THE GOLD STANDARD IN DIVERSE SPEND
DIGITAL REPORT 2022
IN ASSOCIATION WITH:
THE
GOLD STANDARD IN
DIVERSE SPEND
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JPMORGAN CHASE & CO.
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JPMORGAN CHASE & CO.
Through mandates, mentorship and mobilisation, JPMorgan Chase & Co. is promoting diverse spend throughout its supply chain to enact real change
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n an era where Environmental, Social, and Corporate Governance (ESG) is rising rapidly to the top of corporate agendas, prioritising diversity is not, on the surface, a novel idea. In fact, JPMorgan Chase has been committed to supporting diverse suppliers for almost 30 years, with the philosophy that an inclusive supplier base that mirrors the communities in which the bank does business generates wealth, creates jobs and fosters economic growth. Currently, JPMorgan Chase dedicates about $2bn annually - to diverseowned and managed companies. And in October of 2020, JPMorgan Chase made a commitment to increase its spend with Black, Hispanic and Latino businesses by US$750 million as a part of the firm’s $30bn commitment to help close the US racial wealth gap. JPMorgan Chase’s global procurement function oversees $19bn in annual spend, across 6,500 suppliers encompassing technology, professional services, real estate, legal, and every category in-between. Given the impact of this significant spend and its ripple effect on the global economy, the team is cognizant of the importance of purchasing responsibly. Jim Connell, Chief Procurement Officer and Head of Global Supplier Services aims to drive diversity further through the bank’s procurement function.
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JPMORGAN CHASE & CO.
JPMorgan Chase: The Gold Standard in Diverse Spend
“Supplier diversity is a top priority across Global Supplier Services, which really involves every part of our team - even payment operations and supplier assurance services, who historically wouldn't be involved,” Connell says. “I think it's important that we all play a part in driving supplier diversity forward.” JPMorgan Chase is “doubling down” through a unique approach that leverages its own scale to systematically promote best practices and commitments throughout its supply chain. The firm is mobilising key suppliers to spend more with diverse companies; mentoring those with emerging supplier diversity programs; enhancing discoverability of diverse suppliers; and promoting increased spend targets with key business communities, specifically Black, Hispanic and Latino. The strategy is built upon JPMorgan Chase’s Gold Supplier program, an initiative launched in 2017 that brings together industry leaders 6
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to generate shared, incremental value and strengthen relationships with its most strategic and highest performing suppliers, from bluechip market leaders to small and agile innovators -both publicly traded and privately held. Connell and his team understand that simply demanding that Gold Suppliers spend more with diverse companies may not provide the desired results. To help drive results they needed a better understanding
JIM CONNELL TITLE: CPO AND HEAD OF GLOBAL SUPPLIER SERVICES INDUSTRY: BANKING
of each company’s current capabilities and how much room there is to grow. "Around a year ago, we engaged with over 100 of those top suppliers to figure out where they are in their journey toward a sustainable supplier diversity program,” Connell says. “We conducted a comprehensive end-toend supplier diversity benchmarking survey, which allowed us to tier them into three different groups.”
EXECUTIVE BIO
LOCATION: USA Jim Connell, as Head of Global Supplier Services (GSS) for JPMorgan Chase & Co., is responsible for Sourcing, Procurement, Third Party Oversight (TPO), Payment Operations and supplier control assessment for a $19B supplier spend portfolio, distributed across 31,000 engagements with 6,500 suppliers. Prior to this role, Jim was the Head of Third Party Operations and Controls for the firm, overseeing the firm wide TO program, Supplier Assurance Services and Payment Operations. Before this, Jim led the firm's Corporate TPO group, inclusiveof the PO policy, technology, regulatory engagement and cybersecurity. Before joining the firm in February 2014, Jim served as CPO for RBS Citizens Bank, managing Strategic Sourcing, the Contract Management Center of Excellence and a supplier spend profile of $1.7B per year. Prior to accepting the CPO role in 2012, Jim held various leadership positions within BS Citizens Bank's sourcing function, including management of the Marketing, HR, Technology, Facilities & Operations sourcing teams. Prior to entering the financial services industry in 2008, Jim practiced strategic sourcing for 7 years at Comverse, Inc., which followed a successful 5 year tenure as a corporate technology sales representative. Jim holds a Bachelors degree in Political Science from Merrimack College, and lives in Connecticut with his wife, Dorin.
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WWW.OVERLANDTANDBERG.COM
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Tackling diversity through data and technology Overland-Tandberg is a global technology company serving over 100 countries. We spoke to its Chairman and CEO, Eric Kelly. As Chairman and CEO, Eric Kelly takes a dynamic role in leading the company in its global growth strategy. This has involved an important collaboration with one of the world’s leading banking corporations, JP Morgan Chase, that is expanding the company’s mandate of improving global diversity in the corporate and technology sectors. Kelly says Overland-Tandberg was on the lookout for a partnership with a bank to fit the company’s growing, global footprint. “We actually started off discussing the banking relationship, and then it quickly moved into a symbiotic partnership—they became our corporate sponsor. The collaboration has gained momentum and velocity, with Overland-Tandberg carrying out business with JPMC on the supplier diversity side, working with their chief procurement officer and their supplier diversity group. Established trust and success Kelly points to Overland-Tandberg’s long history when he speaks about the company’s robust reputation in the marketplace. As one of the longest
established black-owned global technology companies, it has built up a respected position. Our vision of “Global Intellect and Inclusiveness” is the ethos that drives the organization – this vision allows us to have a comprehensive understanding of diversity and inclusion. Diversity and data challenges Multinationals and foreign companies face the same challenges as US companies when trying to find black-owned businesses, says Kelly, it comes down to a lack of access, availability and awareness. “There are organizations here in the US that showcase specifically black-owned businesses, and diverse companies,” he elaborates. “But I think that from a multinational standpoint of foreign companies, it’s one of access and availability and awareness. How do you find and develop partnerships at scale with diverse companies when there’s no technology platform that’s designed to provide that information?” Kelly continues, “The world is digital and getting smaller. If you’re a US company you’re directly or indirectly doing business globally. This challenge has been constant, which led me to leveraging my history in technology to focus on creating a platform that could align these resources across industry and essentially play a key role in closing the digital and diversity divide.” It’s called Bridge 2 Technologies. Learn more
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JPMORGAN CHASE & CO.
“WE VIEW SUPPLIER DIVERSITY NOT ONLY AS A MORAL IMPERATIVE BUT AS SMART BUSINESS”
JIM CONNELL
CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.
Very nascent supplier diversity programs, or those still in the planning stages, are labelled ‘emerging’. Relatively successful supplier diversity programs that have been established for several years are categorised as ‘established’, while industry-leading, bestin-class supplier diversity programs are considered ‘mature’. “That benchmarking allowed us to approach each supplier in a different way,” Connell explains. "We asked them to draft and submit a growth plan that would show us over a three-year horizon how they're going to improve supplier diversity, in general, and specifically with Black, Hispanic and Latino companies. We then benchmarked those growth plans against each other, and once we felt they were sufficiently ambitious, we accepted them.” To date, almost 40% of Gold Supplier growth plans have been determined ambitious enough to have an impact. Collectively they will increase diverse spend by $6.2bn over the next three years, $1.2bn of which is earmarked for Black, Hispanic and Latino suppliers. Financially, it is a major step in the right direction for diverse businesses, and Connell expects that figure to balloon further as more Gold Suppliers are fully onboarded. What’s even more motivating to Connell and his team is ending 2021 with about a dozen Gold Suppliers initiating a supplier diversity program for the very first time. “Most exciting is the exponential impact of this,” he says. “Around half of our Gold Suppliers have also committed to replicating this initiative with their supply chains, cascading the mandate that diversity is a priority for them. We're excited about the idea of magnifying and multiplying that impact. If we can, in some small way by evangelising the methodology that we use, jpmorganchase.com
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BRIAN SHORTER
NOEL WASHINGTON
TITLE: HEAD OF THE GOLD SUPPLIER PROGRAM
TITLE: VP OF SOURCING, BUSINESS DEVELOPMENT & SUPPLIER MENTORING PROGRAM LEAD
Mobilising Key Suppliers “I created the Gold Supplier Program in 2017. My vision for the programme then, as now, was that it be differentiated from traditional ‘preferred supplier’ programs and create real value for JPMorgan Chase, our Gold Suppliers, and the communities we serve. This is a highly influential group of companies with combined revenues of over US$2 trillion, wielding very significant spending power. It’s in this context that we have developed our supplier diversity initiative over the last year, and have the potential, collectively, to make very material improvements for diverse suppliers and diverse supply markets. “My hope for the future is simple: I want supplier diversity to become businessas-usual for our Gold Suppliers, with supplier diversity programs, and diverse suppliers, that are fully incorporated to the Golds’ sourcing, procurement, and vendor management practices. “The most encouraging sign that my hope may be achieved, though, are the reasons why Gold Suppliers are participating. It’s not just because JPMorgan Chase asked them to get involved. Gold Suppliers tell us that they view supplier diversity as a way to invest in and improve the communities they serve where their employees and customers live and work. In short, it’s good business."
