Are You Ready for a Supplier Diversity Policy Just Yet?

As we wrap up the first quarter of 2021, it’s still not too late to consider some goals and objectives for your organization to finish out the year, and with trends pointing towards more and more initiatives surrounding diversity perhaps now is the time to consider a supplier diversity program. 

Whether the need for a defined program is coming from your clients or other regulatory requirements, a policy may not always be the best place to start. Consider the lift and efficacy of a newly drafted policy and consider the question: Am I ready for a supplier diversity policy just yet?

While policy may seem like the logical place to start when building out your supplier diversity program, you may actually be jumping ahead a few steps and discover further down the road your policy isn’t quite the right fit for your program. Consider building out your program from the ground up, with emphasis on defining what your program is or will be, what is in scope for your policy, and how your policy governs your program. If you spend time and effort drafting a policy that doesn’t accurately speak to your program you have only wasted valuable resources that could have spent time researching and developing your program. Recommended first steps are defining requirements, stakeholder interviews, or building out a RACI for the specific roles within your program before defining any processes or procedures for your program.

Once you have a detailed list of roles and responsibilities associated with your program, now may be the right time to consider the procedural duties for your program. If you have an established procurement procedure, start here to highlight the areas where new diversity requirements can be implemented (workflows and diagrams are a great way to visualize your process and procedure and begin to whiteboard opportunities for diversity involvement). Understanding what steps will satisfy your diversity requirements can make implementation easier, especially by limiting additional steps that may be perceived as bottlenecks. Communication will also be key when implementing your program, so be sure to consider how and when you will be inserting your diversity procedure into existing processes and be prepared to handle any resistance or feedback if changes are significant.

After you have established what some of the tactical work will look like, consider any technology or support needed to implement this initiative and start to engage the proper teams to begin your actual build. This may mean engaging your procurement, finance, or risk partners, or it may mean working with your system administrators or IT teams to begin implementing the necessary supplier information management (SIM) components. The ability to sort, filter, classify, and manage your suppliers will be vital when building out program, especially when considering Tier I versus Tier II reporting. Try to limit the number of manual processes needed to satisfy any program requirements so a large portion of this work can be automated through proper channels.

If you have defined your program, established requirements, and have a clear path ahead how you will manage your program and supply base, you may be ready to dive into policy development. This ultimately should function as law for your program, so be sure to plan a proper rollout and implementation for your program and how you communicate and disseminate your policy. Use the first few months of a new program to measure success and try and coordinate with a review of your policy so you can properly update. As a final recommendation on policy, be sure to include a change log to monitor and track any edits to your policy. If you find yourself having to edit over multiple iterations, revisit some of the previous steps in your program development to see if you are missing important components in your RACI or defined roles and processes.

While it may be tempting to start with policy, be sure to have all requirements and responsibilities documented, as well as a defined “happy path” for your program before jumping ahead to policy drafting. This can help ensure you have a robust policy that speaks accurately to your program instead of a policy of wish list items of how you want your program to work.