Dial P for Procurement
Episode 29

Economic impact is much greater than jobs created. Children from high income homes are six times more likely to graduate from college. That has a multigenerational impact on a family. Every $1,000 increase in household income increases the likelihood of young adult employment by a percentage point. These are meaningful and eye-opening changes for our society and for our communities.

-Ken Yearwood, Associate Partner, McKinsey & Company

Episode Summary

Supplier diversity is not a new corporate initiative. In 1968, General Motors started what is generally recognized as one of the first supplier diversity programs in America.

The death of George Floyd in 2020 raised awareness of supplier diversity programs in the C-suite. Widespread demonstrations and public outcry drove renewed corporate interest and activism across industries and in companies of all sizes.

Almost immediately, the operational challenges associated with turning those intentions into reality at scale set in. Finding suppliers to partner with, setting the most appropriate KPIs, and positioning supplier diversity relative to other ESG (Environmental, Social, and Governance) programs is not easy. Companies must embrace the cause as part of their overall culture to make it sustainable.

In this Dial P for Procurement interview, Kelly Barner welcomes Ken Yearwood, an Associate Partner at McKinsey & Company and one of the authors of the research based-article ‘Expand diversity among your suppliers—and add value to your organization.’

In this interview, Kelly and Ken discuss:

• The key success factors he has observed in companies that are leading the way and fulfilling their vision with regard to partnering with minority-owned businesses

• How procurement can help decision makers overcome their natural reticence to try new things in order to introduce new suppliers into the company

• Why companies should be measuring and reporting on their economic impact of their supplier diversity program

 

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Episode Transcript

Intro/Outro (00:01):

Welcome to dial P for procurement, a show focused on today’s biggest spin supplier and contract management related business opportunities. Dial P investigates the nuanced and constantly evolving boundary of the procurement supply chain divide with a broadcast of engaged executives, providers, and thought leaders. Give us an hour and we’ll provide you with a new perspective on supply chain value. And now it’s time to dial P for procurement.

Kelly Barner (00:31):

Hi everybody. I’m Kelly Barner. Thank you for joining me for this episode of dial P for procurement here on supply chain. Now, one quick note, before I introduce this week’s guest to you. If you enjoy what you hear in this conversation, I can assure you there’s lots more like it. And there’s also lots of other programming available on supply chain now. So engage comment like, and of course follow so that you never miss an episode. Now without further ado, I would like to welcome my guest today. This is Ken Yearwood. He’s an associate partner at McKinsey and company. Hi, Ken, how are you?

Ken Yearwood (01:08):

I’m doing well, Kelly, how are you?

Kelly Barner (01:10):

I am doing great. And because we love to know more about our guests personally, and we love food here at supply chain. Now I gave you the heads up that the big topic is always food. So you’re based in the Chicago area, which is a great city for foodies. And we would love to know what is a favorite restaurant or dining spot or hangout spot. And what do you order when you go?

Ken Yearwood (01:35):

Yeah. Yeah. Great question. Um, I love the food scene in Chicago. Uh, one of my favorite restaurants is a restaurant called hi Sue. It’s a Vietnamese restaurant in the Pilsen neighborhood. Okay. And they have a whole host of, of things that I love to order, but they’ve got a fantastic, uh, steak dish and a awesome pasta dish that I, I really enjoy there.

Kelly Barner (01:57):

Now, do they also do foe?

Ken Yearwood (01:59):

They do. They do. Yes. Uh, they, they are a restaurant that is highly rated, but, uh, I think off the beaten path for a lot of, uh, folks visiting Chicago. And so it’s a great place to check out. That’s lesser known

Kelly Barner (02:13):

Now. I actually, I love foe, but one of the things I’ve learned about myself is that it’s very hard to eat in public. <laugh> it’s like you can’t be neat and eat fo and enjoy it. You gotta get like the SLRP and the noodles are going all over the place. It’s sort of a, a joyful thing, but best enjoyed at home from, from my perspective <laugh>

Ken Yearwood (02:34):

Yes. Honestly, they’ve even got a, they’ve got a wings dish that is amazing, but a little sticky. So you can’t, you can’t go with pride.

Kelly Barner (02:41):

We get all the fingers <laugh> yeah. Now the other thing that I would love to know, so I’ve spent my career in procurement. Uh, it’s nothing that anyone who’s seven or eight years old says they wanna be when they grow up. And so I would love to know professionally speaking, how did you end up in the field of procurement?

Ken Yearwood (03:00):

Yeah, that’s a good question. Uh, candidly, a, a couple things to note here. One, uh, operations broadly is, is an area in which we McKinzie and company have come to do, uh, just a, a ton of work in over the last few decades. Uh, and within that procurement has been an area, uh, that is one of if not the largest within our operation to practice. And so, uh, given the work that I do across what we call advanced industries, which are companies like automotive, aerospace organizations that I think make really cool things, uh, procurement is an incredibly important lever as they drive candidly growth and margin for their business. And it’s an area in which I have come to to really, uh, enjoy the impact that we drive with our clients and enjoy that you can just see the impact, uh, over a relatively short period of

Kelly Barner (03:49):

Time. Absolutely. No, and I think it’s exciting that it’s part of the operations practice. So many times when I interview people, I will ask, you know, do you report up through finance? Do you report into operations? I, I know a lot of people and procurement report into finance, but I always find it exciting when there’s more of an ops connection, because I think it makes the transition away from that sort of traditional counting the pennies kind of reputation that procurement tends to have. And it, it does reflect the impact that procurement is able to have as you’re pointing out.

Ken Yearwood (04:21):

Yeah. Completely agree. Especially as we think about sort of today’s context and, and the significance of supply continuity, it, it is, uh, paramount that procurement and operations, especially given the organizations that I serve are, are connected.

