Shell Energizes Supplier Diversity Initiative

When you’ve been one of the industry leaders in diversity for more than 40 years, it can be easy to become used to winning and lose your competitive fire. Year after year of meeting or outperforming your goals can make even the most astute achievers a bit complacent. Fortunately, that’s not the case oil and gas energy leader Shell Oil Company finds itself in with its supplier diversity program. However, after taking a long hard look at its past successes and setting a vision for new goals and achievements, the company has hit refresh and is retooling its supplier diversity practices.

One of the first things Shell has done is to create an executive steering team, chaired by the company’s U.S. Country Chair and President Bruce Culpepper and driven by leaders of the company’s major U.S. businesses. According to Debra Stewart, director, Supplier Diversity and Diversity Outreach, these company executives have partnered with the leadership of the procurement team to develop supplier diversity growth strategies for all of Shell’s U.S. businesses.

“Supplier development is to be included in the Supplier diversity strategies of each of these businesses. Some of the businesses have identified particular suppliers that they want to grow and develop, and others will be moving to do the same,” Stewart said.

Supplier development and capacity building is a major need for the energy industry. With this need in view, an exciting new initiative that Shell also has underwritten in a collaboration with the Women’s Business Enterprise National Council (WBENC) and energy industry peers provides intensive training to leaders of women’s business enterprises (WBEs) who are either current suppliers in the energy supply chain, or have the potential to be. The WBENC Energy Executive Program is a week-long, immersive executive education experience that will focus on “increasing the competitive advantage, capabilities and strategy development of each WBE.”

“The intent of [the program] is to provide an experience to give WBE’s and their leaders an intensive experience that incorporates knowledge of the energy industry into a delivery of business training,” Stewart elaborated. The program is the result of Shell reviewing its largest diverse spend categories and recognizing that there were few minority-and women-owned business enterprises (MWBEs) in many of those categories who had significant experience in the energy industry. Stewart said, “We would like to see more WBEs, and MBEs participating in some of these categories in our industry.”

“There are some places where we have gaps, where we spend significant money year in and year out, and there are just a few MWBEs. If we, as an industry, want to significantly grow our ability to do business with MWBEs, we need to support them in gaining the knowledge and access to resources to develop their capabilities and accelerate their growth to scale in our industry,” she added.

The inaugural pilot of the WBENC Energy Executive Program will be held November 5-10, 2017 at the Shell Robert Training & Conference Center in Louisiana. Industry experts and professors from the University of Texas, McCombs School of Business will teach the curriculum and energy industry executives will be featured as guest speakers, with opportunities for WBEs to network with them and each other. Stewart expects that the learning from this pilot will be high impact and lead to opportunity for the energy industry to pilot with WBENC to offer it annually.

Shell was one of the earliest supplier diversity practitioners in the oil and gas industry and one of the founding sponsors of the Houston Minority Supplier Development Council. For many years, the company was a leader in the industry in the amount of business it was doing with MWBEs. However, a few years ago, the company’s MWBE spend began to decline and industry peers “were catching up and passing us, and we weren’t happy with that,” Stewart admitted.

DEBRA STEWART»

“We globalized our businesses, we globalized procurement and we began to do bigger, longer term contracts— regional and global contracts. That kind of approach put pressure on our ability to do business with local businesses, not only in the U.S., but in some other countries, as well,” she continued. “We raised an alarm with our U.S. leadership saying, ‘We are committed as a company to local content, but our performance in local content in the U.S. with respect to minority- and women-owned businesses is such that we’re no longer in leadership.'”

In order to reverse that trend, Shell began the process of refreshing its supplier diversity initiative at the beginning of 2016 with the goal to have 10 percent of its third-party discretionary spend dedicated to minority- and woman-owned businesses.

Stewart, a 28-year Shell veteran whose mission is “to transform the way supplier diversity is done,” acknowledged that meeting that goal is going to be a challenge. But Shell, with its history of supplier diversity achievement, is planning to meet it through a more rigorous approach in driving inclusion in its supply chain and helping to build the capacity of MWBE’s in the energy industry.

“To achieve and sustain our goal, we must be much more rigorous in driving inclusion in our supply chain processes, and make sure that supplier diversity is deeply embedded, or re-embedded, if you will, in our business processes and in the priorities of our business leaders, not just our procurement teams. We need to get engaged with capacity building to help grow and develop MWBEs in some of these categories where there is very little participation today.”

Deborah Wallace, Barfield Photography