In 2020, McKinsey announced 10 actions toward racial equity. This set of new commitments “builds on our work to create better outcomes around racial justice and equity, and gives every firm member the opportunity to be tangibly involved,” says Sara Prince, McKinsey senior partner and leader of the 10 actions.
Action 7 articulated a bold goal focused on supplier diversity: to double our spending with diverse suppliers within three years, a goal we have now surpassed.
“The firm has a deep and longstanding commitment to helping advance diversity, equity, and inclusion in business, in society, and within our firm,” says Scott Parris, chief procurement officer and McKinsey partner. “We are proud to have demonstrated that commitment, and we are just getting started. We will continue working to make it even easier for colleagues to find and choose diverse suppliers.”
The benefits of supplier diversity flow in both directions. Increased spending with diverse suppliers leads to greater representation, employment, and economic advancement for diverse and small business communities. For McKinsey, new suppliers promote innovation through new products, services, and solutions, driving healthy competition with existing vendors.
There is a robust philosophy behind our supplier diversity program, says Eyvon Austin, supplier diversity manager. “We’re ensuring our commitments to supplier diversity are firmwide, integrating elements such as clear spending goals across teams, supporting business development of diverse suppliers, and increasing our engagement with nonprofits that bring together diverse suppliers.”
To achieve our objectives, two strategies in particular have proven instrumental: Connecting with and crafting opportunities for new diverse suppliers while continuing to nurture and grow our relationships with existing diverse suppliers.
We felt comfortable because when you look at McKinsey’s history, their fingerprints are on things a lot deeper than supplier diversity. They've been providing high levels of social impact for a long time.
Building new connections
Diverse suppliers can face hurdles when competing for new business. While they often offer incredible service and value, diverse suppliers may not have the benefit of legacy business, contacts, access to capital, or other advantages that many competitors may have.
In 2020, McKinsey worked to accelerate its approach to supplier diversity, with a focus on making it easier to find talented, diverse suppliers that we knew existed across our major spend categories.
Our efforts, such as increasing collaboration with nonprofits that foster connection with diverse suppliers, helped unlock new relationships with a range of suppliers we had never worked with before—including World Wide Technology (WWT), the largest U.S. Black-owned business providing IT solutions and consulting.
In 2022, McKinsey was proactive in establishing a relationship with WWT. Brett Kelley, McKinsey director of vendor management, and his team sought out WWT through our collaboration with the nonprofit National Minority Supplier Development Council.
“We learned about WWT’s broad capabilities and shared values around diversity and innovation and together decided to build our relationship,” says Brett.
Diverse suppliers often face challenges in the RFP process because their competitors have likely worked with the company before and have contracts from previous work to build on. Brett and the team moved to put a contract in place for WWT even before a specific opportunity arose to make them competitive in McKinsey’s bidding process.
“In supplier diversity, we often deal with the ‘chicken or the egg’ paradox: the contract or the opportunity,” says Brian Sharpless, director of diversity business development at WWT. “But what McKinsey did was start laying the groundwork on a contract without a specific opportunity. That opened doors for us when the time was right.”
Once WWT came on board, McKinsey worked to accelerate the relationship, sending a sizable amount of business to WWT in a short amount of time.
“It usually takes a year or two to get to where we got in the first couple months with McKinsey,” says Frank Boensch, WWT’s regional sales manager for NY/NJ/PA. “They put a lot of trust in us on some pretty sizable deals.”
The trust worked both ways.
“We have a responsibility to bring the smaller minority-owned business and suppliers we work with along and pave the way, so we need to make smart decisions,” says Brian. “But we felt comfortable because when you look at McKinsey’s history, their fingerprints are on things a lot deeper than supplier diversity. They've been providing high levels of social impact for a long time.”
Nurturing and growing existing relationships
While WWT is a new supplier to the firm, McKinsey has been working with other diverse suppliers for years. One example is Corporate Concepts, a woman-owned business in Chicago that offers workplace furniture solutions and collaborates with businesses to create better workplace experiences. McKinsey has worked with Corporate Concepts for 17 years.
When Jennifer Cusack founded Corporate Concepts in 1983, she knew of very few women who’d ventured into the commercial and office furniture business. But she took the leap. First-year sales topped $3 million—three times original projections. And the company has continued to grow steadily ever since. McKinsey began working with Corporate Concepts in 2006, and the relationship has continued to expand.
“We started with a small project in Chicago and proved ourselves, and now we work on McKinsey offices all over North America,” says Jennifer. She brought in Jackie LeSavage as the relationship manager, who has been with the account ever since.
“McKinsey has been a vital client because it is truly a collaboration. We are integrated into the planning and design process and are treated as partners,” says Jackie. “Not only has working with them grown our company’s size, but it has also helped us blossom professionally.”
“When it comes to diversity and impact, McKinsey really cares,” says Jennifer. “They walk the talk.”
To learn more about our supplier diversity efforts, or to work with us, visit McKinsey’s Supplier Diversity Program.