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    Published on: March 1, 2011

    by Michael Sansolo

    In the endless pursuit of lessons for business, I never considered reality television. After all, what could possibly come from that? Yet again, I was wrong.

    There are two shows that demonstrate clear management lessons for virtually anyone at any point in their careers. Thanks to Sarah, my daughter and cultural advisor, I would recommend are: “Kitchen Nightmares” and “Tabatha’s Salon Takeovers.”

    To be clear about this, Sarah’s record isn’t perfect. (“Bridezillas?”) But the kitchen and salon shows should become regular viewing for business people. In these shows a celebrity expert (one a chef, one a stylist) parachutes into struggling businesses to highlight and address failings in record time. It may sound silly, but the lessons are pretty compelling and far more common than we’d all like to admit.

    While I haven’t watched many episodes, what I’ve seen presents a clear picture. The chaos that is destroying all these businesses starts with the person on top. In some cases the owner/operator/manager is apathetic and the business suffers from their lack of caring. Some are the opposite, controlling everything and not allowing their staff and business to grow. And some are being crushed by the weight on their shoulders. But in all cases, their businesses are in huge trouble.

    The celebrity “expert” dispenses ideas in a colorful way (and always with an accent) that appeals to the television camera. Ignore the theatric because the advice is stunningly good. I’d sum it up as: delegate, communicate, educate, update and exfoliate.

    In the episodes I’ve seen, the lead person is usually overwhelmed by their duties. (Aren’t we all?) Yet, as they drown in a sea of issues, they always have staffers who tell the camera they can do more. So the “expert” reminds the boss to start focusing on leading and to delegate the details that others can handle. Not one manager receives this news gratefully, but in the end it frequently provides the time they need for more important duties.

    It also becomes painfully obvious how leaders can communicate and miscommunicate. In most episodes, there is a staggering lack of discussion of issues that matter, creating chaos in the business place. What’s more, communication is undermined by a “do as I say, not as I do” attitude. One salon owner had a closed-toe shoe policy for safety, yet wore flip-flops on the day of a filming. Every employee noticed. In one restaurant, the chef/owner’s lost confidence clearly communicated itself to employees. In yet another case, the manager communicates complete disinterest and not surprisingly, loses her business. It reminds us that leaders send messages with everything they do - and don’t do.

    Not surprisingly, these struggling businesses all neglected employee education, making their problems worse. There’s the waiter who failed to make a proper salad or the stylist who was out of touch with hair color products. In both cases, leadership’s lack of investment led directly to customer dissatisfaction and lost business. Likewise, these businesses all neglected facility updates and improvements for too long, making them look old and worn. The experts show them the impact of remodels.

    Lastly, the experts talk about exfoliating—the beauty term for removing the old, dead skin. Virtually every episode puts a spotlight the need for the businesses to pare down their offerings and to focus on what they do best and what their consumers want most. Especially in the restaurants, you can see the problems caused by menus that are large and diffuse. Exfoliating extends to employees who simply have lost their passion or marketing efforts that have become counter-productive. Changes are made and in most cases improve the operation. (In some, reality intrudes and the business fails.)

    The problem is that most of us don’t get the benefit of a celebrity expert and a television show’s budget. But ask yourself if you would listen anyway? If you would, find a trusted partner or colleague who is willing to tell you the hard truths. At the minimum, watch and ask yourself if what you are seeing on television is happening in your store or with your team.

    Even without the accents, you might learn.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: March 1, 2011

    by Kevin Coupe

    It always worth noting when things that we’ve always counted on as being part of our daily lives - even if we didn’t think about them very much - become obsolete.

    The latest example...the Baltimore Sun reports that “the still-common mercury thermometer appears headed for extinction.

    “While many people probably have them in their medicine cabinets, or on their walls, the retail sale of mercury thermometers has been banned or restricted in at least 18 states ... with more such legislation pending, according to the Interstate Mercury Education and Reduction Clearinghouse.

    “Mercury thermometers also are on their way out in a wide variety of industries, along with a long list of other measuring devices, thermostats and switches that rely on mercury components.”

    It isn’t like the mercury thermometer hasn’t had a good run; it was invented in 1714 by - go figure! - Daniel Gabriel Fahrenheit.

    And now, the Sun goes on, “the National Institute of Standards and Technology (NIST), in Gaithersburg, Md., no longer will provide calibration services for manufacturers and users of mercury-in-glass thermometers — a critical service it had provided to American industry since 1901.”

    The reason: “Exposure to high levels of metallic mercury vapors can cause permanent damage to the brain, kidneys and a developing fetus. Brain damage can result in irritability, behavioral changes, tremors, changes in vision, hearing and memory problems, according to the Centers for Disease Control and Prevention (CDC).”

    Wait a minute. Did they say that mercury can cause brain damage, irritability, behavioral changes, tremors, changes in vision, hearing and memory problems?

    This explains something. Because yesterday, Charlie Sheen told Piers Morgan on CNN that his situation has created “a tsunami of media and I've been riding it on a mercury surfboard.”

    Coincidence? I think not.

    So this story becomes an Eye-Opener on a whole variety of levels.
    KC's View:

    Published on: March 1, 2011

    Advertising Age reports that rising commodity prices likely will cause CPG manufacturers to do three things - increase their prices to compensate, reduce their dependence on price-oriented promotions, and increase their marketing and ad dollars in order to make the sale to money-conscious consumers.

    According to the story, “Food companies, hit by the first wave of agricultural commodity cost increases, are already taking price increases, while household and personal-care players, more affected by oil prices, are preparing to do so soon. The U.S. Department of Agriculture last week projected food prices will rise 3.5% in the U.S. this year and possibly as much as 5%, as retailers appear to be open to passing along price hikes.”

    Among the companies saying that they plan to take price increases are Procter & Gamble, Colgate-Palmolive, Clorox, Campbell’s, and Heinz.
    KC's View:
    Michael Sansolo and I have been making this point a lot over the past year - that at a time when it is increasingly hard to differentiate oneself in terms of price (either because the competition is too tight, or you simply don’t want to play the price game), the ability to tell a story is paramount. And that’s what effective marketing and ad dollars do ... they tell a story, they establish a narrative, and they paint a picture that resonates for the shopper.

    Published on: March 1, 2011 has a long piece discussing the likelihood that’s “days as a haven for sales-tax shirking shoppers” may be over, as “the battle has entered a new stage as Amazon builds warehouse/fulfillment centers in more locations, states grow hungrier for revenue, and a rising sales tax rate (it now averages 9.64% nationwide) puts retailers who do collect tax at an ever bigger disadvantage.”

    Indeed, the story notes that “Amazon is not only the biggest retailer on the web, but also the only one of the top 10 (for 2009 as ranked by InternetRetailer) which doesn’t collect sales tax from most buyers.” And even Amazon seems to concede - even as it goes to court wherever necessary to defend its position - that eventually it is going to lose on this one, acknowledging in its annual SEC 10k filing that “Our fulfillment center and customer service center networks, and any future expansion of them, along with other aspects of our evolving business, may result in additional sales and other tax obligations.”
    KC's View:
    As noted here before, my thinking has evolved on this one ... and it is hard to argue that Amazon’s business model depends on sales tax exemptions to survive. For competitive reasons, there is no rationale for Amazon having this kind of competitive advantage over brick-and-mortar retailers; from a public policy perspective, governments can no longer afford to ignore this source of revenue at a time when many services are being cut. (Though I suspect that before Amazon builds distribution centers around the country, it will look for the same kinds of tax breaks that a lot of big retailers seek and obtain.)

    I do have a bit of a problem with the “sales tax shirking shoppers” line in the Forbes story. I understand why the writer puts it that way, but I would continue to argue that I have rarely, if ever, purchased from Amazon because of the lack of sales tax ... it has a lot more to do with discounted prices, selection and convenience.

    Published on: March 1, 2011

    Interesting piece in the New York Times about how American consumers seem to have “a greater interest in making stuff last. For a number of products - cars, phones, computers, even shampoo and toothpaste - the data shows a slowing of product life cycles and consumption. In many cases the difference is mere months, but economists and consumers say the approach just may outlast a full recovery and the return of easy credit, because of the strong impression the downturn made on consumers ... Whether a broad, long-term shift in consumer habits is under way is a question tickling economists and analysts. Some insist that, as with the Depression, the recent downturn has made a lingering impression on how people view the propriety of, say, stuffing a still-working cellphone into a desk drawer in favor of a newer model.”

    Some examples cited by the Times: “Consumers are holding onto new cars for a record 63.9 months, up 4.5 months from a year ago and 14 percent since the end of 2008, according to Polk, a research firm. In fact, the firm said, when used cars are included, the average length of car ownership stands at 52.2 months, also a record.

    “Industry analysts also report that people on average upgrade their cellphones every 18 months, up from every 16 months just a few years ago. They hold onto their laptops an average of 4 years and 4 months, a month longer than they did a year ago, though that figure has been creeping up since 2000.”

    And some companies actually are turning durability into a marketing message. The Times writes that “Levi Strauss is telling customers to take steps that will actually lead them to buy fewer pairs of jeans. The Levi’s sustainability campaign urges customers to wash their jeans less often and in cold water, a move that the company says reduces water use.”
    KC's View:
    This is the civilian definition of “sustainability” - making things last longer, because it makes sense economically and environmentally. Businesses that take a page from Levi Strauss are likely to be rewarded, because they will be viewed by shoppers as being an agent for the consumer as opposed to being a representative of the manufacturer.

    Published on: March 1, 2011

    • In the UK, the Daily Mail reports that Tesco is considering expanding its e-commerce model in a way that would allow people to order online and then pick up orders at any one of the some 1,400 Tesco Express convenience stores and Tesco Metro small-format stores that are scattered around the country. This “click and collect” model, as Tesco describes it, is seen as a possible way of breaking through to consumers who remain skeptical about home delivery.
    KC's View:
    Smart. It is all about creating an innovative and integrated delivery model that serves the consumer in the most number of ways.

    Published on: March 1, 2011

    The Wall Street Journal reports that Taco Bell, stung by accusations and a lawsuit charging that there isn;t enough actual beef in its meat mixture, “will air television commercials, radio spots and other ads featuring franchisees and employees talking about the makeup of its taco filling. In one ad, an employee says, ‘Our seasoned beef is 88% premium ground beef and 12% signature recipe. If you want to see that signature recipe, go to It's right there’.”

    This comes after Taco Bell ran newspaper ads saying “Thank you for suing us,” taking the position that the lawsuit give sit the opportunity to make a broader quality point.
    KC's View:
    All of which makes sense if objective, third-party testing proves that Taco Bell’s description of its meat mixture is accurate. If it isn’t, then there aren’t enough ads and commercials to salvage the fast feeder’s reputation. (I, for one, am not convinced. I still think that Taco Bell’s meat tastes mediocre at best.)

    Published on: March 1, 2011

    • Wakefern Food Corp. announced that it has been named one of NJBIZ magazine’s “2011 Best Places to Work in New Jersey.” This award, given annually, “recognizes and honors top places of employment in New Jersey that benefit the state's economy, workforce and businesses.”

    • The Hartford Courant reports that Gov. Daniel P. Molloy has made a proposal that is rankling some consumers - he is suggesting that shoppers should pay sales tax based on the actual or original price of a product or service, rather than the discounted price that is charged because of coupons or a sale.

    The goal, Molloy says, is to help close the state’s $3.5 billion budget deficit.

    Bloomberg reports that consumer spending “cooled more than forecast in January as rising food and fuel prices caused Americans to cut back on post-holiday visits to malls and restaurants. Purchases rose 0.2 percent, the smallest gain since June, as winter storms may have also discouraged shoppers, according to figures from the Commerce Department today in Washington.”
    KC's View:

    Published on: March 1, 2011

    • Safeway announced that it has promoted Mir Aamir to President of Customer Loyalty and Digital Technologies. Aamir in his new role will lead Safeway's loyalty programs and oversee digital and mobile efforts related to loyalty, but also will continue to be responsible for Marketing Strategies, Shopper Analytics and Insights, Club Card Strategies and Pricing.

    Aamir most recently served as the Senior Vice President, Marketing Strategy and Financial Planning and Analysis.
    KC's View:

    Published on: March 1, 2011

    • Jane Russell, who went from being discovered by Howard Hughes are starring in The Outlaw, which the billionaire produced and directed, to starring with Marilyn Monroe in Gentlemen Prefer Blondes, died yesterday. She was 89.

    The story behind The Outlaw illustrates how the culture has changed. While the film was shot in 1941, it took almost a decade to get it into theaters because censors were concerned about the extent to which her cleavage was displayed.
    KC's View:

    Published on: March 1, 2011

    Got the following email from an MNB user about the rising cost of commodities:

    Yet another side note: the global warming effect…

    US consumers may be protected from soaring food prices; however, the most significant concern lies with the world’s poor whose income is devoted mostly to food.  In fact, the consequences of this food crisis go far beyond economics. After all, the big question about uprisings against corrupt and oppressive regimes in the Middle East isn’t so much why they’re happening as why they’re happening now. And there’s little question that sky-high food prices have been an important trigger for popular rage.  And let’s not forget the food riots in Haiti and around a few years ago.

    While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.

    It’s true that growth in emerging nations like China leads to rising meat consumption, and hence rising demand for animal feed. It’s also true that agricultural raw materials, especially cotton, compete for land and other resources with food crops — as does the subsidized production of ethanol, which consumes a lot of corn. So both economic growth and bad energy policy have played some role in the food price surge.

    Still, food prices lagged behind the prices of other commodities until last summer. Then the weather struck.

    Consider the case of wheat, whose price has almost doubled since the summer. The immediate cause of the wheat price spike is obvious: world production is down sharply. The bulk of that production decline, according to U.S. Department of Agriculture data, reflects a sharp plunge in the former Soviet Union. And we know what that’s about: a record heat wave and drought, which pushed Moscow temperatures above 100 degrees for the first time ever.

    The Russian heat wave was only one of many recent extreme weather events, from dry weather in Brazil to biblical-proportion flooding in Australia, that have damaged world food production.

    Don’t let this winter’s snow fool you: globally, 2010 was tied with 2005 for warmest year on record, even though we were at a solar minimum and La Niña was a cooling factor in the second half of the year. Temperature records were set not just in Russia but in no fewer than 19 countries, covering a fifth of the world’s land area. And both droughts and floods are natural consequences of a warming world: droughts because it’s hotter, floods because warm oceans release more water vapor.

    But the evidence does, in fact, suggest that what we’re getting now is a first taste of the disruption, economic and political, that we’ll face in a warming world. And given our failure to act on greenhouse gases, there will be much more, and much worse, to come.

    Another MNB user linked this story to the one we had yesterday about how China is likely to become the world’s largest economy by 2020, and India is likely to move into second place by 2050:

    There’s another side to the big growth predictions which to me is much more ominous: Where are the resources to support this kind of growth going to come from? We now know that climate changes due to human activity are real. We know that peak oil is around the corner. Some are becoming more aware that sustainability will only be achieved if we can learn to live within the limits of our planet’s ability to sustain us.

    In fact, from my perspective, GNP growth, which used to be a sign of a healthy economy, may now be a sign of overshooting sustainability. To survive, we need to curb population growth and or learn to consume less resources per capita. The sooner we shift our goal focus, the more likely we will be able to achieve it.

    As far as China and India are concerned, MNB user Charles Fallon wrote:

    I don’t understand why you’d be depressed by news that China and India will, with time, become bigger economies than the United States.

    They both have roughly three times more people.  So, when folks there start earning a little more than 1/3 of what we earn, they will live in larger economies.  Surely, Americans aren’t uncomfortable with the idea that one day, Indians will earn half as much as Americans.

    In fact, Americans should cheer these projections.  Not only does it suggest that many countries, beyond India and China, will see rising middle classes ready to purchase American goods and services (hooray for Hollywood); but, the wage gap will shrink and eliminate the manufacturing advantage that other countries currently enjoy.  Manufacturing will return.

    Fair point. I shouldn’t have been negative about the shift, because, to be honest, I don’t generally feel that way.

    As in retailing, sometimes it is okay to be number three in a market ... if you have a sustainable, innovative niche that keeps you viable long-term. As a nation, I think we have to be a little concerned about what that niche is ... but there’s nothing inherently wrong with other countries having so many people that their economies are larger than ours.

    Regarding the situation in Wisconsin, MNB user David Burgess wrote:

    You and others keep repeating that the Governor of Wisconsin is threatening to take away the public unions’ collective bargaining rights.  No matter how many times it’s repeated, it still won’t make it true.

    He is not trying to take away their collective bargaining rights for their wages.  He is asking to take away bargaining rights for benefits in order to end the shell game that government and public employee unions have been playing for years.  Since government budgets are always under some kind of crunch (hey, we can always think up cool ways to spend money) governments and unions have added benefits to the out years of contracts in order to meet union demands without breaking the current budget by mortgaging the future.  The extra revenue will come due on someone else’s watch.  Sound familiar?  It’s the same strategy that has us at 14+ trillion and counting in red ink.  Place the burden on future generations.  Only, in the case of the states, the future is now.  Why is it so unreasonable to try to close the loophole that is threatening to bankrupt many of our states, including Wisconsin? 

    I’m a staunch conservative when it comes to public unions and collective bargaining rights.  Me and FDR.

    I understand that there are some basic economic issues that need to be resolved in both the states and at the federal level ... and that I’m understating the problems by calling them “basic economic issues.” And I certainly think there needs to be debate and discussion about how to resolve these issues in a responsible and mature way, as opposed to in a political way that caters to the base on either side of the aisle.

    I have two concerns. One is that the climate is demonizing teachers at the precise moment in history when we need to view education as an investment, not a cost. And the second thing is that the Governor of Wisconsin is proposing taking away by fiat a right to collective bargaining for benefits ... and I worry whenever governments take away rights by fiat.

    We had a story yesterday about a Wall Street Journal report that there is a court battle taking place between the Australian winemaker behind the Yellow Tail brand and the Wine Group, the American manufacturer of Little Roo. The issue is trademark infringement, with Yellow Tail accusing the Wine Group of creating a label that is largely undistinguishable from its own, and that the cheaper Little Roo is devaluing its brand.

    The Yellow Tail label features a wallaby.

    According to the story, “David Kent, the Wine Group's chief executive, says that the kangaroo on his company's label is an eastern grey bush kangaroo carrying a baby poking out from its pouch. ‘We were looking for a way of communicating a strong sense of place,’ he says. ‘There's been an American fascination with the joey, the baby kangaroo…It's a totally different concept’.”

    My comment:

    Well, maybe “totally different” is a bit of an overstatement....

    I’ve looked at the two labels, and they look pretty similar to me. If I were the Yellow Tail folks, I’d probably be ticked off, too.

    The bigger problem, it seems to me, is the whole “me, too” culture. Rather than coming up with something new and different, better to simply copy the other guy.

    One MNB user disagreed:

    Is there a problem with competition in the marketplace?  It’s this kind of competition that makes capitalism work and gives the consumer the best products at the best prices.

    If no one competed with Steve Jobs, our iPhones would still cost $600.00.

    I usually agree with your point of view, but this comment seemed pretty glib.  You don’t get to be as successful as The Wine Group if you aren’t giving retailers and consumers what they want.

    I don’t think I was coming out against either competition or capitalism. I think I was suggesting that the Wine Group is playing the copycat game, and that I don't find this to be particularly innovative or praiseworthy.
    KC's View: