At the recent Jaggaer Rev conference in Nashville, there was considerable focus on sustainable and purposeful procurement (hence my keynote). Procurement technology firm Jaggaer is certainly getting behind that agenda and there is a genuine commitment to the cause from their senior people I spoke to at the event.
At one stand-out conference session, we heard from a couple of impressive Harvard University procurement leaders, who described their supplier diversity and inclusion programme. (CPO Sara Malconian also spoke during a panel discussion during the event).
Lauren Aiello (Director of Strategic Sourcing) and Taisha Crayton, who heads the “Office for Economic Inclusion and Diversity” (OEID) at Harvard explained that the demand to do more around supplier diversity came initially from the faculties at the University, from staff and students. The initiative would demonstrate Harvard’s commitment to invest in the growth and development of diverse businesses.
But whilst that demand was an important driving force, the “why” of supplier diversity needs to be defined in a more specific manner. Harvard identified these benefits:
· Diversity drives innovation and creativity, which provide a competitive edge
· It creates a more competitive process, and new players challenge existing suppliers
· It supports the reduction of racial and gender pay / wealth gaps
· Multiple and diverse supply side resources widens the supply pool, increasing resilience
· Program promotes Harvard’s values and commitment to economic inclusion and diversity
Procurement is very devolved in the organisation, so the task for the central team was to develop a framework for implementation at the operational level. That framework includes:
· Articulation of a diverse supplier vision
· Clear metrics
· Supplier diversity & inclusion personnel in place
· Data tools
· School / unit engagement and support
· Identify / address the barriers to growth of the diverse supplier community
“OEID encourages the use of underrepresented businesses enterprises in the purchasing of all goods services and construction at the University”, Crayton said. It is dedicated to creating resources, training and opportunities of engagement both internally and externally that are sustainable, transparent and allow for continuous improvement. The unit also has a governance role, ensuring sponsorship, policies, procedures, and “champions” are in place in the university’s various schools.
Despite the impressive progress, Crayton acknowledged that the program is still at an early stage. There are no agreed goals yet – “we need to establish exactly where we are before we set targets”. There can also be distortions in measurement, which is why it is important to look at both spend and number of suppliers when measuring progress. “One very large contract with a minority-owned supplier in a particular year can distort the picture when you make comparisons”.
But the task to embed diversity thinking in the category management process has started. That will include a baseline of diverse business count by category, a dashboard for quarterly reporting, and annual diversity spend plans. The wider programme is developing a training and education programme for UBEs (under-represented business enterprises), standardising data collection and reporting on tier 1-3 suppliers, and looking at implementing economic inclusion and diversity language in standard contracts. Harvard is also using Tealbook (the supplier data platform) to help enrich supplier data and provide wider benchmarks, and Tealbook is also a resource to help buyers find diverse suppliers.
Crayton’s team is also working with construction colleagues, with a dedicated resource for that critical opportunity area. As well as the wider initiatives, a standardized onboarding process, investment in diversity tracking and compliance, and input into the development of a “construction academy” are on the agenda there. There is also a scheme through which Harvard MBA students will mentor UBEs – what a good idea!
The session finished with six proposed headline “action points” for those looking to develop supplier diversity.
· Communicate
· Enrich data
· Collaborate
· Standardise
· Educate
· Address barriers to entry and growth
Of course not everyone has the resources to set up a dedicated unit in the way Harvard has. But for larger organisations, public or private sector, the Harvard OEID is an impressive and interesting model in terms of its remit and priorities. It will be interesting to see how the results and outcomes look in a couple of years’ time – something to look forward to at Jaggaer REV 2024 perhaps!