business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: August 7, 2012

    There is a wonderfully insightful and entertaining presentation by futurist Don Tapscott entitled "Four Principles for the Open World" that is absolutely worth watching, in which he describes the ways in which a culture of transparency is changing and will change the ways in which we live and work. It is a "turning point in human history," Tapscott says...and he is enormously persuasive in talking about collaboration, transparency, sharing and empowerment.

    Check it out..

    By the way...if you don't know about the TED conferences and talks - of which the Tapscott presentation is a part - it is really worth learning about them. TED describes itself as a nonprofit devoted to "ideas worth spreading," and there are hundreds of fascinating talks - none of them longer than 18 minutes - on

    They are eye-openers, each and every one of them.

    And thanks to the MNB reader who brought this one to my attention...
    KC's View:

    Published on: August 7, 2012

    by Michael Sansolo

    Consistency is always admired in management because it creates a basis for trust. Yet consistency can be limiting, especially when managers and leaders don’t change to meet shifting challenges. A recent pre-season article about my beloved New York Giants offered a detailed picture of how abandoning a long-held plan can actually work if the right conditions are in place. It’s a lesson that even football haters might want to consider.

    Like many fans I’m very fickle. My mood shifts weekly from hating parts of the team to loving them; from finding them mediocre to watching them win the Super Bowl. We Giants fans are especially fickle when it comes to the team’s coach, Tom Coughlin. Even though he’s incredibly successful and a fabulous model for business behavior, we call for his firing every time the team loses two games in a row. That’s what makes sports so much fun.

    Coughlin’s leadership lessons are worth following and repeating because he’s made the team significantly better and has brilliantly guided them to two titles in the past five years. (It’s best I write something nice about him now, before they lose two in a row and I want him fired again.)

    Five years ago, Coughlin’s story was of an old dog learning new tricks. Known as an incredible disciplinarian - he fined players for showing up on time, not early, for meetings - Coughlin seemed headed for dismissal. Then he changed, allowing some older players more flexibility on practice and showing more patience with injuries. Whether or not that was the reason, the result was a championship.

    That was five years ago, which is an eternity in sports. What happened last season might provide an even more valuable lesson in how a team with clear vision can deviate from plan and do it successfully.

    In 2011, the Giants abandoned many of their usual playing strategies. (For the football fans out there, this meant less reliance on a running game. Non-football fans shouldn’t worry; it’s not that important.) Essentially Coughlin’s management team recognized that injuries and personnel changes had altered the strengths of the team. So they changed with it.

    That they won is only part of the story. The key is the trust that built up. As the New York Times wrote in the team preview, the changes were made by assistant coaches, who are closer to the players and who understood how a system of trust game them the latitude to succeed.

    “Those assistants are empowered to coach (and upper management) in an uninhibited way because rigid habits and ego-driven loyalties to underperforming or miscast players simply don’t exist,” wrote Andy Benoit of the Times. The following paragraph could be a model for any team including yours.

    “This is true stability. True stability comes from flexibility, not rigidity. It breeds confidence and security throughout. It keeps everyone abreast of the team’s core principles, but also alert to the inevitable necessity of change. It fosters a commitment to winning that goes beyond T-shirt slogans and metaphors. It allows for improvements during the course of a season. And as we are learning, it can change Football America’s definition of ‘greatness.’”

    I wish I could write that as well myself. Read that last paragraph again and think of your work team and ask, “Would the same be said of us?”

    If not, you have a new role model, even if you hate the Giants.

    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: August 7, 2012

    Reuters reports that Tesco has taken the successful test of a virtual supermarket concept that it used in South Korea and brought it to Britain's Gatwick Airport.

    The concept features walls with pictures of products displayed as they would be in the store, with people able to use their smartphones to point at specific products and place orders that will then be delivered to their homes of offices.

