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: May 8, 2015

    by Kevin Coupe

    Orson Welles lives. And is crowdfunding his latest movie.

    Well, not exactly. But sort of. And it isn't just his latest movie, but his last movie.

    Let me explain.

    Orson Welles, the genius filmmaker who gave us Citizen Kane and The Magnificent Ambersons, but later in his career, unable to get film projects funded by Hollywood studios, found himself doing wine commercials and performing card tricks on Dean Martin's TV show, died in 1985. At the time of his death, he had shot 1,083 reels of film for a project called The Other Side of the Wind - he'd shot it over a series of years funding, actors and crews became available, but hadn't been able to edit it into anything watchable.

    Now, a number of filmmakers - including Peter Bogdanovich and Frank Marshall - have acquired the rights to complete the movie, and have listed the project on Indiegogo to get it crowdfunded to the tune of $2 million.

    Once they have the money, it is expected that the work will be detailed and laborious, but hardly impossible - Welles' estate has detailed notes for how the movie is to be edited, and so it seems entirely possible that this most modern of funding options will make it possible for us to see a "new" Orson Welles movie sometime next year.

    Of course, the phrase "once they have the money" is fraught with complications.

    One of the stories I read about this project indicated the $2 million is a "modest" amount, and that when producers went online looking for an identical amount to make a sequel to the movie "Super Troopers," they got it in 24 hours.

    I checked this morning, and after 24 hours of fundraising, The Other Side of the Wind only has raised $74,545 ... which tells you something Eye-Opening about modern tastes.

    If you're interested, by the way, you can check out the project here.
    KC's View:

    Published on: May 8, 2015

    The Wall Street Journal reports that the US Congress plans to consider legislation that would lessen the demands on US companies to disclose certain cybersecurity breaches.

    Under the proposed legislation, the story says, "companies would be allowed to decide whether a breach of consumer data merits notifying customers. Under the proposals, companies would need to quickly notify customers about an intrusion if they believe there is a risk that the breach would lead to serious identity theft or fraud. But if companies believe there is no reasonable chance that a breach will hurt customers, the proposed legislation would allow them to keep it under wraps."

    The story notes that the federal legislation would supersede state laws with stricter disclosure mandates.
    KC's View:
    There is a certain logic to a national standard. The Journal argues persuasively that "complying with dozens of separate requirements is costly and can slow a response when a breach occurs, experts say. Rather than dealing with a separate attorney general in every state when a breach happens, companies would mainly be answerable to the U.S. Federal Trade Commission under the proposed law."

    I'll buy that.

    However ... I just don't think that companies should get to make this decision. If data is compromised, the rules covering disclosure ought to be both specific and strict. After all, as a consumer, it is my data that is being compromised, and it ought to be a legal requirement that I need to be informed.

    I'm not saying that every company would do the wrong thing. But there will be companies more concerned with their own priorities than consumers', and they'll make the wrong decision. It'll come back to haunt them, and haunt the companies that try to make the right decisions.

    Specific and strict mandates will, in the end, be good for everyone.

    Published on: May 8, 2015

    The Wall Street Journal reports this morning that "Wal-Mart Stores Inc. is one of a growing number of big-box retailers building out their supply chains with distribution centers designed to meet the demands of online shopping. The company expects to open four such giant facilities this quarter, as it aims to triple online sales by 2018, to $35 billion from $12 billion last year ... Each of Wal-Mart’s new facilities will be more than 1 million square feet and hold 500,000 items—much larger than its traditional distribution centers for stores, which hold 30,000 to 50,000 items.

    "Wal-Mart opened an e-commerce center in Texas last year, and like that one, the new buildings will use both human labor and automation, such as computer-controlled chutes, to move items. The new centers will be part of a network for filling online orders that includes traditional buildings, plus 11 existing smaller e-commerce centers and 83 Wal-Mart Supercenters that have been designated 'ship-from-store' locations."
    KC's View:
    Man, I'm just waiting for the announcement that Walmart is launching click-and-collect at 3,000 US stores, and they'll all be online by Labor Day.

