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    Published on: April 11, 2011

    by Kevin Coupe

    Fast Company reports that Google, looking to make an impact on the social media space that Facebook seems to have dominated to a greater degree, went out a memo to employees saying that “ 25% of their annual bonuses will now be tied to how well Google pushes out its social strategy in the coming year.”

    "This is a joint effort so it's important that we all get behind it," CEO Larry Page said in the memo.

    That may seem a little draconian ... but it reflects a fascinating approach to leadership and management that is worth considering.

    Think about it. If a company has a grand strategy, it seems incumbent on everyone working for the company to be focused on the same goal, the same tactics, to be rowing in the same direction. And as much as possible, it seems to make sense for people to be compensated based on their abilities to advance the company toward those goals.

    You can’t just dictate to employees. You have to earn their loyalty, you have to work hard to get them to buy in and take ownership. In doing so, you become a leader rather than just a manager.

    But tying compensation to delivering on strategic goals in fundamental ways? That seems to make a kind of sense.

    At least, that’s what they think at Google. And that’s our Monday Eye-Opener.
    KC's View:

    Published on: April 11, 2011

    CNN reports that Walmart plans to launch a new advertising campaign today using the slogan "Low prices. Every day. On everything.” And, at the same time, it “is bringing back thousands of products that were unceremoniously dumped from stores and says the company is ready to roll up its sleeves to win the lowest price battle with its rivals.”

    In doing so, company management is conceding that its recent strategy - eliminating clutter, reducing selection, and trying to get a little more trendy - only left it open to tougher competition from the likes of Target.

    "We have lost our customer confidence ... in having the lowest price," Duncan MacNaughton, the company’s chief merchandising officer at Walmart, tells the Associated Press. “Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad match policy.”
    KC's View:
    We’ve been saying here for months now that an angry Walmart is a dangerous Walmart ... and Walmart clearly is irritated by its current status.

    The one thing we don;t know at the moment is whether everything Walmart is considering or actually doing - lower prices, more products, smaller stores, online grocery sales, etc... - are part of an integrated strategy or simply a result of a company throwing spaghetti against the wall to see what sticks. I’d bet on the former ... but then again, some of Walmart’s moves lately have been questionable. So, we’ll see...

    Published on: April 11, 2011

    Internet Retailer has a long piece about, the Ahold-owned online grocery service, in which co-founder and president Andrew Parkinson is quoted as saying, "I'm very excited about growth ... Everything is coming together now - the technology, the demographics, and the strength of the e-commerce space in general."

    The story goes on: “But Parkinson and his co-founder brother, chief technology officer Thomas Parkinson, also realize that they must keep innovating in the face of growing competition. Retailers from Inc. and Wal-Mart Stores Inc. to traditional supermarket chains and smaller retail stores are getting into the e-grocery game. The prize for the big mass merchants: Selling to online customers grocery products that they buy frequently and make up a big part of their budgets. The prize for retail grocers: Staying in the grocery game.”

    Some other excerpts from the piece:

    • “Although Ahold doesn't break out Peapod's financial numbers, the Parkinsons say Peapod has been profitable for years and invests about 10% of its revenue in technology. Its in-house team of some 60 I.T. developers continues to build better mobile shopping apps, for example, including one for Android phones that lets shoppers use voice commands as well as a scanning feature to place products on their shopping list. ‘In three years, we'll see 50% of orders through mobile and scanning,’ Andrew Parkinson predicts.”

    • “The e-retailer recently launched an app specifically for the iPad, and notes that it has already seen iPad users spending more than the typical Peapod ticket of $150. It also plans to soon introduce apps to make it easy for customers to share their shopping ideas and lists with friends through Facebook and Twitter.”

    • “In an effort to improve convenience, Peapod plans to launch later this year a text-message service that will alert customers when their delivery driver is due to arrive within 10 minutes, instead of making customers hang around their homes for a typical one- or two-hour delivery window.”
    KC's View:
    To be clear, the article also notes that “the web only accounted for 1.4% of U.S. grocery sales in 2010, according to Forrester Research Inc. Grocery sales, excluding food services, totaled $589 billion in 2010, according to the latest estimate of the U.S. Department of Commerce. “ And, “a report last year by Forrester found that less than 10% of online adults had purchased groceries online, and among online grocery buyers only 16% made such purchases more than once a month.”

    That said, there is simply too much momentum in terms of technology, too much evolution in terms of young, web-connected people becoming part of the mainstream customer base, and too many major tech players - Amazon, Google, Facebook - to ignore this segment.

    I agree with the conclusion that to stay in the grocery game, you have to play in this space.

    Published on: April 11, 2011

    The Seattle Times has a profile of Craig Jelinek, the president/COO of Costco who is often mentioned as a likely successor to CEO Jim Sinegal. While Jelinek does not give interviews, he recently spoke to students at Seattle University, and was self-effacing about his career prospects.

    "'I haven't taken over. Let's get that squared away,' he said to one question about the challenges of succeeding Sinegal. 'There's a lot that could happen before that could happen ... If I happen to be blessed to take over for Jim Sinegal, I can only be Craig Jelinek'."

    The story notes that "then Jelinek listed a few of his assets: knowing Costco's culture, helping employees grow and succeed, and 'putting on my pants one leg at a time like everyone else'."

    And, the Times writes, Jelinek said that he is enthusiastic about Asian and Australian expansion, though he's not convinced that China is a good place to do business at the moment.
    KC's View:
    You just know that when Sinegal finally retires, Costco will have a seamless and trouble-free transition. No drama, no fuss. It has that kind of culture.

    Published on: April 11, 2011

    The Wall Street Journal reports on a speech given by PepsiCo CEO Indra Nooyi at a conference sponsored by the paper in which she “criticized fellow corporate leaders for failing to try hard enough to increase the ranks of women in upper management.”

    Nooyi reportedly suggested “the creation of a private panel of big-business chiefs. This CEO commission would publish results of corporate efforts to expand the number of senior executive women – including ‘company scorecards and metrics’ – and consider setting public targets for women's advancement.”

    The Journal reports that “Nooyi also urged conference attendees to keep reinforcing the notion in their workplaces that "having women in the organization enhances your ability to make the numbers.'' She said that's especially true at Pepsi, where 30% of executives are female, and she's committed to making sure "our employee base reflects our consumer base.''
    KC's View:
    If women are still the primary shoppers in most American households, it can only help manufacturers and retailers to have more people in leadership ranks who get what they need and want in ways that too many guys never will. or can.

    Published on: April 11, 2011

    The Business Journal reports that Harris Teeter is offering its shoppers the opportunity to pay a monthly $16.95 fee for online grocery shopping, rather than paying a per-order fee.

    Under the new option, shoppers can pay one fee and place an unlimited number of orders with the retailer’s Express Lane Online Shopping service, which currently is available at 68 stores. The Business Journal reports that Harris Teeter plans to expand the service to another 20 stores “within the next year.”

    Full disclosure: Harris Teeter’s online service provider is MyWebGrocer, a longtime and valued MNB sponsor.
    KC's View:
    This is sort of like Amazon’s Prime membership., and very smart. Monthly is one approach ... but let’s see how long it takes someone to offer an annual fee. Someone other than Amazon, that is.

    Published on: April 11, 2011

    Iowa-based Hy-Vee announced that it is working with “celebrity chef Curtis Stone to develop a series of recipes designed to bring families together for meals that are easy, affordable and fun. “

    Stone, who is the host of Top Chef Masters on Bravo and appears as an investor/mentor on NBC’s America’s Next Great Restaurant, also will be featured in commercials and other advertising materials.

    According to the announcement, “Stone’s recipes for Hy-Vee will emphasize fresh, high-quality, seasonal ingredients and ease of preparation. New recipes will appear each month in the company’s print ads, on its website and in stores. Television commercials will feature Stone shopping for ingredients in Hy-Vee stores and helping customers cook and serve the featured dishes at home.”
    KC's View:

    Published on: April 11, 2011

    The Los Angeles Times reports that there is a new food trend, apparently born out of continuing concerns that the nation’s recessionary climate will persist. There is a niche of people who are buying and stockpiling freeze-dried food, preparing for a time when they lose their jobs, their salaries, their retirement benefits and their options.

    “This sort of stockpiling was once the purview of survivalists preparing for Armageddon,” the story says, but a tangible caution has crept into the lives and attitudes of a growing number of people.

    One piece of evidence: “Costco's Great Gift Ideas catalogue last Christmas included a one-year, four-person supply of dehydrated and freeze-dried food on sale for $2,999. It sold out.”
    KC's View:
    Nothing says “Happy Holidays” like a basket of freeze dried food...

