Firing your racist agency is just the first step

Last week’s fallout at The Richards Group is just the beginning of an advertiser reckoning over supplier diversity.

When Stan Richards, the 88-year-old founder and former chairman of The Richards Group, made racist comments about an ad being “too black” last week, the fallout was predictable.

Motel 6, the client who the ad was for, swiftly fired its agency of more than three decades. Home Depot, a client for more than 25 years, cut ties with The Richards Group next.

The dominos continued to fall as Keurig Dr Pepper and The Salvation Army ditched the agency too. Finally, Richards, who founded his namesake agency 44 years ago, stepped down.

That’s all well and good. But it's only the beginning. Longtime clients of The Richards Group shouldn’t pat themselves on the back for taking the obvious PR step of distancing themselves from the agency and call it a day.

They now need to ask a very tough question: how did we work with this agency for so long, and what about our internal processes need to change to ensure this doesn’t happen again?

Supplier diversity isn’t the sexiest topic, but it’s crucial to preventing high-profile gaffes like the one The Richards Group and its clients experienced last week. Brands, agencies or any business that depends on a network of vendors, for that matter, needs to factor diversity and equity into the process of building out that supplier network.

Bringing on new suppliers can be challenging, especially when procurement and finance get involved. Companies struggle to be mindful of intersectionality when hiring diverse suppliers, prefering to bucket businesses into easily checked boxes.

Agencies in particular have production teams and other long-standing vendors they prefer to work with, so shaking up those relationships can be met with pushback, according to Brooke Foley, CEO of Jayne Agency, which focuses on helping corporations diversify their supply chains.

But, as we’ve seen time and again, consumers have no patience for corporations that don’t back up their words with tangible actions. Firing an agency is one way to show you won’t tolerate racism from suppliers, but that doesn’t actually fix the underlying systemic issue. 

Opening more opportunities to minority-owned businesses and helping underserved communities build generational wealth is the work consumers care about.

There are a few companies in our industry leading the charge on this issue. Nielsen, for example, has had a supplier diversity program in place since 2009, and aims to put at least 10% of its budget toward minority-owned businesses annually. TBWA launched its own search platform to help the agency identify diverse-owned businesses to partner with, allowing it to put $260 million toward diverse-owned businesses since 2014.

Some brands are doing this in the agency space already. Former HP CMO Antonio Lucio instituted a diversity mandate for its agencies back in 2016 and has been grading its partners on a diversity scorecard since. And at the ANA Masters of Marketing conference today (Wednesday), chief brand officer Marc Pritchard spent the majority of his keynote speech talking about Procter and Gamble's supplier diversity efforts, which aim to achieve equal representation to the US population.

But not enough companies are doubling down on this effort alongside their own internal diversity initiatives.

“Supplier diversity is a conversation we need to have in this industry,” said Cat Colella Graham, founder of employee experience agency Cheer Partners. “Employees are looking at the brands they want to work for and asking, are they inclusive? Are they purposeful? Do they reflect the community?”

Once companies reevaluate their supply partner strategy through a diverse lens, it will break stereotypes that diverse or minority-owned businesses aren’t big enough to handle work for large brands, and give these companies more opportunities to grow and thrive.

It will also help companies avoid catastrophes like what happened with The Richards Group, where a handful of employees are sure to get laid off after a mass client exodus made their jobs redundant.

“Brands need to go beyond ‘we cut ties’ and reveal why to employees and to stakeholders,” Colella Graham said. “What will they do differently in hiring a new advertising agency? What questions will they ask? Who are they going to employ to make sure this happens? I'd hope they're starting to do that.”

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