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    Published on: March 27, 2018

    by Michael Sansolo

    There’s a good chance that it might be a highly overlooked moment, but for countless business reasons it’s worth giving a second look at Sunday night’s edition of “60 Minutes.”

    No, not for that interview.

    The other “60 Minutes” profile of the night focused on Giannis Antetokoumpo (best shot at this: YAHN-is anh-teh-toe-KUHN-po), a professional basketball player known widely as the Greek Freak for his incredible skills. The story focused on the player’s incredible story from poverty in Athens to superstardom in the National Basketball Association.

    While not as well known as LeBron James or Steph Curry, Antetokoumpo possesses immense talent and combines the size of an NBA big man with the grace of a smaller player. Hence the sobriquet: Greek Freak.

    To date his career with the Milwaukee Bucks is a tale of growth. Each year his statistics and play improve and in the process his team keeps getting stronger on the court and on the bottom line. As the “60 Minutes” story makes clear, Giannis is heavily responsible for both.

    What stands out it in the story is Giannis’ (I can’t keep typing that last name) work ethic. As he tells the interviewer he needs to continually improve his strength, stamina and skills for a simple reason: he needs to get even better. “I am really scared of failure so I have to get better.”

    With that simple phrase he captured the essence of competitive spirit. Here’s a young man whose story is almost a fairy tale of success. He now makes millions each year from his basketball skills and lives a life that was once beyond his imagination. And that one sentence shows he understands the challenge of maintaining such a lofty perch.

    He needs to get better.

    And he’s right because if he lets down it’s possible that his edge will disappear and with it all the riches and fame he now enjoys.

    Every business should relate to this, especially the most successful. The key isn’t to maintain your current level of excellence, but to strive for something higher. We talk here constantly of how new competition, heightened consumer demands and endless technological improvements are raising the bar higher and higher. What was good enough yesterday is rarely if ever good enough tomorrow.

    And that’s why that one moment in the interview is so important. It’s that recognition that good enough is never good enough. Somehow we have to get better.

    In the movie Annie Hall, Woody Allen joked years ago, “A relationship, I think, is like a shark. It has to constantly move forward or it dies. I think what we got on our hands is a dead shark.”

    Success = in business or on the basketball court - is exactly the same. Move forward, work hard and find ways to improve. Otherwise, what you’ll have on your hands is a dead shark.

    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: March 27, 2018

    by Kevin Coupe

    Amazon’s search for a second headquarters city in North America - HQ2, as it has been dubbed - continues, with company executives visiting the various localities that made the final cut.

    Details of these visits, and the pitches being made to Amazon, are leaking out in dribs and drabs, but the video at left is one of the more entertaining artifacts … a short video pitch made by the city of Chicago that brings together the city’s identity as the “Second City,” Amazon’s mantra that every day is Day One, and Jeff Bezos’ known love for all things “Star Trek.”

    Chicago may not win, but the pitch is an Eye-Opener.

    KC's View:

    Published on: March 27, 2018

    There is a story in the New York Times entitled “Grocery Wars Turn Small Chains Into Battlefield Casualties” that looks at the “tremendous shakeout” taking place in the retail food business right now.

    The premise is that the entry of Amazon into the food business, and the expansion of Walmart’s efforts there, and the resultant machinations from other major retail food chains, all have added up to enormous pressure on small and regional chains.

    “At stake,” the Times writes, “is not only the price of toothpaste and bananas, but the fate of thousands of cashiers, cake decorators and meat cutters, many of whom belong to labor unions and are owed pensions when they retire … Like businesses in other industries — including Toys R Us, which announced liquidation plans this month — many failing supermarkets are owned by private equity firms that have loaded the companies up with debt.”

    Burt P. Flickinger III, managing director of Strategic Resource Group (and an MNB fave), tells the Times, that this debt “hampers their ability to compete in an environment where prices in some markets have dropped by as much as 25 percent.”

    Among the companies mentioned in the piece as vulnerable to varying degrees are Tops, Marsh, Fairway, and WinnDixie.
    KC's View:
    The theme of this story is one that we’ve been talking a lot about lately. What it all comes down to is that it is tough competing when you don’t have a clear differential advantage and compelling narrative; it is even tougher when you are burdened with debt that makes it hard to invest in the kinds of initiatives necessary to survive.

    I got an email from my old friend, the great Jack Allen - legendary for his career teaching at Michigan State University - that pointed to another issue highlighted by stories like these: Can an industry with these sorts of issues be seen as attractive to talented students looking for career opportunities?

    It is a good question. In my view, there are a lot of companies out there that never will be seen as interesting by students who want to work for innovative, disruptive companies. But I do think there are some companies that have a different mindset, that want to challenge their employees and want to have their employees challenge them, that will be attractive.

    But only some companies.

    Published on: March 27, 2018

    Walmart-owned Jet announced yesterday that it has hired Simon Belsham, who used to run Tesco’s e-commerce business in the UK, India and 10 markets across Central Europe and Asia, to be the company’s new president.

    It is, Reuters writes, “the retail behemoth’s latest move to grab a bigger piece of the intensely competitive sector.”

    Belsham “will oversee all operations including grocery and general merchandise and join Walmart’s U.S. e-commerce leadership team, according to an internal email sent on Monday by Marc Lore, the head of Walmart’s e-commerce business, to Jet employees,” Reuters says.

    Before his two-year tenure at Tesco’s e-commerce business, Belsham spent two years at Ocado as director of nonfood.

    Reuters notes that “most recently, Belsham worked as chief executive officer of venture-backed Not On The High Street.” At Jet, “he will succeed Liza Landsman, who left the company in March, a little more than a year after she was promoted to the job.”
    KC's View:
    We’ve known that Walmart/Jet wasn’t done in terms of talent and company acquisitions, and Belsham has the kind of global experience that will serve it well as it continues to expand.

    Published on: March 27, 2018

    The New York Times writes about how “the kitchen is the center of the home and a locus for interactions that go beyond preparing and eating food. Now tech companies and appliance makers, aiming to deepen their relationships with customers, are increasingly targeting the room that is synonymous with togetherness.

    “Household brands like Whirlpool, Samsung and Bosch are racing against tech behemoths like Google and Amazon to dominate the kitchen with internet-connected appliances and cooking gadgets that include refrigerators embedded with touch screens, smart dishwashers and connected countertop screens with artificially intelligent assistants that react to spoken commands.”

    While tech companies are highly engaged and invested in smart kitchen technologies, the Times points out that this is unlikely to be a smooth and barrier-free path to broad consumer acceptance.

    For one thing, there is a sense - growing of late - that connected appliances make a house more vulnerable to hackers and fundamentally less private. (If Russians can hack into the national power grid, why not our kitchens?) And, there are the economics of such a shift - we’re used to recycling our smart phones and laptops every few years, but refrigerators are expected to last a lot longer; will making them more tech-savvy mean that they’ll be out of date faster, or even go out of fashion more quickly?

    And finally, there is the fact that the traditional kitchen tends to reflect “the rhythms and patterns in the heart of the home,” and so people may be more resistant to disruption there.
    KC's View:
    The points made in the piece - both about the disruptive power of these technologies and the capacity of many people to resist them for a variety of reasons - each strike me as entirely legitimate.

    The voice-activated technologies like the Amazon Echo and the Google Home are sort of the first wave in the technological invasion - they’re getting us used to what’s possible before seducing us into potential. In my case, I’m happy to use my Echo Show in the kitchen, but it will be a long time, I’d guess, before I’d invest in a smart refrigerator or oven. (Some of this may be age - I’m old enough to remember a time when refrigerators and freezers didn’t defrost themselves , and so I count that advance as a a BFD. As for the oven, I’d just love gas instead of electric … I don’t need to be able to turn it on from another room.)

    These advances may be the province of the extremely well-off for the time being. I would, however, make two other, admittedly contradictory points.

    First, these changes almost always happen faster and more decisively than anyone can expect or predict. And second, I have this feeling, based on current events, that we may be about to enter a period of retrenchment when it comes to some technologies, as we’ve been aware by Facebook of exactly how vulnerable we can be.

    Published on: March 27, 2018

    Vanity Fair has a good piece about Eddie Lampert, described as “the billionaire majority shareholder of Sears and Kmart” who established his own hedge fund three decades ago at age 25 and had a series of major successes, all of which have been largely obscured by his decision to get into retailing.

    An excerpt:

    “Today those triumphs are largely obscured by his worst mistake: the 2005 merging of Sears, the iconic retailer whose doorstop mail-order catalogue was once a fixture in nearly every American home, with the downmarket Kmart chain, which he had brought out of bankruptcy in 2003. Twelve years on, this blundering into retail has made him a poster boy for what some people think is wrong with Wall Street and, in particular, hedge funds. Under his management the number of Sears and Kmart stores nationwide has shrunk to 1,207 from 5,670 at its peak, in the 2000s, and at least 200,000 Sears and Kmart employees have been thrown out of work. The pension fund, for retired Sears employees, is underfunded by around $1.6 billion, and both Lampert and Sears are being sued for investing employees’ retirement money in Sears stock, when the top brass allegedly knew it was a terrible investment.”

    Mark Cohen, CEO of Sears Canada from 2001 to 2004 and now a professor at Columbia Business School, says that as bad as it looks, “Lampert’s money is collateralized against hard assets, of which Lampert will take control if the company defaults on the loans.” In other words, if the whole company tanks, Lampert is largely protected, despite the hundreds of millions of dollars he has sunk into Sears and Kmart.

