How Can Corporate America Be Truly Inclusive?
Well-intentioned and increasingly popular supplier diversity programs often fail Black-owned businesses, says diversity and inclusion strategist Denise Hamilton.
Writing in the Harvard Business Review recently, Hamilton noted that many businesses took steps to beef up their supplier diversity programs and announced related initiatives in the wake of George Floyd’s murder in 2020. For example, Target’s CEO has spoken about how that event forced him to rethink the role of corporate America in addressing racial inequality.
“As CEOs, we have to be the company’s head of diversity and inclusion,” Brian Cornell told a business group this week. “We have to be the role models that drive change and our voice is important.”
Hamilton’s advice to well-meaning business leaders: Listen more. “If you sincerely want to help Black businesses,” she wrote, “try asking them what they need and listen to their answers.”
- Be customers, not teachers — “Many supplier diversity programs included programs to teach entrepreneurs how to compete for contracts with big companies. But who says we need teaching?” she wrote, noting that her business already has multiple contracts with large corporations. “Many of us don’t need training; we need customers. Black does not equal remedial.”
- Establish pricing transparency — “Black business owners often find ourselves underbidding other suppliers without knowing it,” Hamilton observed. “With fewer connections who have knowledge and information about ballpark ranges for certain contracts, we’re left on the outside doing guesswork in offering our proposals. Only once we’ve been selected and begun doing the work does someone mention — usually off-hand, not realizing we were unaware — that we charged much less than others.”
- Fix pay cycles — Black owners, who have less access to capital and often face higher interest rates, struggle to make ends meet when corporate clients take 75 days or longer to pay invoices. “In working for months before we begin to be paid, we’re effectively providing interest-free loans to corporations in the form of our work,” Hamilton wrote. “To boost Black-owned businesses, shorten pay cycles to ‘net 30’ [30 days] or less.”
“Top executives should put more effort into fixing these problems, and less into announcing how much they care,” she concluded. “Together with hard-working suppliers of all backgrounds, corporate America can build a new normal — one more fair, equitable and successful than ever.”
Hamilton’s article can be found here.