I’m writing this post from 30,000 feet, as I return home from Orlando, Florida where, over the past week, several members of the NWBC have been “creating magic together” at the Women’s Business Enterprise National Council (WBENC) National Conference and Business Fair. Though the highlights were many—including opportunities to hear from established women business owners, learn more about the certification process, and visit Epcot Center—perhaps the most exciting part of the trip was the opportunity to meet and talk to several engaged and innovative corporate supplier diversity leaders in attendance.
Yes, I think my job is even cooler than Disney World.
Corporate supplier diversity programs are corporations’ explicit effort to include into their supply chains businesses owned by underrepresented groups, such as racial or ethnic minorities, veterans, or women. By no means a guarantee of business—firms compete with other qualified firms for contracts—supplier diversity programs represent a corporations efforts to actively identify, recruit, and offer guidance to business owners who bring racial, ethnic, gender, or other diversity to the corporate supply chain.
Though these programs and efforts have long been considered “the right thing to do,” they are increasingly understood to go hand-in-hand with healthy bottom lines, as well. In fact, companies that emphasize supplier diversity generate 133 percent greater returns on procurement investments than those firms without supplier diversity initiatives.[1] And, of course, supplying to large companies is an excellent strategy for businesses to scale up, as securing such contracts can lead to increased revenue and the opportunity to develop sustainable and long-term relationships. Although a majority of women business owners employ no full-time workers, and see less than $1M in revenue, many in this majority seek to create jobs and grow their receipts; these are the business owners who stand to gain the most from participation in these programs.
With all this in mind, the National Women’s Business Council is pleased today to announce the release of our latest report, Research on Women’s Participation in Corporate Supplier Diversity Programs. This report details findings from a first-of-its-kind survey of over 800 woman-owned businesses with at least $25,000 in annual revenues, specifically designed to illuminate women business owners’ experiences with corporate supplier diversity programs. The report specifically highlights factors that facilitate or impede women business owners’ participation in private sector supplier diversity programs, and offers preliminary recommendations for how to improve such offerings. Outcomes will be of interest to business owners seeking to supply with large corporations, corporations themselves, and policy-makers at all levels.
Important takeaways include:
- The most in-demand supplier diversity program offering is “introductions,” with approximately 75 percent of respondents indicating that they are likely to participate in that component of a program.
- The number one impediment faced is the lack of contacts with decision-makers, closely followed by the lack of relationships with actual buyers.
- Respondents report less interest in participating in mentorship and training than in meeting decision-makers.
While only about 5 percent of surveyed firms with receipts under $100K have won a corporate contract, over one quarter of firms with more than $1M in revenue report the same. However, through detailed investigation, this work reveals that women business owners across nearly all revenue categories report similar barriers to supplying large corporations, indicating that the gap in women’s participation as corporate suppliers is not entirely a function of capacity. Other factors, such as more limited networks, may also play a role in woman-owned businesses’ relative underrepresentation as corporate suppliers. (We’ve discussed the importance of networking before, and even created a toolkit on the topic—check it out here!)
The report released today highlights the importance of women business owners’, corporate supplier diversity personnel’s, and procurement officials’ attendance at supplier conferences or procurement fairs. This reminder brings us back to where we started: the WBENC National Conference and Business Fair, where I enjoyed meeting plenty of folks in each of these roles—and got a chance to learn more about supplier diversity from the corporate perspective. More on that, soon.
Check out our latest research report on women business owners’ experiences with supplier diversity programs. Then, stay tuned for Part II, coming this fall, which more fully explores the corporate perspective on the value of these programs, best practices in their implementation, and how women business owners can successfully leverage them to secure business and scale up.
Author: Annie Rorem is the Senior Research Manager at the National Women’s Business Council.
[1] Jones, Steven D. “Benefits of Supplier Diversity May Go Beyond ‘Social Good.’” The Wall Street Journal. August 21, 2006.