    And, Cohen describes Lampert this way: “the wizard behind the curtain.”

    You can read the entire piece here.
    KC's View:
    Cohen’s “wizard behind the curtain” is ironic, because he seems entirely disenchanted with Lampert’s way of doing business, criticizing his strategic approach and a lack of corporate governance at the company, among many things. Plus, let’s remember - the original wizard behind the curtain ended up being nothing but as con man and a fraud.

    The Vanity Fair piece is compelling reading, though - it traces Lampert’s life from his working class beginnings through his 2003 kidnapping, and explains his rationale - faulty as it turned out to be - in buying Sears and Kmart and then combining them. I really recommend it.

    Published on: March 27, 2018

    The Financial Times reports that Amazon has signed a distribution deal with French retailer Casino, making it possible for customers at Monoprix, its upscale grocery banner, to get groceries from it via PrimeNow.

    The deal, FT writes, ends “months of speculation that the US ecommerce giant was planning partnerships or acquisitions in Europe.”

    Casino’s chairman/CEO, Jean-Charles Naouri, says that the deal “reinforces its omni-channel distribution strategy and gets even closer to its customers and their needs.”

    Jean-Charles Naouri, chairman and chief executive of Casino, said on Monday: “Casino Group reinforces its omni-channel distribution strategy and gets even closer to its customers and their needs.
    KC's View:

    The funny thing is that it was Monoprix that came up with a witty and effective rejoinder - which you can seen at left - to the much-seen Amazon Go introductory video.

    But I suspect that it was exactly this kind of approach that made the two companies a good fit. They both seem highly customer-focused, which is a prerequisite for success these days.

    Published on: March 27, 2018

    Perhaps you’ve heard about the full-page ad that Facebook CEO Mark Zuckerberg took out this past weekend in the Washington Post, New York Times, and Wall Street Journal, among other papers.

    The headline was this: We have a responsibility to protect your information. If we can’t, we don’t deserve it.

    And then it went on: You may have heard about a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again.

    We’ve already stopped apps like this from getting so much information. Now we’re limiting the data apps get when you sign in using Facebook.

    We’re also investigating every single app that had access to large amounts of data before we fixed this. We expect there are others. And when we find them, we will ban them and tell everyone affected.

    Finally, we’ll remind you of which apps you’ve given access to your information — so you can shut off the ones you don’t want anymore.

    Thank you for believing in this community. I promise to do better for you.

    And it was signed by Zuckerberg. (Terrible penmanship, by the way. I wonder if he was ever taught cursive.)

    But here’s my thought about this.

    Isn’t it sort of ironic that when the guy who helped to invent social media needed to apologize for his company’s missteps, he turned to one of the oldest mediums - old fashioned print newspapers - to do so?

    I’m just asking.
    KC's View:

    Published on: March 27, 2018

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

    CNBC reports that a new study by inMarket suggests that the installation of Amazon lockers at Whole Foods stores is encouraging more quick trips to Whole Foods by shoppers, “giving the natural and organic retailer a new way to boost sales … Short ‘micro’ visits, defined as three to five minutes in length, were up 11 percent at stores with lockers since Amazon closed its purchase of Whole Foods on Aug. 28.”

    • The New York Times has a story about how, even as Amazon collects sales taxes in every state that assesses them, “those deals don’t always extend to taxes assessed by local governments. The company still isn’t collecting sales taxes in dozens of cities, including Philadelphia, Pittsburgh and Cedar Rapids, Iowa, according to a new report from the Institute on Taxation and Economic Policy, a left-leaning think tank.”

    Not only are these communities missing out on potential tax revenue, the story says, but “local retailers, many already struggling to compete with online retailers, are effectively forced to charge more for their products than online sellers that aren’t required to collect local taxes.”

    The problem is that “a hodgepodge of state laws govern tax collection … For example, sales tax rules based on the location of the seller may be impossible to enforce if the company has no physical presence in that jurisdiction.” It all makes collecting taxes in some locations problematic.

    • Call it a big investment - probably to the tune of many millions of dollars - by Amazon in its own ecosystem.

    It was announced yesterday that Amazon Studios will underwrite a four-episode miniseries about 16th century Spanish explorer Hernan Cortes that will star Javier Bardem, be produced by Steven Spielberg and written by Schindler’s List scribe Steven Zaillian. The miniseries will only be available to Amazon prime members via streaming.

    Variety writes that “the greenlight for the Cortes series continues a shift in strategy at Amazon that began last year with a mandate from CEO Jeff Bezos to move toward more event programming from the entertainment division.”

    There is a fascinating backstory to the Cortes project. It actually is based on an original script by the late screenwriter Dalton Trumbo back in the sixties, and was designed to be his follow-up to “Spartacus,” which he wrote, and was going to star Kirk Douglas. And that’s interesting because Trumbo was one of many writers who was blacklisted during the McCarthy era; Douglas’s hiring of him to write “Spartacus” is seen as the beginning of the end of the Hollywood blacklist.
    KC's View:

    Published on: March 27, 2018

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

    • The Associated Press reports that burger chain In-N-Out is seeking a restraining order again Cody Roeder, who uses the name Trollmunchies when he posts YouTube videos, asking that he be banned from its restaurants and from talking to its employees.

    The legal filing stems from a series of visits that Roeder made to In-N-Out locations, identifying himself as the new CEO, harassing employees and even customers, while recording the whole thing and posting the videos on YouTube. This has then led to other people trying to do the same thing, and In-N-Out wants them to be banned as well.

    “We have recently seen an increase of visitors to our stores, who are not customers but instead are intentionally disruptive and who then try to promote themselves through social media,” In-N-Out EVP Arnie Wensinger said in a statement. “These visitors have unfortunately used deceit, fraud, and trespass to their own advantage, and in each instance, they have attempted to humiliate, offend, or otherwise make our customers or associates uncomfortable.”

    Banned? Hell, if this clown is messing with In-N-Out, I think some sort of long-term prison sentence would be a lot more appropriate. And maybe being forced to eat Burger King.
    KC's View:

    Published on: March 27, 2018

    • Dan Tarnopol, Wakefern Food Corp.’s corporate counsel, has been named the company’s new director of Business Development and Real Estate, succeeding Tish Daly, who is retiring.
    KC's View:

    Published on: March 27, 2018

    • Linda Brown, who as a young girl was at the center of the 1954 court case, Brown v. Board of Education, that resulted in a US Supreme Court decision that ended the legal racial segregation of American public schools and the precept of “separate but equal,” has passed away. She was 76.
    KC's View:

    Published on: March 27, 2018

    We’ve had a number of stories here about changes being made at Whole Foods which could suggest some dilution of the retailer’s core values by its new owner, Amazon. But MNB reader Todd Ruberg wrote:

    We all have to remember that Whole Foods was a troubled operation before Amazon bought it, and I think the core problem then……retail competition able to distribute Organic and Healthier Food more efficiently and cheaply to the consumer……is still an issue now.

    Whole Foods has tried some things on pricing….,mostly targeted or promotional, but as of yet hasn’t overhauled the bigger drivers of that issue. I also think that fixing the retail operation of WF wasn’t their only or even primary goal, as much as access to retail brand and organic/healthy food for their Amazon online offerings and physical space to experiment with delivery lockers, Echo merchandising, etc…

    Good point. As always.

    Regarding changes in priorities at Campbell Soup, one MNB reader wrote:

    I started my sales career with Campbell Soup Company in 1969. How the times and Campbell Soup Company has changed. In 1969, Campbell Soup's portfolio consisted of 46 varieties of condensed soups, 13 SKUs of Franco American pasta products, 5-6 SKUs of Campbell Pork and Beans, 4 SKUs each of Campbell Tomato Juice and V-8 juice, and 3 SKUs of Franco American gravy.

    The advertised price of soup was $.10 per can on tomato soup and 8 for $1.00 on most of the condensed soups. Today's retails on tomato soup are well north of $1.00 and the rest of the condensed soups are well north of $1.50 per can.

    Condensed soups today, are not much of a bargain for today's consumer. I applaud Campbell for trying to revive the RTS soup category, but these SKUs too are approaching an EDLP of the $3.00 plus.

    I applaud Campbell for acquiring and diversifying their CPG portfolio. I am trying to imagine sitting at the table with a bowl of soup and a bowl of popcorn.

    On another subject, from MNB reader Monte Stowell:

    Regarding advertising on social Internet sites and other online websites, I find the ads are very annoying and are not at all effective for influencing what I might want to buy. I do spend more of my time going to product web sites to learn about a given item I might be interested in buying. It would be interesting to see a study that showed the effectiveness of the $40.2 billion dollars that companies spent with Facebook advertising. I understand that the mediums where advertising dollars are being spent have changed dramatically since the internet has come into play, but my question is, "Is there any research that shows just how effective internet advertising is versus other mediums where advertising dollars are being spent.”

    And finally, from MNB reader Karen Alley:

    I love that you quote “The West Wing” in today's MNB. That was such a great show. Great writing, great acting, and it made us see the good in the things that can happen in the White House.
    KC's View:

    Published on: March 27, 2018

    The Final Four in the NCAA Women’s Basketball Tournament are set, with the Louisville Cardinals scheduled to play the Mississippi State Bulldogs, and the Notre Dame Fighting Irish to go up against the University of Connecticut Huskies. These games are scheduled for Friday, with the Championship game to be played on Easter Sunday.
    KC's View: