Celebrating the Christmas Holidays – Latin Style

Did you know that Hispanic Children Feed Camels rather than Reindeer?

Up North, here is what you would hear… “T’was the night before Christmas, when all through the house not a creature was stirring, not even a mouse…”

While Down South the story goes as follows… The balmy trade winds carried the songs of carolers who stopped from door to door to visit friends, share a special meal, or break up a “piñata.” Stashed away is a figure of jolly ole Saint Nick with his rosy cheeks, white beard and red suit to remind children that the Child Jesus would soon arrive bearing gifts for all.

But the moment of greatest anticipation wasn’t Christmas at all, but rather the day (January 6) when the Three Kings traveled on their camels to visit Baby Jesus bearing gifts of Gold, Frankincense, and Myrrh. On the night before their arrival, January 5th, children from all over Latin America fill a plate or shoe box with grass so the camels can feast while the Three Kings leave them gifts.

…and so it happens throughout most Latin countries during the Christmas season. There are some interesting subtle variations from each culture. A few are listed below:

In Mexico, Christmas celebrations begin on December 16, and for nine days children dressed in elaborate costumes representing Mary, Joseph, and the shepherds, reenact Biblical scenes from the Nativity. Celebrations culminate with the traditional splitting of various piñatas filled with candy.

In Puerto Rico, Christmas eve begins with carolers playing traditional instruments and singing holiday songs, at designated doorsteps of family and friends. As they go from home to home and grow in numbers, the carolers are finally invited in at their last stop for a traditional chicken soup. On Christmas Day, children open a few presents not from Santa but rather from their parents. Some homes may include images of Santa as part of the overall festive decorations. However, the children anxiously await for their gifts on the magical day when the Three Kings arrive.

In Venezuela, the Nativity scene is placed beneath a Christmas tree. At midnight on Christmas Eve, the Child Jesus is believed to leave gifts for the children under the tree. Unlike Puerto Rico and Mexico the major gifts are given on Christmas Day followed by smaller gifts, if any, on Three Kings Day.

In Dominican Republic, the influence of Haitian superstition also referred to as “voodoo” is evident. Before the New Year, residents wishing for good luck and fortune are expected to thoroughly clean their homes and replace their old clothes by December 31. For those that cannot afford a Christmas tree, they decorate their homes with branches painted in white to resemble the “snow” from a white Christmas.

Can you imagine Christmas without Santa Claus?  Most Hispanics do.

Selling to Hispanic Consumers

Companies are discovering that traditional sales methods such as cold calling or coupon clipping are less effective with Hispanic consumers than with the general public.  Language preferences, cultural differences, and time-living in the US are all contributing factors.  What then should companies do to win over the fastest growing segment of our population? 

Sales managers and consultants commonly use the phrases ‘initiating contact’, ‘staying visible’, ‘time management’, and ‘setting daily goals’ to motivate and train their respective sales teams.  What they often omit, however, are terms for understanding a buyer such as needs analysis, cultural sensitivity, language preference and listening – each of which represent an obligatory sales approach to lure Hispanic consumers.

To successfully sell to Hispanic consumers, companies should spend time with their Hispanic customers to better understand their personal key buying habits and criteria.  Answers to questions such as why they chose ‘to buy’ or ‘not buy’ under certain selling circumstances will help unveil their behavioral preferences.  Also, new terms specific to Hispanic consumers such as ‘selling etiquette’, ‘acceptable greeting styles’ and ‘closing protocols’ will become a critical part of every sales person’s vocabulary.

To reach Hispanic buyers, some companies hire Spanish-speaking employees with ten or more years of experience. They believe that a Spanish-speaking sales force will have a better chance of closing sales among Hispanics than an English dominant one.  They may be right to an extent but may not realize that the relationship between a Hispanic buyer and a Hispanic seller has less to do with the Spanish language and more to do with their cultural differences.  With over 30 Hispanic cultures to choose from, forming an effective sales team could become a daunting task.  In theory, yes, however, in reality, not necessarily.