    Gatwick is seen as an ideal location for such an installation because many citizens use the airport when returning from holidays abroad. The installation is positioned as a way for people to order foods and beverages that can fill up empty cupboards and refrigerators when they get back for vacation.
    KC's View:
    When I first saw this concept, I thought I'd seen the future. Nothing has happened to change my mind ... I still think it is one of the most interesting retail developments of the recent past.

    Published on: August 7, 2012

    The Washington Post reports on how the US Congress currently is debating the renewal of farm legislation, with the Senate "pressing to keep the program limited to fresh produce. The House, however, has proposed making room for frozen, canned and dried produce — agitating program supporters and pitting factions of the food industry against one another in a bout of frenetic lobbying."

    Here's how the Post frames the story: "Since its creation a decade ago, the tiny program has been distributing free fresh fruit and vegetables as snacks to elementary schools that have a high percentage of low-income children, a group that typically has less exposure to fresh produce and does not consume anywhere near the amount recommended by national dietary guidelines.
    The effort raised consumption in participating schools by a quarter-cup per day, or 15 percent, according to an analysis released by the U.S. Department of Agriculture, which oversees the program. The increase did not contribute to weight gain, suggesting that the fruit and vegetables replaced other foods, the study said."

    It goes on:

    "Advocates of the House legislation say schools should have access to produce in all forms. The frozen, canned and dried varieties are often more affordable than fresh produce, they argue, and their inclusion would enable schools to provide a wider range of options year-round ... School nutrition associations in three states — California, New York and Texas — have signed on.

    "But while the California School Nutrition Association wants the program expanded, the California Department of Education does not. The department said kids have plenty of exposure to frozen, canned and dried produce in federally subsidized school meals. United Fresh Produce Association, a trade group that primarily represents fresh-produce firms, has made the same argument."
    KC's View:
    I smell lobbying money here. It is not a particularly sweet aroma.

    Listen, I think there is no reason why, when certain fruits and vegetables are not available fresh, that they can't be provided to kids in canned or frozen form. But it has always been my belief that they were anyway ... and that this program was to heighten their exposure to fresh foods.

    Let's not pretend they are exactly the same. They're not. Except, of course, to politicians who hunger for the kinds of dollars that lobbyists can steer their way.

    Nope, there is nothing particularly sweet about the aroma of this debate.

    Published on: August 7, 2012

    Forbes reports that Walmart, in addition to installing solar panels on 100 of its stores in California, is building "a 265-foot-high wind turbine" outside one of its distribution centers, in Red Bluff, California. When completed, the wind turbine is expected to provide up to one-fifth of the warehouse's electricity.

    It is described as "Walmart’s first such installation and the next stage in the company’s efforts to eventually obtain 100% of its energy from renewable sources," and Greg Pool, a director of energy for Walmart, says, "It looks like our renewable energy strategy is going to take a lot of tools ... We are pursuing wind energy and renewable energy at a lot of different levels."

    Reuters reports that the US Securities and Exchange Commission (SEC) has asked Walmart to "add more detail on legal proceedings and cyber security" in the wake of an ongoing investigation into alleged bribery schemes reported by the New York Times in the company's Mexico operations.

    According to the story, "the SEC asked the world's largest retailer to provide greater detail about the outcome of legal proceedings, such as the range of a possible loss from litigation. If no range could be provided, the SEC asked that Wal-Mart provide a reason why such an estimate could not be given."

    Wal-Mart has told the SEC, the story says, "that it would change the disclosure. Instead of reading: 'While management cannot predict the ultimate outcome of these matters, management does not believe it will have a material effect on the Company's financial condition or results of operations,' it will now read: 'Management does not believe any possible loss or the range of any possible loss that may be incurred in connection with this matter will be material to the Company's financial condition or results of operations'."

    Wal-Mart also reportedly said that "it would update disclosures related to the Foreign Corrupt Practices Act matter if any material development occurred."
    KC's View:

    Published on: August 7, 2012

    Cool piece in Fast Company about notable Americans who got their career starts at McDonald's. (A lot of people have. McDonald's has employed some 20 million people over the years.) The piece is based on a new book by Cody Teets entitled, "Golden Opportunity: Remarkable Careers That Began At McDonald's."

    Among them....

    • Andrew Card, the former White House chief of staff, who says that "I remember thinking that McDonald’s was unique as a great equalizer. Wealthy and poor, black and white all came to McDonald’s and stood in the same lines and sat at the same booths."

    • Jerry W. Hairston, Jr., the L.A. Dodgers second baseman, who says that "I was exposed to an incredibly diverse group of people of different ages and backgrounds. In sports and in school, everyone was around the same age and came from a similar upbringing. I remember noticing that everybody on crew was equally industrious, no matter what their background. I gained their respect and trust by sharing their work ethic and the goal of serving customers."

    • And Amazon founder Jeff Bezos, who says that "the most challenging thing was keeping everything going at the right pace during a rush. One of the great gifts I got from that job is that I learned to crack eggs with one hand. My favorite shift was Saturday morning. The first thing I would do is get a big bowl and crack three hundred eggs into it."

    You can read the entire piece here.
    KC's View:
    Regular readers will know that I'm no McDonald's fan ... but the simple fact is that an awful lot of people have learned about maintaining a positive work ethic and responsibility by laboring under the Golden Arches. That's something that all small businesses can do, something that may be the best contribution they can make to their communities.

    Published on: August 7, 2012 announced the launch of Amazon Textbook Rental, saying that "now college students can choose from thousands of textbooks to rent for the semester and save up to 70%.

    "To rent a textbook, simply search for the book, select 'Rent Now,' choose shipping and payment options, and check out. All textbook rentals are Fulfilled by Amazon and are eligible for Free Super Saver Shipping on orders over $25, and Prime Free Two-Day Shipping. At the end of the rental period, returns are free and simple with a prepaid, printable label."
    KC's View:
    Cool idea, very timely, and just another step in Amazon's plan for world domination.

    Published on: August 7, 2012

    Ron Johnson, the new CEO of JC Penney, has sent a letter to the retailer's customer base introducing himself and trying to put the company's new pricing policies in some context. The letter reads as follows:

    Dear valued customer:

    You've probably heard about recent changes at jcpenney. I'm honored to say that I'm one of them.

    I'm Ron Johnson, and I came here because I have a lifelong passion for retailing - and jcpenney has been one of America's favorite stores for over a hundred years. My goal is to make jcpenney your favorite place to shop.

    I've asked our team to innovate in many ways - to help you look and live better - and to make shopping more enjoyable.

    While you will see many changes, you can rest assured that we'll never lose sight of our founder's values. When James Cash Penney built his first retail stores over a century ago, he called them 'The Golden Rule," because treating customers with respect was his highest priority.

    One of Mr. Penney's guiding principles was offering low prices every day - instead of running a series of "special sales." We're honoring Mr. Penney by returning to his pricing policy, so you'll find great prices every time you visit.

    We've also made it easier to return items, we're bringing in more great brands, adding excitement to our presentation, offering free back-to-school haircuts for kids, and much more.

    Basically, we're putting you and your family first, trying to give you new reasons to smile every time you visit a jcpenney store.

    You'll see many innovations in the coming months, and I'll keep you informed in a series of letters like this. I hope you'll let me know how we're doing, and share any ideas that could help us do better. Just click the link below to send me a note.

    On behalf of the jcpenney team, thank you for shopping with us.

    KC's View:
    I continue to believe that what Johnson is trying to do makes a lot of sense, and, if it works, will set JC Penney on a more sustainable path. I just don't know if he's got the time to pull it off...

    Published on: August 7, 2012

    In an interview with the Telegraph in the UK, Andy Bond, the former CEO of Walmart-owned Asda Group there, said that he fully expects Amazon to "eclipse" Walmart in terms of size and volume by 2020, saying that this is typical of a "period of vast change," and adding, "No one should underestimate what internet companies are doing to the retail industry."

    Bond also addressed the subject of executive compensation: "The multiples earned by top executives compared to average salaries has got to a point where it's slightly gratuitous in some circumstances. Things have got out of control," he said. "Do people deserve to earn a lot of money? Yes. But the whole economic reward thing has become too much the focus, for management and for investors."

    Bond currently is the chairman of the fashion company Republic and the internet-based bicycle company Wiggle, and he has the following take on how e-commerce will converge with bricks-and-mortar:

    "People tend to describe retail in a binary way – bricks and mortar or online – but we're going to see a convergence. The costs of running an online business are increasing dramatically – whether through people or marketing costs – while the state of the economy and lower demand means the costs of bricks and mortar are going down.

    "I think you'll see online retailers take the view that marketing brands through bricks and mortar becomes increasingly appealing. But it will be about using shops to create a brand, not just to sell product."
    KC's View:

    Published on: August 7, 2012

    ...with brief, occasional, italicized and sometimes gratuitous commentary...

    • Kraft Foods announced that October 1 will be the day that it expects to split the company into two entities - the Kraft Foods Group, which will comprise the North American grocery business, and Mondelez International, its global snacks business.

    November 1 will be set as the day by which everyone in the company will know howe to pronounce "Mondelez," and December 1 will be set as the day by which everybody knows how to spell it. No date has been set by which the company hopes that everybody working for Mondelez will think that using that name was a good idea.

    • The Financial Times reports that Richard Schulze, the founder and former chairman of Best Buy, is bidding to take the company private.

    According to the story, Schulze sent the retailer's board "a proposal to acquire the company in alliance with unnamed private equity groups, although he has not reached agreements with any such groups or secured other financing commitments." The proposal reportedly would value the company at almost $9 billion.

    He's gonna need more than private equity money. He's going to need some sort of plan to make Best Buy relevant in a 21st century environment ... and up to now, it hasn't been working out all that well...
    KC's View:

    Published on: August 7, 2012

    • In Portland, Oregon, New Seasons Market announced that it has hired Michelle Lantow, the former CFO for McCormick & Schmick's Seafood Restaurants, to be its new chief administrative officer.

    In addition, Chris Tjersland, former managing partner at Ultimate Source Northwest and director of business development at Co-Sales Northwest, has been hired as the company's first private brand development manager.
    KC's View:

    Published on: August 7, 2012

    Responding to yesterday's story about Walmart's decision to sell genetically modified corn, and my comment that in view of the lack of labeling of such products, I found this development to be less than reassuring, one MNB user wrote:

    Regarding the benefits of using GMO’s.  My cynical side kicks in when I read that the people who designed the GMO corn, Monsanto, also make Roundup, the weed killer it’s resistant to.  And now that farmers can use it with impunity, sales of Roundup have increased tremendously.  Not to mention that the corn is a hybrid and cannot reproduce so famers must buy seed every year.  Kind of like a rural version of the company store.

    MNB user Peggy Long wrote:

    I'm a supporter of GMO research and products.  Yes, we won't know for years (maybe hundreds of years) if there is any health impact from these products, but having a pesticide license opened me up to the chemicals that farmers use to increase yield and improve their crops.  And, a product that uses less chemical to produce a food product, I think is a good thing.  So, it's not the GMO part of this equation, nor is it the chemical part of this equation (as both are now a part of our food chain), but it is the LABELING which is critical.  So that consumers can make informed choices.

    And another MNB user wrote:

    Please don't by in to this "the other side of the story" thinking that passes for "balance" in the mainstream media! There has not been a single GMO corn produced that has been proven to with stand drought better than conventional corn. It's not the seed, it's the soil that matters.

    BTW...this reader offered a link on the subject that is worth reading.

    One MNB user wrote:

    I just wanted to bring it to your attention that genetically modified produce is in fact labeled as such, you just have to know a little about PLU labels.

    He sent along a picture of a PLU label noting that any five digit code starting with an 8 means that it is genetically modified ... but that strikes me as so obscure as to be useless to the typical consumer.

    MNB user Steven Ritchey wrote:

    About GM foods, I think it’s important we look at both sides.  Most advances in science come about because of a specific need.  The need for more efficient transportation, more efficient means to generate and transport  electricity, and maybe the need to more efficiently grow crops and have them be more disease, pest and drought resistant.  Admittedly the law of unintended consequences has reared it’s ugly head with some of  our “scientific advances”, but I think it’s extremely important we always look at both sides.

    From another reader:

    Keep agonizing!  It's always the what-you-don't-know that'll kill you.

    And still another reader offered:

    I agree two sides to every story but, can you say Soylent Green?

    As always, extra credit for the movie reference...

    On the subject of the new pay packaged awarded to Supervalu's new president/CEO Wayne Sales, one MNB user wrote:

    As a former associate, and someone who still has a personal stake in the company (namely a family member that is still employed with them), all I can say is  “WTF!?!”   I know of MANY instances over the  years where there have not only been NO bonuses – but NO salary increases for many associates working in the banners.  Yet this guy gets MILLIONS in his first year?!?  No wonder the company is failing – they can’t get their priorities straight!!

    On the subject of the impromptu "sex show" that two amorous customers put on in a Kansas Walmart, one MNB user wrote:

    Perhaps, just perhaps, Kansas is rediscovering its cultural hotbed of left-wing populism from the late 19th century...

    Another reader wrote:

    Maybe the amorous couple in the Kansas Wal-Mart were just the latest in a flailing marketing campaign from Bentonville.  You know - like the opposite of a flash mob?  And maybe they intended to pay for the product they picked up before leaving, kind of like when you open a soda while you're shopping with every intention of paying for it, but you're just SO thirsty...

    You never know.

    But, from another MNB user:

    Really?  That is worth reporting?

    Absolutely. I can't resist stories like that.

    (Are you kidding? I had a headline yesterday with the words "sex show" and "Walmart" in the same sentence. I'd be willing to bet that half my readers went to that story first...)

    On another subject, MNB user Bill Hilson wrote:

    The comparison of Stew Leonard's to Fairway is a bit stretched, other than the fact they both started as family-owned operations. Stew's has struggled to carry 9,000 SKUs while Fairway, at it's smallest stores, carried over 40,000 SKUs. The new Fairway stores carry around 90,000 SKUs. You are comparing a few apples to bushels of fresh organic apples.

    The comparisons won't end there... Stew Leonard;s has most of their meat in plastic vacuum packaging, where Fairways have real butcher shops. I could go on...

    Stew's enjoys a great location, a measure of entertainment for child-burdened shoppers, and a reasonable value proposition if all you need are the basics. The newer Fairways are temples built to honor the value-minded foodies looking to eat beyond the ordinary while still on a budget. Sure, the new stores are different from the sawdust-on-the-floor beginnings on 74th Street at Broadway; they are better in every way.

    I think the bulk of my comparison related to the fact that both companies started as family-owned businesses, and that while Stew Leonard's has maintained control by remaining so, Fairway has expanded much faster - and with some risk, in my mind - by taking private equity money and now planning an IPO. They are both perfectly legitimate ways of doing business ... but different, and worth comparing.

    I would also quibble with your characterization of Stew Leonard's "struggling" to carry more SKUs ... I think that has been a specific choice. And I think describing Fairway as a "temple" may be in itself a bit of a stretch. It's a very good store.

    I know that my house is pretty much the same distance for Stew Leonard's and Fairway, going in opposite directions. For almost 30 years, I've been happily going to Stew Leonard's ... and while I do go to Fairway from time to time, I can't say that it was such a fabulous experience that it changed a three-decade habit. (And I know that on a Saturday afternoon, it is still harder to get a parking space at Stew Leonard's...)
    KC's View: