Diversity, Equity & Inclusion
Scaling DE&I through supplier diversity
Working with Korn Ferry, a non-profit health care organization expanded its DE&I efforts with a renewed focus on supplier diversity.
Scaling DE&I through supplier diversity
This non-profit health care organization had grown to become one of the largest health care providers in the state. It was part of the fabric of the region, with a highly visible presence and a positive reputation as both a reliable community partner and a trusted health care provider. Recognizing its influence and responsibility to the racially and socioeconomically diverse communities it serves, the organization's leaders felt they could and should be doing more to advance the values that were important to them.
With that end in sight, the organization partnered with Korn Ferry to develop a strategy for addressing health equity in its service area. At the same time, they embarked on a project with us to develop a comprehensive approach to DE&I. DE&I was in the organization's DNA, but there wasn't yet a strategy in place. The consensus among senior leaders and key stakeholders was that, "We've started the journey, but we need to scale the journey," says Flo Falayi, Korn Ferry's Associate Client Partner who led the engagement.
Supplier diversity was a key component of scaling DE&I. Building inclusive supply chains and vendor networks was a natural fit for the organization's strategy and business model. It had the potential to stimulate local economic development while also improving health equity and health conditions within the surrounding environment.
The organization's procurement team had a long history of engaging local diverse businesses, but those initiatives weren't explicitly focused on supplier diversity. In 2021, as part of its broader DE&I effort, the organization engaged us to take a step back, assess the current state of its supplier diversity, and create a roadmap and strategy informed by best-in-class supplier diversity programs. "They wanted us to help them shape what the journey would look like," Falayi says.
Our solution included three distinct phases: performing a current assessment based on stakeholder interviews, followed by benchmarking and opportunity mapping.
We conducted in-depth interviews with a cross-section of senior leaders in the organization, gauging their perspectives on topics including the appetite for change and potential barriers to scaling supplier diversity.
The strength that stood out immediately to us was the organization's reputation and its existing relationships with diverse suppliers. "They have a lot of really strong relationships in their community," says Valerie Fissidas, Senior Research Associate at Korn Ferry. "They serve a very diverse community, and they are a leader in their community for health care, and they wanted to make sure that they are reflective of the communities that they serve."
The stakeholder interviews also turned up several key operational challenges. The organization lacked many of the processes and infrastructure seen in best-in-class supplier diversity programs, such as:
The limited data on diverse suppliers was a recurring theme. Though the organization did have data on the total number of diverse suppliers, the data was not segmented by ownership designations, such as which businesses were run by women, minorities, veterans or LGBTQ+ individuals. The organization had a solid foundation and the will, but the lack of actionable data left it largely flying blind.
"If you want to build this, you need data," Falayi advised the client. "You need a way to translate insight into action."
We then identified a list of five comparable health care organizations whose supplier diversity programs were considered best-in-class. Some of the most important shared attributes included:
“Seeing how similar organizations are further along on the journey is key”, says Fissidas, who led the benchmark analysis. Understanding how they approached the same challenges and limitations helped clarify near-term opportunities while keeping the bigger picture in focus.
Finally, we blended insights from the stakeholder interviews and benchmarking to develop an opportunities map. Recommendations focused on the organization's existing strengths, such as expanding current partnerships with diverse suppliers through training, education and community outreach.
Together with the client, we worked to identify actionable short-term opportunities to deepen those relationships. This included hosting community events and educational sessions for local businesses on how to become a vendor and partnering with existing suppliers on workshops about inclusive business practices.
"We recommended that they really dive in and not only go after new suppliers but also focus on the relationship that they have with current suppliers," Fissidas says. "That was one of the more personal recommendations to that organization just because of their community focus."
We incorporated the comprehensive list of opportunities into a supplier diversity program roadmap, which was divided into short- and long-term goals. The short-term goals (one to three years) included cleaning up and validating existing supplier data and establishing a diversity spend baseline. It then required assigning a dedicated individual or team to supplier diversity and updating the onboarding process for diverse suppliers (including the creation of education and training materials).
We also recommended the organization become a member of the Healthcare Anchor Network, a coalition of health systems committed to using their purchasing power to improve the communities they serve, including through supplier diversity.
The longer-term goals (three to five years) painted a picture of what Falayi calls "transformational alignment" with diverse suppliers. This requires exploring new data systems, building community partnerships, hiring dedicated staff, establishing performance and accountability criteria, and gaining visibility into suppliers' diversity spend (known as Tier 2 reporting).
"We wanted to show them the goals they can start with in the short term and what it's going to look like on their journey to get them to a world-class program," Fissidas says.
The organization is in the early days of its journey, but it now has a clear view of its destination and a roadmap to get there.