Kelly Barner (04:36):

Yeah. Now another little bit about your background. I found this really interesting. You’re actually the co-founder of a stem education nonprofit. So anybody that doesn’t have kids currently going through schools, stem is science, technology, engineering, and math sort of cohesively as a, as a discipline. Tell me a little bit about that program and, and how you got involved.

Ken Yearwood (04:59):

Yeah, great question. So I, uh, the nonprofit is called elite, which stands for emerging leaders in technology and engineering. And it’s an organization that, that I co-founded with a, uh, a group of friends, candidly, uh, coming out of, uh, of college. And the, the mission was to help students and to introduce them to stem, uh, now called steam for the, where the, a stands for, right. But, uh, introduce them to, to topics and, uh, and subjects that, that they may not otherwise have access to. And so we started our programming, uh, in Ghana and, uh, have since expanded and taught in countries like Tanzania and Jamaica and Mexico, and have ongoing summer programs. And after school programs at, uh, several schools in New York city, and it’s an organization that’s been ongoing for wow. Over 10 years now. So, wow. We’ve made quite a bit of progress and continue to do programming around the world. And it’s an organization that I’m excited about.

Kelly Barner (05:59):

Well, I think that’s incredible. I know what I was spending my time on post college graduation. Certainly wasn’t helping anybody locally or internationally. So I give you and your friends a, a lot of credit for sort of going above and beyond. Now, have you gotten to travel to any of the international locations associated with the program? Or do you have course, oh, you have been there?

Ken Yearwood (06:21):

I have, yes. In fact, I, uh, one of them, my, uh, my mother’s side of my family is from Jamaica. And so I, I was uniquely interested in our programming in Jamaica and actually was teaching in Kingston for

Kelly Barner (06:35):

That is fantastic. And it gives you a diverse point of view, right? When you get to take something that’s fixed, like science technology and everything that goes with it and travel around the world into different cultures and, and geographies. Um, and perhaps that idea provides us with a little bit of a transition to our main topic for today, which is supplier diversity. Uh, this has been an enormous topic for procurement for a long time, but really with focused energy over the last couple of years. Um, and we’ve talked a little bit about how you got into procurement. Is there anything that you wanted to add in terms of how you started to focus and develop an expertise specifically around supplier diversity?

Ken Yearwood (07:18):

Yeah, candidly, I, I think it’s been a, a focus throughout my, uh, my time and, and working with organizations on procurement broadly. Yeah. Uh, but I think moreover coming out of, of George Floyd and, and, uh, other sort of social issues in 2020, and, and maybe even before, uh, increasingly clients were asking for our perspective on supplier diversity and, and how, um, how we could be helpful, right. What we were seeing across industries, across clients, across different types of organizations, uh, and candidly how, uh, how we could scale organizations impact, um, not just from the perspective of partnering with our traditional corporate clients, but also how we might work with and, uh, serve and support more minority owned businesses themselves. And so, uh, the latter of which has become a key focus as we’ve published our 10 actions as a, as a firm, one of which is to serve more minority owned businesses. And so out of the momentum of, of the last few years, uh, came, I think, a renewed energy for me and for our clients and for, uh, my colleagues in, in getting involved in this space and helping enable success of our, of our clients and, and the companies that they work

Kelly Barner (08:37):

For. I love your use of the term momentum there. I, I think that’s so incredibly P I think it’s the perfect sort of description for the energy that has surged and accompanied this movement. So you talked about all of these different clients that you’re working with, and I give them huge credit for proactively reaching out and looking for help because it is a complicated program to put in place. And then it’s even more complicated to stick to the public commitments and, and vision statements that you share. Yep. What would you generalize are some of the characteristics of the companies that truly get it and are sort of leaders or, or forward thinkers in this area?

Ken Yearwood (09:17):

Yeah. Great, great question. Uh, I think there’s a few things that, that I see as, as themes, many of which won’t be a, a, a secret to you per se, um, but are important and are, are not easy to get right. Necessarily, right. Uh, the first is I think having a bold aspiration, right? Whether it’s internal, whether whether you choose to communicate that externally, I think recognizing at the top of the house that, uh, this is important for the organization, it’s good for business, it’s good for society, and it’s the right thing to do. Uh, it is, is wildly important and critical to get. Right. Right. I think the second is, uh, embedding supplier diversity in the culture of the organization and not just having it feel as though it is a, uh, sort of one-off initiative or a surge for something that only is prioritized by, by procurement or worse off a handful of people within procurement.

Ken Yearwood (10:13):

Right. It has to really be embedded within the culture of, of decision making and partnerships, um, within the organization. Um, and then I think complimentary to that is this notion of, of having, uh, top down support, right? The organizations that I see do this exceptionally well, all have C level support for supplier diversity in some way, shape or form typically with, uh, again, someone in the C-suite being a sponsor, right. Being a, uh, someone that will pound the table and really make sure that this is prioritized. So there there’s a, a long list. I, I, I think that comes after that, but those three are, are

Kelly Barner (10:51):

Critical. Now, if we continue with this idea that it shouldn’t be a, a sort of flash in the pan type of initiative, it has to be tightly woven into the culture so that everyone has some level of ownership and therefore responsibility, how much you narrow that a little bit to think about what the procurement teams are doing. Maybe something very action oriented in those larger organizations that, that truly get it and are being successful.

Ken Yearwood (11:18):

Yeah. Good question. A few things. Um, the first is driving visibility across the organization, right. And so making sure that there are forms in which supplier diversity is actively discussed and reported upon and, and, um, and push forward, right. And that you’re, you’re tracking sort of the bold aspiration that was set. Um, second is, is, uh, like tactically going out and continuously building relationships with diverse suppliers. And this is not always easy, but is, is against incredibly important and, and a part of what, uh, organizations are and should be doing in procurement in general, not just the diverse suppliers, but this notion of, um, time at which you’re ready to launch an, an RFP is not the best time to, to, to start, right. That’s right. It’s with diverse suppliers and it’s, it’s hard, but it, it is important. And, and it ensures the success of the business and, and of the procurement professionals.

