business news in context, analysis with attitude

Published on: April 2, 2015

While I usually provide a text version of my video commentaries, every once in a while I don't ... just because I think it is better for actually seeing and hearing it.

I will tell you the general subject though. It is about about the best way to create customer loyalty and why differential advantages are the best way to create a sustained relationship with the shopper. But most of all, it is about hot dogs.

Enjoy.

To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Published on: April 2, 2015

by Kevin Coupe

The Washington Post has a piece about how Zappo's, the online retailer that is owned by Amazon, is embracing an approach to management that it calls "holocracy."

According to the story, "the new system replaces the conventional command-and-control workplace with a series of self-governed teams, known as 'circles.' The effort is supposed to speed decision-making, share authority and help the organization become more innovative." The story defines holocracy as "a model where the usual functions of a boss are handed over to the organization at large," and says that the new system "apparently includes protocol-driven meetings and a jargon so peculiar it can make other corporate lingo sound like poetry."

What's really interesting about holocracy is that it is very hard for some folks to adapt to and adopt .... and so Zappos CEO Tony Hsieh is making employees an offer they can't refuse - saying that if they cannot get on board with the new system and meet certain criteria, they can opt to leave Zappo's and get three months pay as severance.

The company says it has "a lot of faith in the vision of where this is going to take our organization," and that its goal is "that everybody figures out how to contribute and how to help the organization."

And it is willing to spend money to make sure that not only is everybody rowing in the same direction, but that everybody has an oar in the water.

It is an Eye-Opener.

Published on: April 2, 2015

Arkansas Gov. Asa Hutchinson, responding to broad-based criticism from the business community as well as the entreaties of his 31-year-old son, yesterday asked the state legislature to withdraw the religious freedom bill that it had passed and sent to his desk to be signed into law.

Supporters of the bill say that it is designed to assure that governments cannot infringe on people's personal religious beliefs, while opponents say that the bill would essentially institutionalize the ability of people to discriminate against the LGBT community.

Acknowledging the fact that the passage into law of a similar bill in Indiana had created enormous controversy on a national scale, Hutchinson said that the Arkansas bill was "divisive" and needed to be rewritten so that discrimination against any class of people would not be enabled.

However, it remains for the Arkansas legislature to decide whether to rewrite or amend the bill.

In Indiana, Governor Mike Pence has promised to fix the new religious freedom law so that it does not allow for discrimination. And this morning, USA Today reports, "Indiana Republican legislative leaders, under growing pressure from inside and outside the state, said Thursday that lawmakers had reached agreement to alter Indiana's controversial 'religious freedom' law to ensure it does not discriminate against gay and lesbian customers of Indiana businesses. The proposal, rolled out at the Statehouse, would grant new protections for LGBT customers, employees and tenants."

Pence has not said whether he will sign the new bill.

Opposing the legislation as bad for business have been organizations as varied as Walmart, Apple, Marriott, GE, the NCAA and NASCAR.

The Los Angeles Times reports this morning that "a recent survey by the nonprofit, nonpartisan Public Religion Research Institute found that 80% of respondents opposed the concept of allowing small-business owners to refuse services on religious grounds to those who are gay, lesbian, bisexual or transgender."

Published on: April 2, 2015

The New York Times this morning reports that McDonald's has announced that it will give raises and new benefits "to 90,000 employees in the 1,500 outlets in the United States that it owns and operates, responding to competitive pressure from a tighter job market and to labor campaigns drawing public attention to its pay policies.

"The decision, however, does not affect the 750,000 employees who work for the more than 3,100 franchisees that operate roughly 12,500 McDonald’s restaurants around the country."

The story goes on: "The company will increase wages to at least $1 over the local legal minimum wage for workers in restaurants under corporate control to an average of $9.90 an hour by July 1. That average will increase to more than $10 in 2016. Employees who have worked in company restaurants more than a year will also be eligible for paid time off, whether they work full or part time. An employee who works an average of 20 hours a week might accrue as much as 20 hours of paid time off a year, the company said."

And: "McDonald’s will also expand a program intended to help employees of both its own restaurants and those operated by franchisees to take classes online toward earning high school diplomas. The company will cover those costs, as well as assist employees with college tuition."

Published on: April 2, 2015

Bloomberg reports that Walmart "expects to be in heavy investment mode for the next 18 to 24 months as the company improves the way it handles inventory and outfits more locations with in-store pickup for online orders.

The Bentonville, Arkansas-based company also is working to make pricing more competitive in private-label products and bolstering its grocery business, Wal-Mart executives said Wednesday in a presentation to analysts."

Greg Foran, head of Wal-Mart’s U.S. operations, told the meeting that "we have as a top priority to grow sales and market share. And that starts with improving the core and concurrently investing for the future.”

Fox Business reports that "Foran, responding to a question from an analyst, said he wouldn’t discount initiating a loyalty program at Wa-Mart, something the company hasn’t done, but that the best way to retain customers is to offer the 'right price' in the first place. 'But I never discount anything,' he said."

Published on: April 2, 2015

The Wall Street Journal reports that "President Barack Obama on Tuesday rejected legislation that would have scrapped a National Labor Relations Board rule streamlining union-organizing elections, his fourth veto since taking office and his second since Republicans gained full control of Congress ... The rule, which was completed in December by a five-member board of presidential appointees, represents one of the biggest procedural changes in decades to the federal union-organizing process. When it takes effect on April 14, it will streamline elections by allowing certain documents to be filed electronically instead of by mail. It also generally delays legal challenges from employers—such as whether certain workers are eligible to vote—until after workers have cast their ballots."

The GOP has denounced the rule as unfairly speeding up union elections and putting employers at a disadvantage. However, Republicans do not appear to have enough votes to override the Presidential veto.

Published on: April 2, 2015

National Public Radio's Morning Edition has a piece about Walmart's urban incursions, noting that its downtown Washington, DC, store "defies all stereotypes of the big-box store as most picture it: a monolith of consumerism, an island surrounded by the sprawl of a parking lot, tucked away in the suburbs.

"That Wal-Mart chose to open a store in a rapidly developing urban neighborhood is indicative of where this company sees its future. More than 80 percent of America's population lives in cities. So while big-box stores are likely to continue opening in rural and suburban areas, Wal-Mart must go smaller if it wants to get bigger."

You can read (or listen to) the entire story here.

Published on: April 2, 2015

• Amazon announced this morning that it is expanding its Prime Now service - offering one-hour delivery for thousands of items - to Atlanta, where it will be available from 8 a.m. to midnight, seven days a week. Two-hour delivery is free and one-hour delivery is available for $7.99.

To this point, Prime Now has been operating in Baltimore, Brooklyn, Dallas, Manhattan and Miami, with Amazon promising a rollout to additional cities this year.


• Newport Avenue Market, a single-store independent in Bend, Oregon, announced that it is introducing Apple Pay "as a new, secure payment option for shoppers. The addition of Apple Pay is just the next step the market has taken in continuing to keep up with the latest technology trends in the grocery industry.

“We’re always trying to keep up with the latest technology trends, think of innovative ways to keep our customers happy, and maintain that great shopping experience that Newport Avenue Market offers,” says Lauren G.R. Johnson, Leader of the Pack & COO of Newport Avenue Market.

The company notes that this is just the latest of some $2.5 million in investments in "new technologies, lessening the store’s carbon footprint and creating a carefree shopping experience for guests."

Published on: April 2, 2015

• The Cincinnati Enquirer reports that Kroger is buying the former Nash Finch Co. distribution facility on 25 acres of land in Blue Ash, Ohio, for $9.3 million.

According to the story, "Kroger spokesman Keith Dailey confirmed the purchase, but said the company is not actively developing the site at this time. Nash Finch closed the facility last year after the company merged with the Spartan Stores grocery store chain."

Published on: April 2, 2015

More email regarding the religious freedom bills that have created controversies around the country because, in the view of some, they allow people to cite religious beliefs as a rationale for discrimination against the LGBT community.

Reacting to the picture of a t-shirt made by an Indianapolis florist that we ran yesterday (reproduced here), one MNB user wrote:

The first thing I did after reading NewsBeat for the day was to go and see if I could buy an "I got served" tee shirt from Watts. Couldn't find it on the main site on their website, (that's a miss on the business owner's part as I can't imagine I'm the only one looking after reading your article). I love this shirt - as Larry the Cable guy says, "I don't care who you are, that's funny".
 
I've got an email into them to see how I, and any other of your readers interested can get a shirt. I'll let you know what I find.

I appreciate that.

Another MNB user wrote:

Not to beat a dead horse over this Indiana law, but I think the elephant in the room that no one has been talking about is birth control and other drugs that some people have strong religious beliefs about. The Indiana law would most likely allow pharmacists with “strong religious beliefs” the right to deny morning after pills and preventive birth control pills to their customers.  The pharmacist could refuse to provide erectile dysfunction drugs to all unmarried men, because sex outside of marriage violates his or her beliefs.  What if there is only one pharmacy that serves its community?  I am sure there are many areas throughout Indiana where one local pharmacy is the norm. The pharmacists in those areas could impose their beliefs on the general population and those pharmacists would not be held accountable for doing so.

From another:

Say a Muslim business owner is sued by a woman denied service because she wasn’t veiled; I wish I had a level of absolute certainty that the legislature in Indiana would stand arm-in-arm with that business owner.  But, I don’t.

And this from a state that couldn’t even agree on a time zone until a few years back.

MNB user Tom Herman wrote:

Quite frankly, this shouldn’t be a controversy.  How many people have actually read the law or even understand what it means?  The act basically holds that government sometimes has to infringe on religious freedom in order to pursue equality and other goods, but, when it does, it should have a compelling reason and should infringe in the least intrusive way possible.  No place in the act even mentions the words gay or marriage equality.  There is a federal RFRA, as well as half of the states have their own RFRA laws.  If the government infringes on someone’s or some organization’s religious rights, if challenged, they would have to have a compelling reason and find the least intrusive way possible.  How could this be controversial?  Where in a tolerant society can’t we make reasonable accommodations for a small minority of people with deeply held religious beliefs?

Specifically in Indiana, the state doesn’t currently have a law that specifically protects the gay and lesbian community.  Not one person has been able to point to any businesses currently discriminating against the gay and lesbian community.  It is wrong, they would be ostracized, and would go out of business if they did.  What we are seeing now is intolerance for people with deeply held religious beliefs.  What we are seeing now is clear bigotry against evangelical Christians.  I have even read comments that evangelical Christians should run out of town or even hung.  If you want to see them, look up any article that deals with the issue in the New York Times and see the comments for yourself.  While there are many bigots out there, there are also many wise and deeply humane people whose most deeply held religious beliefs contain heterosexual definitions of marriage. These people are worthy of tolerance, love, respect and gentle persuasion.

Three things.

First of all, I reject the argument that this represents "clear bigotry against evangelical Christians." I just think you're wrong.

Second, it is instructive when you write that "not one person has been able to point to any businesses currently discriminating against the gay and lesbian community." Which means, I think, that no businesses had been put in an uncomfortable position where they felt compelled to discriminate. So why did Indiana need the damned bill?

Finally, it is important not to take too seriously the comments that people write on message boards .... because they essentially are unedited, they can reflect the worst instincts of people with truly ugly opinions (from both sides of the aisle). That's why I've never had a message board on MNB ... I prefer civil discourse, and I don't run the comments of the lunatic fringe.

And from still another:

Sounds like a great week for someone wanting to earn a profit to open a Gay-Friendly Chain of Bakery/Floral/Pizza Shops!

An MNB user chimed in:

I’ve enjoyed the debate on the subject and thought I would chime in.  I need to preface my comments to say that I am a follower of Jesus Christ. 

The idea that all Christians (I cannot speak to other beliefs) would refuse service to gay men and lesbians is false. I am a former Inn owner and would never have thought to ask about or worry that two people of the same gender are renting a room with one bed. Unfortunately, this is an argument that has a base where you are either on one side or the other.  That base is are you born gay.  I do not believe, based on the bible, that anyone is, so I will never buy into the idea that it’s the same as the discrimination we experience based on race.  However, to those of us who see it as a sin, I would ask all of us to look inside and understand that we’re all broken in some way. 
 
To me the bottom line is my faith does not make me less of a sinner than anyone else and I certainly would not want a business to ask me if I’ve sinned today before they decided to serve me or not!

And another:

How often have people hidden behind religion to promote their own biases? Religion justified slavery, and segregation, witch burning, stoning, beheadings, and a crucifixion. Why not discrimination too?

And still another:

I find it interesting the position Walmart is taking on this issue.  Is this not the same company that was the very last large retailer to carry the emergency contraception pills in all of its pharmacies after numerous lawsuits and government regulations forced them to?  Didn't their religious beliefs put the emergency contraception pill on the same level as abortion, and they held their beliefs should trump state requirements?

So how many pharmacies in Indiana now can stop stocking and dispensing the emergency contraception pills based on their new law?

The world is changing. Walmart's top leadership has changed. I think that may be what we're seeing here.

And finally, MNB reader Neil G. Reay wrote:

So I guess that people protesting the religious freedom law in Indiana want to be able to force a Jewish synagogue to host a neo-Nazi wedding…or an African-American church to provide a choir to a Ku Klux Klan rally…or a Quaker-based business to provide guns and live ammo to an NRA conference…or a play center to rent out to a pedophile club for a Kid’s Fun Day. We have become a “demanding” culture, where individuals “demand” that everyone else meet their own personal standards of conduct, but there are few common acceptable standards to satisfy everyone. That is why our Federal government is at a standstill. The fact is that businesses can offer any range of services that they want, and they will either succeed or fail according to the fit between their offering and the social audience. People who demand that Chic-fil-A provide abortion coverage as a “right”  as a health benefit should also be willing to support the NRA demanding that they provide mandatory handgun training to all employees (in the interest of gun safety and to provide a trained militia if needed). Widespread cultural or government discrimination (e.g. Jim Crow laws) needs to be fought, but once the right to eat out or buy wedding cakes or do other things are widely available, we have to allow businesses to choose whom and how they serve. Outliers will fail. All of the examples above should be able to be courteously denied if the group or business chooses. Enforcing “your rights” may constrain “my rights.” Neither the majority nor the loudest is always on the high moral ground. Maybe we should look more for options rather than offences.

You seem to think that the problem with America is that the culture has become too demanding. I would argue that at least one of the problems with America is that too many people can't distinguish between a legitimate argument and a specious one. The ability to discriminate against silly scenarios is one kind of discrimination that I would heartily endorse.

A Neo-Nazi group is never going to ask a synagogue to host a wedding. Not gonna happen. The Klu Klux Klan is never going to ask an African American choir to provide the entertainment. Not gonna happen. A Quaker-owned business is not going to be asked to provide guns, because it isn;t going to be in the business of selling guns. And I really don't think that a play center would get in trouble for not renting out its facilities to a group of pedophiles. Not gonna happen.

That's like saying that a cancer center is going to get sued because it doesn't perform meniscus surgeries. Not gonna happen.

There is a difference between providing a wide range of health benefits to employees other than one that conflicts with the owner's point of view, and not providing handgun lessons. And if you don't see the difference, absolutely nothing I can say, no matter how reasonable I want to be and how understanding about religious freedoms I wish to be, is going to allow this to be a civil discussion.

Here's the deal. I have no idea who you are. I know nothing about your color or your sexual persuasion. (Your name suggests to me that you are a male.) But I do know that if you walk into a store and ask to be waited on, the person behind the counter ought not be able to look at you and decide not to sell you the products and service they offer to other people just because you are black or white or yellow or brown, or because that salesperson thinks you might be gay or straight. Just as, by the way, that store ought not be able to pay you less simply because of your gender, religion, ethnicity, color or sexual persuasion.

Do we have freedom of religion? Sure. Absolutely. But also, I think, freedom from religion being used as an excuse for behavior that is essentially un-American, or as a cudgel against people who disagree with us.

This may seem to you as unreasonably demanding. But it strikes me as the very essence of America. And, by the way, it also seems to me that we as a nation spend an awful lot of time fighting and criticizing countries where it is okay to treat people as lesser beings because of their ethnicity, religion, gender, or even their politics.

End rant. At least for now.

Published on: April 2, 2015

It seems appropriate that during this week when the question of religious freedom vs. civil rights has been front-and-center of the political discourse, that HBO has been showing a new documentary, "Going Clear: Scientology and the Prison of Belief," written and directed by Alex Gibney, based on a similarly titled book by Lawrence Wright. There seems to be a lot of attention to the subject: the Hollywood Reporter has said that the film has been much seen, garnering strong ratings for HBO during its initial showings.

The ratings are justified, because the movie is mesmerizing. Broken essentially into three parts, the movie looks at the lure of Scientology (especially to celebrities like Tom Cruise and John Travolta), the history of the organization and its founder (L. Ron Hubbard), and allegations of misconducts against its current leadership, especially David Miscavige, who has run Scientology since Hubbard's death. These allegations are largely delivered by people who have left Scientology and subsequently been subject to various forms of harassment.

To me, it seems utterly clear that Scientology is more cult than religion ... but having said that, I must admit that we all draw the line in different places. If religion is defined as "the belief in and worship of a superhuman controlling power, especially a personal God or gods," Scientology is defined by this movie as being far more about the worship of Hubbard and Miscavige, each of whom is painted in, shall we say, less than flattering terms.

While I find any belief in Scientology's tenets to be utterly mystifying and the organization's alleged strategies and tactics to be abhorrent - especially its practices of intimidating and humiliating believers into complete subservience , and forcing members to disassociate from friends and families who do not share their convictions - the subtext of the film really is about the nature of belief and the essence of faith. While I may scoff, do I have a right to judge?

There is an email today in "Your Views" in which a reader suggests that all the debate in Indiana over religious freedom legislation really reflects a "clear bigotry against evangelical Christians." Now, I disagree with that completely ... and couldn't committed, sincere Scientologists argue that this documentary reflects a clear bigotry against their religion. (Would evangelical Christians argue that Scientology deserves the same freedoms and considerations enjoyed by their faiths?)

I am troubled by all this. Not by the fact that we're having the debate, but by the hazy lines often drawn between public policy and private belief, and the difference between how my head and heart are reacting to all this.

In my heart, watching this film, I am appalled. Even if the film is only half accurate (and I suspect it is far more accurate than that), I find Scientology's belief system to be warped in the extreme, its practices to be exploitive, its claim to be a religion absurd, and its right to be called a religion (and get all the attendant tax benefits) highly questionable.

In my head, though, I have to wonder if Scientology has any less right to the protections and advantages of the law than Catholicism, Judaism, or Islam. And I also have spent a lot of time thinking not about the leaders of Scientology, who seem to be basking in worship and riches, but rather about the followers - ordinary people who are seeking direction, looking for faith (in something or anything), and who seek meaning and personal definition in some higher or greater power. They hardly are wrong or alone in having such desires; the question is whether they've bet their souls on the wrong horse.

I don't know.

But I am thinking about it. In provoking this kind of thought, "Going Clear" is a highly successful piece of work. It is hard-edged, opinionated, and utterly fascinating. I urge you to watch it, think about it, and talk about it. As we've learned this week, there sometimes may be a disconnect between matters of public policy and private faith, but there always is a place for a civil discussion of these issues in the public discourse.

Published on: April 2, 2015

Tomorrow is Good Friday, and MNB will be taking the day off.

We’ll be back Monday. Have a great weekend.

Slàinte!