Supplier Development Comes Up Short: Until the thinking changes

ImageThere seems to be a supplier development craze going on. More and more organizations seem to want to answer the “how-to” questions for minority suppliers. No less than five organizations have sought our counsel on supplier development initiatives in the last two months alone. There is no doubt supplier development is important and it is especially important for diverse businesses. But what is more important is how organizations delivering supplier development support and the diverse business owners who participate think about supplier development. Without the right thinking supplier development probably doesn’t hurt (except for the waste of time and money) but it is unlikely to add much value. How we think about what we do is the largest contributor to how well we ultimately do it.

There are a few easy questions to test the thinking of an organization participating in supplier development.  Are they doing it because they could get funding for it or because they have the expertise and process to make it effective? Are their measures of success more about what activities they performed than how much more competitive the participating businesses became? Does working with more businesses automatically equal success for the organization? If any of these are true the thinking is likely wrong and the investment in supplier development is likely a waste.

Business owners have to think differently too. It is one thing to know the “how-to” of important supplier capabilities like business operations, process improvement and account management. It is another to consistently implement what you know. The difference is in the thinking. Do the business owners want to build a competitive organization or simply gain access to a contract? Are they open to advice and willing to change or simply going through the motions to say they participated? Are they leveraging the supplier diversity initiative to gain access or are they depending on it to sustain their business? Sending the wrong thinking through the right supplier development process will give you very little in return.

In our well meaning desire to do something it is easy to lose sight of what we are really trying to accomplish. The big picture goal is to create a base of competitive diverse suppliers. Supplier development is undoubtedly a valuable tool. We just have to get and keep ourselves focused on the right thinking: a process that works and one focused on the elements creating competitive suppliers; metrics that measure impact and progress and not just activity; participants whose aspiration is to be competitive and to deliver value and not just get a contract. Supplier development is important but our thinking about supplier development is even more important. That’s what I think. What do you think?

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  • Dr. Melvin Gravely is professionally dedicated to developing capacity and opportunity for minority entrepreneurs.  He is the author of the popular books, The Lost Art of Entrepreneurship, When Black and White Make Green and his latest book, Getting to the Next Level: Business, Race and Our Common Goal to Be Competitive.  Gravely is a sought after keynote speaker and respected advisor to major corporations, chambers of commerce executives, urban city leaders, and NMSDC affiliates.

    Dr. Gravely is a frequent guest on radio stations from Los Angeles to New York and has been featured in many national publications including Black Enterprise Magazine, Ebony Magazine, Entrepreneur Magazine and American City Business Journals.

    After ten successful years working for a large corporation, he co-founded a civil engineering firm and grew it into a multimillion dollar company.  Dr. Gravely is the director of the Minority Business Accelerator, part of the Cincinnati USA Regional Chamber.  He is also an author, speaker, and entrepreneur. Dr. Gravely speaks and writes on various topics related to entrepreneurial thinking and minority business development.  He is the author of six other books, including The Lost Art of Entrepreneurship.