News Column

2010 Corporate Elite: Diversity, Vision, Remain Keys to Success

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In times of economic turmoil, the importance of the success story transcends the realm of mere human interest.

As the U.S. economy struggles to regain its footing in the aftermath of a devastating recession, we look to these stories for optimism and, above all, a little insight. In its annual Corporate Elite edition, HispanicBusiness Magazine again highlights 25 highly successful Hispanic executives, whose stories remind us that, whatever the obstacles, success is within reach.

In addition to being workhorses, the 25 Elite tend to be optimistic and well educated. They're also unafraid to think differently, and to utter the unexpected.

"We're not in the business of making money," said Betty Rengifo Tucker, an executive vice president -- and the highest-ranking Latina -- at Comerica Bank. "I realize it's kind of shocking when I say that. But we're really in the people business. ... caring is our competitive advantage." This year's cream of the crop includes leaders from a diverse array of organizations, from energy giants to fast-food chains to insurance companies and the United States Postal Service. Most are optimistic about the outlook for 2010, and insist that the recession has not taken a toll on their companies' diversity initiatives.

Among them is Margita Thompson, vice president of external communications for HealthNet, whose prior positions include being not only the press secretary for California Governor Arnold Schwarzenegger, but also a producer for CNN's Larry King and a press secretary for former Second Lady Lynne Cheney.

Risk Takers

And there's Mike Fernandez, vice president of public affairs at State Farm Insurance. Shortly after becoming the first member of his extended family to graduate college some 30 years ago, Fernandez became only the second Hispanic in American history to serve as a press secretary for a member of the U.S. Senate. At State Farm, he helped the company navigate the PR minefield that accompanied Hurricane Katrina.

There's also Ofelia Melendrez-Kumpf, who, despite the skepticism of her friends and family, took a job at McDonald's while studying accounting at Cal-State Fullerton 18 years ago.

"At first, they were unimpressed: 'So you're going to go flip burgers?'" she remembers. Today, her friends and family are so impressed they've been known to send resumes her way. As McDonald's vice president of quality service and cleanliness for the Greater Southwest region, Melendrez- Kumpf oversees some 720 restaurants, which bring in a total of $1.6 billion a year in revenues.

These and other executives shared with HispanicBusiness Magazine not only their life stories, but also their thoughts on how companies and individuals can best succeed in this challenging economic landscape. Hurricane Katrina was not only a tragic disaster for residents of Mississippi and Louisiana. It also proved, initially, to be a public-relations nightmare for State Farm. Though few residents of Mississippi had flood insurance, many were covered for wind damage. But the wholesale destruction wrought by the storm made it nearly impossible to decipher the source of the damage. State Farm initially decided to offer zero dollars to anyone without flood insurance.

U.S. Congressman Gene Taylor publicly compared company executives to child molesters. A hotshot lawyer named Richard F. "Dickie" Scruggs � famous for winning a landmark settlement against the tobacco industry � took up the case. Right away, he shamed State Farm with an egregious anecdote: the company had fi red an engineering firm that concluded wind had been a major factor in the destruction of many homes. Successful strategies State Farm launched a nationwide search for a good public relations executive, and found Mr. Fernandez. As the head of State Farm's public affairs division, Mr. Fernandez helped re-shape the company's approach to the case.

A major part of the new strategy was simple: Don't clam up. As a former player in the shark tank of D.C. politics, Mr. Fernandez was well versed in this mindset. "In today's environment, 'No comment' will not cut it," said Mr. Fernandez, who served under U.S. Senator Ernest "Fritz" Hollings in the 1980s. Since then, he has led the public-relations divisions of three other Fortune 500 companies: ConAgra Foods, CIGNA and US West.

Mr. Fernandez and other PR specialists began fighting back. They shared their side of the story with the editorial boards of newspapers. They talked with journalists to correct the record on some points.

The wider message: in the new media landscape, a company's reputation matters more than ever. Surveys bear this out, Mr. Fernandez said.

"Increasingly, 'reputation' has made its way onto the top- 10 list of things that keep (executives) up at night," he said. Meanwhile, State Farm has weathered the economic storm better than most of its peers. Although it lost money in 2008 to the tune of nearly $550 million, the company nonetheless rose a notch on the Fortune 500 list in October, to No. 31

Leaner And Meaner

It's no secret that the recession has been exceptionally devastating to the U.S. Postal Service.

In 2009 alone, the enterprise lost more than $7 billion � a tenth of its revenue.

Unlike most government agencies, the Postal Service is not funded with any taxpayer dollars. Instead, it runs like a business in that it must generate its own money, through postage stamps and other means.

Th is year, the Postal Service faced perhaps the biggest threat since its inception some 200 years ago. Bound by recent federal legislation, it was obligated to put $5 billion into a fund for retiree health benefits. It was an expense the agency couldn't afford.

Marie Therese Dominguez, the Postal Service's VP for government relations, and an attorney by trade, played a major role in persuading Congress to waive that obligation for one year. Th is was no small matter: It meant the Post Office would be able to make payroll.

"We fully expect to rebound next year," said Ms. Dominguez, who was inspired to become a public servant by her father, who, as a Secret Service agent for President Ronald Reagan, was one of the men who helped thwart the 1981 assassination attempt on the president's life.

Over the last decade, the number of employees at the Postal Service has declined � mostly through attrition � to about 600,000 from 800,000, she said.

The Postal Service still needs to shave about $3.5 billion in expenses, which will reduce the workforce by up to 15,000 more employees. In all likelihood, it will forever be a leaner organization. Now, it is looking at some cost-saving measures, such as delivering mail fi ve days a week instead of six.

Taking Chances

In today's tough economic climate, the value of a dollar is a big deal. Perhaps as a result, McDonald's has famously avoided calamity during the recession.

But other fast-food companies also offer food for affordable prices, and they haven't fared as well.

Over the course of 2009, McDonald's opened nearly three times as many new restaurants as it closed, according to a company spokeswoman.

Ms. Melendrez-Kumpf attributes McDonald's recession-era success to its willingness to take risks by unveiling new products for inexpensive prices. The most notable example is McDonald's decisive push into Starbucks territory in which it began hiring baristas and undercutting Starbucks' steep prices. The next unveiling will be the McCafe Frappe, thick and creamy blended ice drinks available in mocha or caramel.

"McDonald's and our franchisees understand the importance of value now more than ever," she said.

Know How To Advance

The Corporate Elite are wise in the ways of professional advancement. Some have risen through the ranks by knowing how to re-invent themselves.

Patricia Elizondo, senior vice president in sales operations for the eastern region of the United States, joined Xerox 28 years ago as a fi nancial auditor.

Th en, while getting her Masters of Business Administration degree, some classmates informed her that Xerox was a great place to get into sales. She looked into it. In the mid- 1980s, Ms. Elizondo began a new career within the same company. As a sales person, she had to start back at the bottom, literally trying to find customers by going door-to-door in downtown Chicago. The rest is history.

"It was a different era of sales," she laughs. "Today, in the post 9-11 environment, you couldn't even get into those buildings. They all have a security desk."

Flexibility can also be a useful trait. Ms. Melendrez-Kumpf of McDonald's knew this early on, and wasn't shy about sharing her willingness to relocate with her superiors. Since her McDonald's career began 18 years ago, she has worked in Los Angeles County, Chicago, Orange County and Dallas, where she currently resides. Ms. Thompson of HealthNet stresses the importance of finding a mentor.

"It's hard," she said. "You can't go up to someone and be like, 'Will you be my mentor?' But to have someone help explain the ropes to you is very helpful. I think you also have to have a personality to really shine."

Diversity Matters

Most of the executives say while the economy may have punctured diversity initiatives at some companies, it hasn't seemed to at their own.

At McDonald's, for instance, six of the 22 regional vice presidents of quality service and cleanliness are Hispanic.

For her part, Ms. Melendrez-Kumpf was wooed to McDonald's by a diversity program to attract, train and retain Hispanic women to the fast-food company's operations division.

"I was really lucky McDonald's had the foresight to know that here's a group that can bring added value to McDonald's," she said.

At State Farm, which is growing three times faster in zip codes where at least 50 percent of the residents are Hispanic, the company is actively recruiting bilingual agents in Southern California. At HealthNet, about 15.5 percent of the employees were Hispanic in 2009, and 45 percent were members of an ethnic minority.

Meanwhile, Hispanics make up about 15 percent of the U.S. population; minorities, 34 percent. "If you are an ethnic minority, I think you have a competitive advantage in the marketplace," Ms. Thompson said.

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