Several years ago, while at a conference, I was struck by an insight shared by Professor Jeff DeGraff, a deep specialist in innovation and creativity. He had studied hundreds of teams, seeking to discern what made some more successful than others at delivering business value through innovation. In the end, after evaluating a multitude of factors, the only thing he’d found in common across the “winning” teams was a high degree of team member diversity.
Despite this remarkable value driver, our history of enabling diversity (not to mention, equity and inclusion) has been poor in the corporate world, supply chain included. We’ve made steady progress in recent years, but 2020 feels like an inflection point amid the social pressures of the pandemic and high-profile events like the murders of George Floyd and other people of color. Many companies have taken public anti-racism stances and are enacting proactive policies and governance mechanisms to hire and promote more women and people from underrepresented minority groups.
This year, the topic of diversity, equity and inclusion (DE&I) is a requisite for the executive committees and boards of many of our companies. In the second quarter of 2020, 45% of Fortune 500 earnings calls addressed the topic of diversity, compared to 6% the year prior. A 2020 survey of supply chain professionals shows 85% saying that working on ethnically and racially diverse teams is important to them. This figure rises to 90% for younger generations, with 45% of 18-34-year-olds saying it’s extremely important.
The real question is whether we will start “walking the talk” in our collective hiring, promotion and management practices, treating DE&I outcomes as a business imperative, the same way we work toward the perfect order, improved profitability levels, higher net promoter scores, etc. In the words of business guru Peter Drucker, “you can’t manage what you can’t measure.” Enter the inaugural Supply Chain DE&I survey, currently in the field as a joint research collaboration between the Association for Supply Chain Management (ASCM) and Gartner. The goal of this study is to gauge the state of DE&I in supply chain organizations in North America and Europe, with a focus on ethnic and racial diversity.
A View on DE&I from ASCM CEO Abe Eshkenazi
I recently had the opportunity to discuss this survey and the broader topic of DE&I with Abe Eshkenazi, CEO of ASCM (formerly APICS), which has more than 45,000 members worldwide. Here are some highlights from our discussion:
- Stan: Why is ASCM currently focused on DE&I through this survey?
- Abe: We have focused on DE&I for many years. What 2020 has shown is that slow evolutionary change in this area is just not going to get us to where we need to be fast enough. While we are evolving, we are losing out on talent, because they don’t want to work in an environment that does not reflect their characteristics, or they leave due to a lack of inclusion. We are excited to collaborate with Gartner to provide additional data reference points on DE&I so that we can reshape the workplace more quickly.
- Stan: Why has it taken us so long to make progress in terms of DE&I in supply chain?
- Abe: This is a systemic issue that goes back to the 1970s, ’80s and ’90s. As supply chain emerged as a function, many of its management and employees migrated from other functions such as finance and engineering, which due to their own narrow talent pipelines were primarily staffed with white males. In this homogenous environment, it was hard to see the need for change and other issues tended to get higher priority. We’re starting to make progress now. This all begins with a more balanced employee pipeline.
- Stan: Do you see a more balanced pipeline for supply chain in today’s environment?
- Abe: Supply chain as a field has grown in popularity. We are seeing more diversity in student populations studying supply chain and its related areas. The challenge for CSCOs is to create an environment where diverse talent is valued, included and heard within the workplace. We want to make sure that we keep and develop the leaders of tomorrow.
- Stan: Beyond the entry-level pipeline, how can we ensure greater parity at all levels in our organizations?
- Abe: Some of this is about leaders and managers at all levels consciously promoting diversity in how they structure teams. In other cases, we may need to restructure job roles in ways that promote diversity. Unfortunately, with this year’s pandemic, we’ve seen record numbers of women exit the workforce due to increased family needs, for instance. We need to offer solutions, such as flexible working arrangements, to address that challenge.
- Stan: How do you see conversations about racial and ethnic diversity changing now and moving forward in 2021?
- Abe: It seems we’ve been able to move from it being a taboo subject, at some companies, to having an open discussion amongst our supply chain community. Some companies historically pointed to their vendor diversity as a sign of progress, but now more companies are also gaining traction on racial and ethnic DE&I within their own workforces. We’re curious to see what the data will show from this survey.
- Stan: What else do you see as key to supply chain achieving more ambitious DE&I goals in the long term?
- Abe: Times are tight this year, but we need to continue investing in general employee and leadership development for our people. Moreover, we need to reach those who might work in supply chain earlier in their lives. Early 20s is too late. We need to educate teens and pre-teens on the opportunities, ideally through governmental, academic and corporate channels. We also need more mentorship for diverse populations. Finally, with better measurement and public transparency of companies’ DE&I performance, we also see peer pressure as a force moving our community in the right direction.
How Can You Support This Research?
It’s important to know where things stand today to help drive initiatives for the future. In order to do this, we need your help. If your supply chain has operations in North America and/or Europe, you can participate confidentially in this 15-minute survey. Please tell us about your organization’s DE&I profile and initiatives, here: https://lnkd.in/eQhqeSD.
As a token of our appreciation, you will have the option to select one of two recent Gartner reports that will automatically download upon completion of the survey. In addition, you can receive a copy of the final diversity, equity and inclusion report prior to publication in February 2021 by providing your email address.
Toward the end of our interview, Abe mentioned another study showing that the return on assets and equity was 15% higher for companies with gender-diverse boards and 35% higher for those with fully diverse boards (i.e., gender, sexual orientation, race and background) — proof positive for Professor DeGraff’s observation that diverse teams are “winning” teams.
Let’s make this happen!
VP Distinguished Advisor
Gartner Supply Chain