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    Published on: December 17, 2015

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.

    It's the holidays, and we're all sending and receiving packages and hoping things will arrive on time and trying to decide whether to use FedEx or UPS or the post office, and hoping that when somebody else makes that choice, it'll end up being the right one.

    We've had several stories lately about how delivery companies want to avoid the problems of past years. As so often seems to happen, they've geared up for higher volume, but it is higher than expected, and so a week before Christmas, they're trying to keep up. All of which is why Amazon is trying to figure out how to take increasing control of its distribution systems ... they're simply not confident in the companies with which they're doing business.

    But I heard a story the other day that would make me worry a lot more about at least one of those delivery companies ... at a lot more granular level.

    My youngest brother, Tim, told me a story about how he was having trouble with FedEx. He was having trouble getting a package delivered to the right address, but the details of the story really aren't important. He was in a FedEx store, trying to reason with the person behind the desk, trying to explain why and how to fix a problem that was not of my brother's making.

    And that's when the FedEx employee dropped the bomb. He explained his resistance to fixing the problem this way: "It's not my package," he told my brother. "It's your package."

    Wow.

    In my mind, that's exactly the wrong thing to say. If you work at FedEx - whether you are at headquarters or in a truck or working behind a counter - it seems to me that it is your job to act like every package is your package.

    And here's the kicker. The guy talking to my brother was the manager. If that's the message he's sending customers, imagine how he's poisoning the minds of his employees.

    It isn't just FedEx.

    At some level, if you work for a supermarket, you ought to be acting like every product you sell is going to be used for a meal being served at your table.

    If you are in a service business, it is your job to provide service. Not to act as if you're doing someone a favor just by tolerating them.

    I'm appalled by the statement by the FedEx guy, but I don't think he's alone. Not by a long shot. I think it may be more typical than any of us would like to admit, and I think most of us can conjure up the last lousy service experience we had ... and it probably was recently.

    The question is what do people and companies do about it.

    The beginning of the answer is to create a culture in which people understand that they have to treat people's packages like they are their own.

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

    KC's View:

    Published on: December 17, 2015

    by Kevin Coupe

    At a time when airline travel seems to be more problematic than ever - at least in part because major airlines have merged and now are doing everything they can to squeeze every bit of profit they can out of travelers with a sardine can-like experience and costly fee structures that soak their customers - it appears that at least one facet of such travel is improving.

    The part that takes place ob=n the ground.

    United Press International reports that a new JD Power study says that "a major cultural shift" seems to have occurred, with airports improving their part of the experience to the extent that "travelers who passed through U.S. airports in 2015 may be the most satisfied they've ever been."

    According to the story, "Researchers said the survey, conducted between July and October, focused on six factors -- terminal facilities, airport accessibility, security, baggage claim, check-in/baggage check, and retail amenities. And the report indicates travelers are happier than ever with their experiences in those elements." The airports that have responded to consumers' desire for a better experience "by offering a variety of food, beverage, merchandise, and other attractive services and amenities are realizing significant gains in overall customer satisfaction."

    The UPI story goes on to say that "Among large U.S. airports, Portland International Airport was rated the highest with an overall score of 791 out of 1,000. Tampa International was second (776) and McCarran International in Las Vegas (759) third. Orlando and Salt Lake City rounded out the top five.

    "Among medium-sized airports, Dallas Love Field and Southwest Florida International Airport in Fort Myers tied for the No. 1 spot -- each with a score of 792. Indianapolis (789), Raleigh-Durham, N.C., (789) tied for third and Jacksonville, Fla., (787) was fifth.

    The worst-rated medium-sized airport was Cleveland Hopkins International Airport, which received a score of 698. The lowest-rated large-sized airport was New Jersey's Newark-Liberty International Airport, with a score of 646. Chicago's O'Hare and Los Angeles' LAX -- the third- and second-busiest airports in the United States -- also scored in the bottom five with 680 and 670, respectively."

    And while it is not mentioned in the UPI story, I checked and - no surprise - the hell hole known as LaGuardia Airport in New York City is the second worst rated large airport in the country.

    The JD Power study also mentions the things that seem to make the biggest difference to consumers, like a speedy and efficient security setup, and clean gates. And while "ample electric outlets" does make the list of required amenities, free and speedy wi-fi does not ... which surprises me.

