An organizational & supplier diversity perspective on CSR & DEI
Practicing corporate social responsibility (CSR) impacts employees, the community and, ultimately, it impacts the organization itself. Every company can benefit from prioritizing CSR. That’s why leaders in supply chain management, human resources and heads of diversity, equity and inclusion (DEI) efforts joined HealthTrust for “Perspectives on Corporate Social Responsibility for Organizational DEI and Supplier Diversity,” during the HealthTrust University Conference in July. Following are highlights of some of the thoughtful approaches they shared.
Understanding the basics
CSR is a model and framework of an organization’s plans to improve its social and environmental actions, for employees, external stakeholders and the planet. It merges economic viability, environmental protection and social equity. It’s the big picture of how organizations take ownership of their impact on society. Under the CSR umbrella are sustainability efforts within environmental, social and governance (ESG) categories. These measure an organization’s ethical footprint. While CSR makes an organization accountable, ESG makes the actions taken measurable. This includes DEI as a focus on the human element, prioritizing an inclusive workforce, including attention toward underrepresented groups.
DEI programs are more successful when applied in a holistic, versus piecemeal, fashion. Best practices dictate that workplace initiatives should enhance the culture by involving collaborations with partners, suppliers and the community, says Aigner George, PharmD, AVP of Pharmacy Solutions and Chair of the DEI Council at HealthTrust. “It is your culture; it’s how you operate,” she shares. A successful DEI effort should be built upon inclusive leadership and provide colleagues at all levels of the company with a sense of belonging. As part of CSR and ESG, an organization may report on DEI goals, providing transparency into its actions and impact.
How CSR & DEI benefit employees
In the human resources arena, Jennie Hanson, Regional VP of Human Resources, HCA Healthcare/HealthTrust, sees the organization’s ability to attract, retain, engage and inspire colleagues through the broader CSR lens as vital to the organization’s success. “We can do that externally, which is important, but we need to do it internally, too,” explains Hanson. For retention, employees need a sense of safety and belonging. Listening to what employees want and the values they want to see engrained in their employer is key.
Staff can feel aligned with their employer if their interests are supported. That includes philanthropic work. Colleagues at HCA Healthcare logged 96,000 hours of volunteer work across 5,600 community organizations in 2020, Hanson said. Supporting initiatives like this, and mapping them to CSR efforts, assists HCA Healthcare/HealthTrust in thinking about how to move social equity forward. This support makes a difference in the community, and it also helps mitigate the difficulty organizations are facing with labor retention and shortages, as a good reputation can attract employees as well as help keep them.
Maintaining a sustained focus on DEI work is challenging but necessary, especially in retaining and engaging a diverse employee population. One suggestion offered by Miles Asafo-Adjei, Director of DEI, HCA HealthCare TriStar Division, is to analyze employee retention by race and gender, versus just analyzing the overall numbers. If certain groups have higher attrition rates than average, that’s a signal more work is required. Organizations need a sustained effort to continue this analysis, to dig deeper and ensure no one falls through the cracks. It also means analyzing demographic data at all leadership levels to understand where the majority of the diversity is focused within an organization. For example, an organization may find that entry level positions are the most diverse, and as they climb higher within their hierarchy, there is less diversity. In this case, leadership works to understand potential barriers and create more equitable advancement opportunities.
How DEI applies to suppliers
For Joey Dickson, Supplier Diversity Officer and AVP of Purchased Services & Diversity Contracting with HealthTrust, a supplier diversity program should demonstrate the organization’s culture internally and externally. His team manages HealthTrust’s Supplier Diversity Program, which has grown to 180 contracts with more than $469 million in diversity spend. The chief goal of the program is to align members’ DEI missions with capable, diverse suppliers, providing equitable access and helping these suppliers succeed.
Charlene Vickers, Director Supplier Diversity & Inclusion at Johnson & Johnson, defines supplier diversity as the expansion of opportunities for business owners from the minority, LGBTQ, veteran and disabled communities, and women. “The primary goal of intentionally working with diverse suppliers is to drive economic, social impact and social inclusion through this work—ultimately addressing the economic wealth gap,” she says. In 2021, Johnson & Johnson spent $2.2 billion with certified diverse businesses in the U.S., maintaining their membership in the Billion Dollar Roundtable (BDR) for the 11th year.
While many DEI programs in the healthcare arena are domestically focused, Johnson & Johnson’s efforts are global. “For us, it’s about driving health equity globally and empowering our employees,” Vickers says. “For supplier diversity, it’s also a part of how we are able to uphold our stakeholder values.”
Customers like HealthTrust are challenging organizations to do more to serve communities and are pushing the envelope, she adds. “Johnson & Johnson is committed to ensuring we have a value chain that reflects the patients and customers we serve around the world.”
Organizations pursue diversity and inclusion through multiple pathways. “The important point is to take action and do what works for your organization,” says Larry Fogarty, CPA, MHA, VP of Supply Chain Management, Methodist Le Bonheur Healthcare. Leaders at his institution began weaving DEI efforts into the organization’s fabric in 1999. “We realized it was not a program but a strategic imperative. As an organization, we’re only as successful as the communities we serve.” The hospital had to make a concerted effort to understand what it could do differently to advance economic development among minority- and women-owned businesses in its community, and then take measures to create a plan.
Working with partners to make changes
Vickers has found that an organization can further maximize CSR and DEI impact efforts through “unorthodox” partnerships. Johnson & Johnson is part of the BDR, a collaborative that includes other healthcare companies to brainstorm ways to address DEI spending in supply chain.
One initiative is to bring more visibility and involvement of Black-owned businesses into the healthcare industry. Supplier discovery is the top challenge seen in surveys across this space, as it can be difficult to identify diverse businesses. To solve that problem, the BDR members curated a list of Black-owned businesses and shared the list across companies. “If they can do work for other major healthcare organizations, they may be able to serve Johnson & Johnson,” Vickers says. The BDR members held a showcase to highlight Black-owned businesses and make connections. They will expand this effort to other groups over time. So far, they are seeing great outcomes. “We are leveraging the power of the collective to bring visibility and opportunity to diverse businesses,” she adds.
Another partnership Johnson & Johnson focuses on is customers. The company is no stranger to Tier 2 reporting, which gives view to diverse suppliers used by an organization. In the last few years, Vickers has seen a significant increase in demand for Tier 2 reporting, and it has evolved to include more engagement with customers and benchmarking on best practices. By partnering with responsive stakeholders, and with a vested interest in finding more solutions and results in this space, an organization can have a greater impact, she adds.
Targeting the best opportunities
From a provider standpoint, Methodist Le Bonheur’s DEI efforts improved once leaders realized that offense was better than defense. The organization spent many years, Fogarty explains, fending off claims that it was not doing enough in this area. By approaching it offensively and understanding where there were opportunities, they recognized they could get better results.
The health system found its greatest success with diverse suppliers in the areas of construction, renovation and expansion. While construction needs vary year-to-year, there are often more opportunities with these services. Fogarty says there are many capable minority- or women-owned general contractors and subcontractors. However, these businesses often did not have hospital or clinically-related experience, which was a barrier. To resolve this, Methodist Le Bonheur staff worked with its general contractors to provide educational sessions on bidding, employee management and project management in the healthcare realm. The 18-week sessions were offered twice a year and had great participation from the targeted populations.
Having this education better positioned these minority- and women-owned businesses to serve Methodist Le Bonheur’s needs and allowed the healthcare facility to fully engage them as general contractors responsible for hiring subcontractors, versus staying in their previous roles as subcontractors.
Organizations can also lean on partners like GPOs and minority business councils to help with vetting and screening potential suppliers. Fogarty shares that his organization used to try bringing in more diverse suppliers, but that overwhelmed the health system. “We had many requests we could not fulfill or provide meaningful opportunities to, which was frustrating to the businesses,” he says. The GPO and business councils serve as filters to identify and vet potential diverse suppliers for them. “Now, we’re more focused and controlled around what we need and how we go about it, while looking intentionally to minority- and women-owned businesses to fulfill our needs. It’s a core thought, not an afterthought.”
Vickers agrees with this approach.
The more an organization can connect the diverse supplier discovery process to the business needs, the more successful the company will be in making the right connections. Going to a conference and collecting business cards is not helpful if there aren’t good opportunities to match to them. The suppliers may also need development, such as coaching or mentoring, and there are creative ways to provide that, just as Methodist Le Bonheur has done.
Developing healthy CSR and DEI efforts within the supply chain should be systemwide. While procurement may want to lead the efforts, there should be representation across the organization, to help craft strategies and drive decisions on which suppliers to use. The more visible the efforts are internally, the better the response will be. “Do the education and awareness, and you’ll pick up champions along the way,” adds Vickers.
While it’s up to each company to establish the appropriate supplier development goals and objectives for its program, a toolkit from HealthTrust offers the following suggestions for getting started:
- Utilization: Integrate strategies to include competitive sourcing opportunities.
- Education: Provide resources to help small, minority and woman-owned businesses.
- Tracking: Emphasize continuous improvement. As program targets are achieved, monitor and report on progress.
- Certification: Partner with certifying organizations to ensure that program participants provide high-quality goods and services.
- Outreach: Seek out diverse suppliers through active involvement in small business and minority development organizations and tradeshows.
Learn more about HealthTrust’s diverse supplier contracts. Contact your HealthTrust Account Director or email email@example.comShare Email DEI, HTU, Q4 22