business news in context, analysis with attitude

Published on: November 1, 2012

This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

I haven't been on a date with someone other than Mrs. Content Guy since September 10, 1979. I don't really think about dating much, except to wonder occasionally why my 23-year-old son can't seem to find a nice girl with whom to hang out.

I thought about dating the other day, though, because of - go figure - a story in the Wall Street Journal, which talked about the difficulty of mixed relationships. Not mixed in the sense of race or religion, but mixed in the sense of politics. Apparently, for a large percentage of the nation's single population, the odds of finding a date-able person have been roughly cut in half. Republicans don't want to date Democrats, and Democrats don't want to date Republicans.

That's how profoundly divisive our politics have become. Love, apparently, cannot conquer all.

When I saw this piece, I did what I usually do in such cases. I got in touch with Michael Sansolo and asked him if he could date anyone who did not agree with him politically. He responded, quote rightly, that I shouldn't worry about it because it is incredibly unlikely that either of us will ever find ourselves in such a situation; he also said that if by some sad turn of events either of us find ourselves to be single, we would be so desperate that we'd be profoundly grateful if a woman even talked to us. It wouldn't matter, he suggested, if she had three arms ... forget worrying about her politics.

I agree with Michael for the most part. Especially about the desperation part. But I also think, on reflection, that I probably could not spend my life with someone who had fundamentally different words views - whether about politics, religion, food, wine, beer or baseball. You know, all the things that matter. So he's right - if somehow I survive Mrs. Content Guy, I'll probably end up on a pier somewhere, fishing, drinking beer and pounding out MNB.

It occurs to me that while this may be acceptable or inevitable for someone my age - I've spent more than five decades developing a life view, and while I'd like to think I have the capacity for personal growth, I also recognize that I'm probably barely tolerable even to the woman who lives in my house to whom I am related by marriage - it is certainly less acceptable in young people. Or, at least less optimal if they want to find someone to love, and someone to love them.

While we all worship at the alter of social media, the fact is that it allows and encourages young people to share everything about themselves, and to know everything about people whom they barely have met, if they have met at all. Which means that these young people are pre-selecting and prejudging each other, before they've even laid eyes on each other. My son, for example, probably would find it unacceptable to go out with a Yankees fan (I totally get this, by the way), but he's likely never going to be in a position where he'd have to figure out whether the girl he's met is worth looking past her appalling taste in baseball teams.

That's too bad. When I met Mrs. Content Guy, I was a young newspaper reporter from an irish Catholic family, with longish red hair, a broken down car and an annual salary of about $6,800 a year. She, on the other hand, was working for a stock brokerage, and came from a family in which reading the business section was a high priority (I always red the comics and sports section first). Furthermore - and this could have been the biggest impediment - she didn't like Mexican food. But since we were the only people in our apartment building who were under 80, or so it seemed, we went out. And needless to say, I took her out for Mexican food.

More than 33 years later, here we are. She likes Mexican food now. She's even pretty fond of me. (I think.) And while I make a little bit more than $6,800 a year, she has left the financial services industry and currently works as a third grade teacher. Life, as John Lennon said, is what happens when you're making other plans.

That couldn't happen today. Or, at least it seems likely to happen. Because we don't test the boundaries of of what is possible. We accumulate all the data possible, and then make a decision. Maybe romance is dead.

Now, this isn't just me getting romantic or sentimental. Though maybe I am a little bit. There is a business lesson in here somewhere...

In our work lives, we sometimes have to be willing to look beyond the data points, to look past the numbers, or even ignore them altogether, and allow magic to happen.

It seems to me that one of the things that may have sunk John Browett in his short-lived tenure at the Apple Stores is that he was so focused on efficiency, on driving costs out of the system, that he missed the larger point about effectiveness - that something happens in the Apple Store that is, in fact, magical. unlike may computer stores, the Apple Store specializes in a kind of romance. All of Browett's previous experiences may have made him blind to this reality, and, to be fair, Apple knew who he was when they hired him. Maybe divorce was inevitable. (Browett reportedly made $3 million for his six months at Apple. Nobody should cry for him.)

So, that's the message of the day ... sometimes, even at work, one has to allow for a little magic, a little surprise, to create a transcendent product or service.

That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

Published on: November 1, 2012

by Kevin Coupe

There is a wonderful story in Fast Company about the how a 21st century business must operate that is definitely worth reading.

