business news in context, analysis with attitude

Published on: December 16, 2014

by Michael Sansolo

Every business strives or should strive for constant improvement. We all know that competition, like so many other forces on Earth, is always evolving. The status quo becomes increasingly irrelevant.

But is there a time when incremental or evolutionary changes aren’t enough? When that happens, what do you do?

That’s a question many businesses are facing these days thanks to the incredible leaps brought about by technology, global competition and even shifting economic patterns. What made for exceptional performance a few years back means mediocrity or worse these days and we can all name countless companies that fell from market dominance. (How about Kodak, Sears, or A&P, just to start the conversation.)

As a resident of the Washington, DC, area I get to watch a classic example of this each fall in the form of the local NFL team. (Both its name and performance are somewhat offensive.) Once one of the top franchises in the league, the team has become stuck in a cycle of mediocrity, with a revolving door of management, operating philosophies and star players.

Let’s be clear: sports offer highly imperfect examples for business because the way success is measured is so clear (wins and losses) and the financial structure so unique. But still there are lessons to be considered.

For example, Tony Kornheiser, a former Washington Post sports columnist and now the host of shows on ESPN and local radio, recently offered up a radical solution for the team. Essentially, he suggested, tearing it apart and starting in an entire new direction.

One of his suggestions is for the team to abandon the traditional methods of talent evaluation and move to the mathematically based Moneyball approach now used by so many baseball teams. As he explained recently, the team is clearly not succeeding with traditional scouting and drafting mechanisms so the only hope is a radical shift.

As a sign of the problems the team has, Kornheiser later reported that Washington ventured down this path a few years back and abandoned that idea within weeks. So lesson one: if you are trying something new at least have the courage to stick it out for a little while.

But let’s look beyond that.

For example, businesses have to understand if the problem is strategy or a culture that inhibits execution? Consider that Washington has repeatedly changed coaches in the past 20 years with each promising a new operating philosophy and none lasting more than four years. Even with the hiring of two extremely successful coaches, both of which previously won multiple championships, the team’s fortunes barely changed.

Countless minds greater than mine have reminded us through the years that culture far outweighs strategy every time. But if the company culture is so poisoned that it defeats every change, maybe it is time for radical housecleaning. To quote Sean Connery's Jimmy Malone in The Untouchables on the issue of a bad culture: “If you are afraid of getting a rotten apple don’t go to the barrel. Get it off the tree.”

If you don’t think it can happen simply remember another Apple, the computer company. In the late 1990s, the company was nearly dead before Steve Jobs returned, radically attacked the existing product mix and spawned a culture that lead to the iPod, iPhone, iPad and dominance.

Now the change in your company or team may not require anything as rash, but it probably requires something. With a New Year looming, what a great time for bold honesty to frankly address what is and is not working. But don’t stop there.

Take the time to really consider what’s causing mediocre performance. Is your team good enough; is your management style right for what’s necessary; are you providing a relevant product or service to your customers; are you constantly doing things the same way and hoping for different results?

Those are tough questions, but that’s exactly what’s needed in tough times.

As Washington's NFL team clearly demonstrates: doing anything less can leave you just as mediocre as you were before.


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 on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: December 16, 2014

by Michael Sansolo

Here’s a simple reality: people love food. We love talking about how we cook, how we shop and, of course, how we eat. So for a second, forget the well-intention discussions of efficiency and rationalization in the industry and remember that little fact.

As evidenced by my column above, I (like Kevin) love listening to Tony Kornheiser's radio show. What makes it so wonderful is the show ranges far from sports. In fact, I could argue the movies and food get equal time, which makes it a perfect fit for the MNB authors, if not our audience.

Mr. Tony (as he likes to be called) loves talking about his favorite foods and getting gifts of those items from his listeners, whom he calls “the littles.”

A new favorite of Mr. Tony’s is the brown rice/black pepper/sea salt variety of Triscuits. He loves them and ravenously eats boxfuls. Being a loyal little I called Rick Brindle at Mondelez and relayed the story. Rick called his company’s public relations staff and they dispatched a box of samples to Mr. Tony’s studio in Maryland.

The result: Mr. Tony gleefully talked about the gift for two minutes last Wednesday and his on-air crew waxed on about their favorite varieties as they suggested new ridiculous varieties such as mutton and molasses. Through it all, Mr. Tony kept reminding his listeners, “I like Triscuits better than any other cookie or cracker.”

Here’s the thing. Mondelez got a ton of free advertising on the air with just some samples. More importantly, it befriended a passionate consumer who talked about his love of the product in better terms than any ad could ever convey. Mr. Tony started out as a customer, but he turned into an advocate.

That’s not to say that free gifts of food to radio shows is a foolproof marketing strategy. Rather, remember that this shows how much people like all different kinds of food items. And they talk about that passion at work, at parties, on social media and sometimes through the media.

Remember, food stores are not just selling items. They are selling what people love.

Keep it in mind. It can be an Eye-Opener.

Published on: December 16, 2014

Forbes.com has a story about the best retail jobs available, concluding that "a handful of retail chains have risen above the rest, landing on salary comparison and job search site Glassdoor's annual survey of the best places to work."

Of the retailers that made the list of top-50 places to work, H-E-B got the best ranking: "H-E-B workers rated their pay and benefits 26.5% above the average, with the company’s 401K plan and employee discount winning plaudits."

Also on the list was In-N-Out Burger, where employees cited "the company’s flexible, generous vacation and paid time off versus the rest of the fast food industry," as well as competitive pay, life insurance, and free meals."

Costco was further down the list, with workers giving "Costco’s salary and benefits particularly high ratings, with an average of 4.3 on Glassdoor’s 1 to 5 ranking system. By way of comparison, associates at competitor Walmart — which did not make the list — gave their employer a 2.8 in this category."

The story goes on: "The fourth and final retailer to make Glassdoor’s top 50 is Wegmans, a beloved upscale grocery chain based in Rochester, NY but with stores across the northeast."

Published on: December 16, 2014

The Wall Street Journal reports that Google "plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com," and has approached retailers who are part of its Google Shopping service "about creating a 'buy' button … that would be similar to Amazon’s popular 'one-click ordering' feature."

The goal is to keep people on Google rather than referring people to other companies' sites, which it thinks will keep people from straying to Amazon.

"Separately," the Journal writes, "Google is considering a marketing program that would allow merchants to promote two-day shipping for products purchased through its shopping service, according to a person who has been briefed on the plan. The program would resemble ShopRunner Inc., which offers unlimited two-day shipping from retailers including Neiman Marcus Group Inc. and Toys R Us Inc. for a $79 annual fee."

Published on: December 16, 2014

Fortune has a story about FreshDirect (which also just got a story in Direct Marketing News, as noted here yesterday). According to the story, "The New York City-based company got a new competitor in October when Amazon threw down the gauntlet by launching its grocery delivery operation in Brooklyn, its first move into the East Coast market.

"FreshDirect CEO and co-founder Jason Ackerman says his company so far has not felt the impact of Amazon, in large part because the grocery delivery business is such an untapped segment."

The story goes on to say that "being culinary focused has allowed FreshDirect to keep up with and capitalize on industry trends. The company, which sources a lot of its goods from local producers, offered CSA boxes for the first time this year. It also sells meal kits, positioning the service to square off against hot startups like Blue Apron and Plated that deliver all of the raw ingredients needed to make a particular dish. The FreshDirect team also noticed that many of its customers were having two Thanksgivings, one with family and another with friends (aka Friendsgiving), so it developed a line of items geared toward that second, smaller gathering."

Ackerman tells Fortune that "when it comes to competing with Amazon, FreshDirect will need to keep its focus on food. FreshDirect is the David to Amazon’s Goliath. While Amazon knows delivery and logistics, it’s new to food."

Published on: December 16, 2014

There was a long piece in the New York Times focusing on what would appear to be a statistical oddity: "While rates of employment for women have been rising in other countries, they have declined in the United States, falling to 69 percent from 74 percent."

An excerpt:

"As recently as 1990, the United States had one of the top employment rates in the world for women, but it has now fallen behind many European countries. After climbing for six decades, the percentage of women in the American work force peaked in 1999, at 74 percent for women between 25 and 54. It has fallen since, to 69 percent today.

"In many other countries, however, the percentage of working women has continued to climb. Switzerland, Australia, Germany and France now outrank the United States in prime-age women’s labor force participation, as do Canada and Japan.

"While the downturn and the weak economy of recent years have eliminated many of the jobs women held, a lack of family-friendly policies also appears to have contributed to the lower rate. In a New York Times/CBS News/Kaiser Family Foundation poll of nonworking adults aged 25 to 54 in the United States, conducted last month, 61 percent of women said family responsibilities were a reason they weren’t working, compared with 37 percent of men."

The story suggests that women are unwilling to make the trade-offs that men are willing to make; they would work if offered flexible hours, the ability to work from home, and help with childcare.

The Times goes on: "Many women also seem interested in working again — under the right conditions. And near the top of the list of those requirements is the flexibility to avoid upending their family life. Many fewer women than men said they would be willing to take a job with trade-offs that might significantly affect their lives: moving to a different city, commuting more than an hour each way, or working nontraditional hours."

You can read the entire story here

Published on: December 16, 2014

Great line from Gary Friedman, CEO of Restoration Hardware, about the power of a brand…

"People can fall in love with a brand, just like they can a person, or a passion,” Friedman says in a video prepared for analysts and investors. "And it’s not always rational, nor is their behavior. People camping out for days in a line to be the first to buy a new phone, when they could have easily ordered one online is not rational, but they do it. It’s a customer saying: ‘I believe what you believe.’”

Published on: December 16, 2014

• The New York Times has a piece suggesting that as Amazon expands Prime benefits - offering original programming, streaming music and even a lending library - this expansion "appears to be fueled in part by fattened margins on all sorts of books beyond the top best sellers."

It is a long way from the days when Amazon pledged to discount all books over $20 by 30 percent.

Published on: December 16, 2014

• Bloomberg reports that Express Scripts Holding Co. CFO Cathy Smith is leaving the company after just 11 months there. Smith, the story notes, "worked at Wal-Mart for four years and was executive vice president of strategy and CFO for Wal-Mart’s international division.

"During that time, Wal-Mart’s China business appeared strong, though questionable accounting and unauthorized sales practices were taking place, according to employees and internal documents reviewed by Bloomberg.

"Smith has not been implicated in those events. Wal-Mart said last week that the business practices in China had been identified internally, investigated and that changes there had been made."

Express Scripts said that the Walmart situation played no role in Smith's departure. Smith could not be reached for comment.

Published on: December 16, 2014

• The United Fresh Produce Association said yesterday that it has named Jessica Mosley as its new Director of Education. Mosley Mosley most recently was Director of Education and Professional Development at the American Meat Institute (AMI).

Published on: December 16, 2014

…will return.

Published on: December 16, 2014

In Monday Night Football, the New Orleans Saints defeated the Chicago Bears 31-15.