Ken Yearwood (12:18):

Um, and then I, I, I think the, the, the last thing to be, uh, thinking about is, is kind married hand in hand it’s it’s. How are you using digital tools to do the, the previous two things, um, and equally important? How are you thinking about impact within the scope of supplier diversity? Right. So this notion of, Hey, we’re, we’re, we’re, we have a dollar figure we’re going for that dollar figure. And if you don’t hit that dollar figure, everything kind of falls through right beyond that. How are you thinking about economic impact? How are you thinking about the impact to your customers? How are you thinking about, uh, again, the total cost of ownership of having this supplier be a part of your network, um, beyond just cost, but also innovation and delivery and assurance of supply again, in, in times where, uh, that is a, an increasingly important fee

Kelly Barner (13:11):

There’s, there’s so much there. So let me go back and ask you actually, a couple of follow up questions based on that, your advice around building supplier relationships. And, and I laugh when you say, you know, launching the RFPs, not the time to go out and try to find these companies. This is a, an effort that you need to be doing proactively for the long haul. Is that a type of, sort of organization wide, uh, effort where you might have someone in DEI, or you might have a supplier diversity director or manager who’s trying to build those relationships across categories, or does it tend to work better where you have someone in procurement may be dedicated to marketing or hired services or logistics, and they’re focused in either a location or more categories specific way on building out those connections and being ready in advance of those RFPs being issued.

Ken Yearwood (14:01):

Yeah. Great question. I I’ve seen it work best when it’s sort of a, a, a matrix, uh, approach where you have a team or at minimum, an individual who’s focused on diversity, but then empowers champions across the business to, to, uh, be actively thinking about supplier diversity and employing the tools that, that dedicated person or team may be introducing and rolling out. Right. And so you don’t have, um, only one person trying to cover millions or tens of millions or billions of dollars in, in spend. You, you have a targeted team that’s focused on the mission statement, so to speak, um, but then standing up tools, whether they be digital or, or process oriented to ensure that the supplier diversity champions can be successful and can prioritize and support the aspiration.

Kelly Barner (14:51):

Yeah. One of the things that you and I had spoken about briefly in, in preparation for this interview, and I found your point of view on this particularly interesting was we were talking about what is the best way for procurement to try to hit those targets many times, which are made publicly available? Is it working with existing certified, diverse owned businesses to expand, spend and build relationships with them, or is it in fact continuing to work with them? Of course, but proactively going out and trying to diversify the supply base as you bring in diverse owned businesses as supply partners, how do those two different types of approach approaches tend to work in trying to hit those, those goals?

Ken Yearwood (15:35):

Yeah, I, I think you’re bringing up two levers that are aimed at, at sort of solving the same, uh, challenge. Right. And I don’t think it’s one or the other it’s, it’s both and more, um, the first being, should you work with your diverse suppliers that are already part of your spend base? Yes. Right. Um, and should you be seeking out opportunities for those to grow and expand and take on more scope over time? Yes. Um, at the same time, should you, and I’ll actually kind of take your second option and make it two more, right. Um, should you be identifying new perspective, diverse suppliers to partner with? Absolutely. Uh, and should you be thinking about how your own suppliers who are not diverse today are committing to and driving diversity in their supply base are, uh, and the actions that they’re taking. Yes. Right.

Ken Yearwood (16:26):

And so you should be doing all three of those things. And, and I, I don’t know that it’s, it’s an either or, but it’s a sort of, what are the tools in your toolkit and, and making sure that you are, you’re using all of them effectively, uh, with, with sort of one copy that I’ll call out, right. This notion that tier two, can’t be the only answer, right? The answer can’t be to point at someone else’s house, it sort of to be a dual approach. And so I think taking those first two, uh, sort of tools that I mentioned around scaling your current diverse suppliers that you’re partnering with identifying new diverse suppliers is important and should be done in tandem with thinking about tier two suppliers

Kelly Barner (17:06):

And what I like about the tier two. And I agree with you hold heartedly. That’s not enough, uh, to be sort of the thrust of the effort, but what I do like about it is that procurement, so many times ends up sort of between a rock and a hard place because we pre-qualify, we discover, but in most cases we don’t select mm-hmm <affirmative>. And so it does give us the option. If, for instance, we are brought in at the last minute, the 11th hour on an RFP, there may not be time to go do additional discovery. Typically it’s fairly easy to add questions in to at least start the discovery process around which of these prospective suppliers is actively engaged in their own, right around the supplier diversity movement. Um, and maybe especially with particularly reticent stakeholders, that might be a really good way to start to warm them up to the importance that supplier diversity has. Not only in terms of what your company can achieve, but also in terms of truthfully what expectations should be of the supply chain partners, uh, that you choose to work with.

Ken Yearwood (18:09):

Yeah. Completely agree. In fact, I, I would say that for, uh, organizations running best in class supplier diversity programs, the, the notion of having questions in every RFP or the majority of that ask about whether it’s supplier is diverse or, or, and, or, um, whether non-diverse suppliers have, uh, um, tier two focused programs is, is table stakes. Yes. And so as organizations think about standing up their own programs, uh, driving sort of business diversity through their organization, uh, it’s, it’s critical to have that be one component of it.

Kelly Barner (18:49):

Yeah. Now you talked a little bit earlier about economic impact. And so one way to look at that, and I suppose, workforce diversity is, is sort of like a different slice on a, a tier two kind of concept. How would you say it’s changing the opportunity around supplier diversity that an increased percent of spend is moving into services categories? Um, so are you not only are bringing in diversity at the ownership level, you’re also bringing in diversity hopefully at the workforce level, what sort of an opportunity does that create?