    Published on: May 8, 2015

    Fast Company has a terrific piece about Generation Z - the oldest of this group is just 18 - and what we need to know about them.

    The story says:

    "While generational research is an inherently messy process—older generations study 'the kids' to figure them out—much of the recent research is awash in normative preconceptions, biases, and stereotypes. Gen Z deserves a fairer shake, and the rest of us need a more nuanced conversation: This group makes up a quarter of the U.S. population and by 2020 will account for 40% of all consumers. Understanding them will be critical to companies wanting to succeed in the next decade and beyond."

    This generation, Fast Company writes, has "grown up in a world where their options are limitless but their time is not. As such, Gen Z have adapted to quickly sorting through and assessing enormous amounts of information. Online, they rely heavily on trending pages within apps to collect the most popular recent content. They also turn to trusted curators, such as Phil DeFranco and Bethany Mota, to locate the most relevant information and entertainment. These tools help Gen Z shrink their potential option set down to a more manageable size."

    It is really worth reading this story here, because it makes the ultimate point that it is "critical that we recognize Gen Z’s differences and meet them where they are, rather than where we want them to be. Without empathy and understanding, brands risk being filtered into obscurity. As writer Logan Pearsall Smith put it nearly 100 years ago: 'Don’t laugh at a youth for his affectations; he is only trying on one face after another to find a face of his own'."
    KC's View:

    Published on: May 8, 2015

    The Washington Post reports this morning that "the US economy added a solid 230,000 jobs in April, according to government data released Friday morning, a key sign that the labor market is regaining its footing after taking a slide earlier this year. The unemployment rate fell to 5.4 percent, a seven-year low," offering encouragement that "the nation is still hiring at a healthy pace."

    However, it was not an entirely rosy report. "The U.S. Department of Labor also revealed an even gloomier picture for what had happened in March: During that month, the nation added only 85,000 positions, the worst showing since 2012. Before the revision Friday, the March number had stood at 126,000."
    KC's View:

    Published on: May 8, 2015

    Reuters this morning reports that Walmart Canada plans to spend the equivalent of $289.4 million (US) to acquire and renovate former Target properties there, which include a distribution center and a dozen store leases.

    • As it looks to shore up its made-in-the-USA credentials, Walmart has announced another US Manufacturing Supplier Summit and Open Call, at which, it says, "We will not only offer the unique opportunity to meet with buyers across our formats during the Open Call, we will also facilitate meetings for current and potential suppliers with key state economic development officials with knowledge of available U.S. manufacturing locations. Additionally, we will offer a wide variety of workshops on doing business with Walmart. 

    The meetings are scheduled for July 7-8 in Bentonville, Arkansas.

    • The Houston Chronicle reports that Walmart has taken the unusual of denying rumors that its decision to close a half-dozen stores around the country was linked to a plan to convert those stores into "giant entrance facilities for a network of underground tunnels the military will use to transport troops across the country."

    Apparently, these rumors - and Walmart's denial - were fueled by concerns in Texas that planned military training drills in Texas were actually designed to impose martial law in the state. Those concerns have reached a kind of fever pitch as they have been repeated on certain websites and media outlets, to the point where Texas Gov. Greg Abbott apparently has ordered his state guard to monitor the activities of the military’s training exercises in the state to insure that a takeover by the federal government is not imminent.
    KC's View:
    I had trouble writing this last piece with a straight face. At a serious level, it points out the degree to which some people feel totally disenfranchised ... but it also illustrates what happens when people spend too much time listening to certain radio stations or reading conspiracy websites.


    Published on: May 8, 2015

    Crain's Chicago Business reports that MillerCoors has tapped its CFO, Gavin Hattersley, to serve as interim CEO of the company while the board looks for a replacement for retiring CEO Tom Long.
    KC's View:

    Published on: May 8, 2015

    Got the following email from an MNB reader concerned about some of the things other readers have been saying (negatively) about the new Haggen stores:

    I have never worked in a grocery store but I have been in quite a few so I think that makes me an expert (haha).  I think people are being hard on Haggen. I can’t imagine the amount of work involved in changing over the sign on the front of the store let alone the signs and the shelf tags inside the store.  Asking them to change the lighting overnight is expecting too much. When a store does a remodel and changes where things are, I get a little frustrated because I can’t quickly find what I want.  It is now unfamiliar to me.  I think we should give Haggen the benefit of the doubt and give them time to chew a little bit of the big bite they just took on.  They have just forked over a ton of money for the increase in store count and now they need time get settled.

