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    Published on: November 24, 2015

    by Michael Sansolo

    Sitting in a traffic jam last week in Rio de Janeiro, I spied a stark reminder of how technology is changing and shrinking our world. There on the dashboard was my driver’s cell phone, clearly displaying Waze, the exact same application I use in the US for traffic guidance.

    When I mentioned this coincidence at the meeting I was attending in Brazil, a colleague from Singapore remarked that Waze is incredibly popular in his country too. The Waze combination of social networks, local information and mobile technology works everywhere.

    With that in mind I urge you all to watch two extraordinary reports from 60 Minutes this past Sunday. Both demonstrated the incredible pace of change in our world and the need for new approaches to a range of challenges.

    First, watch the segment about active shooter situations—from US schools to the recent Paris tragedy—to understand how police departments are rethinking their approach to such incidents. It will both terrify and educate you and will clearly demonstrate the need for new approaches to emerging challenges. Experience matters, but the ability to think in new ways about the most horrifying of problems has never been more important.

    Incredibly, retailers may find even more to consider from a latter segment on the emergence of electronic money in Kenya. This second report will have you wondering if US retailers might yet find an alternative to the endlessly destructive relationship with credit card companies.

    The Kenyan system, called M Pesa, has shockingly changed the rural economy of Kenya, enabling even those with little money or access to banking to jump far ahead of far more advanced nations. Created by the largest telecommunications companies in Kenya, M Pesa essentially relies on simple—not smart—cell phones to let Kenyans pay for an incredible range of products and services with electronic money.

    As 60 Minutes showed, Kenyans can convert the currency they have to M Pesa at a range of locations, including small shops or even public restrooms. (Pesa, by the way, is the Swahili word for money.)

    An official from the primary telecom company, Safaricom, likened the system to Uber ride sharing or Airbnb hoteling. In short, M Pesa leapfrogs the existing banking system with a solution that is creative, simple and largely works well for everyday consumers.

    To be fair, it is not a perfect system. While M Pesa is widely praised in Kenya, there are reports of fraud, corruption and problems. Like Uber and Airbnb, progress is coming with speed bumps. But those issues aside, the M Pesa is helping Kenyans improve their lives in countless ways.

    The Safaricom official explained that the finance community in many other countries uses every possible method to thwart such new and creative approaches and, no doubt, the US would be on that list. Yet the creative approach to this issue in Kenya merits understanding at the very least, especially when given the endless rounds of retail-finance lawsuits here.

    There may be no similar approach available in the US. However, the benefit of considering new approaches and solutions is never wasted, no matter what the issue - be it finance, security or whatever may come our way.

    Sadly, even Waze can’t guide us through everything.

    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 on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: November 24, 2015

    by Kevin Coupe

    Volkswagen continues to offer object lessons in how to subvert brand equity, how to mismanage a crisis, and why every business leader needs to watch Jurassic Park.

    The brand equity issue? Well, the Financial Times reports this morning that Volkswagen-owned Audi "has conceded that the engines in a further 85,000 cars ... contained an illegal defeat device, raising questions of how systematic the cheating was at the German carmaker."

    According to the story, "admitted that the software was in all three-litre V6 diesel engines manufactured by Audi and sold from 2009 until this year."

    The crisis mismanagement? "The admission further undermines VW’s insistence that the cheating in the two-month-old emissions scandal was limited to a rogue group of engineers," FT writes. "The German carmaker has already admitted installing a defeat device in 11m diesel cars worldwide.

    "It is also facing a third emissions problem after disclosing that 800,000 cars, including some with petrol engines, had been sold with the stated carbon dioxide levels as too low and the fuel efficiency too high."

    In other words, it lied. And then kept lying about the lies.

    The story not only won't go away but continues to get worse.

    I don't know about you, but when I see VW and Audi commercials on TV, I have to laugh. Who would believe anything these people say?

    Longtime MNB readers know exactly why we believe that every business leader needs t watch Jurassic Park ... it is for the movie's essential business lesson ... that just because you can do something doesn't mean you should do something.

    Keep watching the VW debacle. It is an Eye-Opener ... albeit for all the wrong reasons.
    KC's View:

    Published on: November 24, 2015

    The Hill reports that Democrats in the US Senate and House of Representatives have introduced food labeling overhaul legislation that would require the Department of Health and Human Services (HHS) to "create a single standard for front-of-package labeling required for all food products."

    According to the story, "the bill also directs HHS to develop new guidelines that define when the words 'healthy' or 'made with whole grain' can be used and force manufacturers to list percent daily values for calories and sugar, as well as the amount of sugar that is not naturally occurring, on the Nutrition Facts label."

    The story goes on: "The Food and Drug Administration has proposed updating the Nutrition Facts label to require information about 'added sugars' and is considering making calorie and serving size information more prominent. The agency recently asked the public to comment on when the word "natural" should be allowed on food products ... The Food Labeling Modernization Act aims to streamline those changes by overhauling the nation’s food labeling requirements."

    The bill has been proposed in the House by Reps. Frank Pallone, Jr. (D-N.J.) and Rosa DeLauro (D-Conn.) and in the Senate by Sens. Richard Blumenthal (D-Conn.) and Edward Markey (D-Mass.).
    KC's View:
    It is unclear to me how this legislation would create a system that is preferable to the "Facts Up Front Front-of-Pack Labeling Initiative" that has been spearheaded by both the Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA) ... except, of course, that it would be mandatory.

    I do, however, see the value in starting to develop a regulatory framework around how certain words can be used.

    I'm not sure that the name of the bill, which trades on the bipartisan Food Safety Modernization Act, is necessarily the best way to go, however ... there may be some buyer's remorse on that one in certain political circles - though I'd argue that such remorse is absurd.

    Published on: November 24, 2015

    The Associated Press this morning is out with a story saying that while the Global Energy Balance Network (GEBN) has been saying that $1.5 million donated by Coca-Cola had no influence over its approach to combatting obesity, emails show that Coke "helped pick the group's leaders, edited its mission statement and suggested articles and videos for its website." Coca-Cola even influenced the design of the organization's logo, mandating that it not be blue - the color associated with its rival, Pepsi.

    In exchange for the $1.5 million, the emails suggest, GEBN was willing to bend its approach and perspective on how to manage the obesity crisis, focusing on exercise rather than calorie consumption. And Coke was engaged in a level of micromanagement that has not been evident to this point.

    The AP story notes that Coke, looking to minimize the public relations damage, has "accepted the retirement of its chief health and science officer, Rhona Applebaum, who initially managed the relationship with the group. It said it will not fill the position as it overhauls how it goes about its health efforts. It also said it has stopped working the Global Energy Balance Network." And CEO Muhtar Kent tells the AP that "it has become clear to us that there was not a sufficient level of transparency with regard to the company's involvement with the Global Energy Balance Network ... Clearly, we have more work to do to reflect the values of this great company in all that we do."
    KC's View:
    With all due respect to my friends at Coke, this is not just a case of insufficient transparency ... it is a case of improperly exerting influence over an organization that is presenting itself as a scientifically objective resource. In doing so, both Coke and the GEBN manage to dilute their influence and credibility.

    It's tough to get caught with your hand in the cookie jar, so to speak ... and this ought to be an object lesson to every company that thinks it can get away with this kind of stuff. You're gonna get caught, and it is gonna come back and bite you. And when that happens, it is going to hurt.

    Nobody spends $1.5 million on anything without expecting results. And fealty. And even, sometimes, ethical flexibility.

    Published on: November 24, 2015

    The New York Times reports that "the Federal Aviation Administration, scurrying to prepare for hundreds of thousands of more drones flying into the air, released a list of recommendations for how to better monitor recreational use of the machines. Under the proposal, most drone owners would have to register the machines with the federal government, which would place the information in a national database, the first such requirements.

    "The recommendations, from a task force created by the agency, would be the biggest step yet by the government to deal with the proliferation of recreational drones, which are usually used for harmless purposes but have also been tools for mischief and serious wrongdoing, and pose a risk to airborne jets."

    The story goes on: "The government already has rules that limit the use of drones for commercial purposes, like delivering packages. But attention has turned to recreational use more recently, as drones, many of them the size of a laptop computer, have emerged as a must-have item for thousands of people. The Consumer Technology Association, a trade group, has estimated that 400,000 drones will be sold this holiday season in the United States."
    KC's View:
    Maybe I'm wrong about this, but I'm a lot more concerned about recreational use of drones than I am about commercial use. I think companies like Amazon, Walmart, Google, FedEx and UPS, if they get into the drone delivery business, are going to create infrastructures designed to prevent accidents and miscues. These efforts won't always be successful, but there will be a structure.

    Not so much with ordinary people who fly drones. I don't have much more confidence in them than I do in the clowns who seem to get arrested with some frequency for shining laser beams into the cockpits of airliners. The FAA can establish rules and regulations and terms of accountability, but there always will be some idiot who will do the wrong thing for the wrong reason at the wrong moment.

    Published on: November 24, 2015

    The New York Times has an interesting piece about the market for imperfect produce. An excerpt:

    "'We find that it is really easy to convince people when they realize they can pay a fraction of the price to get the same kind of taste and health,' said Ron Clark, the chief supply officer for Imperfect Produce, a San Francisco Bay Area start-up that has been selling what it calls 'cosmetically challenged' fruit and vegetables for the last six months. 'Once one person is convinced, it doesn’t take much to get them to convert others'."


    "In some parts of the Bay Area, where farmers’ market shopping is the norm and a $10 heirloom tomato hardly raises eyebrows, the notion that produce can be slightly discolored or oddly formed hardly seems like a tough sell. But Mr. Clark and his colleagues have not had an easy time of convincing mainstream supermarkets that their produce should fill the aisles."

    You can read the entire story here.
    KC's View:

    Published on: November 24, 2015

    Reuters reports on its new survey that 51 percent of US consumers "plan to do most of their online shopping at Amazon this holiday season, compared to 16 percent at Walmart, 3 percent at Target and 2 percent at Macy's. A little more than a quarter of respondents said they would use another retailer not listed in the poll."

    The results, Reuters writes, "underscored the hurdles that traditional retailers faced in expanding online."

    Fortune reports that Amazon has announced the expansion of its Prime Now same-day delivery service to San Diego and Nashville. The expedited service is available to Prime members who pay $99 a year; two-hour delivery of "tens of thousands of items" is available for free, while one-hour delivery costs $7.99.
    KC's View:

    Published on: November 24, 2015

    • Activist group OUR Walmart has announced that "on Black Friday, November 27, protests will take place from coast to coast outside of Walmart stores as workers and allies demand that the company increase wages and hours ... The Black Friday actions will be taking place in cities including: New York City, Tampa, Washington, DC, Miami, Chicago, Minneapolis, Los Angeles, Oakland, Sacramento, Seattle, Portland and Detroit."

    OUR Walmart says that this is its fourth year of Black Friday actions against the retailer.
    KC's View:

    Published on: November 24, 2015

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

    • The Los Angeles Times reports that, as expected, "the private-equity owners of Petco Animal Supplies have reached a $4.6 billion deal to sell the retailer to CVC Capital Partners and the Canadian Pension Plan Investment Board ... CVC, a private equity group, and the Canadian pension fund beat a joint offer from buyout firms KKR & Co. and Hellman & Friedman."

    The sellers, TPG Capital and Leonard Green & Partners, have bought and sold Petco twice. The first time was in 2000, when they acquired the retailer for $600 million, and then took it public two years later. Then, they bought it back in 2006 for $1.68 billion."

    • The Wall Street Journal reports that "lycopene, a compound in red fruits and vegetables linked to a lower risk of various cancers, may help to prevent bone loss after menopause, according to an animal study published online in the journal Bone.

    "Daily lycopene supplements significantly increased bone density in rats without ovaries compared with controls that didn’t get lycopene. Bone density in lycopene-treated rats was similar to rats given bisphosphonates, drugs used to treat osteoporosis in people."

    And, in an expected bonus, "estrogen and other sex hormones increased in lycopene-treated rats compared with controls, the study found."

    • The Wall Street Journal reports that an animal rights group called Direct Action Everywhere is releasing a video that it says "shows inhumane treatment of turkeys at a supplier to Whole Foods Market Inc. —an allegation the farm and the grocery chain dispute."

    The video is said to show "abuses that run counter to the animal-welfare claims by the company, Diestel Turkey Ranch, and the standards championed by Whole Foods," including "birds with dirty, matted feathers and others with visibly swollen eyes and other body parts. It also shows a turkey carcass decomposing among other birds."

    Whole Foods says that the video does not show conditions as they actually exist, and Diestel Turkey Ranch says that "the video is misleading because it focuses on a narrow snapshot in time."

    Helluva snapshot. I'm not saying the video is accurate, but I am curious exactly when in the process of raising turkeys such conditions are even momentarily acceptable. Details to come, I'm sure.
    KC's View:

    Published on: November 24, 2015

    Responding to yesterday's story about Fresh Market's competitive, financial and image problems, MNB user Mark Delaney wrote:

    Funny - shortly after I read your piece on Fresh Market my wife came home and asked "why would I go to Fresh Market?". One recently opened near our home on Long Island and while we do have reasonably good choices when it comes to food retailers ( though a Wegmans would be nice - hint, hint  ) we often talk about how produce and healthier options are often a challenge. On the other hand a couple of months ago when corn was in season I walked into that same store looking for some and could not find any. When I spoke to a stock person they told me they had plenty in the back but has nowhere to put it on display. Really? On that same trip my daughter got a slice of pizza at no charge because the machine they use is not fast enough. Kudos to them for comping the pizza but it would seem there are some basic issues at play. Mr. Anicetti may have his work cut out for him but perhaps some good old fashioned block and tackle merchandising work will allow me to answer my wife's question.

    From another reader:

    I couldn't agree with you more regarding Fresh Market.  I think they have a bit of an identity crisis.  Until recently I lived close to their store in Montvale, NJ (ironically in the "backyard" of A&P's headquarters) and it was never on my radar to go there, even though it was of a similar distance to a rather large Whole Foods market, and the local and excellent Market Basket - both similarly upscale in their offerings and pricing, with interesting choices for a Foodie - IMHO.
    I had gone twice to the Fresh Market store.  It was beautifully merchandised and had friendly staff, but it just never came up as a shopping option for me.  And until I ventured in I wasn't really sure what to expect...and once inside I was pleased by their prepared food offerings as well as the fresh fish and produce available.  It was also relatively empty
    A little self promotion by Fresh Market would go a long way towards establishing a face to the consumer and reminding those of us who know and like them, that they are an available choice ...

    MNB user Rick Charles wanted to chime in on the CVS discussion:

    You are correct on CVS, they have terrible customer service.  You did not address the Pharmacy department.  They are even worse.  They seem to be out of stock on the most basic items and have to order from the warehouse and takes days to get your order.  They text me that my refills are ready and when I go to pick up, they can’t find the order.  My son has Crohns disease and we turned in a prescription and went to pick it up, the prescription was lost.  I asked how that can be.  The counter where I turned in the prescription is 10 feet from the Pharmacist.  Just 10 feet and it was lost.  Had to contact doctor to send new prescription.  They are the worst.

    And, regarding Chipotle's continuing food safety issues, one MNB user wrote:

    I was also sorry to see Chipotle's food safety issues flare up again.

    I enjoy their food and their mission - the Scarecrow video that you highlighted a few years ago speaks volumes about why so many consumers are fanatical about their brand.

    I thought they handled the first outbreak very well and appeared to be transparent throughout. Now this second round will cause many customers to stay away, as you noted.

    We live in Minnesota, not far from one of the locations that was reported. My kids were with us over the weekend and we decided to get Chipotle for dinner - in part because we all love the food, in part because we wanted to support Chipotle in these difficult times.

    I hope they are able to figure this out and correct it quickly.

    From another reader:

    I lost all faith in Chipotle when I found my burrito bowl to contain uncooked chicken(not partially cooked). I didn't get sick. Fortunately, I figured it out after a bite. Visually, it was difficult to see the problem since everything is blended together. The uncooked chicken was camouflaged.

    The staff was rushing to take care of the throng of customers and they missed the mark big time. My stomach still flips when I think of the experience. Don't think I'll ever go back.

    And MNB user Ken Wagar wrote:

    My family are big fans of the food, the choices and the service at Chipotle, but I have never been a fan of their attacks on "factory farms" and their holier than thou attitude toward the people who work hard to help feed the world. Now they seem to be getting their payback for that attitude. A little more focus and a lot more science needs to be put on their small, fresh, natural food suppliers who also run the risks of contaminated or pathogen carrying food and ingredient items.

    A clear focus on food safety and wholesomeness should not require attacks on others but rather working together to solve such problems. I hope there are lessons learned, such things can happen to anyone at any time and can be compounded by dealing with a large number of small unrelated suppliers just as such problems can explode quickly when dealing with a single large supplier. The issue should be safety first.

    Finally, addressing my contention yesterday that technology and e-commerce have rendered things like Black Friday and Cyber Monday irrelevant, convenient more as business constructs than as consumer tools, one MNB user wrote:

    I bought a 50 inch TV today on line. I used the Black Friday ad from a major chain.  Free delivery and no shopping on Black Friday.   I paid $300 less than my son paid for the same TV, at the same chain, three months ago.
    Who needs Black Friday or Cyber Monday?

    KC's View:

    Published on: November 24, 2015

    In Monday Night Football action, the New England Patriots defeated the Buffalo Bills 17-10.
    KC's View: