Clever Geek Handbook
24 January 2026

HR and the New Hispanic Workforce

Recommendation

Louis Nevaer and Vaso Perimenis Ekstein advocate accommodating Hispanic culture and workers in your workplace. They argue that you should make changes in that direction and explain how to make them. While the authors sometimes blur the difficult line between separating out a group as “minorities” or, instead, being culturally sensitive, their advice makes sense to the extent that your company has Hispanic employees and job applicants. The authors’ counsel on how to check for hidden bias in your workplace is quite good, although their mandate for bilingualism may apply only in places where that is already an expected element of the local culture. Employers will benefit from the book’s discussion of the cultural significance of work and extended family for Hispanics. BooksInShort recommends this book to human resource managers working with Hispanic employees, with the note that the applicability and practicality of some of its suggestions may depend on the individual needs of your particular company.

Take-Aways

  • America’s largest minority, Hispanics are its fastest growing workplace segment.
  • The Hispanic community is not uniform in its skills and education in all localities.
  • Hispanic workers want jobs that help them support their extended families.
  • Most Hispanics appreciate classes that improve their English-language skills.
  • Do not mistake Hispanic deference to authority for passivity or shiftlessness.
  • Dignity and respect are vitally important values in the Hispanic cultures.
  • Unions are popular among Hispanics because of their emphasis on collective action.
  • Avoid “Spanglish.” Use Spanish in business as you would use English.
  • Strengthen the loyalty of Hispanic workers by supporting affinity groups and mentoring programs.
  • Help defuse the brown-black tension in your workforce by fostering dialogue.

Summary

Selecting Great Hispanic Employees

You want a diverse workplace and you want to hire Hispanic workers in a proportion that reflects their population in your community. However, traditional recruiting methods aren’t working because the Hispanic population is more educationally and occupationally diverse than other ethnic groups. For example, if you are looking for Hispanic workers with college degrees, you will find most of them in and around Miami, Florida. If your community has Hispanic workers from Mexico, you will find generally low educational attainment among them, not because they aren’t hungry to learn, but because they suffer from Mexico’s pitiful education system. Another problem is the subtle, almost unconscious, forms of bias most native English speakers have toward English spoken with a strong Spanish accent. In many cases, the English speakers need to make extra efforts to learn from and relate to their Hispanic co-workers, who were born and raised in Latin countries, and have had far different life experiences.

“The increase of Hispanics in the workforce and the emergence of HRM [human resources management] as a management tool constitute two of the most significant changes facing corporate America.”

When you interview Hispanic candidates, take the time to understand their cultural norms. For example, Hispanics show respect in ways that many “Anglophone” managers will regard as passive and timid. Hispanic job applicants from working-class backgrounds may seem passive or even shiftless in the way they defer to authority. If you judge them this way, you will forfeit opportunities to hire loyal, hard-working employees. If you use pre-employment assessments to screen applicants, take the relevant cross-cultural effects into account. Consider using a probationary period in place of culturally mismatched assessments.

“The emergence of the United States as a bilingual consumer economy requires HRM to focus on how it can encourage Hispanic, or at least bilingual, candidates to apply.”

Family concerns and personal values matter a great deal in most Hispanic cultures. Hispanic people do not see their work as separate from the rest of their lives, and they appreciate jobs that are congruent with their values. Hispanic workers tend to view their bosses as respected members of their extended families. Managers open to playing this role can increase worker loyalty. In fact, these social relationships often matter to Hispanic workers more than their pay (and pay matters a great deal). Employers can expect hard work and gratitude from Hispanic employees in exchange for benefits that fit their particular needs. These include flexible holidays that allow them to take their important national and cultural holidays off, perhaps in place of standard American holidays.

HR Policies and Your Hispanic Employees

With the rapid growth of the Hispanic workforce, companies are finding it impossible to enforce English-only rules; and it is actually harmful to do so. Having manuals and signs in English and Spanish supports the use of both languages. Apply a bilingual standard to unacceptable speech in the workplace: What is forbidden in English should also be forbidden in Spanish.

“Hispanic immigration to the United States has proved a tremendous benefit to the nation’s economy.”

Hispanics have a collectivist culture that favors labor unions. Their values are compatible with a communal method of working, negotiating and establishing equality. Hispanic workers who are insecure speaking English are often comfortable having their union speak for them. Because they are less confrontational than other members of organized labor, Hispanic union members often prefer working with management rather than against it. Respect and dignity matter a great deal in Hispanic cultures, but that priority can be confusing to employers who place more emphasis on financial results.

“As has been the case with women, African Americans, and Asian Americans, Hispanics operate under the pressure of having to prove themselves, working doubly hard to dispel misgivings about what they lack.”

Hispanic workforce growth has created workplace-based friction in race relations. The old focus was on black and white race relations; now black and brown social problems demand attention as Hispanics displace African-Americans as the largest American minority, and vie for greater political and economic recognition. This issue is just as important as the racial discrimination and gender issues that led to existing laws, regulations and policies protecting minorities and women in the workplace.

“Where Hispanics are concerned, their anxiety and self-doubt about education levels lead them to place a premium on education as a benefit.”

Unfortunately, as Hispanics embrace American culture, they often develop negative attitudes toward African-Americans. Understand the dynamics of this tension, and provide mechanisms such as workshops and seminars to help your employees work together smoothly in an environment of increasing diversity. Developing and teaching a conflict resolution process is vital to maintaining an integrated and united workforce.

“Hispanics with college degrees, for instance, are not randomly distributed throughout the country: they are concentrated in one specific region – Miami, Florida.”

Reassure your Hispanic staff members about their position in your organization by promulgating policies relevant to and supportive of them. Review printed material and communications to ensure the absence of even subtle bias against Hispanics.

Evaluation and Your Hispanic Employees

Of course, your company needs to manage the performance of all its employees, and your HR professionals have long experience in conducting constructive performance evaluations. With the increasing number of Hispanics in your workforce, you have probably noticed how much they care about their jobs. However, if you want to help them improve, be careful about saying anything that can be taken as criticism, even constructive criticism. Hispanics hear critical comments as affronts rather than as helpful suggestions. Many Hispanics tend to be perfectionists, but they are not used to American notions of time management and “good enough” standards. Help them understand their tasks in discrete portions with clear timeframes for each piece. Evaluators should come across more as supportive peers than as judge, jury and executioner.

“HR professionals cannot do anything about the nation’s changing workplace demographics, but they must be aware of emerging issues that can create a hostile work environment for the Hispanic employee.”

Learning a few cultural subtleties can help you a great deal in conducting performance reviews. Hispanics do not approach life with the same sense of individualism that pervades American culture. They are more group-oriented and think of work as a cooperative enterprise. Hispanic workers tend to avoid citing their individual achievements because they would consider such claims insulting to their co-workers. As you conduct each evaluation, be sure to preserve your Hispanic worker’s sense of dignity. One approach is to break the evaluation into three parts:

  1. The preinterview – This is a personal meeting to review goals. The employee prepares an oral or written self-appraisal for discussion in this private, uninterrupted session.
  2. The interview – Conduct this meeting in a relaxed, private setting where you can discuss the differences in your appraisal of the employee and his or her self-appraisal. Commend the employee for goals met or exceeded, work together to list ways the employee can improve job performance and agree on goals for the coming year.
  3. The postinterview – In this meeting, complete a written statement related to the interview and any monetary issues. Ask the employee to add comments and sign off. Provide the employee with a copy, and let him or her know when the next review will be (for example, next quarter or next year).
“In the Hispanic experience, unions are a way to engage management in constructive conversation and reciprocal dialogue.”

The key is to avoid major surprises in any of these meetings. Manage the employee evaluation process in an unbiased way that makes expectations clear and supports excellent job performance.

Why Training Matters to Your Hispanic Employees

Most Hispanic employees value training and development. Begin on the first day with a solid, clear orientation to your company, the trainees’ jobs and exactly what you expect of them. They need to know how they can make their concerns known to the company and who their immediate supervisors are. Prepare your front line managers to work well with Hispanic employees. If you are an HR professional, offer to help counsel new staff members as they phase into the general workforce.

“While ‘English only’ policies have historically been enforced, Hispanics now have a share of the workforce that makes such language rules impossible to enforce.”

Training programs for all workers will provide dividends that far outweigh the costs. Be sure your Hispanic employees know what training programs are available. Offer some topics that will contribute to their success at work and to their lives outside work. For example, many blue collar Hispanics are very enthusiastic about learning English and crave truly helpful classes. They also seek accent-elimination courses and workshops about cross-culture communication.

“The question of who needs to learn English, or Spanish, and of the limits (if any) on Spanglish is a matter of consequence [for] HR professionals.”

Spanish is an inevitable part of the American economy and your workplace. Therefore, encourage your Spanish-speaking employees to learn English, but also actively support English speakers who want to learn Spanish to help them interact with their fellow employees, customers and suppliers. If you have English-only policies, you may want to reconsider them because they will harm you as America’s Hispanic minority grows. Talented Hispanic employees will hesitate to become part of a culture that rejects their heritage. Discourage “Spanglish” as you would discourage any slang in business discourse. Make sure Spanish is used as correctly and as formally as English in your company.

“HRM can go a long way toward ensuring that Hispanic employees stay with the organization.”

Diversity generates many destructive myths. For example, affirmative action and diversity are not synonyms. Help your employees understand that a diverse workforce can be even more productive and successful than a homogenous one. Your top executives must clearly state your company’s goals for diversity through training, HR policies and communication. Teach employees that working in a multicultural environment will help them to reach more people, spark more ideas and enrich each other’s personal lives. How many Americans ate sushi 50 years ago? Have you noticed how many do today? You have also probably noticed the rise of authentic Hispanic cuisine. Americans no longer equate Mexican food with the menu at Taco Bell.

How to Retain Your Hispanic Employees

Hispanics are the fastest growing segment in the American workforce. Because most of them are also immigrants, Hispanics need programs to help them integrate into your corporate culture, and to help your current employees understand and accept them as co-workers. Make this process as seamless and as welcoming as possible. Assess bilingualism when hiring new employees and when promoting employees to supervisory positions. English as a Second Language and accent-reduction courses are solid units of your diversity-building program. They will help your Hispanic employees communicate more effectively at work and during their leisure time.

“When conducting performance appraisals, HRM should incorporate the principles of the ‘new approach,’ which emphasizes the preinterview, interview and postinterview.”

Recognizing employee accomplishments is a cost effective, powerful way to encourage the behavior you want. Hispanics value education, so as you provide the benefits of continuing learning, praise those who use these benefits and apply their new information on the job. At Ford and Citigroup, such programs help Hispanic employees by encouraging them to socialize, and to share information and ideas. Mentoring programs are a highly regarded mechanism for helping employees mature and learn the skills they need. Mentors also help employees connect with key people at their firms and develop their social networks.

“Exit interviews represent a prime opportunity to gain candid information on employment conditions within the organization.”

Many HR departments are wrestling with the concept of work-life balance. Hispanic employees make that wrestling match even tougher because they value family so strongly and have an expansive view of what constitutes a family. Hispanic employees often want to extend their health-care benefits to those they support, such as elderly parents and grandparents. If your company cannot help them do this, Hispanic workers will continue to seek other employment where the company can help them meet these serious personal responsibilities.

Encourage your workforce, particularly Hispanic employees, to participate in relevant professional organizations, because it will help them develop useful skills. Non-salaried Hispanic workers often participate in social organizations, such as home town associations, that matter a great deal to them. If you encourage and support their participation in such groups you signal your concern for them and their families, and you demonstrate your respect for their culture.

Of course, you cannot keep every employee forever. Conduct proper exit interviews with everyone. While HR professionals can conduct these conversations, you might consider using a neutral third party with whom your employee can speak freely. If your Hispanic employees are leaving because of bias and conflicts you know nothing of, you will certainly want to learn about these issues so you can address them. The information you glean from exit interviews can help you build a stronger, more enthusiastic workforce.

About the Authors

Louis E.V. Nevaer has written 10 books. He speaks often on Hispanic issues and consults with corporations about the Hispanic marketplace. Vaso Perminis Ekstein owns a consulting service and has worked as a corporate human resources vice president.

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HR and the New Hispanic Workforce

Book HR and the New Hispanic Workforce

A Comprehensive Guide to Cultivating and Leveraging Employee Success

Davies-Black,
 


24 January 2026

Here Comes Everybody

Recommendation

Author Clay Shirky tackles a daunting task: He sets out to explain how new electronic media are transforming society. In itself, that sounds common enough, but Shirky’s focus and specificity raise his book to a level of much greater value and utility than its peers. He examines the social nature of humans, and analyzes how tools ranging from email to text messages change the way people organize into groups. His style is easy, and he tells interesting and highly convincing stories to illustrate the changes he observes. The result is a book that anyone dealing with group organization and communication should read. BooksInShort recommends this innovative work to marketers, social critics and entrepreneurs who hope to tap into or develop new social structures.

Take-Aways

  • People are innately social.
  • New online media provide innovative ways for communities to form.
  • Traditionally, organizing people to work together has been costly in money, time and effort. Computerized communications make it very easy, quick and almost free.
  • Blogs and Web sites let anyone become a media “publisher.”
  • The sheer speed of these new media tools allows community action to happen at an unprecedented pace.
  • Online forums allow people to meet in new ways.
  • These forums enable even marginalized groups to form their own communities.
  • New electronic tools lower the cost of experimentation, generating many more new projects. Most fail, but those that survive achieve superior quality.
  • New collaborative projects, such as Wikipedia, are process-oriented; people have to keep getting involved, or these projects will fall apart.
  • Successful social tools promise to make your world better, give you innovative tools, and create a relationship between you and other users.

Summary

Social Beings in a Brave New World

The introduction of new social media tools and electronic communication methods feeds one of mankind’s defining traits: “Human beings are social creatures – not occasionally or by accident but always.” People live in groups. All foundational human activities depend on group interaction. Humans are so social that they’ve developed an almost endless string of terms to describe their relationships, so social that the punishment of “solitary confinement” is considered more harsh and profound than being in a prison community, where the only members of society are criminals. Humans are so good at acting in groups and so accustomed to doing so, that people often take their groups for granted and don’t mention them. You recall Michelangelo and Edison, but what about the people who carried the paint up the ladders in the Sistine Chapel and dusted the light bulbs in Edison’s lab.

“When we change the way we communicate, we change society. The tools that a society uses to create and maintain itself are as central to human life as a hive is to bee life.”

Emerging technologies are changing how people interact, how they stay in touch with their social groups and how new groups form. One critical change is economic. Mobilizing a large group of people used to be expensive. Organizing them took huge amounts of work, which led to “the institutional dilemma,” the axiom that formal institutions are necessary for getting things done, even though they absorb resources and get in the way. Now, because e-mail and instant messaging are fast and cheap, time costs are evaporating. Since you can send an electronic message to many people as easily as to one, everybody has access to groups that, once, only their leaders could reach. This fundamental change will produce tremendous upheaval throughout society. For example, look at what’s happened to the music industry in the wake of file sharing.

Sharing, Community and Media

Communities are defined by what they share; members have something in common, even if it is just the experience of interacting. Not all groups are communities. In fact, as a group gets larger, “it becomes impossible for everyone to interact directly with everyone else.” Above a certain size, the effort of integrating a new person into a community becomes excessive; you lose more than you gain. Organizations grow only when the benefits of adding people outweigh the cost.

“Anything that increases our ability to share, coordinate, or act increases our freedom to pursue our goals in congress with one another.”

Traditionally, organizations establish formal hierarchies, symbolized by the “org chart,” and its defined lines of responsibility and communication. When changes take too much managerial effort, the organization simply doesn’t do them, but if it can reduce such “transaction costs” a bit, it becomes “more efficient.” When transaction costs plummet, organizations can grow and small organizations can compete with big ones. When transaction costs disappear, as happens online, groups can do “serious, complex work” without anyone being formally in charge of a project.

“Communications tools don’t get socially interesting until they get technologically boring. The invention of a tool doesn’t create change; it has to have been around long enough that most of society is using it.”

Just as formal organizations exist because of the costs of coordinating groups for mass efforts, so formal professions exist because of cost. They either require specialized skills (driving race cars), specialized equipment (broadcasting TV news) or both (performing neurosurgery). Professions develop formal training to give members the required skills and a shared “way of understanding their world.” But, when electronic media remove such barriers to entry, the result dissolves long-established professions. Printing a newspaper takes time, materials and machines, as well as reporting and writing skill, but publishing a blog or copying an electronic file is easy and almost free, so journalism is awash with new perspectives as citizens themselves report on the world.

“Like everything described in this book, a wiki is a hybrid of tool and community.”

In this wave of “mass amateurization,” anybody can be “a media outlet.” However, bloggers are excluded from journalism’s professional structure and training. They define and cover the news differently. That’s not the only pitfall in the new media landscape. If you sample a few blogs, you might think they sound odd. You might wonder how they expect to reach a mass media audience. The answer is, they don’t. Blogs are available to anyone, but they are like other people’s phone conversations, posted online for small communities, not large audiences. Blogs can develop into “communities of practice,” where people share their expertise about topics on an ongoing basis.

“We have lost the clean distinctions between communications media and broadcast media.”

The actual process of making things public is also different. When it is expensive to publish things – as with newspapers – publishers filter information before printing it. Online, the rule is “publish, then filter.” The result is a transformed route to trustworthiness. Any single blog is likely to be less credible than a major newspaper, but the mass of bloggers build on one another, correct one another and gather worldwide comments far faster than traditional media outlets can.

People Working Together

On the “ladder” of group interaction, simple sharing is easiest and cheapest. For example, people can share photographs with anybody on sites like Flickr. The next step in community interaction is cooperation, where you share with a chosen group, but not with other individuals, although you align your behavior with theirs, perhaps in online conversations. The third stage is “collective action,” where people work as a group on a specific task in a specific way. To function, such groups have to form a unified identity and stay together.

“An individual with a camera or a keyboard is now a non-profit of one, and self-publishing is now the normal case.”

Sharing information online is easy, but throughout most of history, such sharing has been incredibly difficult. If you had a bad experience with a company or an institution, how could you find other victims? Unless you knew them, happened to meet them or paid for ads in the media to find them, you couldn’t. New media have shattered the barriers to connection. People who are culturally, geographically and even temporally far apart can share information now. Look, for example, at the way Voice of the Faithful (VOTF) mobilized in response to child abuse. For decades, people had reported that some Catholic priests had abused children, but the isolated victims were relatively powerless. The Church could respond or not as it pleased. To oppose one priest, VOTF spread victims’ stories via electronic document sharing, and enabled members to join its efforts by e-mail and online. The result was a larger audience, a community that mobilized quickly – and the removal of the offending priest.

“It is a curiosity of technology that it creates new characteristics in old institutions.”

Wikipedia is a good example of the next step: “distributed collaboration.” It emerged out of attempts to solve the production problems with a previous project, Nupedia, a would-be “online encyclopedia.” Frustrated with the glacial speed at which articles were written and edited, Wikipedia co-founder Larry Sanger took the idea of a “wiki,” or “user-editable website,” so flexible that anyone online could edit its content. He almost casually invited his friends to post initial entries on Wikipedia. It might not have seemed to anyone else that an encyclopedia with no one in charge – a reference work that anyone could edit – would even work, but it does, though it is “almost comically chaotic.”

“The scope of work that can be done by noninstitutional groups is a profound challenge to the status quo.”

Wikipedia is growing daily in scope and credibility. If you think it needs an entry, but you don’t have the data, you can post a “stub,” inviting others to supply the information. If you’re an expert, post all the knowledge you want to share. Wikipedia works because people stay continually involved, adding new articles and editing older ones. If people stopped working on it, it would quickly be vandalized out of existence. It demonstrates the “power distribution law,” a concept that describes a “social system” where a few people are very involved, a few are somewhat involved and most are barely involved, perhaps making only a single small edit to one article.

Tools for Protests and Community

Cell phones and Web access enable groups to organize at unprecedented speeds. This has spawned new activities, such as the “flash mob,” where crowds mobilize in response to text or e-mail messages to engage in performance art. Such possibilities also change the nature of political protests. If a group leader posts revolutionary information online or calls for political involvement, the authorities cannot tell who visits the Web site. Organizers can call protestors together quickly via cell phone or e-mail to occupy public spaces peacefully and within the law. This happened in Belarus, where such organizing desensitized the authorities to public gatherings and then shifted to political activity. Immediate access to information has changed consumer grumbles about bad service into formal protests. Because many people are now members of social media sites, such as Facebook, if something happens that they don’t like, they have access to venues that allow immediate protest to lots of people. Finally, activists can use services such as Twitter, which most users employ for purely social contacts, to track government responses to protestors in real time and to react immediately.

“Our new freedoms are not without their problems; it’s not a revolution if nobody loses.”

Social media are producing new communities and changing older ones, sometimes in unexpected ways. Take the online service Meetup, which was designed to help people who share interests find one another online and, if they desired, meet in person. The most active groups on Meetup are not those the founder predicted, such as pre-existing hobby groups. Instead, Meetup draws groups of people with strong interests and shared values who don’t enjoy “support from the broader U.S. culture,” such as self-identified witches. Meetup is popular with people who have already met online and want to meet in person, and with people who share interests, but weren’t already in groups, such as fans of singer Tori Amos. “Stay at Home Moms” is one of the most active Meetup groups, because changes in American living patterns have made it harder for them to gather. Groups that face societal disapproval, such as one that is actually in favor of anorexia, find it easier to meet online.

“Open source doesn’t reduce the likelihood of failure, it reduces the cost of failure; it essentially gets failure for free.”

These new forms of community coalition-building generate several losses for society. People lose jobs as older industries adapt to online media. Social rules come into question. Just in this area, for instance, many laws protect journalists; do these laws also protect bloggers? Finally, online communities are “more resilient,” which is a problem when the group has a negative, dangerous or illegal intent, like a terrorist organization.

“The Internet augments real-world social life rather than providing an alternative to it. Instead of becoming a separate cyberspace, our electronic networks are becoming deeply embedded in real life.”

Most people are part of a “Small World network,” which is connected to a medium-sized group of people, many of whom are connected to one another. A few of the people in your small and medium worlds are highly connected to more outsiders, and they link your group with farther-flung communities. In a setting such as a professional association, these people wield considerable influence. People who associate primarily with others like themselves – no matter how many – generate fewer, safer ideas through a kind of diffused groupthink. By contrast, those who link up with many different kinds of people generate a greater number of better, more innovative ideas.

“The net effect is that it’s easier to like people who are odd in the same ways you are odd, but it’s harder to find them.”

Social media tools provide professional advantages by lowering the cost of failure. For example, many proposed Meetup groups fail. Most older businesses would find this daunting: they try to manage the cost of failure by making it less likely. Those who associate with repeated failures might even be stigmatized. However, trial and error, a great way to learn, is far less expensive, daunting or damning online. Just consider the world of open source software. Most open source projects go nowhere and have no users. Yet, because open source people get involved in projects voluntarily and abandon them with no penalty, talent flows to interesting projects, letting communities sort projects cheaply and try them risk free. From a traditional business point of view, this is chaos and early in the process, no one can predict which projects will fly. However, if a project reaches a critical mass of involvement, and if it sets community norms of reciprocity and high performance, and if those involved care about each other and act respectfully, community-based projects can be cheaper and even better than professional projects.

“Promise, Tool, Bargain”

Every new electronic device or online meeting place tries to create “a successful fusion of a plausible promise, an effective tool and [an] acceptable bargain with the users.” New venues or mechanisms often communicate their promises implicitly, through interpersonal social cues, to try to draw people to engage with them. These promises shift in time and context; it is harder to enlist people to participate in starting something than to get them to try something you started for them. Choosing what tool to use also depends on your context: the tool you need is governed by what you want to do. As you invent or test more tools, the options your community promises its users grow richer and more varied. The bargain often blends explicit rules and community norms, so it also changes through interaction over time. Getting all three elements right is difficult. In some cases, like a start-up or experiment, set the bar very low so you encourage involvement. In other cases, your promise might be exclusionary. Who uses which tools, and how often will vary radically within a single community. As for the bargain, that will change too; communities die or, sometimes, fulfill their purposes and just fade away.

“Fame is simply an imbalance between inbound and outbound attention, more arrows pointing in than out.”

 

About the Author

Clay Shirky writes and consults on the cultural implications of the Internet, and serves on the faculty of the Interactive Telecommunications Program at New York University.

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Here Comes Everybody

Book Here Comes Everybody

The Power of Organizing Without Organizations

Penguin Group (USA),
 


24 January 2026

Mastering the Rockefeller Habits

Recommendation

Entrepreneurship expert Verne Harnish, a student of business management, interprets a set of managerial best practices he calls the “Rockefeller habits.” He refers throughout to Standard Oil co-founder John D. Rockefeller (1839–1937), who had three bedrock management precepts: “priorities, data and rhythm.” Harnish’s short, effective manual illuminate all three, detailing why companies need firm plans, established priorities, big goals, effective delegation and strong values that it integrates into its performance. In this useful best-selling guide, now translated into nine languages, Harnish clarifies how CEOs and senior managers can apply these ideas to nourish their companies’ growth. BooksInShort recommends his useful management primer to entrepreneurs, executives, and business students and professors.

Take-Aways

  • Standard Oil co-founder John D. Rockefeller (1839–1937) had three bedrock management precepts: “priorities, data and rhythm.”
  • Firms need established priorities; timely data; and regularly scheduled daily, weekly, monthly, quarterly and annual meetings.
  • Leaders should create just a few rules, carefully explain them and always follow them.
  • A leader must predict market dynamics, business trends, revenue growth, and more.   
  • Every firm needs five important goals, one main priority and one audacious goal.
  • Most start-ups stay small because their leaders can’t or won’t delegate.
  • Chief executives must ask, “Do we have the right people?” “Are we doing the right things?” and “Are we doing those things right?”
  • Every firm needs a “one-page strategic plan” showing its main goals and financial facts.
  • A firm’s “core values” correlate with strong performance.

Summary

The Fundamentals of Business Management

Managing a business is like parenting a child. Certain fundamentals apply. The three basic guidelines are:

  1. Establish a limited number of rules.
  2. Repeatedly stress your real priorities to your colleagues and employees – or kids.
  3. Always behave according to the rules you set.
“Growing a business is a dynamic process that requires a shifting set of priorities as the leadership team navigates the predictable evolutions and revolutions of growth.”

Ron Chernow’s book Titan, a biography of Standard Oil co-founder John D. Rockefeller (1839–1937), sets forth the famous industrialist’s three bedrock management precepts: “priorities, data and rhythm.” Your firm should adopt all three:

1. Priorities

Every business needs five primary annual and quarterly objectives (plus monthly goals if your firm is expanding at a 100% growth rate every year). Include one primary target for the periods you measure. These objectives will become your “Top 5 and Top 1-of-5 priority list.” Don’t exceed this number of priorities because an “organization with too many priorities has no priorities.” Every employee should have his or her own work objectives, which must align with your firm’s goals. Establish short- and long-term priorities for your company. Make one long-range priority a “big, hairy, audacious goal” (or BHAG). Communicate your priorities to your employees. To engage your workforce, create a compelling theme to go with your objectives.

2. Data

Your company must keep daily and weekly records of all operations, including sales, costs and market activity. Each employee should track at least one significant metric daily or weekly. Pay attention to your firm’s “smart numbers,” the primary metrics measuring your degree of success over the long-term. Adapting a method from another industry, retailer Joe McKinney of McKinney Lumber in Muscle Shoals, Alabama, “established and popularized an internally understood Critical Number – a proprietary measurement of plant productivity.” At McKinney, the critical number indicates day-to-day profitability trends. Aim for this level of timeliness in your operational and financial reporting.   

3. Rhythm

The more internal meetings companies conduct, the more successful they will be. Plan to run daily, weekly, monthly, quarterly and annual meetings. Keep your “daily huddles” short – five to fifteen minutes each, tops, but realize that “your execs need regular, face-to-face huddles to discuss new opportunities, strategic concerns and bottlenecks as they arise.”

“Whatever strengths or weaknesses exist within the organization can be traced…back to the cohesion of the executive team and their levels of trust, competence, discipline, alignment and respect.”

Run your meetings efficiently. Set an organized agenda for every meeting. These meetings fulfill the crucial objective of setting a rhythm and keeping everyone in your organization “informed, aligned and accountable.” Don’t be concerned that this schedule might seem to feature too many meetings with too much emphasis on your primary messages to your employees. “Until your people are ‘mocking’ you,” you haven’t gone over the message sufficiently.

“You don’t have a real strategy [unless] what you’re planning to do really matters to your existing and potential customers, and…it differentiates you from your competition.”

Every company must discover and develop its “X factor” – the one special strategy that delivers sustainable value and, over time, positive valuations. Rockefeller applied this concept to his oil business. During his era, oil firms found gushers everywhere. Their concern was transporting the oil. Rockefeller involved his company heavily in railroads, and produced his own barrels to hold his oil, thus cutting his transport expenses in half.

Midsized Firms

Steve Kerr, who was in charge of GE’s well-regarded Crotonville leadership training facility, offers three pieces of advice to the CEOs of midsized firms:

  1. Plan your tasks for the next 90 days and also plan 10 to 25 years ahead. Focus on what counts to your customers and the factors that differentiate you from your competitors.
  2. “Keep everything stupidly simple.” If a strategy or procedure seems complicated, it’s “probably wrong.”
  3. Operate as much as possible with “firsthand data.” This is the Crotonville way. GE’s senior executives visit Crotonville each month to teach the company’s managers and to learn from its most important customers.” GE benefits from hearing directly from its customer about what they want.   

Efficiency

Besides setting clear priorities, securing necessary analytical data and utilizing regular meetings, CEOs and senior executives must make sure their companies and people operate as efficiently as possible. Conflict among employees or disagreements with customers cost employees 40% of their work time. To reduce this productivity loss, develop a system for employees to quickly communicate to managers about disputes that require solutions. Managers must secure the proper data to quickly, correctly resolve these disputes.

“Some firms do things that differentiate themselves, but it doesn’t really matter to a customer (high quality when the customer just wants speed), while other firms do things that the customer desires, but so does all the competition.”

Corporate CEOs must secure the necessary funding to expand their operations in a way that fuels growth. Their ability to raise money depends on how bankers and other financial lenders regard their company’s stability and its future prospects. The more positively a CEO and a company’s representatives shape bankers’ perceptions, the more likely the firm is to secure good financing with “better terms, less-restrictive covenants, lower interest rates” and “waived fees.”

Building Your Business

Only 4% of small US firms make a successful transition to becoming large firms. You want to make your company a “gazelle,” the name Cognetics founder David Birch applies to enterprises that “grow at least 20% a year for four years in a row.”

“The One-Page Strategic Plan helps you get your long-term and short-term vision, metrics and priorities on a single page to aid communication and alignment.”

For example, consider Seattle-based Mostly Muffins. The company started in 1987 as a caterer serving downtown businesses. It’s now on schedule to earn $10 million in revenues. Co-founder Molly Bolanos says that an organization’s “stages of growth and the issues you face in a company and as a CEO are very predictable…It’s positively textbook.”

“Systems and structure are logical responses to complexity.”

Companies must meet three requirements to grow from small to large:

  1. Leaders must learn to “delegate and predict”; both skills build executive judgment and competence.
  2. The firm must develop “systems and structures” to manage quick growth.
  3. The company must be able to operate in a bigger “sandbox” – that is, an expanded future marketplace.

Delegation, Anticipation and Alignment

Most business leaders don’t like to delegate. This explains why 96% of all firms have 10 employees or less, and why most have fewer than three employees. CEOs can’t expand their companies without adding people. Adding people means learning to delegate. Successful delegation depends upon hiring the “right people.” Remember, “one great person can replace three good people.”

“Everyone in the organization [must] determine his or her own top five priorities, aligning them with the company’s, and creating the clarity that’s crucial for top performance.”

Leaders must foresee what is going to happen in their marketplace. Sound leaders accurately forecast revenues and earnings, as Wall Street expects and demands. Generally, though, CEOs don’t predict weeks or months ahead. Even being a few minutes ahead of your competitors and colleagues gives you an edge. And, for long-term growth, your firm must be an engine of predictable profitability.

“What makes people hate their jobs? What makes them nonproductive, complaint-happy deadwood? The answer – recurring problems and hassles.”

As your company grows, you need a solid organizational framework. Align your systems with your management structure. Organizational charts can help. Every company needs three types of schematics: “the standard hierarchical organizational chart”; a set of charts that map your “work progress or work flow”; and the “almost matrix,” which tracks the relationships between and among “organizational functions” and “various business units.”

“Systematically gather data on what’s hassling your employees – and then do something about it.”

Once you have more people, you will need to introduce appropriate systems to enable efficient teamwork. For example, when you reach 50 employees or between $10 million and $50 million in revenue, you should upgrade your information technology systems. At the $50 million mark, upgrade them again.

“Determining a brand promise is a fateful moment…Choose the right one – the one your customers respond to, the one you can track and execute day after day – and you win.”

As more people come on board, and as you secure and implement the systems to support them, predictability becomes increasingly essential. Leaders must be able to chart a proper growth path. Without it, long-term corporate survival can become uncertain.

Three Questions for Business Leaders

Executives should ask:

  1. “Do we have the right people?” – In 2000 and 2001, Fortune magazine put The Container Store atop its list of Best Companies to Work For. The Container Store hires the right people, pays 50% to 100% more than its competitors and provides more than 200 hours of training during a new employee’s first year.
  2. “Are we doing the right things?” – The right things include leading your people, managing all of your firm’s activities, keeping accurate records and staying accountable.
  3. “Are we doing those things right?” – When your revenue and/or market share grow at “twice the market,” you’re doing things right. 

The “One-Page Strategic Plan”

Keep things simple by creating a one-page strategic plan that outlines how and where you plan to lead your company. Include the name of your organization, your name, the date, your firm’s “core values” and “beliefs,” its purpose, the actions it must take to achieve its goals, and who will be accountable for each action. And don’t forget your brave BHAG.

“Your measurable brand promise…defines your company in the minds of the public. It…is a single-minded measure around which all…decisions are made.”

Your one-page plan should cite your three-to-five year targets for revenues, profits and market cap; your sandbox – where your firm plans to operate as first or second in its field in the future; the initiatives and capabilities that will enable you to achieve your goals; your “brand promise” that keeps your customers coming back; your primary goals; “five or six initiatives for the year”; “one or two critical numbers” – for example, a balance-sheet tally and an income-statement; your “quarterly actions steps”; a “quarterly or annual theme”; a scorecard tracking your progress; the rewards that will accrue when you achieve your goals; and your “quarterly priorities.”

Core Values

Establish only a few rules. Focus on them, and repeat them often. Base all of your actions on these rules. Create a strong “cultural foundation,” because a solid corporate culture translates to robust performance. That’s why core values are so important.

“If you can’t afford the people to run the business for you, then all you have is a job, not a business.” (The Scooter Store CEO Doug Harrison)

Implement these strategies to strengthen your core values:

  • “Create legends” – Tell stories to communicate and promote your core values to your employees. Tie relevant stories about your company to specific core values.
  • “Recruitment and selection” – Refer to your core values throughout your hiring process. Include them in recruitment materials and mention them during job interviews.
  • “Orientation” – Repeatedly cite your core values when you train new employees.
  • “Appraisal process” – Connect your core values to your employee performance ratings.
  • “Recognition and reward” – When you publicly honor employees’ outstanding work at quarterly or annual meetings, always refer to your core values.  
  • “Internal newsletter” – Run stories in your in-house publications that describe employees who exemplify your core values.
  • “Themes” – Build your corporate motifs and patterns around your core values.
  • “Everyday management” – Link all “decisions, reprimands, praise, customer issues and employee concerns back to the core values.”                                                                                                                                                                                                                               

About the Author

Verne Harnish, also known as the syndicated columnist who writes “The Growth Guy,” founded the Entrepreneurs’ Organization and chairs its CEO program, the Birthing of Giants. He also wrote the best-selling Scaling Up: Rockefeller Habits 2.0.

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