Companies looking to enhance their sales efforts to Hispanic consumers should shift their emphasis from acquiring an experienced Spanish-speaking sales force to researching buyer needs, preferences, and protocols within a specific geographic area.  They should ultimately focus on building a sales force that matches the dominating cultural presence within a target area.  For example, if an area is occupied by Peruvians then hire a predominantly Peruvian sales team.

So, how can one go about identifying a dominating Hispanic ethnicity?  One way would be to use primary market research data to ‘photograph’ a target area.  The response data should quickly spotlight the dominant Hispanic cultures and help identify qualified candidates that inherently understand key culturally-sensitive nuances.  Done right, the cultural composition of an ideal sales team should become self-evident.

Banking the Unbanked

The FDIC believes that the future of U.S. retail banking may rest heavily on the successful integration of millions of ‘unbanked’ Hispanics into the U.S. banking system over the next two decades.  Are U.S. banks up for the challenge?

Although the average deposit may be small, the aggregate amount from Hispanic bank accounts, according to Economy.com, is expected to generate over $200 billion in new banking business over the next ten years. This stunning report was revealed at a high level conference sponsored by the FDIC and IADB. They not only highlighted the $56 billion per year of money-transfer services that banks have been slow to claim from outside services, but also underscored the compelling obligation of member banks to encourage Hispanics to deposit their earnings into the U.S. financial mainstream.

In California, Wells Fargo & Co. has led the way by redecorating their branches to showcase a Mexican theme. According to Businessweek.com, the familiar surroundings of Aztec art helped to generate 700 new accounts per day. Wells Fargo & Co. was not alone. At Bank of America, Spanish advertising efforts attracted one million new Hispanic checking accounts.

The increase in new Hispanic checking accounts from two strong banks that implemented “cosmetic” changes may give the impression that the $200 billion projection for new banking business in the next ten years is right on course. What remains conspicuously absent, however, are the grassroots efforts of Hispanic businessmen and women launching Hispanic-focused community banks. These business-oriented Hispanics believe that the Hispanic trust cannot be won by competitive savings rates alone, but should include a warm greeting in Spanish followed by an intimate understanding of the clients’ financial priorities.

Both large and small banks who hope to prosper from this new pool of converted ‘unbanked’ Hispanics will face a number of challenges. As an example, in the collapse of the sub-prime loan programs for home buyers, the majority of the mortgage holders who defaulted on their payments were Hispanic. Many of these unwary victims lost their life savings and their homes.

As banks begin to implement their various strategies to educate the ‘unbanked’ Hispanics, they should keep in mind that many of their prospective customers come from countries where banks are known to condone abusive practices and, in some cases, been forced to close. Redecorating a lobby may win over a few Hispanics; but eventually, what may prevail will be consumer-friendly lending practices designed to encourage sustainable growth within Hispanic communities.

Your Next Competitive Edge

Many CEO’s continue to ignore the warning signals coming from the untethered, unaddressed, and virtually untouched emerging Hispanic markets exploding within their own backyard, the US of A.  What should these leaders do?

Alarming statistics on the rapidly growing Hispanic population appear to be falling on deaf ears. Statements such as “25% of the US population will be of Hispanic descent by 2050” – (census.gov) or “Hispanic purchasing power will reach $2 trillion by 2015” – (hispanicbusiness.com) or “the average age of 60% of Hispanics in the US today is 15 years- old” – (pewhispanic.org) have dominated the headlines for the past year.     Why then have statements of this significance practically become a ‘non-issue’ among corporate leaders?

There are two key reasons why CEO’s may appear to be ignoring these warning signals. First, their marketing departments and ad agencies may be telling them that Hispanics will eventually respond similarly to their existing ad campaigns as general market consumers; hence, eliminating the need to invest differently in this consumer group, long term.    Secondly, their human resource departments may be having difficulty filling job openings with qualified Hispanic candidates; hence giving the impression to their CEO’s that the urgency to hire Hispanics has been somewhat exaggerated.

The striking parody between corporations looking for new ways to connect with Hispanic consumers and Hispanic professionals seeking meaningful employment within these same firms underscores some of the key issues that leaders need to address. If the ‘top brass’ leaders at major corporations do not help Hispanics to secure senior-level management positions, how then can their respective CEO properly approve a strategy to win over Hispanic consumers over the long term? Moreover, if a company’s CEO is not a strong advocate for nurturing diversity within the workplace, how then can their human resources department attract and retain the qualified Hispanic candidates that CEOs need to develop effective strategies?

The optimal solutions to gain favor among Hispanic consumers may vary from company to company. Certainly recruiting more Hispanic employees is a good start. Another suggestion may be to develop educational forums on Hispanic cultural differences for existing employees. Having both existing employees and new Hispanic hires on the same page will foster a more effective exchange of ideas. Despite these and many other efforts to include Hispanics in the workplace, the importance of placing Hispanic professionals at key decision- making levels should remain a top priority. Without the ability for Hispanics leaders to contribute in a meaningful manner, upper management may fail to recognize the warning signals from this burgeoning market and potentially provide a powerful edge to a a more receptive competitor.

Modernizing Supplier Diversity

After several years of downsizing, Supplier Diversity is due for an overhaul.  It needs new leadership and a revised blue print that reflects the many years of good and not so good practices.  Even the industry experts agree and shared their personal views for this article.

For decades Supplier Diversity initiatives have been designed to help minority-owned companies penetrate corporate coffers by granting them direct access to lucrative vendor contracts that otherwise would be awarded to a close-knit group of established suppliers.  Although Supplier Diversity has succeeded in highlighting minority entrepreneurial potential, most corporations still struggle with developing effective ways to integrate minority-based vendors into their supply chain.

For over 40 years, corporations have spent millions of dollars funding fully-staffed Supplier Diversity departments designed to attract qualified minority-owned companies onto their roster of approved vendors.  By now, one might expect to see tangible progress such as expanded Supplier Diversity departments within corporations, an increase in the number of approved minority vendors, and ultimately a positive return on investment.  Instead, Supplier Diversity departments at most corporations have been either drastically reduced in size or eliminated all together.   What remains today is a mere shell of what existed in the early and mid ‘90’s, prompting one to ask, “Why did Supplier Diversity fail and how can we learn from these experiences?”

The term Supplier Diversity is the brain child of Reginald Williams, an outspoken African American consultant/community leader who in the early nineties was solicited by corporate leaders to share his extraordinary vision and guidance.   Mr. Williams encouraged corporations to seek profits by increasing their minority vendor base.  He argued that a corporate vendor base that reflected the ethnicity of its customers would benefit from improved customer loyalty and in turn market share. (Arabe, 2001)

According to Mr. Williams, if a company sold 80% of their products to minority-based customers, such as a fast food company, having 20 to 30% minority-owned suppliers, rather than the less than 2% norm, would provide a healthier social/economic balance at the local level.  Since minority-owned companies tend to hire minority employees, increasing the number of approved minority vendors would not only look good from a public relations point of view but also provide an efficient channel for reinvesting profits to increase sales.  The earnings paid out to employed minorities would help the local economy, which in turn would secure their customer’s buying power.  In Mr. William’s opinion, “It was a WIN, WIN situation”.

Mr. William’s thesis caught the attention of established public sector entities including the Minority Business Development Agency’s (MBDA) founded in the early ‘70’s and financially supported by the US Department of Commerce.  In the early nineties the MBDA became a policy-making arm for companies helping to grow Supplier Diversity initiatives nationwide.  Over time other ancillary organizations such as the National Minority Supplier Diversity Council (NMSDC.org) became more involved.  Even academia chimed in with the Tuck School of Business at Dartmouth in Hanover, New Hampshire and the Kellogg School of Business in Chicago both successfully lobbying for legislation to fund annual scholarships for minority business owners attending a condensed MBA program, (L. Greenhalgh, personal communication, December 17, 2005).  Despite the wide spread support from the public sector and universities, corporations have failed to see a viable ROI from their Supplier Diversity investments and have chosen for the most part to reduce their financial commitments.

A Recent Discussion Among Supplier Diversity Officers
Several weeks ago I was invited to a meeting with several top Fortune 100 companies including representatives from their respective ad agencies on record.  At the table were Supplier Diversity officers from both sides along with a few potential minority-based vendors. The lively exchange generated a number of insightful comments and concerns. I have listed a few below:

“On the one hand my CEO is very supportive of our Supplier Diversity goals while on the other he is holding me accountable for an increase in procurement ‘Supplier Diversity’ spend.  How can I nurture young minority-owned companies who can’t deliver the capacity I require, while at the same time show increases in Supplier Diversity spend?  It is simply not possible.”

Another followed.  “The pool of truly qualified minority-owned businesses has grown smaller forcing corporations to use minority-owned shell companies to meet their quotas.  Since these shell companies normally operate on paper and not in the field, their benefit to a local economy is minimal at best.”

One more added, “The metrics used to measure the success of a Supplier Diversity program is the total value of contracts awarded.  Wouldn’t it make more sense to measure success by the number of contracts awarded rather than their accumulated value since the objective of Supplier Diversity is to increase the number of minority-based vendors?”

A Vendor-Mentorship Solution
The candid exchange among the participants gave us an unprecedented opportunity to explore solutions to these problems.  One such solution was the formation of vendor-mentorship programs that would allow young minority-based companies to perform at a more controlled pace.  With contracts valued in the tens and hundreds of millions of dollars, a young firm strapped for resources could never compete despite their sincere intentions to deliver.  By the same token a multi-national corporation’s procurement office would never risk awarding a large contract to a vendor that lacked sufficient resources and experience.  As a result, the gap between a corporation’s intent to fill their vendor pipeline with qualified minority vendors and minority vendors in search of business growth opportunities remains wide and dysfunctional.

A midway solution to close the gap would require procurement offices of multi-nationals to take charge by restructuring large contracts to include a variety of smaller contracts, custom-made for a vendor- mentorship program.   By matching vendor capacity with the appropriate size sub-contract, minority-based vendors would gain the knowledge and confidence needed to become larger vendors.  As they successfully complete their assigned jobs, they would automatically qualify for a sub-contract of greater value and responsibility.

Currently procurement offices of multi-nationals segregate their vendors by tiers where Tier-1 vendors are allowed to bid for large contracts.  Approved vendors who do not meet the requirements of a Tier-1 vendor due to size, capacity or business focus are classified as either Tier-2 or even Tier-3 vendors.   Normally Tier-1 vendors are required to sub-contract to qualified Tier-2 and 3 vendors.   For example, Interpublic Group (IPG), a holding company comprised of numerous small ad agencies and independent creative teams would qualify as a Tier-1 vendor and potentially win the national advertising account for a multi-national.   To comply with government regulations, the multi-national awarding the contract to IPG would mandate that a percentage of the contract be awarded to minority-owned businesses.   Without proper oversight, what is mandated and what is actually accomplished can be easily manipulated.

Tiers 2 and 3 vendors mandated to work with minority vendors usually have fewer resources or bottom-line incentives to properly groom rising minority vendors.  Some circumvent the mandate by selecting shell companies with a controlling minority interest or by improperly classifying large and established minority vendors to appear as young companies.   At two to three levels removed, procurement officers have little chance of knowing if their efforts to fill the vendor pipeline with qualified minority entrepreneurs are accomplished fairly.  Since these departments measure the success of a minority vendor initiative by the total dollar value of contracts awarded, there is no way of knowing for sure if one or ten minority vendors actually participate.  During our discussion this very issue regarding the inaccuracies inherent with the current practice for measuring minority vendor involvement became contentious.  Minority vendors present expressed the need for greater accountability while the Supplier Diversity officers disagreed vowing that any other method would be too difficult to track while potentially adding to their current work load.

The proposed vendor mentorship program addresses the Supplier Diversity officer’s work load by involving one of many non-profit organizations that are already approved to qualify minority vendors such as the National Minority Supplier Diversity Council (NMSDC).  These organizations can assist in profiling, qualifying and matching minority-based vendors with a list of custom-fit corporate procurement offerings.  The corporate procurement and Supplier Diversity departments would develop a tiered vendor program with manageable segments per tier as well as per industry that selected minority vendors could be expected to handle successfully.  In addition, associated academic institutions along with an assigned mentor would offering legal advice and relevant business coaching.

As minority vendors complete their assignments, they would automatically qualify for more business and in return be asked to mentor the next crop of minority vendors.  This perpetual relationship among minority vendors would encourage cross-cultural cooperation while allowing corporations to harness and leverage minority entrepreneurial enthusiasm to their long term competitive advantage.   Rather than equating the success of this program by the total dollar value of contracts awarded, a company would measure success by both the number of completed contracts and the rate at which vendors acquire larger contracts.

All the pieces of the Supplier Diversity puzzle already exist.  Now what we need is new leadership to modernize Supplier Diversity to meet our changing requirements into the 21st Century.

Realigning Your Diversity Goals

If ‘Diversity in the Workplace’ is the present reality and the next competitive edge, then why do Diversity department heads continue to face slashed budgets, internal staff reductions, and virtually little support from their CEO’s?

When CEO’s ask their Human Resource department heads to hire more minority employees, they are probably reacting to the public’s demand for increasing diversity in the work- place. “It’s the right thing to do!” claim strong supporters for minority-related causes. Many of these industry watchdogs strongly believe their persistence is winning over the hearts of shrewd CEO’s whose relentless search for profits has often undermined minority career advancements.

With 78 million baby boomers retiring in the next 20 years, the US Census Bureau claims that over 35 million job positions may remain unfilled based upon an expected reduction in the current US labor force. Most of these job positions will eventually get filled by minority candidates that a recent New York Times front page feature article reports will become the majority by 2042. The Hispanic sector alone is expected to represent 30% of the US population or about 128 million individuals.

Today the Hispanic population accounts for about 15% of the US population with a total of 47 million individuals. Their explosive growth from year to year has become a powerful economic force that companies can no longer ignore. Driven by an active consumer base and a vibrant work force, Hispanic purchasing power will exceed $1 trillion in 2010 and double by 2015 (source: http://www.pewhispanic.org).

With Hispanics filling less than 8% of ‘white collar’ jobs today, the expectations that more Hispanics will be seeking corporate career opportunities in the years to come has attracted the attention of CEO’s and their management teams. Quick-reacting companies that provide meaningful career opportunities for Hispanics will undoubtedly get a leg up on their competition by gaining early access to the best and the brightest candidates. Nevertheless, attracting candidates may be challenging since the majority of the Hispanic population is under the age of 18. For those candidates that are available, firms should make their work environment more inviting by promoting programs on cultural acumen and integration. Ultimately a well orchestrated program that emphasizes cultural similarities as well as important differences among diverse employees will foster increased productivity through improved collaboration and retention.

For years CEO’s felt that Diversity departments were just another medium to generate positive corporate images within a targeted community. Newspaper articles covering local Gala events, for example, could generate a powerful backdrop for a corporate logo seeking positive public relations value. However, as Diversity departments turned

their attention to Hispanic communities, the expected public relations boost generated mixed results. Diversity department heads quickly learned that their efforts had to be all inclusive to achieve the desired results, a daunting task.  They learned that leaving out important members of a community from a photo or article, for example, could potentially anger its readers.  Over time marketing campaigns that included the input of a Diversity department tended to underperform expectations and hence were deemed problematic or ineffective.

Due to a growing number of failed marketing events, CEO’s could no longer justify the tens of millions of dollars invested in Diversity and have demanded a direct correlation to increased sales or reductions in costs from their Diversity managers. Unable to show reliable results, Diversity Officers at many corporations large and small have seen their budgets severely reduced and in some cases eliminated. The budget reduction has left some companies operating skeleton Diversity departments run by one or two individuals.

With scaled down budgets, Diversity departments have lost favor with their top management and continue to be one of the first budgetary line items to be affected negatively during an economic downturn.  Senior VP’s and middle managers who were once asked to sit in on Diversity meetings no longer receive invitations. Even the term ‘Diversity’ has been threatened. At a Fortune 500 company, the label ‘Diversity Department’ was replaced with the less controversial phrase, ‘Office of Inclusion’. Regardless which term is used, ‘Diversity’ or ‘Inclusion’, the challenge of creating harmony in the workplace to attract needed candidates from a talent pool of individuals with seemingly different cultural backgrounds continues for the most part unanswered, unaddressed, and unchallenged within corporate America.

An Alternative Approach
CEO’s can no longer rely on ‘feel good’ rhetoric to promote Diversity in the workplace. To initiate positive change, they must take on a more direct role by adjusting their corporate culture to financially reward, rather than showcase departments that achieve competitive leverage from a more diverse team.
This process could begin with a modified organizational structure that would accommodate one Diversity Officer for each of the three major minority sectors, namely, Hispanic, African American, and Asian. All three department heads would report directly to the CEO.

Why would a team of three Diversity Officers be more effective than the customary one? History shows that companies that have only one Diversity Officer to represent all minority interests tend to favor their own ethnicity at the expense of estranging the others. Rather than promote the benefits from a diverse workforce, a one Diversity Officer-led department could potentially be viewed as a self-serving medium that favors one ethnicity, its own.

A few years ago, a Fortune 500 company hired a Hispanic professional to head up their newly minted Diversity department. After a successful launch, the Hispanic Diversity Officer moved on to another organization and was succeeded by an African American professional who in less than one month replaced the original department with African American employees. Many of the collaborative agreements with Hispanic non-profit organizations were tabled and replaced with agreements from African American non-profits. By the time the company’s annual Corporate Diversity Forum was launched, the ratio of panel mem- bers participating in each session had reversed to favor African Americans.

Having more than one Diversity department head may appear unnecessary, but CEOs should note the hidden costs incurred in operating a one DiversityOfficer led department.  A one-Diversity-Officer operation can antagonize a department by promoting an underlying  negative peer resentment, one that could permeate into other departments causing reduced morale and lack of trust, all of which could generate higher turnover among employees. These hidden costs could very possibly justify the cost of hiring multiple Diversity officers.

CEO’s could leverage a multiple Diversity Officers department as an ideal platform from which to showcase their genuine support for a more diverse workplace.  Since all three Diversity Officers will have to learn to work effectively together, their feedback to a CEO could provide valuable insights on optimal ways to introduce, incorporate, and integrate Diversity within their corporate culture. In part they can become an ideal internal focus group dedicated to help CEO’s and their managers study customized ‘best practices’ for leveraging diversity in their workplace.

Winning Over the Latino Vote

As the Hispanic population continues to surge,  US Census projections show that after 2030 about 1 out of every 4 Americans will be of Hispanic descent.  Are we ready for a Latino or Latina President in the White House?

Politicians seeking office in the next two decades should seriously consider brushing up on their high school Spanish.  The Hispanic vote will be up for grabs and whoever best understands the Latino political psyche will, undoubtedly, come out ahead.  Although the spotlight continues to swirl around bipartisan bickering in Washington, the next battle lines to be drawn will be over the Hispanic voter.

Unlike their ‘compadres’ who are better established in the US, most foreign-born Latinos have fled from a politically entangled economy in their country to come to the US. The emotional scars inflicted on these potential U.S. voters have left a lasting effect of deep rooted mistrust for any political party. Even here in the U.S. these same voters are currently witnessing Washington lawmakers grapple with potentially polarizing issues such as the aggressive patrolling along the US-Mexican border.

For some it may be deja vous, all over again! Back in their home country, Latino voters have had their fill of empty political promises, placating rhetoric, and unscrupulous lawmakers to the extent that if a political analyst in Washington sought a reliable barometer to measure voter apathy after a political event, any Latino voter over the age of 25 would qualify. They have seen and heard it all!

Where there is apathy, complacency is not far behind. Any candidate who believes that the Latino voter can be won with a couple of ‘slick’ promotional ads may be in for a surprise. Latino voters are not only hard to win over but even tougher to gauge.  Why?

When asked how they feel about a candidate, one should be prepared to hear what one wishes to hear. Latinos, by nature, do not like to disagree openly with people outside of their inner family circle. They will say just the right words to give the impression that they are in full agreement. What they truly feel remains ‘in the family’.

The Latino voter requires patience and reliable research to grasp their concerns. They may speak the same language, Spanish, but the cultural ’engines’ that power their individual and collective emotions vary widely.  A ‘one-message for all’ strategy may miss this coveted target altogether.