Inclusive Procurement and the Value of Cultural Intelligence

One final post from us on the recent MSDUK conference – the event that promotes inclusive procurement (supplier diversity) in business – on the session of the Knowledge Forum day that really gets to the heart of the matter. It was delivered by the Cultural Intelligence Hub, which uses its knowledge and experience of multicultural audiences to help businesses enhance their brand position and relationship with a new and growing group of consumers and suppliers.

The workshop looked at the current profile and demographics of the UK’s minority communities and how businesses engage with them. It began with a question and answer session with the audience to establish just how much we think we know.  And I’m happy to say that the audience was deemed “pretty well informed.”

What do we know about BAME? For starters, what does it stand for? Well that’s easy, we could look it up – British Black, Asian, and Minority Ethnic communities. But in terms of a few stats, did we know that the 2011 census established that the BAME community accounted for 8 million people in England and Wales. That’s 14% of the population – a growing community that is more diverse than ever before. In London alone, 40% of the population is made up of BAME, with an estimated spending power of £300 billion. So from a business point of view, there is a commercial case for talking to a BAME audience.

The majority of people from a BAME background live in London, Birmingham and Greater Manchester, so, it was emphasised, if your business deals in those areas, you really need to engage with then (if you don’t already) to secure your future market.

We were told how education is particularly important to a large number of ethnic minority groups, and the most likely group to hold a degree is? – the Chinese. Not to imply these are linked, but of the FTSE 100 CEOs, only 4% are non-white. And did we know how many BAME (owned/run) businesses exist in the UK? Actually we did, either we’d done our homework or the audience was already very ethnic-minority aware – the answer is 300,000.

The point of laying out the basic facts was to raise awareness that there is a business case for being more minority-owned-business aware, and that there is value in supplier diversity. Ethnic diversity is growing, it’s a new(ish) market with spending power and increasing market share. It has an increasing and developing talent pool and with that, creativity and productivity are growing too. So it’s important to give this community the same playing field as everyone else. Not simply out of corporate responsibility or external regulations, but because it’s the intelligent and right thing to do. (More on this in our previous posts here and here.)

The speakers, directors of the Cultural Intelligence Hub, Jag Poonia and Anjana Raheja, gave some insights they have gathered over a long period of time. “These communities are here to stay, and they are growing,” they said. “The Chinese are one of the top earning groups in the UK, and the Southern Asians the fastest growing middle class who make up half of all new millionaires. Research shows that BAME communities are three times more likely to be entrepreneurs, own small businesses or be self-employed, and are already contributing £25-35 billion to the economy.” So why do they feel businesses are not speaking to them in their campaigns?

The Intelligence Hub sees three distinct streams within that society: the Mono culture, an older generation rooted in their culture that don’t feel the need to step out of it; the Dual culture, that straddle both Western society and keep their own cultural link; the Hybrid culture, third- and fourth-generation born brought up in the UK and see themselves as fully British. (One wonders how that balance will change as their children grow up.)

It was interesting to note that only 45% of the BAME population think Advertising speaks to a multicultural society. Why is that? What are the risks? Fear of multicultural marketing alienating the mainstream or potential new customers with different motivations? Risking damage to corporate standing? The risks of not understanding and reaching out to specific cultures are higher. Did we know for example, that yams on sale in Africa are always cut in half, if that’s not understood in this country, they won’t get bought by the communities that eat them, because they can’t see what’s inside. A particularly good example of not doing your homework was the opportunity seized by a major food retail store that saw Ramadan as a good time to increase sales, putting some well known snacks on sale with a Ramadan celebration banner that promoted ‘smokey bacon’ flavour crisps! The hub drew our attention to the Dove Real Beauty advert -- a good example of reaching an inclusive society.

Some firms already seize the opportunities of inclusivity, like Balfour Beatty, which has pledged to spend £1 billion a year with SMEs (read minority organisations); AT&T which accounts for 24% of its total spend on diverse suppliers; EY which in UK and Ireland aims for 10% BAME representation in their partner intake, and the like. There are many businesses doing really good things. The opportunities they are discovering are access to new and creative SME businesses, not only in their supply base but in their leadership, creating better corporate standing (often demanded by customers now), building trust and credibility, and therefore increased sales and market share.

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