Washington, DC
April 20, 2021

Bias in Supply Chains – What are your biases? by Michael Tobolski

Studies show that people can be consciously committed to diversity and inclusion, deliberately work to behave without prejudice, and still be influenced by ingrained bias. Even the strongest advocates can take missteps. But we can’t change our actions and behaviors until we diagnose the problem.

Bias can take two forms. Conscious (explicit) bias is a choice; unconscious (implicit) bias is an involuntary reaction, a learned behavior from parents, friends and colleagues over decades.

The truth is that none of us can be “bias free” because we, as humans, are imperfect. We can’t know everything. Our understanding of the issues underrepresented groups face requires a constant willingness to learn and grow. Don’t believe me? I encourage you to take one of the “Implicit Association Tests” that Project Implicit offers here. You might be surprised by the results.

You, as the reader, have conscious and unconscious biases. Reconciling with this reality is a journey. I speak from experience when I say it takes effort, focus and courage to reshape your thinking. For me and many other white men, our biases are based largely on a fear of change, and of losing white male privilege. Recognizing where our bias comes from can help us open our minds and progress past reactionary thinking and fear.

In the world of supplier diversity and inclusion, bias significantly inhibits progress toward gender equality in global value chains. For example, male buyers and executives may perceive that women-owned businesses are less competitive than their male counterparts. This implicit bias is “backed up” by conscious bias that cites selective data or even one negative experience from the past which is then used as a blanket justification against working with all women-owned businesses. The result is that women are excluded from bidding opportunities, limiting the growth needed to prove their “value” to the biased buyer. It’s a vicious cycle that adversely affects both the women suppliers and the buyers because neither are able to realize their full potential. A woman business owner shared with me that they hesitate to identify as woman-owned because it would limit their chances to work with corporate buyers. By assuming that women-owned businesses can’t meet large, multinational buyers’ needs, organizations limit their ability to stay competitive.

Consumer purchasing decisions are, now more than ever, driven by diversity and sustainability efforts. A recent Nielsen survey revealed that 66% of global respondents, both women and men, said they were prepared to pay a premium for products and services from companies that are committed to positive social and environmental impact.

Beyond providing opportunities for the best supplier candidates to participate in the bidding process, one should also consider the impact of supplier diversity on recruitment and retention of talent. A significant 86% of female millennials report that an employer’s policy on diversity and inclusion is important. Yet, fewer than 10% of companies publicly disclose information about how they promote gender equality in their supply chains. This is a missed opportunity.

To-date, progress to address bias has been slow. We all need senior leadership to embrace the issue and visibly lead efforts to address bias in organizational culture. Proactively implementing a supplier diversity and inclusion focus with specific objectives and measurement at the corporate level is required. With men holding 71% of senior management roles globally, things aren’t going to change if we continue with business as usual.

What can organizations do? The first step is to help make the unconscious bias conscious by identifying, understanding, confronting and addressing biases. Only then can an organization implement policies and practices that effectively counter bias. The process may begin in procurement or Diversity, Equity and Inclusion (DE&I), but to be truly successful it must become an inherent part of the entire corporate culture.

Here are a few examples of best practice that are at the heart of the matter:

  • Make the Business Case for Supplier Diversity & Inclusion by showing the importance of mirroring the customer and diverse employee base, and the positive bottom-line impact. Communicate this corporate policy internally and externally and focus on the business users and not just the support groups of procurement and DE&I.
  • Implement an RFP Policy driven by senior management to ensure that any bids that go out must have at least one diverse supplier included in the bid process; if none can be found, there needs to be a process where the head office must sign off to that effect.
  • Train All Employees starting with senior management workshops on how to identify unconscious bias. Regularly include existing staff through to new hires in discussions of bias and the benefits of inclusion, with a special focus on value chains and the decision makers that spend in those value chains.

The impact of gender bias in supplier diversity is real. Unfortunately, progress is not happening fast enough. You can do something to change that.