    Published on: April 11, 2011

    There is a piece in Forbes about Sean O’Connor, who developed a product called “Batter Blaster,” which allows consumers to make fresh pancakes out of organic ingredients contained in a pressurized can - the sales pitch is that people can make pancakes without the normal mess that comes from batter.

    The story is a good read because O’Connor is a small guy with a big idea, he’s invested himself heavily in making the product a success - he travels cheap, and makes his sales pitch by making pancakes on the spot for interested parties - and he has achieved a certain level of success. He also didn’t go into Walmart until he thought he was ready, he’s been lucky in terms of media coverage, and he really hasn’t had any competition in his niche.
    KC's View:
    Here’s the passage that stood out to me, coming at the end of the story:

    Thanks to little competition thus far, he has managed to avoid paying retailers so-called shelf-space slotting fees, which can run several hundred dollars per year per store.

    "I haven't paid anything to get on shelves yet," O'Connor says, "but I've had to handcuff myself to people's desks and cry."

    It is troubling to know the extent to which too many companies still depend on slotting allowances and the like ... making money on the buy rather than the sell.

    Published on: April 11, 2011

    • The Washington Post reports on continuing concerns on the part of some folks in the Washington, DC, market about Walmart’s plans to open four stores there.

    As the story notes, “The company says that the four stores it plans would create 1,200 jobs at a time when Mayor Vincent C. Gray (D) and city officials are struggling to find work for members of the city’s unskilled population. But some studies suggest that Wal-Mart’s growth has led to a comparable or even greater loss of jobs and an overall reduction in the wages of retail workers in a given market.”

    Still, what objections there have been “have come in pockets and parcels, not by tidal wave, with some residents looking forward to having access to the Walmart retail experience, especially because, and the Post writes, “With its first D.C. stores, Wal-Mart plans to make groceries a hefty portion of its offerings, bringing produce and healthy foods to neighborhoods where they are for the most part not currently available, aligning with local community development efforts.”
    KC's View:

    Published on: April 11, 2011

    The Kroger Co. has announced “new details of its progress on seafood sustainability and the next phase of its partnership with World Wildlife Fund (WWF), a leading global conservation organization. WWF is at the forefront of developing strategies for responsibly-sourced wild seafood.  Kroger has been working with WWF for more than a year to assess its current seafood supply and develop ways to improve the sustainability of its seafood buying practices and standards.

    “The results of the internal analysis suggest already more than half of the top 20 wild-caught seafood species sold by Kroger are certified by the Marine Stewardship Council (MSC) or in full assessment.  Kroger has set a 2015 goal of sourcing 100% of its top 20 wild-caught species from sources that are certified by MSC, in full assessment, or involved in a Fishery Improvement Project with WWF.”

    The announcement goes on: “In addition to sourcing 100% MSC certified fish, Kroger is supporting a number of Fishery Improvement Projects in cooperation with WWF including the Ecuadorian mahi mahi and Indonesian yellowfin tuna fisheries. The improvements being put in place will directly help these fisheries perform at a level consistent with MSC standards, benefiting local communities, fishermen, suppliers and consumers.

    Kroger will also no longer sell shark, marlin or bluefin tuna due to sustainability concerns in the species.
    KC's View:

    Published on: April 11, 2011

    In a blast from the past, Boulder, Colorado will get a new organic and natural food store on Earth Day, April 22 - Alfalfa’s, which was name of a local chain that started in 1979 and had a kind of iconic status until it was acquired by Wild Oats, which then was acquired by Whole Foods. And, the new store is located at the original Alfalfa’s Boulder location.

    According to the Daily Camera, “The Whole Foods-Wild Oats transaction stirred the ire of the Federal Trade Commission, which fought the acquisition in a federal court battle that it eventually lost. The antitrust agency subsequently continued to pursue an administrative case against Whole Foods and last year reached a settlement agreement that required the sale of 32 stores - including the 1651 Broadway and 2584 Baseline Road sites in Boulder.

    “The 1651 Broadway location was one of only three that ended up selling, as it landed in the hands of Boulder-based A-M Holdings LLC, an entity established by Mark Retzloff, a co-founder of the original Alfalfa's, and veterans of the natural products industry. A-M Holdings also acquired the Alfalfa's intellectual property.”