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Mentoring Suppliers “I partner existing suppliers that support the organisation, but do not currently have a supplier diversity program (mentees), with other external strategic suppliers of JPMorgan Chase that have well-established supplier diversity programs (mentors). “Mentees and mentors will work together over the next 18-24 months to design and implement a sustainable supplier diversity programme. We hope the organisations we are mentoring will create a long-term sustainable diversity department that will in turn create more opportunities for diverse-owned businesses. Our goal is to have opportunities translate into awarded business, and increased revenues for diverse companies; and access to a broader selection of innovative businesses for our Gold Suppliers. “A majority of the mentees have secured leadership buy-in to hire a Head of Supplier Diversity or assign a dedicated resource to drive the effort. Many of the companies have recognised the importance of inclusion of diverse suppliers and identified opportunities to shift how they procure products and services to drive awareness to the utilisation of the diverse business community.”
JPMORGAN CHASE & CO.
TED ARCHER
WILLIAM KAPFER
TITLE: HEAD OF DIVERSE SUPPLIER BUSINESS DEVELOPMENT
TITLE: GLOBAL HEAD OF SUPPLIER DIVERSITY COMMUNITY ENGAGEMENT
Discovering Diverse Suppliers “Not being able to find or discover qualified diverse-owned businesses is a pervasive misconception. There are diverse businesses in just about every industry. In my role, I work closely with colleagues across the firm to match excellent diverse businesses with the opportunities that will lead to their success. JPMorgan Chase is committed to growing minority and other underserved businesses more broadly. My team connects these businesses to resources directly provided by the firm or provided indirectly through partnerships with other organisations. “Black, Hispanic and Latino-owned businesses often face greater challenges than their counterparts when navigating relationships with large enterprises. This can sometimes lead to challenges with being ‘corporate ready’ when an opportunity arises and once an opportunity is awarded it can be difficult to scale up to meet all the demands from a large corporation.“According to the JPMorgan Chase Institute, Black, Hispanic and Latino households have median family wealth of just 13 percent and 19 percent of white households’ median family wealth, respectively. If black businesses achieved parity with non-black businesses, we would have US$676 billion in more business revenue, 1.6m more jobs, and 25m more wages.”
Supporting Black, Hispanic and Latino “Just as we know that a diverse organisation leads to better problem-solving and innovation, so does a diverse supply chain. Focusing supplier diversity programming on Black, Hispanic and Latino companies helps us to play a role in addressing the racial wealth gap, while promoting and increasing economic mobility for the country’s most historically underrepresented segments. Advancing racial equity requires a more intentional focus on the challenges faced by these communities of colour and a commitment to becoming an inclusive institution. “We have set a clear, quantifiable goal to spend an additional US$750 million with Black and Latino-owned businesses by 2025, as part of the firm’s overall US$30 billion commitment to racial equity. Our program is distinguished by the fact that we don’t limit our internal relationships to simply sourcing and procurement. Our team cohesively aligns its efforts with JPMorgan Chase’s firm-wide DE&I initiatives allowing us to raise awareness about supplier diversity throughout all levels of the business. “We are off to a strong start – and remain encouraged by the firm-wide support that this strategy has catalysed—as we continue to further accelerate work already underway to address racial equality and opportunities in the communities in which we live and work.”
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make supplier diversity an integral part of doing business for these big companies, it can really have a transformational effect on diverse communities. That's an exciting notion for us that really mobilises the team.” Though supplier diversity is a mandate for these suppliers, JPMorgan Chase recognises that not every organisation has the resources or expertise to transform overnight - and is supporting them through these challenges. For suppliers with emerging diversity programs, the firm offers access to mentorship. “We're pairing them up with those that are best-in-class, industry leaders in supplier diversity,” Connell says. “We're creating mentor-mentee relationships where they can learn from the best, and providing them with tools, templates, and training modules. For suppliers with established but growing diversity programs, the bank is helping to overcome one of the most common hurdles: discoverability. In the US, the inability to find a deeper pool of diverse suppliers is more a perception than a reality. Connell and his team help to point the way to getting started. “Many suppliers are daunted by the idea of finding diverse businesses and it's a blocker to initiate their programs at all,” Connell says. “We tell people to start small and analyse their own spend, because they're probably spending money with diverse suppliers today that they don't even know about. “There are tools you can use to analyse that, but more importantly is creating relationships with some of the key diverse business certification organisations like the National Minority Supplier Development Council or the Women's Business Enterprise National Council. They can give you the support you need to build your program, expand your databases with eligible suppliers, 14
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“CREATING MORE INCLUSIVE SUPPLY CHAINS ACROSS THE WIDER BUSINESS COMMUNITY WILL CHANGE THE COMPETITIVE LANDSCAPE FOR DIVERSE SUPPLIERS FOR GENERATIONS TO COME.” JIM CONNELL
CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.
and your network of other companies that you can share best practices with.” Through the Gold Supplier program, JPMorgan Chase also shares its own list of diverse suppliers, with teams in place to ensure that minority and underserved businesses share the same level of visibility as more established competitors. “We have over 100 of the biggest companies in the country, and together we've created this community where we
share diverse supplier lists,” Connell says. "Through practices like this, we help each other succeed.” Improving spend with diverse suppliers supports a wider ESG agenda at JPMorgan Chase & Co. “There is an expectation now that companies that we do business with also share our values. We believe that procurement spend can be leveraged for social good, whether that’s racial equity, environmental
sustainability or good governance. It is not a box-checking exercise,” Connell says, “but a vital pillar for the future of the bank and its stakeholders. We view supplier diversity not only as a moral imperative, but as smart business,” he explains. “We compete with other banks for clients, customers, and talent. And so we know that a bank that is firmly rooted in these communities is going to have a positive long-term impact.” jpmorganchase.com
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"COMPANIES SHOULD EXPECT THAT ESG IS GOING TO BE AN INTEGRAL COMPONENT OF HOW THEY'RE MEASURED”
JIM CONNELL
CPO AND HEAD OF GLOBAL SUPPLIER SERVICES JPMORGAN CHASE & CO.
When society wins, so too does the overall business community. "Companies should expect that ESG is going to be an integral component of how they're measured in their relationships,” he adds. "And it all boils down to: are you spending your money in the right way, in a way that helps the community? It's a hard thing to measure until you start looking at it in specific domains around diversity, sustainability, and governance. We're taking a programmatic approach to this, getting quantitative around our Gold Supplier community and how we would seek to influence both our direct spend and our suppliers’ spend.” In the coming 12 months, the bank anticipates firm progress in the growth plans that have already been submitted, with more opportunities as further Gold Supplier growth plans are approved. But it is the longterm vision that will enact real change, and bring the bank’s true ambition to life. “The larger purpose of all of this is to have companies develop sustainable programs that will create new diverse spend for decades into the future,” Connell says. “We'd like to see this initiative cascaded to thousands of businesses because creating more inclusive supply chains across the wider business community will change the competitive landscape for diverse suppliers for generations to come.” jpmorganchase.com
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