Ken Yearwood (19:22):

Yeah, it’s, it’s a great question, Kelly. And it’s one that we covered in some of our recent research. Uh, I know that we discussed previously yes. But this notion of, of sort of unlocking NextGen and making sure that we as a corporate community are not contributing to a, a greater gap between, uh, one community and others. Right. And in particular, as we look at the us and where, uh, certain portions of the economy have seen outsized growth, it is, uh, more so in services and in particular professional services than other sectors of the, of the past. And so that does not mean we should only focus on those new sectors or on those growing sectors. We should continue to do the good work that many organizations are doing. And for those that are looking to start and are watching this today, jump in and, and, uh, let’s get in touch and help you get involved.

Ken Yearwood (20:15):

Um, but it should, we should also be thinking about some of those categories that are sometimes right harder to, uh, diversify for a whole host of reasons, many being, uh, sort of implicit biases within the organization around not wanting to drive change and test new things. And so, um, how are we thinking about categories like legal and financial services? Um, how are we thinking about, uh, in some cases, real estate and other professional services categories, uh, where diverse suppliers exist today, but aren’t always included in the conversation when new suppliers or new scope is being put out there for, for discussion.

Kelly Barner (20:56):

Now, when we think again about this idea of, of relationship, I’m a huge fan of the idea that there’s an awful lot procurement can learn from current suppliers. If, if we work for an organization that does already have some diverse owned businesses as supply partners, but we’re consciously looking to build that out. How might we learn from the suppliers that we’re already working with in ways that we can improve the overall supplier experience, which hopefully positively impacts everybody, but might also help in terms of how we’re finding new suppliers to partner with.

Ken Yearwood (21:30):

Yeah. Great question. I have conversations about this, uh, with our clients frequently, this, this notion of, well, one thing tactically, that I’m seeing organizations do more frequently, and in some cases we, we are helping is think about, uh, where they may be process breakdowns that preclude diverse suppliers from being successful. Right. Um, and moreover, what do you do about them, right? How do you actually help those diverse suppliers not trip at that stage in the process? Because I don’t, I don’t know that the, the processes were created to, uh, to, to show bias to one group versus another, but they are right inherently. And so how do you think about enabling diverse suppliers to be successful, whether it’s payment terms, whether it’s insurance requirements, whether it’s, uh, knowing how and, uh, sort of what box to check on a, a digital RFP platform. Right. And so, um, one of the things that I’ve seen organizations do is actually sit down with their existing divers suppliers to your point, and almost do a focus group, right? Mm-hmm <affirmative> where do, where do you all have challenges in, uh, being effective at participating in partnerships with us? Right. Um, whether it’s sort of after the market event or, and during a full partnership or during the market event. And I think the learnings that are coming out of those discussions help inform and enable the success of not just their current diversifier base, but also potential future partnerships.

Kelly Barner (23:09):

Yeah. And I think that’s an excellent point. And, and we’re gonna talk a little bit about maybe the potential impact that our current economy is having on these programs in a minute. But I do think procurement has talked for a long time first about supplier relationship management, and then about the concept of becoming a customer of choice. But, and I’ll say it, uh, most cases it’s been more talk than action. Uh, we might know where there are friction points, uh, but we don’t necessarily take the steps required to, to resolve them. Um, and so I actually think starting with a, a sit down focus group of diverse own businesses and asking genuinely, where can we be better? Where are you having issues? Whether it’s a technology or you gave the examples of insurance coverage, uh, access to lawyers to go through these corporate contracts we send out, right?

Kelly Barner (23:59):

It’s, uh, it’s an overhead burden. Um, but I do think it’s an opportunity for procurement to learn and reflect, and certainly anything we can do to position the whole enterprise as a better customer to work with as a better, more collaborative, open eared partner is, uh, you know, if we’re selfish, it’s a huge opportunity to make procurement look like. Uh, we’re more lined with the goals of the business. Uh, we’re trying to drop drive top line growth, as well as protect the bottom line. I think that would be an excellent place for a lot of teams to start.

Ken Yearwood (24:32):

Yeah, I agree. And, and I think going back to some of what we discussed earlier, it it’s what makes having a dedicated, um, supplier diversity team or person important because the reality is, uh, giving people the benefit of the doubt folks aren’t being malicious, but, but they are, um, trying to execute and, and trying to, uh, in some cases take the path of, of least resistance or take the path that they’re most familiar with is probably even better way to say it. Um, and that path may not actually always be the best path for the business. Um, and it certainly preclude certain players from driving competition, which is, that is better for the business is helpful for the long

Kelly Barner (25:21):

Term. Now we’ve talked about the, the trend towards putting resources and attention on supplier diversity, but no trend like this happens in a vacuum. And so we’ve had growing attention and visibility and hopefully results sort of run against the surge of ESG as a broader initiative. Mm-hmm <affirmative> what thoughts would you share about how that larger umbrella bringing in sustainability and governance in addition to different kinds of social programs of which supplier diversity is one, how has that complimented changed, affected the supplier diversity journey?

Ken Yearwood (25:58):

Yeah. Good question. So, listen, I it’s no secret that right. Supplier diversity has been, uh, something of a, of a mission and a, a focus for 50, 70 years. Right. Um, but the, the renewed momentum that we discussed earlier, I, I think is, is changing how businesses prioritize and think about it. Uh, and I think it, it, um, transcends not just corporation, but also their employees and their customers and, and the people that are engaging with their business. And so, um, to, to bring that back to your question, this notion of embedding supplier diversity within sort of a, a broader umbrella, I, I think broadly speaking is a good thing, right. And, and it’s a good thing, I think for a couple of reasons, but, but one of which is, uh, a little bit of what we discussed earlier around embedding supplier diversity in the culture and the fabric of the organization. And so if ESG or sustainability, or, or sort of choose your, your, um, your umbrella theme, right, is something that’s spanning the, the, the employee base and spanning the executive community within these organizations, having supplier diversity, be a pillar of that, I think is huge and, and elevates the significance of supplier diversity from, uh, sort of one or small group of people within the organization to being a, a focus of, of, of the entire company. Right. And that’s strategic pillar for, uh, for everybody as opposed to a small group.

