Diverse suppliers are good for business and the community

 

Sponsored by JPMorgan Chase & Co.

Now more than ever, there’s a focus on prioritizing businesses that are actively addressing diversity, equity and inclusion, which creates opportunities for diverse suppliers.

JPMorgan Chase is dedicated to the development and utilization of qualified diverse businesses ”“ defined as companies that are at least 51 percent owned and operated by members of historically underrepresented groups, including minorities, women, military veterans, disabled veterans, service-disabled veterans, people with disabilities and members of the LGBT+ community.

Ted Archer, Global Head of Business Partner Diversity for JPMorgan Chase, recently spoke about why diverse suppliers are good for business and the community.

1.Tell us about how you came to lead supplier diversity at JPMorgan Chase and what inspired you to get involved in this work?

I”™ve been at JPMorgan Chase for seven years, and previously served on the firm”™s Global Philanthropy team as Head of Small Business. Most of my career has been dedicated to building business programs and partnerships that drive economic growth, and helping underrepresented businesses succeed. Supplier diversity is an exceptional discipline because its impact goes beyond the transactional and advances the fundamental opportunity for businesses to scale. Through its buying activity, the firm is able to make dreams possible for business owners, their employees and their communities.

2. In what ways does supplier diversity create value for companies?

Supplier diversity provides corporations with access to innovation. Diverse businesses often bring new perspectives and solutions to business problems. They also know how to operate efficiently with limited resources, and are agile enough to tailor their services to suit your business needs. Secondly, supplier diversity contributes to talent acquisition and employee retention. Prospective employees, particularly millennials and members of Gen Z, are very interested in corporate citizenship and will leave a company that isn”™t aligned with their values. Third, supplier diversity generates wealth in diverse communities. Diverse suppliers tend to hire within their local areas, providing jobs and incomes, lifting the overall economy. A prosperous and thriving community is good for business.

3. How are you re-thinking the way to approach supplier diversity, and what about this approach do you think would make supplier diversity more sustainable?

The formal practice of supplier diversity began in the mid-20^th century within a manufacturing and government procurement context. Supplier relationships were driven by pricing and product or service delivery.  

However, an important component of supplier diversity is supplier development. Small and underrepresented businesses often don”™t have access to the same resources, financing and contacts that large majority-owned companies do. Taking the time to build deeper relationships with these businesses enables you to identify other ways to support their growth including creating connections to networks  that lead to contract opportunities, capital and other resources. Additionally, you should work closely with them as they navigate your organization. Reducing the complexity of working with a large company goes a long way in enabling the supplier to deliver their services successfully.

By moving away from framing procurement in transactional terms, not only do we grow diverse businesses, but we also drive value for corporations by increasing the number of strong, agile and innovative companies in our supply chains.

It”™s also time to consider diverse businesses in a wider range of purchasing categories including technology and professional services. An intentional focus on leveling the playing field in future-facing industries enables us to identify businesses that are positioned for rapid growth, and higher profit margins, which could help close economic disparities in underserved communities, including the racial wealth gap.

4. How are you amplifying the impact of supplier diversity across the wider business community?

We have mobilized over 100 of our top suppliers, known as “Gold Suppliers,” to mirror the firm”™s commitment to supplier diversity by enhancing their own supplier diversity programs and their efforts to include more diverse businesses in their supply chains over a three-year period.

Understanding that different companies have different levels of diversity program maturity, we are meeting them where they are and providing them with mentoring, coaching and education so they are better equipped to run a successful supplier diversity program of their own.

While we”™re measuring spend increases, the larger purpose is to have these companies develop sustainable programs that will generate opportunity and growth for decades to come.
Over the last two years, nearly 90% of our Gold Suppliers have committed to spend increases generating more than $6 billion in new spend with underrepresented businesses. Additionally, 85% of the Gold suppliers enrolled in the firm”™s supplier diversity mentorship program launched new supplier diversity programs in 2022.

5. How would a diverse business get started to work with large companies like JPMorgan Chase?

For businesses interested in providing services to companies in the private sector, the best first step is to become certified by a diverse business certifying organization. While many business owners are familiar with government diversity certifications, there are also certifications that are well recognized by private-sector corporations, such as the National Minority Supplier Development Council, which certifies businesses that are at least 51% owned and operated by an ethnic minority (Black, Hispanic, Asian, Native American). Another organization is the Women”™s Business Enterprise National Council (WBENC) which certifies woman-owned companies. They each have affiliates across the United States that provide services locally. There are also organizations that certify veterans, such as the National Veterans Business Development Council (NVBDC); businesses owned by people with disabilities (Disability:IN) and members of the LGBTQ+ community (National LGBT Chamber of Commerce). These organizations do more than provide a certificate. They provide a network of corporate executives and other diverse business owners who can help foster business growth.

However, certification alone will not ensure success. Business owners have to begin developing relationships with prospective corporate clients. Two ways to get started are: 1) leverage the certifying organizations. Throughout the year, they host conferences, matchmakers, seminars and webinars ”“ all designed to provide business owners with information and enable them to meet and network with corporate executives. 2) Register with each prospective corporate client. Companies with active supplier diversity programs often have online registration portals through which they invite business owners to share their company history and capabilities. JPMorgan Chase has a Supplier Diversity Network which is a searchable database for our supplier diversity and sourcing teams to find new diverse businesses when contract opportunities come up.

Business owners should be prepared for the time it will take to get from first contact and registration with a corporation to actually executing a new business contract. It may take months, and even a year or two. Corporate purchasing is driven by business need so entrepreneurs should be prepared to develop a long term strategy and cultivate relationships with procurement teams and supplier diversity leaders who can provide insight into upcoming opportunities.