    One of the interesting things about this is that most airports don;t face competition ... it isn't like if you are flying from one place to another that you have a lot of choices. And it isn't like most customers have other travel options ... the majority of travelers can't choose between air, rail and car travel when making their plans.

    But still, the airports seem to realize that turning their facilities into compelling, entertaining, option-rich experiences makes sense, especially if they want to grow their broader sales and profits.

    I often travel between New York (using either LaGuardia or Newark) and Portland, Oregon ... and there is no question that one end seems like it belongs in the third world, while the other actually seems like it belongs in the 21st century. (It helps in Portland that the light rail system runs right to the airport; one can walk out of the airport, hop on a train and be downtown in about 30 minutes for $2.50.)

    There is, I think, an Eye-Opening lesson here for retailers ... that they should never underestimate the importance of the actual experience. It needs to be efficient, but it also often will perform even better if it is effective and entertaining and even aspirational.
    KC's View:

    Published on: December 17, 2015

    The New York Times reports this morning that "Congressional negotiators introduced a sweeping year-end spending and tax-break package Wednesday that bursts through previously agreed budget limits with $66 billion in new spending for 2016. It also makes permanent an array of tax benefits at a cost of adding more than a half-trillion dollars to the deficit.

    "The legislation, which President Obama is expected to sign, showed Republicans and Democrats reluctantly bowing to the unsatisfying realities of a divided government.

    "In the end, a compromise emerged that allowed all sides to claim some victories, but with success often measured not in what was achieved but in how well each side prevented the other from reaching its goals."

    Among the goals that were reached - and were applauded by lobbying groups such as the Food Marketing Institute (FMI) was budget language ensuring "that supermarkets have the benefit of understanding the U.S. Food and Drug Administration guidance on how to label items not on a menu for one full year before they have to comply with the cumbersome menu labeling law. Tying compliance requirements to the publication of FDA’s guidance for menu labeling alleviates some of the urgency supermarkets expressed in having to make implementation decisions under a cloud of confusion. This also gives FDA time to fix some of the problems before implementation.”

    In addition, FMI says, it is happy that "Congress will help avert $1 billion in devastating retaliatory tariffs by repealing mandatory Country of Origin Labeling (COOL) requirements for beef and pork products that were in violation of World Trade Organization trade standards.”

    However, FMI did express disappointment that "lawmakers did not include a federal standard for GMO labeling," but it expressed optimism that this will be addressed by lawmakers in the near future.
    KC's View:
    Wow. Compromise. Not a word one hears a lot about in politics and governing anymore.

    To be sure, not everybody is happy. Far left Democrats and far right Republicans apparently are expressing their dissatisfaction with the deal and their intention to vote against it. (Easy to do, since its passage seems to be assured ... so it isn't like voting against it will do anything more than enhance their credentials to likely already gerrymandered districts. But maybe that's just my cynicism speaking.)

    Mario Cuomo once said that "you campaign in poetry; you govern in prose." This deal seems like prose, but at least governing goes on.

    Published on: December 17, 2015

    MarketWatch reports that Whole Foods says that speculation that it is looking for a buyer so it can go private are unfounded.

    "Recent rumor and speculation regarding the possibility of Whole Foods Market going private are exactly that – just rumor and speculation,” says spokesperson Michael Silverman.

    And co-CEO John Mackey says much the same thing: "I don’t know where all these ‘going private’ rumors come from ... We don’t have any announcements. We are not working on anything. It’s just rumors….It’s rumor and speculation.”
    KC's View:
    This sounds suspiciously like a "non-denial denial." It sounds definitive, but if they announced a go-private deal next week, it isn't like anyone will be able to accuse them of actually lying.

    But maybe that's just my cynicism speaking.

    Published on: December 17, 2015

     Money reports that cybercrooks have infiltrated Safeway stores in California and Colorado with card "skimming" scams that have affected a number of customers.

    "Skimming," the story explains, is when "criminals scan and store card data, usually via small devices, and then use the accounts for their own purposes."

    Safeway has confirmed that it is investigating skimming incidents in a number of stores, but has not said how many or the extent of the hacking.

    Security expert Brian Krebs first reported the breach on his website, and Safeway spokesman Brian Dowling responded, “We have an excellent track record in this area. In fact, we inspect our store’s pin pads regularly and from time to time find a skimmer, but findings have been limited and small in scale. We immediately contact law enforcement and take steps to minimize customer impact.”
    KC's View:

    Published on: December 17, 2015

    Internet Retailer reports that a new study by Kantar Media. Millward Brown Digital and Unmetric reveals that during November, before Thanksgiving, Amazon's daily "share of attention," or time spent on the site, was close to 35 percent, compared to nine other retail websites (including Walmart, Target and Best Buy) that totaled 13 percent.

    According to the story, "Site visit patterns shifted on Thanksgiving. Amazon’s share of attention increased about 6% that day, but other retailers with smaller online consumer bases experienced 100% jumps, including Best Buy, Nordstrom Inc. (No. 19 in the Top 500) and JC Penney Co. (No. 37), the study says. Patterns changed again on Black Friday, the day after Thanksgiving, with share of attention for most sites, including Amazon, dipping from Thanksgiving Day but still above pre-holiday benchmarks."

    “Amazon’s ability to grow share of attention, hold it through the core five-day period and maintain its already significant advantage versus primary competitors during the core four-day stretch is a noteworthy achievement,” the study says. “Even on its slowest day (Black Friday), it had an 8:1 advantage in share of attention versus its nearest competitor and more traffic than the combined total of the other nine retailers we studied.”
    KC's View:
    To me, what this study seems to indicate clearly is that Amazon has become a habit with most online shoppers ... it is part of the everyday process, a constant presence in their lives, and always an option for many or most purchases.

    Which sounds a lot like these shoppers have bought into Amazon's ecosystem strategy.

    Published on: December 17, 2015

    Ahold-owned Giant Food Stores, based in Carlisle, Pennsylvania, announced yesterday that it is launching a "new fresh meal kit program at its Camp Hill and Hampden Township stores. Available in the Deli or Prepared Foods departments, each kit features pre-measured fresh ingredients to make two servings of the selected meal as well as step by step instructions."

    The company said that "the cost for one kit, which serves two people, is $14.99 and two kits to serve four people is $24.99. In addition to being available at the Camp Hill and Hampden Township stores, Peapod customers in the Harrisburg, PA and Jersey City, NJ areas can also order the kits for delivery. The fresh meal kits will debut in an additional ten GIANT stores in the greater Philadelphia area in late January 2016."
    KC's View:
    Interestingly, Entrepreneur is out with a story saying that while "home delivery of freshly prepared meals, meal kits and provisions took off in 2015, with dozens of new ventures kicking into gear, each with its own spin on convenient, healthful food," the industry should "get ready for a shakeout in 2016: Too many concepts supported by too little market research have been funded with too much money."

    Even if this is true, I think there is plenty of room for companies that bring differentiated alternatives to the consumer, occupying specific niches that make them relevant to a specific customer base. Me-too offerings likely will proliferate, but they'll fail ... as they should.

    Published on: December 17, 2015

    Vox has an interview with journalist and food advocate Michael Pollan, best known for "The Omnivore's Dilemma" and "In Defense of Food," in which he talks about the country's "screwed-up" relationship with food.

    An excerpt, in which Pollan addresses new dietary guidelines scheduled to be released by the US government:

    "It’s very important to keep an eye on the big picture. Eating real food is the most important thing you can do if you’re concerned about your health. The precise amount of various nutrients really is not going to make a difference. Those very specific recommendations are probably most useful to institutions that need to conform their feeding programs to federal standards — like the school lunch program.

    "[The recommendations] are also important to the industry, which loves nothing better than to launch another conversation around nutrients because that leads to opportunities for new health claims. For example, if this time around 'added sugar' becomes a food category, which it hasn’t been in the past, it’ll be an opportunity for foodmakers to boast about how little added sugar they have in their products. But that won’t turn unhealthy food into healthy food."

    Interesting piece ... and you can read it here.
    KC's View:

    Published on: December 17, 2015

    Digiday reports that Mondele z has a goal of reaching $1 billion in annual, direct e-commerce sales by 2020. Right now, the story says, "it’s at about $100 million in annual online sales, meaning it’s shooting for a tenfold increase in four years."