Kelly Barner (27:30):

Yeah. And in terms of that strategic pillar theme, my sense is that, you know, we talked a little bit about the opportunity for economic impact, my sense, uh, take a differing opinion if you have one, my sense is that the companies that are measuring economic impact are among the most purposeful and the most mature in this space, because it’s not an easy thing to measure and track and report. And so I would be interested in your thoughts around the measurement of economic impact. Yeah. Um, and how that might serve as something that actually sort of keeps the focus where it needs to be in terms of driving actual change versus having supplier diversity. That’s something that everyone generally agrees with, but at the end of the year, you look at the numbers and you say, how, you know, how different are they really

Ken Yearwood (28:18):

Mm-hmm <affirmative>. Yeah. Great question. Uh, I, I think the, the, the best, the, the best organizations out there are, are to your point, thinking about economic impact and the way that that manifests itself, uh, is, is typically a, a measure of jobs created, right. But as you look at our research, um, and, and studies that are out there, the impact is so much greater than just jobs created. Right. Um, we discuss in our article, this notion that, uh, children from high income homes are six times more likely to graduate from college, right. That’s a general multigenerational impact that you’re having on a, on a, a family, right. Um, every $1,000 increase in household income increases the, uh, likelihood of, of young adult employment by a percentage point. Right. And so like, these are, are meaningful, um, uh, changes to our society and to our communities. So, uh, broadening this notion of, of, of social impact beyond just job creation yeah. Is, is, uh, I, I, I think eye opening. Yeah.

Kelly Barner (29:27):

Well, let’s stay with that point for a minute because certainly being able to influence college graduation rates, um, being able to impact individual household income, those are things that are not only important, generally speaking, they’re unbelievably important in the economic conditions that we find ourselves in. Um, and you and I are talking about midday on June 13th. Um, I don’t know about you, my phone was going crazy earlier with notifications about the market sliding into, you know, bear market status. And so we’ve got maybe recession on the horizon, we’re waiting to find out about Q2, how might this economy, or should this economy, or will this economy impact some of these supplier diversity initiatives that have been begun that certainly predate the conditions we find ourselves in today?

Ken Yearwood (30:17):

Yeah, it’s a, it’s a, it’s a really, uh, challenging notion for a lot of companies because it it’s, uh, I, I think as companies think about ways in which they’ll back down the hatches, so to speak, um, certain initiatives, not supply diversity in particular, but certain initiatives may be deprioritized. And I, I think taking it back to one of our initial premises is notion that supplier diversity and business diversity is good for business. Yeah. And good for society is, is absolutely critical to maintain, right. The, um, I, I think if, if organizations, uh, take only a social lens, it is easy to sometimes deprioritize those things when they are good for business and, and talking to stakeholders within the business that have worked with diverse suppliers and sharing anecdotes and stories about how those diverse suppliers have delivered in times of challenge, how they have, uh, driven innovations for the business in ways that, uh, other organizations and other business partners may not have been able to, uh, talking about how they have, uh, been a cost effective answer at a time when that was a priority for the organization, right. Talking about how you can, uh, drive supply or drive partnerships in your term near geographies than, uh, than you have been able to do in the, in the past are, are, are really, really important discussions to double down on at a time when, to your point, we are, uh, looking at at a potential recession in the, in the months ahead, if you, if you read every headline out there.

Kelly Barner (32:02):

Well, and I, I like your point about sort of the communications or storytelling aspect around this. I think it has an opportunity to be very powerful because when I think about the, really the mandate of procurement, in some ways, if we are doing our job the right way in facilitating product and supply purchases throughout the company, people don’t necessarily know what products, what services are associated with certified diverse owned businesses. Hmm. And so closing the loop by bringing those stories back, I might have no idea that our creative partner or our ad firm is, is diverse owned. All I know is procurement has made it hopefully very easy for me to secure these services that I need. And so bringing that full circle and telling those success stories and shining the light on those suppliers, of course reinforces the idea that we are in fact doing well by doing good.

Kelly Barner (32:56):

Um, but also helping influence hopefully future decisions so that the organization continues down that road. Um, and, and to your point too, I think this comes around to some of the next gen levers that McKinsey researches and, and has talked about in the research that you’ve published. I think it’s critical that it’s sort of a forward looking mm-hmm <affirmative> right. This is an initiative it’s like risk management. It’s never done. We’re never gonna cross this one off the list. What are some of the next gen levers that procurement teams or organizations can think about pulling not just to get through where we are today or improve upon where we are today, but to set themselves up to continue growing, going forward.

Ken Yearwood (33:36):

Yeah. Happy to, happy to share. I’ll I’ll maybe give a, just a little bit of context on what we mean NextGen, right. And so NextGen as we’ve discussed in some of our research, I think has two levers, right? The first is making sure that, uh, as a corporate community, and as, as business leaders, we are, uh, driving supplier diversity in sectors and in categories that are, or spend categories that are, um, showing outsize growth in our economy, both in the us and globally, right. The, that tends to over index in the last called 20 to 30 years on professional services. And so how do we think about as the services, uh, sectors, right, uh, grow at an outsized rate compared to others that we are not, uh, not leaving diverse suppliers out of the discussion in that group. So that’s sort of lever one. When we talk about diverse, uh, NextGen supplier diversity, the second is thinking about how we drive, uh, sort of business diversity across the, the E the business ecosystem.

