On his third attempt to conquer Everest, George Mallory was asked why he was climbing the 29,008-foot peak. His response was, "because it is there."

What does a 1924 quote about climbing Mount Everest have to do with your supplier diversity initiative? It is a fair question.

To start, supplier diversity is not a new challenge. While the origin of today’s diversity efforts began with the civil rights movement in the 1950s, it was not until the race riots in Detroit in 1968 that General Motors launched what many consider to be the first supplier diversity program. Soon after GM, other auto industry giants and companies from different sectors, such as IBM, followed suit by introducing their diversity programs.

The second point, which is the focus of this post, is why, since its inception, supplier diversity success has evolved at what some consider to be a glacial pace and what you can do about it.

At the Foot Of The Mountain

“I'm an ordinary guy who has been fortunate enough to have some very extraordinary experiences, both personally and professionally. In my most recent book, I share my journey to climb Mt. Kilimanjaro and the struggles to reach the highest point on the African continent. Along the way, I learned a great deal about myself, my team, and what it takes to overcome big challenges. You can join me on my Kilimanjaro adventure in the pages of Kissing Kilimanjaro: Leaving it All on Top of Africa.” - Daniel Dorr

Have you ever stood at the foot of a mountain? For me, that question is more literal than figurative, but you can envision what I mean.

Whenever we face a crisis, our attention is understandably focused on finding a solution as quickly as possible. We, in essence, become "locked in the moment" because the fallout of inaction is usually significant.

However, in our hasted energy to resolve a problem, we tend to lose sight of why we are in this situation in the first place. In other words, there is a bigger picture beyond our narrow scope of immediate impact, and we need to recognize its importance.

I like to think of it as the slow-leak tire syndrome. You have a tire with a slow leak and must repeatedly pull into a service station to fill it to the proper inflation rate. Is it an inconvenience-absolutely, but is our frequent station stops enough of a hassle to prompt us to either repair or replace the tire?

When I was originally asked to write this article on the disruptive impact a potential West Coast port workers' strike would have on supply chains, the slow-leak tire analogy immediately came to mind.

A Long Time in The Making

The contentious situation we are now facing at this and other ports in North America has been brewing for some time, pre-dating the COVID-19 pandemic.

Have you ever heard the old saying, "when everything is said and done, there is more said than done?"

How about “everyone talks about the weather, but no one does anything about it?”

The common theme through the above examples of observational wisdom is the suggestion that talking about something is not the same as doing something about it.

Based on experience, I would not be off base in suggesting that this same theme applies to the subject of supply chain resiliency. In other words, in the world of procurement and strategic sourcing, the importance of resilient supply chains has been a point of discussion for some time.

However, what the COVID-19 pandemic and today’s increasing geopolitical instability have taught us is that our fruitful discussions in the past did not necessarily translate into meaningful actions and outcomes today.

Didn’t See It Coming?

When considering the significant disruptions in our global supply chains over the past two years – the most recent involving baby formula, we must ask ourselves how we got here. Didn’t we see it coming?

Let's face it, before COVID-19, how many of us would have predicted that our supply chains would, in some cases, snap like a rubber band stretched beyond its level of tolerance. Sure, we knew there were potential vulnerabilities in our supply and demand networks, but who expected such far-reaching, universal failures? By the state of things today, very few saw what was coming, and even fewer believed that we weren't ready for it.

Why were we so confident?

The problem wasn’t a lack of awareness regarding the importance of having resiliency and agility in our supply chains. We knew it was important. The issue was in our approach, or better yet, our interpretation.

My first Op-Ed, Open Letter to the C-Suite, appealed to the C-Suite to hold Procurement accountable for not investing in technology.  The blog referenced a Gartner perspective that only 22% of procurement leaders have a long-term digital strategy.  I touched a nerve, invoking comments from a few readers suggesting there are procurement leaders - the Magical CPO - that understand how to navigate the C-Suite to get the budget for technology investments.

To give credit where credit is due, Nikesh Parekh, CEO of Suplari (Now Microsoft), is the source for the term Magical CPO.  It describes a procurement leader that understands how to build business cases and secure budgets for technology investments that improve their department's efficiency and effectiveness while supporting the needs across all business disciplines. The Magical CPO persona, by definition, is juxtaposed with the technology laggard. If you saw my first Op-Ed, I noted that 78% of procurement leaders are technology laggards without any digital automation strategy.

The Magical CPO persona

Let’s unpack the Magical CPO persona to agree on common qualities. My views are based on my observations and experiences over a 30+ year career in procurement. There is no Wikipedia page for Magical CPO nor a Google search that prompts any relevant hits - I checked.  While I understand there are more sources than Wikipedia and Google, the point is that there is generally no standard persona for the Magical CPO. Here’s my interpretation of what the Magical CPO must possess: 

There are no shortages of headlines such as the one above linking supply chain disruption to inflation. While I don't want to oversimplify the current situation, when supply can't meet demand for various reasons, inflation is the end result. External forces such as the above reference to the war in Ukraine and the now seemingly endless COVID-19 pandemic are the most notable contributing factors. And let’s not forget the Suez Canal blockage and its extended impact around the globe.

Undoubtedly, the “interconnectedness of global supply chains” means that these events have far-reaching implications impacting “labor, energy and transport costs.” As a result, the consumer price index (CPI) - which has been somewhat stable for the past few decades, has seen a significant rise in prices.

How significant?

In December 2021, reports indicate that the CPI was “5.4% higher than a year previously in December 2020.” In other words, even though supply chain disruption and its link to inflation are not new, the breadth of its impact globally has created a sense of urgency like never before – at least not in the 21^st century. Nor are there any signs of relief on the near horizon, as a recent New York Times article proclaims that we are not likely to see the return to a “normal supply chain” in 2022 (or anytime soon.)

Along with senior buy-side executives, joining SIG’s Stephani McGarry on the call was the Everest Group. In what I can only refer to as a “captivating session,” the discussion focused on what we as an industry have and will continue to face during these inflationary times.