    However, that would just be a sliver of total sales at Mondel ez - or three percent , to be exact.

    According to the story, "For Mondel ez, it helps that, according to Nielsen, more than half of consumers said in 2015 that they were willing to shop for groceries online. The average cart size of those shopping for grocery items online, through services like PeaPod and Amazon, is between 25 and 50 items, and according to O’Gorman, the goal for Mondele z is getting the impulse buy. The company will use programmatic ads to suggest a few more of their products to complete a recipe, like Oreos and Philadelphia Cream Cheese to make a cheesecake, on top of the items already in their cart. Recipes, in general, are a major part of Mondele z’s online approach."


    • Eleven-store retailer Sendik's Food Markets has announced that it has adopted the Freshop e-commerce solution for all of its stores. The company using using a click-and-collect model, and a video on the retailer's website explains that the fee is $5.95, no matter what the size of the order.
    KC's View:

    Published on: December 17, 2015

    • C&S Wholesale Grocers said yesterday that it has acquired Fresno, California-based FreshKO Produce Services, which will continue to operate under the FreshKO brand name as a wholly-owned subsidiary.

    C&S said that the reason it acquired the company was that it is "renowned for its high level of service and end-to-end expertise in the produce business" that has made it "more than just a distribution company to its customers."

    Terms of the deal were not disclosed.


    • The Richmond Times-Dispatch reports that Aldi has opened its fifth store in the Richmond, Virginia, market, with plans to open at least four more there. The move, according to the story, "is part of an Aldi’s plans to open 650 new stores across the country, bringing its total number of U.S. stores to nearly 2,000 by 2018."
    KC's View:

    Published on: December 17, 2015

    MNB yesterday took note of a Seattle Times report that Amazon is pondering possible changes in its product review system, with spokesman Tom Cook saying, “We are taking a close look at our policies regarding activism reviews and are considering changes." Prompting the move are cases in which women who wrote about the Sandy Hook mass killings were savaged by "conspiracy theorists who believe the shootings were an Obama administration hoax to push for gun-control legislation"; there also are other cases in which people have used the forum of online reviews to press political points of view that sometimes were irrelevant to the products.

    I commented:

    When I took note of the original Times story, I suggested that the kinds of reviews being aimed at women who wrote about surviving the Sandy Hook experience were emblematic of a coarsening of civil discourse in America. In retrospect, I think that was an understatement. At the risk of being uncivil myself, I think these people are emblematic of the kind of slimy hate-mongers who, unfortunately, are able to use social media to promulgate uninformed and ignorant points of view.

    Nothing wrong with a reasonable debate about Constitutional issues. But these people are nuts.

    As a frequent Amazon user and readers of customer reviews - which have from the beginning, been a game changer for the retailer - I have absolutely no problem if they want to change the rules so that reviews have to be written by people who actually have bought the products, and have to be relevant to the product being reviewed. I'm not sure this would protect the authors of the Sandy Hook-related books, but the bar ought to be at least that high for reviewers.

    FYI...I've been urged over the years to get rid of the edited and curated approach to "Your Views" and just put up a message board, which would take a lot less time on my part. But I see some of the stuff that comes across my laptop, and I respect the time it takes for MNB readers to peruse the site each day ... I don't want to abuse your affection and respect by wasting your time.

    It would require an investment of people and money for Amazon to take a more curated approach to reviews, and I know Jeff Bezos prefers algorithms to people ... but in this case, respect for the shopper ought to justify an adjusted approach.


    MNB user Shelley des Islets responded:

    While I agree that some kind of measure/threshold that limits that kind of lunacy is a good idea, I have to admit I would be terribly sad if it meant we'd no longer have the kind of explosion in creativity that pops up in response to some products ... I'm hoping there's a way to keep these bursts of rogue, playful creativity around and still provide safeguards from seriously damaging attacks.

    From another reader:

    Bravo for your comments today on the coarsening of civil discourse in America!
    I did want to add to your comments, and also open up a discussion on how this has happened.

    As Americans have moved toward receiving their news digitally, it has allowed them to “select the voice” that they want to hear. This means there is no longer a common touch point for Americans to come together and create “open to listen” stories—no Howard Cosell, no Walter Cronkite that we all listened to last night and are talking about today.