Ken Yearwood (34:42):

And, and that sounds like a bunch of lofty words, but it, what the analogy or the metaphor that I, I tell folks is when you Kelly, or I go to buy a home, right? We, uh, we, we may hire or work with a, a broker that broker is our partner, or is our supplier so to speak, right? Uh, and then we decide on a home, we, we are excited and we’re ready to sign the dotted line, so to speak. And, uh, the broker may bring in a, uh, a real estate lawyer and an inspector and other, uh, partners that are part of the, the business ecosystem that are not necessarily suppliers or partners to that broker. Right? So as, as bringing that to the corporations, um, you think about organizations out there that are, uh, identifying diverse suppliers on their platforms to allow their customers to select and prioritize diversifiers to the extent that they want to. Right. As we think about industry associations, getting together to discuss priorities for the future of their industry, how are diverse suppliers being discussed, whether it’s, uh, do we need to create diverse suppliers in certain spaces, or how can we grow the existing ones that are there for the benefit of, of our entire industry community, right? Those conversations are, are happening, but I think can continue to happen and accelerate, uh, in the near term, especially given the momentum that we’re seeing, uh, in supplier diversity as a, as a corporate community and as a society.

Kelly Barner (36:16):

Now, I think your analogy of buying the house is an apt one, because from my perspective, nothing prepares you for what’s involved when you actually go to buy a house, nor does anything prepare you truthfully for owning a house except owning a house. And so if we think about talent and experience and skills, you know, earlier in our conversation, we talked about the fact that no one grows up saying, I wanna be in corporate procurement when I grow up. And yet there are people which I think is wonderful that are now coming up through the ranks of college and early tiers in the professional ladders saying, I want to get out there and impact the good that companies are able to do in the communities that they buy from and, and even sell to what are the consideration from a talent or training or skills perspective that procurement teams can invest in, can embrace so that they are both educated around bringing these processes and considerations into the, into the decision making framework, but also so that as we have conversations with others in the business around how they make their decisions to sign contracts, or to make individual buying decisions, what are the training elements of this?

Ken Yearwood (37:31):

Yeah. Great, great question. So, first and foremost, I, I think increasingly we are seeing, uh, supply chain and or procurement be, uh, educational programs that people are, are seeking out and participating in because of the elevated role of procurement and supply chain, especially given what we saw and what we’re seeing, uh, sort of at the tail end of, of the pandemic, right? Where getting resources, getting supplies, getting products, getting services from point a to point B has, has arguably never been more challenging, right? So, um, I think continuing to invest in those programs and have those programs via a key funnel into organizations is, is important. Um, second, I think recognizing and ensuring that, uh, supplier diversity is a part of that education, whether it’s, uh, in sort of a collegiate setting, uh, in a graduate school setting or on the job is important, uh, in particular understanding the, uh, new and exciting sort of digital tools that are out there to be able to proactively identify diverse suppliers, right?

Ken Yearwood (38:47):

Understanding that there are now tools out there to be able to measure tier two, uh, diverse supplier spend in a, uh, effective and efficient way for the organization. Right. Um, recognizing that there is a community of, of folks, uh, whether it’s in a nonprofit space, you’ve got folks like yourself, like myself, who are eager to, to help and share learnings, right? This is, this is not one of those areas in which if I do well, no one else can do well. Right. I think that’s right. The people that I meet in supplier diversity across my clients are, are eager and happy to share their learnings with, with their counterparts, even in the same industry, in many cases. And so I think recognizing those things are, are incredibly important to invest in and continue to be a part of whether you’re building a program or whether you’re looking to be a, a leader.

Kelly Barner (39:40):

And, and I’ll agree with you. And it’s, it’s actually interesting. I hadn’t thought about it until you mentioned sort of the, the community and the sharing, but I have been far more aware of whether it’s in person events or virtual networking type things. I feel like the celebration and the communications around the progress that we’re making in the area of supplier diversity have never been so visible mm-hmm. And I do truthfully hope that this is one of those areas where progress begets progress. Mm-hmm <affirmative>, uh, the more we continue to talk about it and build community, you know, procurement traditionally has been hesitant to speak too much publicly about the suppliers that we work with for fear of losing leverage or revealing something that we shouldn’t. But I do think supplier diversity is an area where we can not only talk about strategies and tactics and progress, but also share our successes because others can learn from them.

Kelly Barner (40:37):

And not only that, but it, I think opens the door to more and more people showing interest and, and putting energy in, um, it is a wonderful community. I have a number of connections that are either focused on supplier diversity within procurement, or are dedicated supplier diversity managers. Mm-hmm <affirmative>. And I will say that a, a lot of my optimism for the progress that we can continue to make comes from the charisma and the energy and the drive of these individuals. So clearly we’re having sort of a, a good, you know, man woman moment machine kind of moment where the energy is right. And the investment on the part of companies is right. The visibility is right. And those dedicated to the role are right. And so it’s, it does in fact seem like we’re moving in the right direction to keep this sort of above the water from a, an investment and visibility perspective.

Ken Yearwood (41:29):

Yeah. I completely agree. I, I think this, I am very optimistic about, uh, the future progress that we can make in this space. Uh, E even in the face of, of, of potential headwinds. I, I think that this is, uh, this should be seen as something that improve your business, right?

Kelly Barner (41:48):

Absolutely.

Ken Yearwood (41:48):

Irrespective of the type of business and should be prioritized accordingly.

Kelly Barner (41:54):

Now, Ken, I’m incredibly grateful that you were willing to share your time and your expertise with us. So before we wrap up in part, I wanna give you an opportunity if people have watched or listened into this conversation and they either want to take action directly, or would like to reach out to you and connect and learn more, what next steps would you recommend people take?

Ken Yearwood (42:16):

Yeah. So listen, we have publicly made our research available on, on mckinsey.com. And so I, first and foremost, I think leveraging that research to, to learn, to, uh, help tell compelling stories within your organization about the impact that can be had, if you’re in the business of convincing others, uh, is, is step one. Um, and step two, they should never be hesitant to reach out to, um, myself or, uh, they can email supplier diversity, mckenzie.com to engage with our community internally about resources and, and, um, and people to get connected with, to help their organization.

Kelly Barner (42:57):

That is excellent. Ken, thank you so much for your time today.

Ken Yearwood (43:00):

Likewise, thanks for the invite, Kelly,

Kelly Barner (43:02):

And thank you as well to everybody that has joined us to watch or listen to this episode of dial P for procurement here on supply chain now, but if you’ve liked what you’ve seen and heard, don’t let it stop here. Share this interview with a friend, go download one of the reports from McKenzie, keep your journey going, maybe share a success story. Uh, but until next time, thank you so much for joining me. I’m Kelly Barner as always pleased to be your host here on dial P for procurement. Thank you for joining us and have a great rest of your day.

Intro/Outro (43:33):

Thank you for joining us for this episode of dial P for procurement and for being an active part of the supply chain. Now community, please check out all of our shows and events@supplychainnow.com. Make sure you follow dial P four procurement on LinkedIn, Twitter, and Facebook to catch all the latest programming details. We’ll see you soon for the next episode of dial P four procurement.

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Host of Dial P for Procurement

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Marketing Coordinator

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Ben Harris

Host

Ben Harris is the Director of Supply Chain Ecosystem Expansion for the Metro Atlanta Chamber. Ben comes to the Metro Atlanta Chamber after serving as Senior Manager, Market Development for Manhattan Associates. There, Ben was responsible for developing Manhattan’s sales pipeline and overall Americas supply chain marketing strategy. Ben oversaw market positioning, messaging and campaign execution to build awareness and drive new pipeline growth. Prior to joining Manhattan, Ben spent four years with the Georgia Department of Economic Development’s Center of Innovation for Logistics where he played a key role in establishing the Center as a go-to industry resource for information, support, partnership building, and investment development. Additionally, he became a key SME for all logistics and supply chain-focused projects. Ben began his career at Page International, Inc. where he drove continuous improvement in complex global supply chain operations for a wide variety of businesses and Fortune 500 companies. An APICS Certified Supply Chain Professional (CSCP), Ben holds an Executive Master’s degree in Business Administration (EMBA) and bachelor’s degree in International Business (BBA) from the Terry College at the University of Georgia.

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Page Siplon

Host, The Freight Insider

Prior to joining TeamOne Logistics, Page Siplon served as the Executive Director of the Georgia Center of Innovation for Logistics, the State’s leading consulting resource for fueling logistics industry growth and global competitiveness. For over a decade, he directly assisted hundreds of companies to overcome challenges and capitalize on opportunities related to the movement of freight. During this time, Siplon was also appointed to concurrently serve the State of Georgia as Director of the larger Centers of Innovation Program, in which he provided executive leadership and vision for all six strategic industry-focused Centers. As a frequently requested keynote speaker, Siplon is called upon to address a range of audiences on unique aspects of technology, workforce, and logistics. This often includes topics of global and domestic logistics trends, supply chain visibility, collaboration, and strategic planning. He has also been quoted as an industry expert in publications such as Forbes, Journal of Commerce, Fortune, NPR, Wall Street Journal, Reuters, American Express, DC Velocity, Area Development Magazine, Site Selection Magazine, Inbound Logistics, Modern Material Handling, and is frequently a live special guest on SiriusXM’s Road Dog Radio Show. Siplon is an active industry participant, recognized by DC Velocity Magazine as a “2012 Logistics Rainmaker” which annually identifies the top-ten logistics professionals in the Nation; and named a “Pro to Know” by Supply & Demand Executive Magazine in 2014. Siplon was also selected by Georgia Trend Magazine as one of the “Top 100 Most Influential Georgians” for 2013, 2014, and 2015. He also serves various industry leadership roles at both the State and Federal level. Governor Nathan Deal nominated Siplon to represent Georgia on a National Supply Chain Competitiveness Advisory Committee, where he was appointed to a two-year term by the U.S. Secretary of Commerce and was then appointed to serve as its vice-chairman. At the State level, he was selected by then-Governor Sonny Perdue to serve as lead consultant on the Commission for New Georgia’s Freight and Logistics Task Force. In this effort, Siplon led a Private Sector Advisory Committee with invited executives from a range of private sector stakeholders including UPS, Coca-Cola, The Home Depot, Delta Airlines, Georgia Pacific, CSX, and Norfolk Southern. Siplon honorably served a combined 12 years in the United States Marine Corps and the United States Air Force. During this time, he led the integration of encryption techniques and deployed cryptographic devices for tactically secure voice and data platforms in critical ground-to-air communication systems. This service included support for all branches of the Department of Defense, multiple federal security agencies, and aiding NASA with multiple Space Shuttle launches. Originally from New York, Siplon received both a bachelor’s and master’s degree in electrical and computer engineering with a focus on digital signal processing from the Georgia Institute of Technology. He earned an associate’s degree in advanced electronic systems from the Air Force College and completed multiple military leadership academies in both the Marines and Air Force. Siplon currently lives in Cumming, Georgia (north of Atlanta), with his wife Jan, and two children Thomas (19) and Lily (15).

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Kristi Porter

Host, Logistics with Purpose

Kristi Porter is VP of Sales and Marketing at Vector Global Logistics, a company that is changing the world through supply chain. In her role, she oversees all marketing efforts and supports the sales team in doing what they do best. In addition to this role, she is the Chief Do-Gooder at Signify, which assists nonprofits and social impact companies through copywriting and marketing strategy consulting. She has almost 20 years of professional experience, and loves every opportunity to help people do more good.

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Kevin Brown

Host, Logistics with Purpose

Kevin Brown is the Director of Business Development for Vector Global Logistics.  He has a dedicated interest in Major Account Management, Enterprise Sales, and Corporate Leadership. He offers 25 years of exceptional experience and superior performance in the sales of Logistics, Supply Chain, and Transportation Management. Kevin is a dynamic, high-impact, sales executive and corporate leader who has consistently exceeded corporate goals. He effectively coordinates multiple resources to solution sell large complex opportunities while focusing on corporate level contacts across the enterprise. His specialties include targeting and securing key accounts by analyzing customer’s current business processes and developing solutions to meet their corporate goals. Connect with Kevin on LinkedIn.

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Sofia Rivas Herrera

Host, Supply Chain Now en Espanol

Sofia Rivas Herrera is a Mexican Industrial Engineer from Tecnologico de Monterrey class 2019. Upon graduation, she earned a scholarship to study MIT’s Graduate Certificate in Logistics and Supply Chain Management and graduated as one of the Top 3 performers of her class in 2020. She also has a multicultural background due to her international academic experiences at Singapore Management University and Kühne Logistics University in Hamburg. Sofia self-identifies as a Supply Chain enthusiast & ambassador sharing her passion for the field in her daily life.

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Jose Miguel Irarrazaval

Host, Logistics with Purpose

Jose Manuel Irarrazaval es parte del equipo de Vector Global Logistics Chile. José Manuel es un gerente experimentado con experiencia en finanzas corporativas, fusiones y adquisiciones, financiamiento y reestructuración, inversión directa y financiera, tanto en Chile como en el exterior. José Manuel tiene su MBA de la Universidad de Pennsylvania- The Wharton School. Conéctese con Jose Manuel en LinkedIn.

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Demo Perez

Host, Supply Chain Now en Espanol

Demo Perez started his career in 1997 in the industry by chance when a relative asked him for help for two just weeks putting together an operation for FedEx Express at the Colon Free Zone, an area where he was never been but accepted the challenge. Worked in all roles possible from a truck driver to currier to a sales representative, helped the brand introduction, market share growth and recognition in the Colon Free Zone, at the end of 1999 had the chance to meet and have a chat with Fred Smith ( FedEx CEO), joined another company in 2018 who took over the FedEx operations as Operations and sales manager, in 2004 accepted the challenge from his company to leave the FedEx operations and business to take over the operation and business of DHL Express, his major competitor and rival so couldn’t say no, by changing completely its operation model in the Free Zone. In 2005 started his first entrepreneurial journey by quitting his job and joining two friends to start a Freight Forwarding company. After 8 months was recruited back by his company LSP with the General Manager role with the challenge of growing the company and make it fully capable warehousing 3PL. By 2009 joined CSCMP and WERC and started his journey of learning and growing his international network and high-level learning. In 2012 for the first time joined a local association ( the Panama Maritime Chamber) and worked in the country’s first Logistics Strategy plan, joined and lead other associations ending as president of the Panama Logistics Council in 2017. By finishing his professional mission at LSP with a company that was 8 times the size it was when accepted the role as GM with so many jobs generated and several young professionals coached, having great financial results, took the decision to move forward and start his own business from scratch by the end of 2019. with a friend and colleague co-founded IPL Group a company that started as a boutique 3PL and now is gearing up for the post-Covid era by moving to the big leagues.

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Kim Winter

Host, Supply Chain Now

The founder of Logistics Executive Group, Kim Winter delivers 40 years of executive leadership experience spanning Executive Search & Recruitment, Leadership Development, Executive Coaching, Corporate Advisory, Motivational Speaking, Trade Facilitation and across the Supply Chain, Logistics, 3PL, E-commerce, Life Science, Cold Chain, FMCG, Retail, Maritime, Defence, Aviation, Resources, and Industrial sectors. Operating from the company’s global offices, he is a regular contributor of thought leadership to industry and media, is a professional Master of Ceremonies, and is frequently invited to chair international events.

He is a Board member of over a dozen companies throughout APAC, India, and the Middle East, a New Zealand citizen, he holds formal resident status in Australia and the UAE, and is the Australia & New Zealand representative for the UAE Government-owned Jebel Ali Free Zone (JAFZA), the Middle East’s largest Economic Free Zone.

A triathlete and ex-professional rugby player, Kim is a qualified (IECL Sydney) executive coach and the Founder / Chairman of the successful not for profit humanitarian organization, Oasis Africa (www. oasisafrica.org.au), which has provided freedom from poverty through education to over 8000 mainly orphaned children in East Africa’s slums. Kim holds an MBA and BA from Massey & Victoria Universities (NZ).

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Nick Roemer

Host, Logistics with Purpose

Nick Roemer has had a very diverse and extensive career within design and sales over the last 15 years stretching from China, Dubai, Germany, Holland, UK, and the USA. In the last 5 years, Nick has developed a hawk's eye for sustainable tech and the human-centric marketing and sales procedures that come with it. With his far-reaching and strong network within the logistics industry, Nick has been able to open new avenues and routes to market within major industries in the USA and the UAE. Nick lives by the ethos, “Give more than you take." His professional mission is to make the logistics industry leaner, cleaner and greener.

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Alex Bramley

Sales Support Intern

Alex is pursuing a Marketing degree and a Certificate in Legal Studies at the University of Georgia. As a dual citizen of both the US and UK; Alex has studied abroad at University College London and is passionate about travel and international business. Through her coursework at the Terry College of Business, Alex has gained valuable skills in digital marketing, analytics, and professional selling. She joined Supply Chain Now as a Sales Support Intern where she assists the team by prospecting and qualifying new business partners.

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