    All true.

    Except that, as one reader said, one rarely gets a second chance to make a first impression. And it may be that an expansion and transformation of the size that Haggen is attempting may be ill-conceived.

    On another subject, one MNB user wrote:

    I find myself at an awkward crossroad. On the one hand, I agree with scientists when it comes to climate change and the need for vaccines. On the other hand, I just can’t buy into the GMOs-are-perfectly-safe thinking. There’s been a plethora of GMOs-are-safe info flooding the airwaves of late, and some of the speakers have caused me to question my own assumptions — mostly because the speakers seem legit and because I’m not close-minded. I’d like to hear from scientists who aren’t tied to Big Ag, who are neutral in this discussion. I'd still support labeling and may still think that more time is needed (after all, the discussions around climate change and vaccines have been going on for decades at this point), but neutral reports would go a long way in helping me — and I’m sure other people — reconcile the dichotomy of rejecting science in one area while accepting it in others.

    And regarding "Deflategate," I got the following email from MNB user Tim Pramas:

    I am writing in reaction to your take on the Wells Report ("Report").  With respect to Mr. Brady, the Report vaguely references that "he was generally aware of" something, and then condemns him for this "general awareness."  But the specifics of what he was "generally aware of" are in short detail in the Report.

    The Report references that in October, 2014 Mr. Brady was upset that balls inflated to 16 psi (well-above the maximum allowed of 13.5 psi) were used in a game the Patriots won against the Jets (where Mr. Brady threw three touchdown passes).  He then communicated with an equipment person to make sure the game balls were inflated toward the lower range of allowed psi (12.5 being the minimum allowed psi).  His interest in the inflation pressure of game balls is not atypical of other NFL quarterbacks, past and present, who also communicate with equipment personnel about their preferences for the inflation of game balls (some quarterbacks prefer a higher psi, some a lower psi). There is no evidence of any prior awareness on Mr. Brady's part, general or specific, that an equipment person may have deflated game balls right before the AFC Championship to a level slightly below 12.5 psi.  To suggest that he needs to "act like a man" (whatever that means) and "stand with the" equipment manager presupposes some similar level of culpability that not even a most pessimistic view of the evidence supports.  Also, there is no mention in the Report of anyone communicating with Mr. Brady by e-mail so your reference to him not turning over e-mails is unclear.  

    The Patriots defeated the Colts by a final score of 45-7.  In the second half, using balls re-inflated at halftime, the Patriots outscored the Colts by a margin of 28-0.

    I'm not arguing that the Colts would've won. But I think there was cheating going on ... and it remains inconceivable to me that low level employees would have touched those balls without Brady's approval or at least tacit knowledge.

    I understand that many Patriots fans are in denial. But I feel very strongly about this stuff - I hate cheating by professional athletes, mostly because it sends such a horrible message to kids. I hated it when Pete Rose gambled on baseball, I hate it when athletes do steroids, or when they cork their bats, or do something that affects the ball.

    Here's the deal. If this happened to someone on a team I rooted for, I would call for even tougher penalties ... because I'd feel betrayed.

    Don't do the crime if you can't do the time. (And, of course, keep your eye on the sparrow...)

    KC's View:

    Published on: May 8, 2015

    One of the my great pleasures this week was to spend time with the Greater Philadelphia chapter of the Network of Executive Women (NEW), which met at Campbell Soup headquarters for a networking event which included me giving a presentation based on our book, "The Big Picture: Essential Business Lessons from the Movies."

    The highlight for me, however, was the chance I had to do on onstage interview with Maggie Wilderotter, the executive chairman of Frontier Communications and a woman with a long and distinguished resume as a corporate executive. (She also happens to be the sister of Denise Morrison, Campbell's CEO.)

    Wilderotter is a remarkable woman, and one of the things we had a chance to chat about was the notion that while conventional wisdom suggests that women have made great strides in the workplace, there also is evidence that things have not come as far as one might think. There is NEW research suggesting that in the retail/CPG space, the percentage of women executives has not grown significantly, and we agreed that the controversy about Bud Light's ill-conceived label (describing the it as "the perfect beer for removing ‘no’ from your vocabulary for the night," demonstrating a tone-deafness about rape concerns) reflects a broader and sometimes pervasive mentality. Wilderotter emphasized that while it is important for companies to invest in women employees, it also is critical for women to do the hard work and networking necessary to position themselves for advancement and positions of growing responsibility.

    One of the real surprises of the evening was finding out that Wilderotter is a movie fan, and not only did she have a favorite movie with a business lesson, but a story to go with it.

    The movie, she said is Secretariat and she told a story about how, in 2011, she wrote an email to every employee at Frontier. It was her birthday, she said, and she was on an airplane and had just watched that 2010 movie and was prompted to talk about how the movie addressed issues of focus and commitment, of coming back from disappointments and reversals, and how in business, people are running a kind of long race ... and that all the pieces need to work together if success is to be achieved.

    Wilderotter had saved the email and read the email to the audience, telling them that Frontier's employees responded to the metaphor - she got 11,000 responses.

    Wow. A great business lesson from the movies.

    The best business lesson from Avengers: Age of Ultron, I think, is that the folks at Marvel really know how to make these kinds of movies. They're big and noisy, but they aren't stupid and they also offer considerable pleasures. At its core, Ultron is the Frankenstein story revised for a modern audience - a scientist decides to create a kind of new life form, but his best intentions go awry as the creation decides to obliterate the planet.

    The business lesson is one we've talked about before: just because you can do something does not mean you should do something. But there's also another one: when you make a mistake, take responsibility, and fix it. You cannot and should not run away from it.

    Part of what makes all this work is the knowing and wry writing and direction by the great Joss Whedon, and committed performances by the likes of Robert Downey Jr. (as Tony Stark/Iron-Man), Chris Evans (Steve Rogers/Captain America), Mark Ruffalo (Bruce Banner/Hulk), Scarlett Johansson (Black Widow) and Jeremy Renner (Hawkeye) and James Spader (Ultron).

    One of the fun things about this movie is that Whedon toys with our expectations, fulfilling them in some cases and challenging them in others. While this is by no means my favorite genre, I have to admit that I was happy to see it on the opening weekend, in 3D and IMAX ... and I'll be back when the next Marvel movie comes out.

    Because these guys really know how to make these movies.

    That's it for this week. have a great weekend, and I'll see you Monday.

    KC's View:

    Published on: May 8, 2015

    The Dallas Morning News reports this morning that the Blue Bell ice cream company "knew of Listeria findings at its Oklahoma plant as early as 2013, according to an extensive report issued Thursday by the U.S. Food and Drug Administration. That was two years before another Listeria finding prompted the Brenham-based ice cream maker to launch its first recall in 108 years."

    The FDA report says that "at Blue Bell plants in Texas and Oklahoma, the company failed 'to manufacture foods under conditions and controls necessary to minimize the potential for growth of microorganisms'," the News reports.

    The story goes on: "The company did not issue a recall until March 13. That came after tests by a health worker in South Carolina found Listeria strains in Blue Bell products that matched Listeria strains from five hospital patients in Kansas who had become ill earlier. Ten illnesses, dating to 2010, have been linked to Blue Bell products. The federal report shows that the company knew it had a Listeria issue long before it alerted the public."
    KC's View:
    You can read the whole, damning story here.

    The story notes that Blue Bell is now saying that it will take months to clean things up and get back on store shelves. I wouldn't bet the ranch on that ... I think that this story suggests that Blue Bell may be done, and that there may be executives hiring lawyers today in hopes of avoiding jail.

    As always in these cases, they should go to jail, and survive there on a steady diet of Blue Bell ice cream.