    The new store also has a number people involved with it that worked for the original Alfalfa’s.
    KC's View:

    Published on: April 11, 2011

    Bloomberg reports that the Great Atlantic & Pacific Tea Co. (A&P) has settled a lawsuit it filed against Royal Ahold in which it accused that company’s Stop & Shop division of hiring one of its former senior executives - Frank R. Vitale, who had been A&P’s vice president of operations - in violation of his non-compete clause. Terms of the settlement were not disclosed.

    • The Associated Press reports that “Johnson & Johnson has agreed to pay $70 million to settle civil and criminal charges of bribing doctors in Europe and paying kickbacks to the Iraqi government to illegally obtain business,” though the US Securities and Exchange Commission and US Justice Department said that the settlement did not include any admission or denial of guilt. The settlement does include writing a series of checks: “The company will pay $21.4 million in criminal penalties for improper payments and return $48.6 million in illegal profits, according to the government.”

    In addition, the AP writes, “United Kingdom regulators said they reached a $7.9 million settlement with J&J over illegal payments made to orthopedic doctors in Greece. The U.K.’s Serious Fraud Office said it launched its investigation in 2007 after receiving information about the payments from U.S. authorities.”

    • Safeway has received a “Role Model” award at the Produce for Better Health Foundation’s annual meeting held in Monterey, California. The award has been in honor of the retailer’s Lunchbox Winners program, which features professional athletes encouraging students to eat well and get enough exercise.

    • Officials with Brookshire Grocery Co. are finalizing details for a Brookshire’s/Super 1 Foods WWII Heroes Flight that will take 33 World War II veterans to Washington DC to visit the World War II Memorial and other sites.
    This is the third such trip the company has sponsored. The two previous flights in 2010 departed from Tyler, Texas. The majority of this group will depart from Shreveport, La.; the flight will take place May 10-12, and there is no charge for the veterans or volunteers selected for the trip.
    KC's View:

    Published on: April 11, 2011

    Sidney Lumet, one of the most accomplished of American directors who often used New York City as a backdrop - and even as a character - in his movies, has passed away of lymphoma. He was 86.

    Among his movies: 12 Angry Men, Serpico, Prince of the City, Dog Day Afternoon, The Verdict, Murder on the Orient Express, Fail-Safe, and perhaps his most noteworthy achievement, Network.
    KC's View:
    It so happens that I once worked for Lumet. I was an extra, and got “promoted” to a small role, in a 1972 move called Child’s Play (not the one about Chuckie).

    The thing about Child’s Play is that it had a pretty good pedigree. It was based on a Tony Award-winning play. It starred James Mason, Robert Preston, and Beau Bridges. (My billing was under the title. Waaaay under the title.) And it had Lumet at the helm, just a year after he directed Sean Connery in The Anderson Tapes and a year before directing Al Pacino in Serpico.

    And here’s the thing about Child’s Play. Despite having all those elements in place, it was an awful movie. Got terrible reviews. Almost nobody went to see it. Every time I went - and I saw it in the theaters at least three times with at least three different girls because, hell, I was in the damn thing! - the theater was pretty much empty.

    In recent years, as Lumet got older and was the subject of various career retrospectives, it seemed like the only movie they never would mention was Child’s Play. I don’t think it was ever put out on VHS tape or on a DVD ... though for some reason, it is actually available on iTunes.

    Needless to say, I bought and downloaded it. What the hell.

    But here’s the business lesson. (You knew there had to be on in here somewhere.) Sometimes, it doesn’t matter if you have all the ingredients, if all the signs suggest that what you’re doing is going to work really well and pay off big.

    Sometimes, it just doesn’t work out that way.

    Sometimes, you get Child’s Play.

    When it happens, you get right back to work. Because the next time out, you might get Serpico.

    Published on: April 11, 2011

    Got a number of responses to Friday’s piece about a Boston Globe report that Boston Mayor Thomas M. Menino is signing an executive order that will expand “his ban on sugar-sweetened drinks in schools to include all city properties and functions, a sweeping restriction that means that calorie-laden soft drinks, juices with added sugar, and sports drinks like Gatorade will no longer be offered in vending machines, concession stands, and city-run meetings, programs and events ... The mayor, who has battled weight issues, said that too many Bostonians are overweight or obese and that he wants to make healthy choices easy for them.”

    My comment:

    I have no problem with not serving such drinks in schools; I firmly believe that schools should not just try to encourage highest-common-denominator thinking, but also highest-common-denominator living, and that includes good nutrition and adequate exercise.

    But adults are capable of making their own decisions. I think some folks over-react to hysteria about the so-called “nanny state,” but this is a case where they would be right. Provide nutritional information all you want, but this is yet another case where “banned in Boston” does not have a good connotation.

    MNB user Elizabeth Archerd wrote:

    Your headline is wrong. No one has banned sugary soft drinks in Boston. Nothing requires a unit of government to sell any kind of product on government property, much less make money off a temptation.

    Adults can make their own decisions at any store or vending machine on private property. (That's true no matter how capable the adults are!)

    I was making a play on words. But you’re right ... it was not technically correct. But Banned By Boston At All City-Sanctioned Venues And Events” didn’t seem as pithy.

    MNB user Dave D’Arezzo wrote:

    This so reminds me that politics and common sense diverge.  To me the question besides the issue you raised Kevin (the role of government) is where do you draw the line and how can we educate?  Do you ban beer and wine? (We tried that before!).  I looked up apple juice, and besides trace vitamins (the highest vitamin content in apple juice from a percentage standpoint is vitamin c, and it takes 25 servings of apple juice (nearly two gallons) to get your daily Vitamin C requirement) and it is actually more caloric per ounce than a full-sugar soda.  Some people bemoan HFCS as being worse for you than “regular” sugar.  Even if it is, it’s like arguing that butter is healthier than margarine, so let’s eat a ton of butter!  High sugar diets are bad for you.  Sugar comes in many forms.  Let’s educate people, so they can avoid feeding their children lots of apple juice and feel they are “being healthy”.

    I did a piece last week about how the Apple Store shows its appreciation of new employees, and noted that few companies seem to use this approach ... and even mentioned that teachers getting tenure - a virtual lifetime commitment - rarely see this sort of love.

    MNB user Dick Shulman wrote:

    Kevin, my wife was a teacher for 35 years and I can vouch for the fact that teachers simply don't get respect.  People visiting an Apple Store don't feel they can do what those employees do, but every parent thinks they could teach.  Administrators are shocking in their lack of respect for their own staff, despite continual pressure for teachers to advance their educational background with higher graduate degrees and more courses.  When my wife retired she was "awarded" with a 10 cent ball point pen and a Xerox non-personalized certificate.  As to retailers you are right on target, most don't have a culture like Apple, yet it is so easy to implement and takes only a commitment from top management to sustain it.

    One other note. On Friday, my Eye-Opener was about how the prom shop where my daughter bought her dress, A Step Ahead in Stamford, CT, keeps a long of everyone who buys prom dresses from it, and notes which dress they bought and what prom they are attending. And they guarantee that they will not sell duplicate dresses to girls going to the same prom. In doing so, this store has become the go-to store for most of the girls in the area. They love the selection, the service, and the emotional security of getting their prom dress there provides.

    I think this is a great concept.

    But one MNB user wrote:

    I was a bit taken back by your remarks concerning the dress shop’s keeping records of what schools had purchased what dresses so there would be no duplicates.  I thought that was standard procedure and didn’t realize things had changed.  I last went to a prom, alas, in 1964.  It was the mo of all of our local dress shops to record that type of information to insure they did not sell the same dress to two or more girls attending the same school’s prom.  At the time, we didn’t think that was special; we just thought it was the norm, which it was.  The only problem, of course, is that not each shop has exclusive dibs to certain brands.  Many girls shop for a dress in, easily, a 100 mile range, so it is/was still possible to see yourself coming and going at the prom.

    This was my first prom dress experience, so it certainly was new to me ... and a lot of other people to whom I have spoken since last Friday.

    Just goes to show you, though, that one man’s Eye-Opener is another man’s “been there, done that.”
    KC's View:

    Published on: April 11, 2011

    In the Masters golf tournament, this weekend, South African Charl Schwartzel turned a final round score of 66 into a 14 under par performance for the entire tournament, enough for a two-stroke victory.

    In doing so, he defeated irish golfer Rory McIlroy, who seemed to be coasting to a win with a commanding performance that fell apart on the 10th hole.
    KC's View: