A CPO session I attended recently that explored the challenging issue of diversity in procurement was sobering, occasionally disappointing and at times downright outrageous.
Thankfully, the emotions I felt had nothing to do with the quality of the conversation – rather the content. It provided a timely reminder of just how much work needs to be done to improve diversity, even before the headwinds that will come with a new Trump-led administration in the White House.
Some statistics shared during the discussion helped illustrate the point. Just 8% of current procurement in the US is spent with diverse suppliers, while only 1% of global procurement is spent with women-owned businesses.
The data, provided by Standard Chartered during a discussion at Procurement Leaders’ Asia-Pacific Procurement Congress, provided a stark reminder of the reality of global business: a picture further tarnished by the fact that while women founders make up 25% of all new startups each year, they receive only 2% of venture funding annually.
There’s so much to absorb and make sense of here, but most can be distilled down to the very simple, human question: ‘why?’
Why are large companies not giving their business to diverse-owned suppliers? Why are women-founders only making up one-quarter of new startups? Why does such a minority of funding find its way into the hands of female entrepreneurs?
The answers to these simple questions are maddeningly complex, but much of it is related to the underlying system and hundreds of years of legacy behaviour. It’s why the work of individuals is so crucial – and will become even more so – in the short to mid-term time frame both in terms of signal value and impact.
A statement of fact: As executives in charge of billions of dollars of spend, CPOs have the power to drive change by taking deliberate action with their spend decisions.
So, why not register with WEConnect to gain access to a database of women-led businesses? While you’re at it, spend some time with the Billion Dollar Roundtable or Social Enterprise UK (or the European equivalent, Telos) to understand how diverse and social enterprises can help fulfil your supply needs while supporting social causes.
At the same time, get a better understanding of how easy your procurement processes – and, not least, your payment terms – are for small- and medium-sized businesses to navigate.
In short, take a stand and make a deliberate pledge to help build a fairer, more equitable, business world.
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