The interview is with Dennis Crowley, cofounder and CEO of Foursquare, the location-based social networking site, and he talks about the fact that by necessity, the business he has helped build will be obsolete in three or four years, because technology continues to make new things possible, and create a consumer class that hungers for innovation.

Among the things that Crowley says have made Foursquare's culture of innovation possible are a) "transitioning from a top-down system to more bottom-up," with associates running the company to a greater extent, and b) understanding that as the company grows, it needs to be reinvented, because what works for a 50-person company won't necessarily work for a 200-person company.

But here's the line that really sums up what competition is like in the 21st century...

The story says that Crowley is obsessed with change because he understands that "his only advantage is his next product, not his current one."

You can read the entire story here.

I want to highlight that phrase one more time, because it is so important...

His only advantage is his next product, not his current one.

Truer words rarely have been spoken.

Published on: November 1, 2012

The Wall Street Journal has a piece about Rosalind Brewer, president/CEO of Walmart's Sam's Club division, and her goal to turn it into a $100 billion business and catch up to Costco.

"To get there," the story says, "she plans to raise membership fees, build stores in metropolitan areas instead of rural towns, increase its financial-services and health and wellness categories, and track members' shopping habits to drive online sales." Brewer is described as the first African American and first woman to lead a Walmart business unit, and she says that she is determined to hit that $100 million goal.

"We're getting a lot more aggressive about managing our membership base," she tells the Journal, "so we have a great opportunity to grow that area. Just this month we introduced a new pilot membership plan [that offers a] rebate based on the amount of purchase. We're taking our first fee increase since 2006.

"We've brought in new brands like Eddie Bauer, Nautica and Lucky Brand Jeans that differentiate us from Wal-Mart and other discount retailers. We carry the Apple brand, so we have the iPhone 5 and the new iPad and as those companies innovate, we are one of the primary retailers that will benefit from that.

"Additionally, we've opened nine new clubs this year versus the two or so clubs we usually open every year and want to escalate new-store openings."

In addition, she says, e-commerce represents an opportunity: "Sam's Club's online sales currently represent less than 1% of total sales, so there's an opportunity there to take e-commerce market share. We are seeing double-digit growth in our e-commerce business."

Published on: November 1, 2012

• Advertising Age reports that Tony Rogers, Walmart's senior VP-brand marketing and advertising, told the audience at the ANA's Multicultural Marketing and Diversity conference this week that the retailer's spending to target "multicultural customers will grow by at least 100%." That is part of a broader effort, the story says, to make sure that the multicultural audience is considered in every business decision, and not relegated to its own silo - which has meant educating people throughout the organization and score-keeping as a way of benchmarking process.

Published on: November 1, 2012

• MarketWatch reports that Amazon.com is losing Wang Hanhua, the man who has been running its China business for some seven years. He will be succeeded on an interim basis by Steve Frazier, Amazon's vice president of retail operations, while a more permanent replacement can be found.

According to the story, Wang is leaving Amazon at the end of the month to do "something he's more interested in," though it also said that rumors he might go to Apple or another Amazon competitor are false.

Published on: November 1, 2012

Just saw a story from the Boston Globe saying that Locke-Ober, the venerable Beantown restaurant that was founded in 1875, that served financiers, captains of industry, politicians, sports figures and celebrities of virtually every kind, has closed its doors.

“Here’s what I was faced with,” David Ray, owner of the restaurant since 1975, tells the Globe. “I had a choice. Make Locke-Ober more casual, lower our standards to conform with the way society is today, or I could close it. I could close it with its history and its dignity intact. Because, frankly, it looked as good as it’s ever looked. The service was good, and the food was good.”

Because I love good writing, I want to share with you what Globe staffer Brian McGrory wrote about the closing, and what it means in the broader sense:

The reality, Ray has learned over the past decade or more, is that Boston has changed, often for the better, but not always so. An increasingly younger city is on a constant search for the next new thing, restaurants being no exception. Formality, here as everywhere, is a thing of the past.

Which is why the Ritz-Carlton on Arlington Street is no longer the Ritz, and even before it changed ownership to the Taj, it had shuttered its second floor dining room overlooking the Public Garden. It’s why the famed Oak Room at the Fairmont Copley Plaza has been completely re-imagined into the contemporary and snappy-sounding OAK Long Bar + Kitchen. It’s why L’Espalier now has contemporary quarters in a modern hotel. It’s why Maison Robert in downtown Boston and Aujourd’hui at the Four Seasons are no more.

And, McGrory goes on:

Times have changed. Long, liquid lunches have slipped into the past. Heavy food has given way to salads. Ray sat in his own dining room as recently as last year and joked about the calorie-rich offerings. “I knew something was wrong when I couldn’t eat here,” he said.

Published on: November 1, 2012

• The Wall Street Journal reports about how retailers, "accustomed to leveraging their transportation and supply-chain networks to respond quickly to natural disasters," were able to react to Hurricane Sandy.

For example, "Home Depot stationed hundreds of trailer trucks filled with supplies along the storm's path; Wal-Mart's Sam's Club warehouse club unit sent 7,000 generators into Northeast stores. Lowe's said it asked some suppliers to bypass their warehouses and send items directly to stores instead."

The story goes on to say that "while retailers will enjoy a sales boost from customers stocking up on storm supplies, it will likely be washed away by losses from store closures, as well as from consumers who will shift some holiday spending to storm cleanup, analysts say."

• The Washington Post reports on Wegmans opening its first Anne Arundel County, Maryland, location - a 125,000 square foot store that is Wegmans' sixth in the state.

The Food Marketing Institute (FMI) announced that it has selected Shepard Exposition Services to be its service partner for the 2014 food retail show, June 11-13, in Chicago’s McCormick Place (South Hall).

• Reuters reports that "a British parliamentary committee has invited executives from Starbucks, Google and Amazon.com to answer questions about their tax practices, which allow them to make significant sales in the U.K., but pay little tax here ... Spokespeople have responded to previous inquiries about their tax affairs by saying the companies comply with tax rules in all the countries where they operate."

Published on: November 1, 2012

• The Wall Street Journal reports that Campbell Soup has hired its first chief marketing officer - Michael Senackerib, who, the story says, "worked for years at Campbell and other food companies and most recently was chief marketing officer at Hertz Corp."

CEOP Denise Morrison says that "Senackerib will help Campbell better understand what is desired by the broader range of consumers it is targeting," the story says.

Published on: November 1, 2012

Regarding the upheaval in the executive suite at Apple, one MNB user wrote:

Really… A story about the iron clad egos of two corporate executives undermining the core principles and drivers of a company’s success… Shocker…

For the longest time I’ve touted Apple as a company who cared as much about its people as its products.  Stories of Mr. Browett and Mr. Forstall help raise the dissolution Apple has had on me.  My only hope is that the spirit of the late Steve Jobs can rain down and inspire a few great leaders to question what is truly important at Apple.

From another reader:

It strikes me that Browett and Forstall are more like your standard executives today. Wanting to skimp on salaries for the underlings and not take responsibility for quality merchandise and service. What a good sign that Apple fired them. It’s too bad other companies don’t follow suit and hire executives who don’t want to come in and cut, cut, cut while earning millions themselves. Apple spreads the wealth around and more companies need to start doing this so our economy can again be strong and we have a solid middle class.





We've been writing a lot about same-day and next-day delivery programs being instituted by a number of retailers, which led MNB user George Denman to write:

As you know Graeter’s has had a substantial overnight delivery service for its ice cream ever since called out by Oprah in 2003. We have always had overnight service for 6-packs and/or 12-packs of Graeter’s available. We are now offering 2 day service at a reduced price for those that can wait the extra day, providing our customers with even more options as the #1 mail order ice cream in the US.

That's a bit of a commercial ... but that's okay, because I love Graeter's ice cream.




Responding to yesterday's piece about Disney buying Lucasfilm and planning to produce new "Star Wars" movies, MNB user Brad Morris wrote:

Literally dozens of books have been written by a variety of authors using the Star Wars universe as the base. Most take place after the end of the last movie of the original trilogy taking Han, Luke and Leia (and their progeny) on new adventures. Each of these books had to be approved by the Lucas publishing organization to make sure that they all were consistent and led the overall story in a very specific direction. These could all be turned into an ongoing series of movies or other ventures that could go on for decades. Star Wars could be like Star Trek or James Bond, providing entertainment for many generations to come just based on existing stories and intellectual capital. It will be interesting to see how Disney chooses to unfold this.
I agree with you that having a creative influence other than George Lucas is probably a good thing.




On another subject, MNB user Joe Davis wrote:

On the topic of the e-readers vs. iPads, I’ll be very curious to see how the new iPad Mini impacts the marketplace.  I have a Kindle and have used it over our family iPad2 for the same reason as many – it’s more comfortable to hold for long periods.  But on Friday when the Mini gets delivered to my door, it may be relegated to being a coaster…

If Apple can get the inevitable iPad Mini 2 to have carrier phone support so you can make and receive calls with it, my iPhone could get shelved as well.  Paired with a Bluetooth headset, I’d have everything I’d need in one.

MNB user Robert Hemphill wrote:

I too am an avid ebook reader, and started years ago with a Treo 650 smartphone, using eReader software, and I've been hooked ever since.   Since then I've used the older monochrome Kindle, Kindle Fire, iPad Retina display and now my favorite - an iPhone 5.   I use the Kindle reader, iBooks and still use eReader from time to time.  Amazon seems to have the most content of all, but the iBook automatically synchs to the last page read, without bothering to as if that's what I want - using iCloud synch.

I prefer the iPad with it's large, gorgeous display, but the Kindles are easier to hold by hand.  My new iPhone 5 wins overall - it's retina display is so crisp, and it's the lightest of all, so it's the one I read with before falling asleep, or anywhere I am with a few minutes to spare.  But don't take my other cool devices away!

Another MNB user chimed in:

I vote for “All of the Above”. My Kindle is all about reading and I read enough that I don’t mind having a device dedicated to reading alone. It just does that task better than the alternative. My iPad and iPhone have other primary functions, but it is great that they can take on the role of reader when the situation requires. Both are great multi-functional devices.

I was an early Kindle adopter, and I still prefer to read on my Kindle than any other medium. That said, I have the Kindle app on my iPad 2, my iPhone 5, and all my PCs.

The kindle sits on my night-stand, and I do most of my reading before I go to sleep. When I travel, I throw in in my briefcase alongside my iPad. I prefer it enough that I want to use it on the plane or in the airport as opposed to my iPad.

I use my iPad sometimes as a reader when I am in a business setting and waiting for something to start. I use my iPhone in situations where I am not carrying either my Kindle or my iPad: sitting in the car waiting for one of my kids to get done with whatever sport practice or event, stuck in line, waiting for the movie to start. Since getting my iPhone 5 (my first iPhone, upgrading from a Blackberry), I find that I don’t use my iPad as much as I used to. I love having all that functionality in my pocket!




Regarding HEB, one MNB user wrote:

While HEB is absolutely a great operator, I need to share a story about my mother, who has lived in San Antonio for many years.  HEB has effectively run most competitors out of town, and it frustrates my mother that she has no other option but to shop at HEB.  When she visits us in Dallas, she loves going in all the different stores (Kroger, Tom Thumb, Sprouts, United’s Market Place, Trader Joe’s, etc) to see and purchase products that HEB does not carry.  Variety and “the treasure hunt” are important to her, and with an HEB on every corner, it’s something that she misses and the San Antonio market lacks.

People will always want choices and there is only so much that one business can provide, no matter how great a merchant and operator they are.  San Antonio will welcome new competitors like Trader Joe’s, and it will actually make HEB better.




MNB user Bryan Nichols wanted to respond to another reader's comment:

I often see comments like the highlighted one below:

More ways for companies to save money by eliminating the offering of benefits to their employees and paying a lower rate of pay. We need a stable middle class in this country and we have been losing a strong middle class due to these types of moves. This economy will not survive if companies continue to eliminate full-time positions so people can earn a decent living and take care of their families. Companies are so top heavy that they can no longer afford to pay decent wages and offer benefits to the workers who face their customers day in and day out.

I realize that this is just ignorance, since most people have never worked at the top of a company.  If they did, they might be surprised to find that many organizations are very lean at the top, and the executives work very stressful and hectic 80 hour work weeks.

But there also are executives like the CEO of Abercrombie & Fitch, who seem to be more focused on their own gratification than the company's fortunes ... and they tend to hurt the image of all CEOs.




Finally, I said yesterday that if negotiations with the UFCW do not work out, Raley's "might have to try the Corbomite Maneuver."

MNB user Dave Parker wrote:

HaHaHa…The Corbomite Maneuver! I’m not much of a Trekkie so I Googled it and found a detailed plot summary of that early Star Trek episode on Wikipedia. It was like reading a textbook on negotiation skills.

Thanks for that enlightening reference and a thought-provoking analogy to the Raley’s-UFCW situation. It’s in perfect synch with your new mantra: "Think. Provoke. Laugh. Repeat."

Another MNB user captured the notion perfectly:

"Not chess, Mr. Spock. Poker!"