Supplier-Diversity Contracts

Picture this:

A small diverse firm just won a highly soughtafter contract with a Fortune 500 company. Although very excited about the awarded contract, the realization of the project’s magnitude begins to set in. Having recently lost experienced employees due to a shortage of work, and waiting for accounts receivable from other completed jobs, the firm fears they don’t have the human resources, the knowledge or the funds to deliver on time and on budget as promised. Still, they begin the project hoping that things will be okay. They have to be because this is their livelihood. But what if things don’t turn out as planned?

This is a scenario that, unfortunately, plays out all too often. Many diversity programs face some opposition within organizations, and when one vendor doesn’t work out, internal clients are hesitant to try another.

Going for the contract with a large corporation is an aspiration for many smaller suppliers.

But those that under-deliver results or overstate capabilities could do more harm than good to the supplier diversity initiative.

Being unable to meet budgets and timelines not only hurts the goals and objectives of a diversity program, but can also severely tarnish a firm’s reputation. When internal clients share good customer experiences amongst each other, word travels fast. When they share their bad experiences, it travels even faster. It is not fair; it is not right, but it happens.

How do we ensure prospective suppliers are indeed ready for the project they are seeking?

When a diversity professional introduces a vendor to the project manager of a corporation, he or she should seek to balance the supplier’s capabilities with the opportunity to find a good fit. Implementing a few crucial steps to the bidding process can secure a successful relationship before securing the coveted contract.

1. MEET FACE-TO-FACE

Decision-makers may look at financials, get information about project experience and check for web presence, but these alone do not provide a full view of a potential supplier.

Meeting with the project manager affords a supplier an opportunity to impress and to be included in a request for proposal (RFP) or other future opportunity. Sometimes a connection is made, and technical expertise or a special niche is identified that can possibly work on a future project. Although this step often eliminates unqualified candidates, even at this point the readiness is not fully identified.

2. ASK THE RIGHT QUESTIONS

Are corporations really listening to what the supplier is saying? The answer lies in communication.

When asked about the number of employees, is the supplier planning on finding employees when it is given the opportunity, or does it already have the right people? Is it the experience of the overall organization or of the individual that qualifies the firm? Are the employees as knowledgeable and skillful as the owner? Do they possess the technical expertise the project requires? When presented with two businesses that will work together in a supplier-diversity consortium, is the collaboration viable, with responsibilities clearly defined between the vendors, or has it been thrown together just to win the bid?

A diversity professional asks these and many other questions, but to get to the real story, there has to be a relationship with the supplier, leading to the third step.

3. CLEAR COMMUNICATION

Strong communication is what builds strong relationships. Having conversations that probe deeply into the supplier’s experience helps corporations further understand the business. It also provides a chance to describe how they are able to handle challenges and offer innovative solutions. This is an opening to hear about dealing with adverse conditions and overcoming obstacles before forming a partnership.

The corporation’s representative can take this occasion to provide candid feedback on the supplier’s communication skills, and to share helpful information like company culture.

This is the first step to helping the supplier recognize that communication is key and often can have the greatest impact on their reputation. Those who can demonstrate their awareness of the need for open communication are showing they are willing to go above and beyond to ensure success.

The ability to communicate goes hand-in-hand with relationship management. If there is open communication between the supplier and the corporation, many issues can be resolved quickly and easily. However, if there is little or no communication, the smallest challenge when not addressed can lead to the termination of a contract.

Surprisingly, some suppliers do not ask questions during the RFP nor do they ask questions once the contract is awarded. They figure they have done this type of work elsewhere. Unfortunately, this is not always the case. Each firm, and often each of its internal departments, can have their own way of doing things, which could have a major impact on whether they can be considered as a reliable supplier. This presents a unique opportunity for the firm to provide insight into how “things are done” within the different internal organizations.

Diversity professionals can help suppliers by providing candid feedback and insight into the inner workings of the organization. They can help by ensuring awareness of the corporation’s expectations and of any potential consequences should expectations not be met. The meetings and conversations with potential candidates are the best opportunity for setting the tone for open communication. When the right supplier gets the right opportunity, everyone wins!