    Instead, people are searching out and finding news that reflects their own viewpoints, since their own viewpoints are then supported, there is no reason to think about any other ideas—leading to a further radicalization of their own viewpoints.

    One of the reasons I continue to subscribe to your daily news is that you don’t always support my viewpoints. You also publicize comments from people you don’t always agree with, and freely admit that you are biased.

    The point is, I think it is vitally important for retailers to constantly challenge their own beliefs and viewpoints—because no matter what our personal beliefs are, our customers are more diverse than we are. We owe it to our customers to create a safe space not driven by our own beliefs or the beliefs of those with “coarsening discourse.”



     




    We also had a story yesterday about how department store chain Kohl's has announced that "it will once again keep its doors open 24 hours a day in the final countdown to Christmas. Starting Dec. 17 at 7 a.m., the discount department store will remain open for more than 170 hours straight, giving shoppers until 6 p.m. Christmas Eve to finish their shopping."

    I commented:

    And, to steal a line from "SNL," in a related move, the Internet announced that it will be open all the time, forever.

    MNB user Kim Richardson-Roach wrote:

    I would like to offer a different perspective in Kohl’s announcement to keep their stores open starting 12/17 until 12/24 at 6 PM.  Even though it might at first blush seem like it is not a value add – there is most likely some very strategic thoughts to why they make this investment.
     
    Even though our world has allowed us to leverage internet shopping much more and many companies are still offering delivery in time for Christmas.  We are very quickly getting to the date where delivery by Christmas will be an extra charge or not guaranteed at all.
     
    I personally am now dealing with the need to go purchase presents that I purchased on-line several weeks ago and today just received the Backorder has now been cancelled email and they will credit my account.  This isn’t going to help me for Christmas – I need to give a present under the tree and I am not going to take the chance of buying something on line – I am going to have to go to a store and make the purchase.
     
    I agree that having the internet open 24/7 is very helpful and most people are leveraging this capability – but there is that critical point in time that the traditional bricks and mortar locations will win out and when Kohl’s looks back at their history – they feel this happens starting 12/17.  They are just capitalizing on a need and making it top of mind to the consumer.


    Fair point. It may just have been my cynicism speaking.




    Yesterday we reported on a Washington Post story about how Sam's Club president/CEO Rosalind Brewer is under attack for comments she recently made in a CNN interview that some have deemed to be racist.

    Brewer, an African-American female, was asked about how she tries to encourage diversity not just at Walmart, but also in other corporations. And she said:

    “My executive team is very diverse, and I make that a priority. I demand it of my team and within the structure. And then, every now and then, you have to nudge your partners, and you have to speak up and speak out. And I try to use my platform for that. … I try to set an example. I try to mentor many women inside my company and outside the company because I think it’s important.

    “And I talk to my suppliers about it. Just today we met with a supplier, and the entire other side of the table was all Caucasian males. That was interesting. I decided not to talk about it directly with [the supplier’s] folks in the room because there were actually no females, like, levels down. So I’m going to place a call to him.”

    I commented:

    The story also makes clear that four out of the eight people on Brewer's executive team are white men ... which all by itself ought to put to rest some of the outcry.

    Most of what this proves, I think, is that some people are always looking for a fight. The people who are complaining about Brewer's statement are probably the same ones who said they plan to boycott "Star Wars: The Force Awakens" because the presence of a more diverse cast reflects an inherent prejudice against white men.

    White men should just get over it. We/they don't dominate the world the way we/they used to, and everything from business to popular culture is going to reflect this.

    Brewer wasn't saying that she was biased against white men ... just that businesses that want to do business with Walmart perhaps ought to better reflect the demographic makeup of the people they are trying to sell stuff to.

    Much ado about nothing. Except that petty people with big voices and exaggerated senses of their own importance always have a way of soaking up all the oxygen in the room.


    One MNB user wrote:

    Kevin, first I'm a big fan of yours and like what your do and for the most part agree with you. But in the case of Ms. Brewer I think you got it wrong.

    First let's take her performance since coming to Sam's, it's been poor to say the least. I keep hearing that she not happy with what's going on but has done little to improve the assortment or sales (let's not forget this is an industry that change can come quick with such limited sku's and inventory). Now she thinks adding higher price ticket items will do the trick, obviously she must not spend much time in her clubs or Costco, as this isn't the answer. Trust me, the club (Sam's) industry needs a person who understands it, she doesn't.

    I would encourage you ask the trade and others who have worked with her their thoughts as what i just shared with you is the popular opinion of her .  To tell other CEOs who they should hire with this type of message is unreal. I and other CEOs take offense to this. WE hire based on the skills and professionalism and not the race, gender or religion. While I agree all MUST be given equal and fair opportunity to advance, suggesting in this roundabout way that one's business might benefit by have a person who is like her in race and color on the call is out of bounds. But if Ms. Brewer feels that CEO will now go out and reassign teams to fit her likes isn't going to happen. I think what Ms. Brewer did was to secure her job based on her OWN poor performance. She just made it much harder for Mr. McMillon and the board to fire her now.


    One MNB user responded:

    I think that it is absolutely appropriate that the best candidate serve in any role regardless of race.  No one should ever be passed over for a position based on color, race, religion sex or any other attribute protected or not that does not affect the job.  I think that some people’s reaction to Brewer’s comments are overly sensitive, but I always suggest we should have some balance in the discussion.  If Brewer meets with a minority company with an all-black group of representatives--which has been the case for me many times—I hope she also contacts them to encourage that they work on getting more balance in the company.

    Also, as a white man, if I meet with a company with all black representatives, is it appropriate for me to contact them and suggest they add some white diversity?  I would offer that based on Brewer’s comments, it should be not only appropriate but expected as good business.  While at first my comments may seem argumentative, that is not the intent, as I have seen all kinds of naturally heavy bias in companies (Asian Companies, Latin American Companies, etc.) and only want some deeper thought on a tough issue.  I am not sure that we should look at the historical domination of white men in business management as justification for biased thinking in any form, by anyone.


    And from another:

    Racism is racism.  If it isn’t OK to object to having nothing but black women calling on me (and it most certainly would not be) then it isn’t OK to object to having nothing but white men calling on me.  Very simple.  There is clearly a double standard when it comes to these matters and I think it is fair to call it out.

    From another reader:

    I’m not taking a position for or against Donald Trump, but I appreciate that he is drawing attention to the whole political correctness discussion. We seem to have become so PC sensitive that it is hard to state an opinion without being vilified by someone looking to further their own agenda.

    I have to be honest here. Nothing that Brewer said sounds like racism to me. And she wasn't asking for people to be fired or reassigned. To me, it sounded like she was going to suggest to this supplier that hr (or she) ought to think in more diverse terms in the future ... especially because the people who shop at Sam's are not exclusively white guys.

    I also recognize that this can be a tricky subject because it always can be construed that pressing for diversity is the same thing as reverse racism. I suppose it can be, but isn't necessarily the same thing ... and I think that at some point common sense and reasonable sensitivity have to take over.

    Here's the thing. I'm a 61-year-old white male who has lived his life in very specific circumstances. There are things I will never, ever know. Some of it is gender, some of it skin color, some of it is ethnicity, and some of it is life experience. If a company depends on some knowledge of and experience with those things to be successful, I'm probably the wrong guy to hire.

    That's not racism. It is a reality of doing business is a far more diverse world, in which companies need to have a more diverse approach to hiring. This doesn't mean the advancement of people who are unqualified ... just being open to possibilities and opportunities that never used to matter.

    MNB user Chris Utz wrote:

    It seems that anyone can cry foul, depending on who’s ox is being gored.  I work at a very progressive company; women in our department outnumber us old white guys.  Recent hires include 3 women and only one man.  I recently recommended another female job applicant for our team.  We have many people of color, Latino descent and foreign countries, working at our corporate headquarters at all levels, from new hires to senior management.

    The enjoyable part of coming to work each day is the positive, welcoming and friendly work environment.  That’s part of the reason for our company’s strength.  We are polite to one-another, almost to a fault, which can create an occasional bottleneck in the elevators.  I’d be shocked to discover anyone here with a chip on their shoulder.   I would be appalled if someone publicly representing our company went off on a preachy negative rant, regardless of their heritage, religion or political persuasion.  There’s no place for such behavior in a modern work environment.


    Lucky you. I'd like to work in a positive, welcoming and friendly environment, but I work by myself ...
    KC's View: