business news in context, analysis with attitude

Published on: March 25, 2014

by Michael Sansolo

Every now and again my travels bring me across the kind of stories that I doubt I’ll ever forget. And I’m thinking John Ondrasik is going to stay on that list.

Odds are you have no idea who John Ondrasik is at first, but I’m betting you’ll discover that in fact you do know him. It’s just that you know him by another name. Take a second (use another browser window please) and play a song from Five for Fighting.

You might play “Superman (It’s not easy),” “100 years,” or “Chances,” and you likely will know the song. What you don’t know is that Five for Fighting is John Ondrasik and that his story has meaning to you and your business.

I had the opportunity to meet Ondrasik in February while moderating the annual IGA Global Rally. That gave me a front-row seat to the kind of presentation I only wish I had the talent to deliver. With the 500 people in the audience I watched Ondrasik stroll to the piano on stage, play a handful of his songs and explain them in a whole new context.

Ondrasik’s story is that good. It’s the story of a musician who freely admits that his career took forever to get started. He jokes about being called an overnight success but that it took him 20 years and close to 45,000 hours of practice to get to that overnight.

He talked about the wonder of his breakthrough hit, “Superman,” and the even harder challenge of writing a follow up hit to ensure he would never be tagged as a one-hit wonder. And he managed to connect it to the audience and the challenges they face.

Think about it: we all want to be stars in whatever we do. Like Ondrasik, we know it starts with hard work. Most singer/songwriters never get to be even one-hit wonders. Most businesses never achieve star status either.

But like Ondrasik we work the process every day. In his case, the story of him rising early morning after morning and serenading a neighbor with songs until he finally wrote “100 years” is funny and pointed. Without hard work, we can’t achieve anything once, no less twice.

He also talked about the process of inspiration, about how he’s learned to listen to the world around him. Song ideas come to him from family (mainly his children), but always from making certain he’s listening and open.

Again, even for non-song writers, that’s a path to follow. Especially in our ever-changing world, listening matters more than we can imagine.

Sometimes those lessons can even come to us in song. To paraphrase “Superman,” it’s never easy to be anything great.

But as we’re constantly reminded from the movie A League of Their Own, it’s the hard tasks that make life, business and success great.


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: March 25, 2014

by Kevin Coupe

The target, apparently, was not just Target.

The Washington Post reports this morning that federal agents informed more than 3,000 companies - large and small, ranging from defense contractors to small, medium and national retailers - were informed by the government last year that their computer systems had been hacked.

Yikes.

The story goes on to say that "the number reflects only a fraction of the true scale of cyberintrusions into the private sector by criminal groups and foreign governments and their proxies, particularly in China and Eastern Europe. The estimated cost to U.S. companies and consumers is up to $100 billion annually, analysts say."

The Post writes that this is the first time that the federal government has revealed the number of private sector companies advised of cyberhacking, and "the disclosure comes as the federal government has struggled to pass legislation to set security standards that companies in critical sectors must follow and to increase information-sharing between the public and private sectors."

If you want to learn more about these Eye-Opening numbers, click here.

Published on: March 25, 2014

Forbes reports that Walgreen-owned Duane Reade is engaged in a test with Poncho, a provider of "personalized weather forecasts," that is designed to also provide customized and relevant promotions from the drugstore chain.

The story explains how it works: "Subscribers take a brief survey on Poncho – specifying what time they wake up, how they commute to work, if they have allergies – and then get two weather updates every day, once in the morning when they wake up and once in the evening before they leave work.

"And now they’ll get promotions paired with each message including relevant coupons for Duane Reade products inspired by the day’s predicted weather." That could mean allergy medicines during the spring and cold medicines during the winter, for example.

And here's where the story gets interesting: "It’s not difficult to imagine it being rolled out to Walgreens stores nationally," Forbes writes. "Or that Poncho could make an attractive acquisition as the chain seeks to build its omnichannel presence. In 2011, Walgreens bought Drugstore.com for approximately $409 million."

Published on: March 25, 2014

The Los Angeles Times reports that in Walmart's most recent annual report, it identified ""changes in the amount of payments made under the Supplement Nutrition Assistance Plan and other public assistance plans, (and) changes in the eligibility requirements of public assistance plans" as being a factor that could materially impact its future performance.

According to the story, "Wal-Mart followers say this is the first time the company has made a disclosure like that," though "one interesting sidelight of Wal-Mart's disclosure is that it doesn't actually discuss how the company benefits from public assistance programs by sticking the U.S. taxpayer with the bill for keeping its workforce fed and clothed."

The Times piece goes on to say that "Wal-Mart says it gets more than half its sales from its grocery departments. Since low-income shoppers are a big part of its clientele, it's unsurprising that that squealing you hear is coming from its annual report." However, the Times writes, "There's no indication that Wal-Mart executives stepped up to the plate during the debate in Washington to warn Congress off these cuts in assistance to its customers."

Published on: March 25, 2014

The Associated Press reports that Mike Ullman, the once and current JC Penney CEO, could see his 2014 salary increase from $810,606 to $1.5 million, and "could also get $5.5 million in stock awards and is eligible to receive a $3 million bonus," based on performance.

As the story notes, "Ullman had been CEO for seven years until late 2011 — when he earned total compensation of $33.7 million. He returned to the helm in April 2013 when the company's board ousted Ron Johnson, who had spearheaded a transformation strategy that involved eliminating most discounts and bringing in hip new brands. The goal was to bring in younger and more affluent shoppers, but the former Apple executive ended up alienating the J.C. Penney's loyal shoppers. Sales plunged and led to big losses, and Johnson was ousted after 17 months.

"Since rejoining the department store chain, Ullman has restored frequent sales events and brought back basic merchandise. J.C. Penney earned $35 million for the quarter that ended on Feb. 1, compared with a loss of $552 million the year before."

Published on: March 25, 2014

• CityWire reports that Walmart-owned Asda Group said yesterday that it plans it eliminate some 200 corporate jobs, "part of a new five-year plan underway to tackle heightened competition from rival discounters and supermarkets. The moves were reportedly part of a package of recommendations put forward by consultancy firm McKinsey, which also included calls for a widening of product ranges."

Published on: March 25, 2014

The New York Times reports on how David Winters, a longtime money manager and founder of Wintergreen Advisers, is criticizing Coca-Cola Co. management for what he sees as an excessive executive compensation program.

According to the story, Winters says that a reading of the company's annual report suggests that "the company planned to award stock worth about $13 billion to its senior managers over the next four years, based on the company’s current stock price. Getting out his calculator, the analyst estimated that between the proposed compensation plan and a previous plan, the company had allocated as much as $24 billion toward stock-based rewards for its senior people."

"We can find no reasonable basis for gifting management 14.2 percent of the share capital of Coca-Cola, worth $24 billion at today’s share price," Winters writes in a letter he made public. "No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation. This compensation plan appears to place the economic well-being of management far ahead of the interests of the company’s owners."

Coca-Cola has responded to the charges by saying that Winters's analysis “is misinformed and does not reflect the facts," and that the compensation plan “is not limited to senior executives, but extends to a large group of employees and is important for incentive and retention."

Published on: March 25, 2014

The Nielsen Company is out with a new study is out with a report saying that "seventy percent of consumers are already aware of “wearables,” and about one in six (15%) of them currently use wearable tech—such as smart watches and fitness bands—in their daily lives."

The report goes on to say that "the majority of wearables owners are young, with nearly half (48%) between 18-34 years old, and men and women are equally likely to don wearable tech. Perhaps not surprisingly, three-quarters of wearables owners consider themselves 'early adopters' of technology (while only 25% consider themselves 'mainstream'). And to support their love of the latest devices, these digital trendsetters typically have more disposable income, with 29 percent making over $100,000. Among wearable tech owners, fitness bands were the most popular devices (61%), followed by smart watches (45%) and mHealth (mobile health) devices (17%)."

And, Nielsen writes, "Nearly half of Americans surveyed expressed their interest in purchasing wearable tech in the near future. But cost will likely be a limiting factor - 72 percent of users said they wish wearables were less expensive. Another barrier to entry could be fashion, as 62 percent said they wish wearables came in forms besides wrist bands and watches, and 53 percent wanted wearable devices that look more like jewelry. This market will likely continue evolving - consumers are already looking for new form factors in wearable designs, including smart glasses and textiles, for their future purchases."

Published on: March 25, 2014

• The Wall Street Journal reports that Canada's Competition Bureau has approved the acquisition of Shoppers Drug Mart by Loblaw Companies, contingent on the sale by Loblaw of 18 stores and nine pharmacy operations because of antitrust concerns. The deal is now expected to close at the end of this week.

According to the story, "In the course of its review of the acquisition, the Competition Bureau expressed potential concerns about certain Loblaw supplier practices. The Company will cooperate with the Competition Bureau in its continued review of these practices. Loblaw is committed to supplier practices that meet the Bureau's objectives of maintaining competitive markets."


• The Chicago Tribune reports that the newest Mariano's store, in Chicago's Ukrainian Village neighborhood, will be the first "to sell game meats such as bison, boar, pheasant and rabbit … Mariano’s executives said that they decided to sell game at the store given the Ukrainian Village neighborhood’s eclectic clientele and culinary culture."

While the store has a grill station where employees will grill meat purchased by shoppers at the store, for the time being they will not be cooking the game there, simply because, as CEO Bob Mariano explains, they need to learn more about the meats before they start cooking them on the premises.

The Ukrainian Village store is the 18th Mariano's store in the area and the fourth converted from a former Dominicks.


• The Los Angeles Times reports that the National Coffee Association is saying that "the percentage of Americans who drink a daily cup of coffee fell last year to 61% from 63% in 2012," though the study "also reported that Americans are choosier about how they get their java fix: The study found a sharp increase in Americans drinking espresso-based drinks, such as lattes and cappuccinos. This segment rose to 18% in 2013, up from 13% the year before … The rate of Americans drinking coffee made from single-cup brewing machines jumped to 13% in 2013, up from 4% the year before, the trade group said."

Published on: March 25, 2014

MNB took note yesterday of a New York Times interview with Clorox Co. CEO Don Knauss, in which he talked about an issue dear to our hearts on MNB … specifically referring to lessons he learned in the Marines about the importance of convincing employees and associates that you care more about them than yourself.

MNB reader Bryan Silbermann responded:

Loved the lessons on leadership from Don Knauss.  As a former military man myself, what he said rings so true.  Power and authority are liberating when you don't have to use them. Expertise and authority depend on care ...  People will care that you know when they know that you care.  

MNB reader Steven Ritchey wrote:

I  had to respond to how profound an effect on organizational culture a leader can have, by their attitude toward the people under them.  I’ve seen the term servant leader used before and it’s pretty accurate.  If the leader feels they are there to serve those who work for them, it lets the rank and file employee know that they are all in it together, not just the worker bees, and the people in charge as two separate  groups, but one group working together.  Meanwhile, those who think it’s the employees job to serve them, well, it really does boil down to a management vs. employee relationship and becomes adversarial.
 
My first  job in the grocery business with working for a Store Director who got it.  If I was the designated floor guy, meaning I had to show up at 5 or 6 in the morning to sweep, and mop the entire sales floor, I may show up to find the Store Director cleaning up the area around the  trash dumpster or cleaning up a restroom from a  backed up toilet.  Being a Store Director he  had lots of part time teen agers working for him, he knew how kids thought and how to motivate them, he knew  how to get you to want to please him.  One night, he was the closing manager and I had to sort and put up empty soft drink bottles, ( I know, I’m aging myself here).  I didn’t have any red carts that were used specifically for Coke products and asked  him if we had any.  He’d seen some in the meat market with boxed beef stacked on them.  He took me back to the market and helped the meat cutter and I unload a couple of carts.  The meat cutter asked him who I was and he  replied, “Oh, that’s Steve, my hard working buddy.”  He treated his full time staff with respect and understood that  people work for reasons other than a paycheck.  He made that a fun store to work in and it made a difference in the level of service the customer got.

Years later, I’m all grown up and working for a regional grocery wholesaler in the Specialty Sales Department, where I  had one of the worst supervisors I’ve ever  had, before or since.  He thought we were all there to serve him and his whims.  My Uncle died suddenly of  a heart attack at home.  I believe the funeral was on a Tuesday afternoon.  My Supervisor made it abundantly clear to me that he expected me to be at work that morning and take off that afternoon for the funeral.  I wasn’t even allowed to take a full day off to be with family.  Contrast that with when his father in law died, he made sure he took his three days of bereavement leave he was entitled to.  I didn’t have much respect for him before that, and afterward, I  had even less.

One MNB reader responded:

I have the privilege of living next to a retired Marine Corp full bird Colonel, Colonel Phil “Thunder” Hinkle. I have had many a wonderful conversations about managing people and issues. I consider myself extremely fortunate to call him my friend above all  a mentor! First lesson I learned was who eats first, even when we have block parties he eats last.