Buying into diversity

GE Vernova goes out to bid for a travel management company in the third quarter of this year but Bernadette Basterfield, the energy giant’s global sourcing executive for travel, meetings and fleet, has a problem. Basterfield is measured by her employer on supplier diversity, yet, she says, “I’ve been researching this and I can’t find a TMC that is female-owned, so I can’t say internally that we’re including such a company in our RFP process. Can I find one in the fleet world either? Hell, no!”

Many women work in corporate travel: 58 per cent of the buyer members of GBTA Europe are female. But perhaps this disguises an industry-wide appreciation that, says Basterfield, “very, very few companies in the business travel sector” are owned by women. Beyond a handful of consultancies and recruitment companies, it is difficult to think of many more.

Corporate travel is not alone. According to WEConnect International, which certifies women-owned businesses (WOBs) and connects them with procurement teams, only one in three businesses worldwide are WOBs and only 20 per cent in the United Kingdom. The majority trade locally only. WOBs attract an estimated mere 1 per cent of procurement spend.

The reasons for female under-representation in ownership are a mixture of the institutional and personal. Even in 2024 there can be entrenched chauvinist attitudes, according to WEConnect regional director Jerome Flint, sometimes manifested as concerns about losing supplier attention because of pregnancy and childcare.

But Jo Layton, the CEO of her own WOB, the serviced apartment agency CAP Worldwide, believes the worst enemy is inertia. “The travel industry is naturally inclusive,” she says. “The barrier is how people have always purchased.” Established businesses are overwhelmingly male-owned, either directly or indirectly, and therefore, says Flint, “getting those first and second major customers [for a WOB] is hard.”

Another significant challenge is access to capital, which, Flint says, WOBs “put as their number one pain point.” WOBs accounted for only 2 per cent of venture-capital funding invested in Europe and the United States in 2023, according to PitchBook, a provider of data on venture capital, private equity and mergers and acquisitions.

When the competition is overwhelmingly male (or indeed white), those who are not, by the very fact of their difference, can feel they don’t belong. Basterfield moved to the supplier side briefly during the 2010s to start a consultancy, and even she, a widely respected, experienced professional, fell victim to impostor syndrome. “I knew I was up against some very noisy owners of consulting businesses,” she says. “I had a huge network I could have reached out to but I felt ‘how do I compete?’ and I talked myself out of it. I didn’t have the confidence to see it through.”

It is to combat all the inherent disadvantages that the concept of supplier diversity has taken hold in the United States and is increasingly being introduced in the UK. The rest of Europe, Flint says, is further behind.

Layton attributes the increased interest in WOBs to the UN Global Compact, to which 20,000 companies worldwide have signed up, pledging commitment to the United Nations’ Sustainable Development Goals. Among those goals is achieving gender equality and empowering all women and girls, including “equal opportunities for leadership at all levels of decision making in political, economic and public life.”

Some signatories to the UN Global Compact might raise eyebrows in terms of their track record on other sustainability issues. It is therefore reasonable to ask whether all those who have made the right noises about supplier diversity are genuinely committed or are virtue-signalling.

Diversity can be a tick-box exercise for some, says Flint, but “a number are serious about this and link performance and bonuses to spend on women-owned businesses. I would say a third have yet to engage, a third pay lip service and a third take it seriously, but I think that will shift more towards serious change going forward.”

In addition to GE Vernova, another corporation which sets spend targets with diverse suppliers is pharmaceutical company GSK, which employs Louise Harries as a full-time supplier diversity manager. Harries is adamant that GSK embrace diversity not just to do the right thing but because it is good for business too.

“Within GSK we sell to diverse communities and therefore those communities expect us to support them,” says Harries. “That also gives us a much better cultural understanding and there’s a diversity of thinking that comes with having diverse suppliers. WOBs do have a different way of thinking and approaching things.”

Basterfield has similar views. “Minority-owned companies can offer a different lens on how they might service the needs of GE Vernova,” she says. “And our customers demand it when they look at our supply chain because they are encouraging it in their own environment.”

CAP Worldwide is a supplier to GE Vernova. Now, in turn, Layton is adopting the same approach towards her serviced apartment suppliers. After obtaining certification from WEConnect as a WOB, which Basterfield had encouraged her to do, Layton launched ‘At CAP, You’re Welcome’. Under this programme, CAP actively seeks fully certified WOBs and other minority-owned businesses, and, equally importantly, records the availability and use of diverse partners.

“This ensures we are measured on our actions and not just our words,” says Layton, who also stresses that “whether the provider has one unit in a tertiary location, or 90,000 units across the globe, all are expected to provide the best, safest and highest level of service and product in their respective market.” Layton also offers mentoring to diverse-owned suppliers, pledging them as much of her attention as large incumbents.

For travel buyers looking to engage with WOBs, Layton says C-suite support is vital. If the executive willingness is there, she urges buyers to do their research thoroughly and distinguish between women-owned and women-led businesses. “A ‘woman-led’ business is a male-owned business,” she says. Buyers should request certificates of ownership.

Similarly to Layton, Harries stresses the importance of buyers supporting WOBs in the RFP process: “I try to be a mentor. Sometimes they may not know all the terminology. Inviting them to bid and supporting them with those bids is crucial. We are going to award the business to the best supplier but at the moment those suppliers are not even getting access to those bids.”

Perhaps the biggest change buyers will have to make to accommodate WOBs, however, especially at companies large enough to employ a full-time travel manager, is to their mindset. “Today, selecting a WOB usually means selecting a small business, says Flint. “Larger companies look for suppliers that can cater to them globally or regionally but that is much more difficult for a smaller WOB.” It is a Catch-22 situation. WOBs and other small businesses are not big enough to win large customers, but by not winning such customers they remain small.

Partly in recognition of this paradox, public procurement is attempting to reform itself. For example the UK Procurement Act, effective October 2024, aims to increase government usage of smaller enterprises. But the private sector could benefit by following the same path. It is often said that smaller companies work harder to provide better service, and are more nimble too; but travel managers may also have to work harder and think more flexibly by adjusting their buying practices to work with a larger number of smaller providers.