How Big-Time Marketers Commit to Diversity in the Supply Chain

The Billion Dollar Roundtable Uses Its Clout to Advocate for Inclusive Supplier Policies

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When a colleague mentioned the Billion Dollar Roundtable, the first thing that came to mind was an extremely elegant circular piece of furniture in one of the high-brow showrooms near our offices within the Pacific Design Center in West Hollywood. But it is actually an important and thoughtful organization whose mission is to promote supplier diversity within companies throughout the country.

It is a small but mighty group of 18 corporations founded in 2001; each spends at least $1 billion a year with minority- and women-owned businesses. Members include Avis, Ford, Johnson & Johnson, P&G, Toyota, Verizon and Walmart Stores.

The Roundtable's mission is to "drive supplier diversity excellence through thought leadership and the sharing of best practices," says Sharon Patterson, the organization's president and CEO. "We want to ensure that supplier diversity is integrated into corporate America's primary supply-chain strategies and processes." This includes budgets allocated by corporate marketers for advertising, promotions, communications, print and broadcast productions, media buying and social media.

The organization holds an annual summit where corporate members share their knowledge and experiences. Findings are reported in policy papers archived on the Roundtable's website. These document a correlation between a successful supplier-diversity program and stronger consumer brand awareness, increased sales, wealth creation and brand loyalty. The next summit will be in New Brunswick, N.J., Aug. 20-21, hosted by Johnson & Johnson. The summits are open to members and invited thought leaders from around the country.

"Supplier diversity is a strategic business imperative and vitally important to everything we do," says Johnson & Johnson spokesperson Carol Goodrich. "We believe Fortune 500 companies have an opportunity to leverage the power of diversity and inclusion in all aspects of their business, including supplier diversity."

Yet even with growing awareness of diversity in the United States, the Billion Dollar Roundtable has only 18 members, which makes one wonder what the other 482 companies listed among the Fortune 500 are doing to advance supplier diversity. "Given the state of our economy, partly driven by changing demographics, the growing purchasing power of ethnic groups and the increase in diverse businesses, corporate leaders will need supplier-diversity initiatives to integrate their supply chain," Patterson says.

The summit will include multicultural and mass-market advertising agencies, including Draftfcb, GSD&M and Saatchi & Saatchi. The large advertising and communications holding companies such as Interpublic Group and Omnicom have dedicated executives to increase the level of diversity, inclusion and engagement within their worldwide networks.

Draftfcb Executive Vice President Jeff Tarakajian, who will be speaking at the summit, says his agency's engagement in supplier diversity has contributed to the success of its client work. He says Draftfcb has client and agency-mandated goals for achieving diverse sourcing of goods and services. "Through our internal sourcing programs, supplier-diversity fairs, lunch-and-learn events, creative match-making sessions and external outreach, our agency has sourced vendors that complement our offerings, while reaching our diversity goals."

Corporate marketers are also placing more emphasis on supply-chain diversity. Toyota Motor North America relies heavily on its suppliers to provide the necessary parts to build automobiles and trucks. Its emphasis on quality, customer service and the timely delivery of vehicles requires a strong commitment to supplier diversity in the United States and around the world. Furthermore, Toyota leaders are placing the same expectations on their own supplier base, including advertising, marketing and communications agencies, to use more diverse suppliers as well.

"Our advertising agencies are very important to our overall marketing campaign," says Monetta Stephens, manager of supplier diversity at Toyota Motor Sales. "They are also important to our supplier-diversity initiative. In order for supplier diversity to succeed, everyone must take ownership of it." Adds Tarakajian, "It's also imperative that the advertising industry produces creative marketing campaigns that resonate with diverse consumers and drives them to action."

He adds that supplier diversity needs to be more than just a feel-good initiative. Instead, it must include positive changes that involve people at all levels of the company, drive product enhancements and innovation and push for better performance measures. At Johnson & Johnson, says Goodrich, "Our results are reviewed by the executive committee and there is direct accountability back to them for performance against our supplier-diversity goals. Compensation is tied to goal achievement and our supplier-diversity results are included as a key performance metric in many of our company's internal and external reports."

All of this is music to Patterson's ears. When she talks about supplier diversity, she says, this is what she tells companies:

1. Identify, clearly understand and effectively communicate the business case for supplier diversity throughout the organization to secure appropriate acceptance and buy-in, starting with the C-Suite.

2. Obtain C-Suite commitment, resources and authority.

3. Set supplier-diversity goals at all levels of the organization with individuals who buy or influence the buying of goods and services.

Bill Imada is chairman-CEO of the IW Group, New York.
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