we respond, no matter what,” explained Ms. Joiner. “Last year we also did workshops in 15 states across the country, in partnership with the National Minority Supplier Development Council, to help suppliers understand the extent of our supplier diversity efforts, and how best to do business with us. These workshops have been a great asset for us.”

According to Elizabeth A. Vazquez, CEO and Co-Founder of WEConnect International, “Some of the most successful supplier diversity and inclusion programs come from companies that have diversity and inclusion in their DNA. They are making strategic investments in the communities they serve not only in the U.S., but around the world. Global corporations must be committed to utilizing the world’s best suppliers. Smart companies will make a conscious effort to identify underutilized suppliers in every market that can bring value, including businesses owned by women, ethnic minorities, people with disabilities, members of the LGBT community, and other groups.”

Hugh McColl reflects on 25 years of supplier diversity at BofA: ‘We understood that brains come in different packages’

In 1990, Hugh McColl Jr. was busy transforming NationsBank into the largest financial institution in the country.
“That time period was kind of like The Wild, Wild West,” the outgoing vice-chairman of Bank of America Corp. (NYSE:BAC), David Darnell, said at an event Wednesday. “It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company.”
During that busy time, McColl, now the retired chairman and CEO of Bank of America, set another goal for the company: 10% of the bank’s suppliers would be minority or women-owned businesses and services.
It was the start of Bank of America’s supplier diversity program— an initiative that paved the way for BofA to be inducted to the Billion Dollar Roundtable this year. The Charlotte-based bank is the first financial services firm to join the group of 20 companies that have reached $1 billion in diversity spend annually. Today, Bank of America spends $2.5 billion on minority and women-owned suppliers.
BofA celebrated the 25th anniversary of its supplier diversity program Wednesday evening at The Westin Charlotte hotel uptown. Darnell and McColl conducted a fireside chat in front of an audience of the bank’s suppliers. At the end of the evening, recently promoted Chief Administrative Officer Andrea Smith presented McColl with the bank’s first-ever Visionary Award.
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“When you step back and think about that one idea and the deliberateness and the impact of that idea, I think you see the true essence of what it means to be a visionary,” Smith said. “So tonight it is my honor to present the first-ever Visionary Award to Hugh McColl for hatching this idea 25 years ago. For his commitment, his leadership, his vision and as he just said a minute ago, doing the right thing.”
McColl and Darnell discussed how the bank has changed over the last 25 years and the role diversity played as NationsBank scaled and expanded to become the Bank of America we know today.
“I think we really understood that brains come in all different kinds of packages,” McColl said. “We didn’t really care what the package looked like, as long as people could get the job done. We were looking for brains, energy and talent. We needed it.”

Here are highlights from the conversation with Darnell and McColl, edited for brevity and clarity:
The need for supplier diversity
McColl: Well, we were really trying to attract good people to our company and we were here in Charlotte and a lot of good people were located in cities all over the world. We knew we had to have a better city and a stronger business community. We looked around and saw lapses in small businesses, in particular an absence of minority-owned businesses. That got us interested in that. We were trying to figure out how to move that ball. We came up with the idea inside the company. We decided we were going to have 10% of suppliers be minority suppliers.
Dealing with pushback

Darnell: That time period was kind of like The Wild, Wild West. It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company and I know there were some leaders that didn’t really understand that we needed this kind of program. You got some pushback. As the leader of our company, how did you handle that?
McColl: Internal resistance went away rapidly. I mellowed a lot as I got older, but when I was younger we would have a discussion about it, in which I did all the talking. We really would just tell them we want to do what’s right. It wasn’t very complicated, it was just doing the right thing and if you were good enough to be in charge or part of our businesses, you ought to be good enough to figure out how to get 10% of purchases from minorities and we did that.
I couldn’t decide whether to tell this story or not, but we had one very large telephone company essentially tell us they couldn’t do that, or wouldn’t do that and everybody said we can’t do anything — they won’t do it. I said, ‘Oh yeah? We could do something.’ So we started switching to Sprint. Guess what. They came around fast because we had a very large telephone bill.
We don’t do anything in a halfway deal. We liked to be the best at whatever we did. If we were going to have a minority purchasing business, we were going to be No. 1 in the country.
McColl’s secret formula
McColl: Something we shouldn’t lose is talking to our customers because people who don’t talk to customers, they will lose them. At the end of the day, customer satisfaction is a huge part of everything.
I always thought the formula was taking care of your own employees first. Then they will take care of the customers and that will take care of the shareholders.
Who hired Darnell?
McColl: I have to ask you a question. Did I hire you?
Darnell: I will tell you that you came to Chapel Hill to hold a ‘Meet the president of NCNB.’ I went, and that night — that’s when I decided that’s where I wanted to work, and it’s been a fun 36 years.
McColl: Well, we were glad to get you.
Words of wisdom
McColl: It seems to me that we should feel good that we’ve been successful and we’ve done it because we wanted to. We’ve had fun doing it and it’s the right thing to do. I don’t believe we want praise for it necessarily, we are just doing what we think is the right thing.
If I’m around here in a decade from now, which I plan to be — y’all cant get rid of my pension and it’s expensive by the way — I hope we can do this again.

Birmingham Civil Rights Institute to Host Supplier Diversity Event

Birmingham Business Journal

SAM HODGSON/BLOOMBERG

Birmingham, July 9, 2015 / The Birmingham Civil Rights Institute and Skye Connect Inc. are partnering on a supplier diversity training event on July 15.

The training, which will focus on new metrics and strategies for supplier diversity, will be led by Alice Gordon, CEO of Sky Connect and Layle McKelvey, supplier diversity manager for United Airlines.

The training will demonstrate how supplier diversity can improve innovation, drive technology enhancements and lower costs in both the service and manufacturing industry. Gordon formerly led the supplier diversity efforts at Alabama Power Co., which has nearly 2,000 diverse vendors and millions in spending with diverse companies.

Registered attendees will also have a chance to learn how to do business with United Airlines.

The target audience is supplier diversity managers, human resource professionals, sourcing agents, procurement managers and others.