business news in context, analysis with attitude

Published on: October 23, 2012

by Michael Sansolo

There’s an old saying that if the only tool you have is a hammer, every problem looks like a nail.

Regular readers of MNB may have noticed that Kevin and I do have a hammer: a book on how to use movies to gain lessons and insights to solve problems and more. So forgive me for pulling out the old hammer to make a point, but I just can’t resist.

In the midst of this politically charged season I keep noticing one thing happening from both sides of the spectrum. In short, partisans that we are we watch these candidates to find moments that only confirm what we already believe. There is nothing Obama or Romney can say that can shift what 95 percent us of think. We watch their speeches, debates and commercials only to find things that delight us (from the guy we support) or disgust us (from the other guy.)

And in that I think there’s a powerful lesson in leadership, but it takes a movie. In fact, it takes a movie from our book, The Big Picture: Essential Business Lessons from the Movies.

Odds are that many of you have never seen In the Heat of the Night, a brilliantly made movie from 1967 that won five Academy Awards, including best picture. The story takes place in a small Mississippi town in the middle of the civil rights movement and highlights the obvious friction between the races.

But essentially it is a murder mystery and a story in overcoming bias. Because it is such a good movie to watch (and you should watch it) I won’t give away the plot, except to say the essential lesson we call out in the book is about a common flaw we all have: knowing the answer to a question without knowing the question. During the course of In the Heat of the Night we repeatedly see what happens when people are so certain of the cause of a crime that they forget to actually follow the facts.

So why does this 45-old-movie and a highly charged political environment matter to business? Because like it or not, we all have the exact same problem.

Too often we know the answer before we know the question. We trust experience and history, not realizing that those very assets can bias us to understanding a changing landscape. And that can lead us, like it leads the actors in the movie, to reaching the wrong conclusions and the wrong answers.

We generally recognize that the world today might be changing faster than anything we’ve ever encountered. Whether it’s the new technologies, competitive challenges or even the different ethos, style and work ethic of different generations we get baffled. We constantly try to find the answer that makes sense and that aligns with the skills we have. It happens to me all the time and I bet it happens to you.

In short, we keep pulling out our hammers when only a small percentage of the problems are nails.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: October 23, 2012

The Chicago Sun Times reports that "Cerberus Capital Management is trying to arrange $4 billion to $5 billion in debt financing to back a bid" for Supervalu, while the New York Times reports that it is not guaranteed that Cerberus will make a bid.

Published on: October 23, 2012

by Kevin Coupe

So, have you seen the stories about Abercrombie & Fitch CEO Michael Jeffries and the list of requirements he has for flight crews on the company's corporate jets?

Here's how the Daily Beast describes them:

“Clean-shaven males had to wear a uniform of Abercrombie polo shirts, boxer briefs, flip-flops and a ‘spritz’ of the retailer’s cologne,” according to a manual that has come to light through an age-discrimination lawsuit brought by a former pilot. (Abercrombie did not directly employ pilots for the corporate jet.) The 40-page set of “Aircraft Standards” also prescribed the color of gloves attendants should use (black when putting out silverware, white when setting a table), detailed menus for Jeffries’ three dogs, and instructions on diction: the men should say “no problem” instead of “sure.”

Oy.

(Though based on what little I know about Abercrombie & Fitch, flight crews probably should be glad that they weren't required to have six-pack abs.)

The problem for Jeffries, it seems to me, isn't just that his focus on aircraft wardrobe seems to lack perspective - especially since he runs a company that, the Daily Beast notes, has seen its stock price drop by 50 percent over the past year. (Though the story also makes the point that the corporate jet is one of the most valued of executive perks, and the one that many CEOs refuse to give up.)

The problem is that the publicizing of these requirements makes him look completely out of touch with the people on the front lines.

Look, I get why private jets can serve an important business purpose and give CEOs a competitive advantage. I think there are times that CEOs ought to fly commercial, and even ought to fly coach, just to make a point (and even do a bit of consumer research, depending on their business). But private jets have their place.

It is lines like "detailed menus for Jeffries’ three dogs" that make me nuts.

I remember being told about a now-former supermarket CEO who used to have his wife and show dogs ferried around on the company's corporate jet, exacerbating his image as someone who had no idea what was happening on the company's various front lines. That happened years ago, but the image still stings ... especially for hard-working people trying their best to keep the company relevant and viable.

The front lines rarely can be understood from 30,000 feet, especially if you are flying around on a corporate jet staffed by polo shirt-wearing, ever-so-lightly perfumed flight crews wearing two sets of gloves.

Two Eye-Opening lessons here for CEOs.

One is that you have to make sure you don't adapt policies and approaches that distance you from the front lines.

And second, rest assured that if you do adapt such policies, they will become public.

Published on: October 23, 2012

The New York Times this morning reports that the US Food and Drug Administration (FDA) has released a report suggesting that "five people may have died over the past three years after drinking Monster Energy ... The reports, like similar filings with the F.D.A. in cases involving drugs or medical devices, do not prove a link between Monster Energy and the deaths or other health problems. The records were recently obtained under the Freedom of Information Act by the mother of a 14-year-old Maryland girl who died in December from a heart arrhythmia after drinking large cans of Monster Energy on two consecutive days."

A lawsuit has been filed against Monster, charging that its drinks are unsafe; Monster denies the allegations.

The Times writes that "the release of the filings about Monster Energy may increase Congressional calls for greater regulation of the energy products industry. Monster Energy is among scores of energy drinks like Red Bull and Rock Star, and energy 'shots' like 5-hour Energy, that companies are aggressively marketing to teenagers and young people."

Published on: October 23, 2012

Fast Company has an interesting story about how Starbucks invested in a "Leadership Lab" that was "a high-gloss, two-hour, theatrical experience that was the highlight of the company's recent conference for about 9,600 Starbucks managers." The goal of this experience is "to mobilize its employees to be brand evangelists," and the story describes it as "part leadership training, with a station that walks store managers through a problem-solving framework," and "part trade show, with demonstrations of new products and signs with helpful sales suggestions."

"But what makes the Leadership Lab different," Fast Company writes, "than a typical corporate trade show is the production surrounding all of this. The lights, the music, and the dramatic big screens all help Starbucks marinate its store managers in its brand and culture. It’s theater - a concept that Starbucks itself is built on."

The story goes on: "Of course, making employees feel something is much more difficult than making them understand it. That’s why at the end of the Lab, Starbucks doesn’t just have its employees write down something they’ll commit to do in their stores and tuck it away. It has them enter it on a laptop and pulls the strongest themes into a ceiling-high word cloud, a panoply of customer-friendly verbs: Connect. Inspire. Smile. Ask.

"The whole shebang ends in a pristine white room where benches face a massive Starbucks logo, inviting you contemplate the company's mission statement: 'To inspire and nurture the human spirit--one person, one cup and one neighborhood at a time.'

"It feels more like a chapel than the exit space for a conference trade show."

You can read the entire story here.

Published on: October 23, 2012

• Reuters reports that Walmart has hit by a new lawsuit - which the plaintiffs are hoping to have certified as a class action - that accuses it and two staffing agencies with which it works of "requiring temporary employees to show up early for work, stay late, and work through lunch at the world's largest retailer," alleging that "Wal-Mart and the agencies violated minimum wage and overtime laws which could affect several hundred temporary workers in the Chicagoland area."

The lawsuit - which Walmart has not yet commented on - comes as the retailer is under labor pressure on a number of fronts, facing strikes and walk-outs by employees in several markets complaining about what they say are tough working conditions.

Published on: October 23, 2012

Restaurant Hospitality reports that Ahold-owned Peapod is working with the Lettuce Entertain Your restaurants in Chicago to add restaurant-quality prepared foods to its selection of products sold from virtual store installations in a number of area commuter railroad stations that allow people to order products using their smart phones to scan QR codes.

According to the story, "these virtual stores feature what Peapod dubs 'Chicago’s Best' prepared foods, drawn from 30 of the city’s favorite restaurants and hometown brands. The list includes LEYE brands like Wildfire and Big Bowl plus items from Eli’s Cheesecake, Chicago Butter Cookies, Intelligentsia Coffee and Goose Island beer. Customers can also access the rest of Peapod’s 11,000-item assortment with the app. Items are delivered the next day."

Published on: October 23, 2012

Advertising Age reports that "more bricks-and-mortar stores than ever are expected to be open for business on Thanksgiving, and email-marketing firm Responsys said 80% of major retailers will send messages on the holiday this year, up from just 45% in 2009."

According to the story, "In 2011, an unprecedented number of retailers opened on the holiday, including Gap, Kmart, Bass Pro Shops, Target and Toys R Us. Plenty of others, including Macy's, Best Buy, Walmart and Kohl's, touted earlier-than-ever-before store openings, leading to the coining of the term "Black Midnight" ... The number of consumers who reported shopping on the holiday either online or offline has steadily climbed to 22% in 2011 from 15% in 2008, according to the NRF."

And, Ad Age writes, "According to ComScore, online sales jumped 18% on Thanksgiving Day to $479 million, while online sales were up 26% to $816 million on Black Friday."

Published on: October 23, 2012

• Advertising Age reports that Anheuser-Busch InBev is planning several higher-alcohol brand extensions for several of its beer lines, which "come as big brewers put more attention on innovations as they compete with newly aggressive liquor brands and craft brews, many of which have higher alcohol contents than traditional light lagers such as Bud Light and Miller Lite. The brewers seem to be targeting a mid-level price range that positions their new brews as slightly less expensive than craft brews but still at a premium to mainstream lagers."

• CNBC reports that Starbucks CEO Howard Schultz described as "sensationalized" the accusations that his company has not paid any corporate income taxes in the UK, and he said that the reason is simple - Starbucks hasn't made a profit there yet.

Schultz said, “Let me try and explain the situation, over the last three years, Starbucks has paid over 160 million pounds in taxes, in VAT (value added tax), in insurance, in real estate taxes, so that’s one piece of the puzzle. The accusation that we have not paid any taxes should be skewed to the fact that we haven’t paid income taxes and the reason is we are not a profitable business in the U.K..."

Published on: October 23, 2012

Russell Means, the Oglala Sioux Indian who, as the New York Times wrote this morning, "helped revive the warrior image of the American Indian in the 1970s with guerrilla-tactic protests that called attention to the nation’s history of injustices against its indigenous peoples," as well as by acting in dozens of movies, died yesterday of esophageal cancer. He was 72.

Published on: October 23, 2012

Got the following email from an MNB user:

I work in the Retail food business and I live in California.  I am voting FOR Prop 37 - Genetically Engineered Foods Labeling for the simple reason, I want to know the source of what I am buying.  I equate this initiative with COOL - Country of Origin Labeling -  I, the consumer,  want to know the 'source' of the food product.

I especially want to know if the organic food item is natural, or genetically engineered, and grown without the use of pesticides. I, personally,  do not consider a genetically engineered food product as 'organic'.

I am not saying I will never buy a product with the GMO label, but I certainly want that choice to be mine, having full knowledge.

I am sure the public will be quite surprised by the amount of food items they regularly purchase are produced from ingredients that were genetically modified.

And another MNB user wrote:

Don't know if you watch Bill Maher's "Real Time" program on HBO, but his guest on Friday night was Gary Hirshberg, CEO of Stonyfield Farms and the discussion centered on Prop 37.  I thought one of the most interesting points that Mr. Hirshberg made was that genetically modified crops designed to survive being sprayed with Round-Up don't produce larger yields than non-modified crops.  I don't know where that study came from, but it would be interesting to see the details from it.  Monsanto/Dow and the other huge petrochemical companies are making money selling the seed and the herbicide, so there is a huge financial incentive on their side to insure that GMO crops don't get labeled, whether there are health risks or not.  The bottom line is that I don't believe anyone knows for sure, but being kept in the dark is clearly not in the best interest of consumers.




Also got a number of emails regarding my obit and comments about George McGovern.

One MNB user wrote:

I too voted for the underdog McGovern in my 1st presidential election vote.  For many years thereafter, I quoted the bumper sticker line, “Don’t blame me I voted for McGovern”.  Not the best attitude and probably not one he endorsed.  While history has been a bit kinder of late to Richard Nixon we all should learn from history - that while you may not agree with others point of view you should listen and attempt to understand why they hold it.

And, from another reader:

We're similar in age Kevin, and the 1972 election was also my first vote. And I also voted for Senator McGovern, and also am proud to say I did.

And I'm glad you called out the commenter for his comment about the "genetically modified President" line, as it was quite disrespectful. So are all the "take back our country in November" yard signs … I wonder if those who have them understand how offensive and disrespectful they are, or just don't care and do it deliberately.

Published on: October 23, 2012

In the seventh and deciding game of the National League Championship Series, the San Francisco Giants beat the St. Louis Cardinals 9-0, sending the Giants to face the Detroit Tigers in the World Series, which begins tomorrow night.