As a large corporation with significant purchasing power, RBC Royal Bank supports the development of an inclusive supply chain that provides opportunity for diverse suppliers to better compete for business. Those suppliers include companies owned by diverse groups like minorities, women, Aboriginal and LGBT people, persons with disabilities, and service-disabled veterans.
Charles Varvarikos, Director, Facilities Sourcing at RBC, said the bank is committed to making a valuable contribution to the community by leading change, and works with diverse suppliers to help them show how they can provide value.
Varvarikos is a pioneer in supplier diversity. As he became familiar with the landscape, he recognized both opportunity and challenge. It was clear that there was an opportunity for more diverse suppliers to become part of RBC’s supplier base. From a procurement perspective, encouraging supplier diversity is good for business. It helps RBC drive business value by gaining access to competitive offerings and greater innovation and insight through culturally-diverse business interactions. At the same time, there was an opportunity to hold true to RBC’s core value of “embracing diversity and inclusion for innovation and growth” by working with diverse suppliers, which can face unique challenges when competing for business.
Recognizing a win-win for the bank and its diverse suppliers, RBC runs a mentorship program that pairs business owners with experts from the bank’s Procurement team.
The bank launched a three-year supplier diversity plan in 2012 that included an innovative Reciprocal Mentorship Program. It saw eight diverse suppliers each year get in-depth one-on-one mentoring with an RBC Procurement expert.
Aneela Zaib is a certified diverse supplier and business owner of emergiTEL, who said the mentoring experience was transformative. Her RBC mentor helped her hone her approach to pitching her business, which has helped her secure at least two service contracts.
Zaib learned to see beyond the proposal process. Her mentor demonstrated the importance of building relationships with Procurement specialists in companies, differentiating her business and being tenacious about showing her market value.
The mentorship between Zaib and RBC was reciprocal. Her mentor was interested in learning about emergiTEL’s services and the challenges her company faced, including how she, as a supplier, interpreted RBC’s Request For Proposal (RFP) questions. Based on her and other suppliers’ feedback, RBC refined some of their RFP questions.
Barriers still exist for companies like emergiTEL. Research conducted in 2012 by Maytree, Supplier Diversity in the GTA: Business Case and Best Practices, found minority business enterprises have difficulty finding contracts to bid on, and are faced with challenging business environments. Minority suppliers tend to be small business enterprises, a disadvantage in the growing trend of businesses consolidating their supply base to fewer, larger suppliers. Internal resistance to breaking out of established relationships poses an additional barrier to diverse suppliers.
A mentorship program is one approach to overcome these barriers and enable diverse suppliers to access the same business opportunities available to others.
What gets measured gets done
A problem in the growing supplier diversity field can be a failure to assign measurable outcomes to new policies. But RBC measures its impact and outcomes. Varvarikos outlined how supplier diversity is embedded in their procurement activities. “The program has evolved from baselining our diverse supplier spend to establishing benchmarks, setting targets and creating tracking mechanisms – with the goal to annually increase the number of diverse suppliers and amount spent with them.” Since the establishment of annual targets, RBC has surpassed its goals every year.
Another RBC commitment is to ensure that its own supplier base understands the importance of supplier diversity. The bank actively encourages its large suppliers (known as “Tier 1 suppliers”) to diversify their supplier base. Many of these companies have followed RBC’s lead and now encourage diversity within their own supply chain. Quite simply, once large suppliers saw diversity was important to RBC, it became important to them. These suppliers have since joined certifying organizations and source from networks of diverse suppliers. According to Cassandra Dorrington, President of CAMSC, ”We have seen growing membership and engagement from large Tier 1 suppliers looking to source from diverse suppliers, especially when RBC and other corporate leaders began to ask questions regarding supplier diversity in their RFPs. This has opened up a wider range of business opportunities for certified suppliers.”
RBC works collaboratively to lead change. On a recent RBC networking event panel, Indy Sian, Director of Business Strategy Development with Telus, outlined how corporations that are generally competitive work together to move supplier diversity forward. RBC has collaborated closely with major institutions such as TD Bank, Telus, Staples, and the City of Toronto by sharing best practices and by showcasing external supplier diversity efforts. That type of collaboration has the potential to strengthen the supplier diversity landscape, providing value for everyone involved.
There is growing acknowledgement that a diverse supply chain can show bottom-line results. The Conference Board of Canada has noted that supplier diversity can better meet customers’ requirements and increase sales to diverse markets. Minority-owned suppliers bring value and innovation to the market. Supplier diversity programs can also enable cost savings and agility.
Background: Supporting certifying organizations & diverse suppliers directly
In 2004, when RBC became a founding member of the Canadian Aboriginal and Minority Supplier Council (CAMSC), supplier diversity was in an early phase in Canada. Since then, RBC has helped the field grow, as an inaugural sponsor of WBE Canada, which focuses on businesses owned by women, and as a founding partner of the Canadian Gay & Lesbian Chamber of Commerce (CGLCC). These organizations certify diverse suppliers in order to assure companies like RBC that a business meets certain criteria to be considered a diverse supplier.
Certification helps enable diverse suppliers. Apart from the links to bidding opportunities that networks like CAMSC and WBE Canada provide, the certification process benefits suppliers by building business capacity both personally and professionally. Through initiatives provided by corporations that practice supplier diversity and councils like WBE Canada, CAMSC and CGLCC, diverse suppliers gain access to training and mentorship thus offering the chance to grow in terms of business acumen, professional development, business connections and bottom line results. Being a certified supplier also opens doors to larger corporations and allows for access to decision makers, who are actively engaging and pre-qualifying diverse suppliers.
For RBC, providing more opportunities for diverse suppliers to compete for business and continuously working towards an inclusive supply chain is both the right thing to do and the smart thing to do.
- Supplier Diversity Forum (video) for small business hosted by RBC Royal Bank and Hire Immigrants
- The Next Frontier for Diversity – Supplier Diversity in the GTA: Business Case and Best Practices