business news in context, analysis with attitude

Here is one of the best emails I've ever gotten, from MNB reader Tom Williams, because it touches all the bases:

I have been a Red Sox fan since that Carlton Fisk moment in the 1975 World Series and my daughter and I go to Anaheim stadium whenever the Red Sox are in town.  Last night was the first time back to the stadium since 2018.  The baseball was fantastic with the Sox winning after 10 innings 6-5. We sat on the field level just past first base and were surrounded by fellow Red Sox fans.  It was difficult to tell we were at an Angels home game.

I had been quite impressed at how the stadium progressed to digital options since our last visit.  Our tickets were purchased online and saved in my digital wallet, parking at the stadium was cashless and completed with Google Pay.  However, as we strolled through the stadium looking at our food options I kept hearing your voice in my head commenting on points of “friction”.

There were several self-serve beverage sections.  Basically, convenience store coolers filled with a selection of can beer with a single cashless register at the end.  The line was at least 10 people deep at each one – “Friction”.  Why are those not using walk through pay technology? I think the city of Anaheim, the Angels and the stadium can afford it.

Then when I got my bratwurst and beer the pleasant lady that took my order needed to turn and walk 10 feet to the kitchen window to relate my order to the prep station worker.  Not too bad except she made the 10 foot walk after each of my four items I ordered.  Oy! What a waste of time and “Friction”.  Again, there must be a technological solution for this.

There are a few chain restaurant locations inside the stadium – Oggi’s Pizza, Chronic Tacos and Jersey Mike’s, that also have locations near our home that we frequent.  The food at the locations in the stadium is just poor quality.  If what they serve inside the stadium was served in the neighborhood locations they would be out of business.  This is a huge “missed opportunity” on a first impression for those that are not familiar with the neighborhood locations.

It is an “Eye-Opener” to me that we as baseball fans (customers) have all come to expect and tolerate poor quality food and beer at over inflated prices simply because they are inside the ball park.  Does the experience of the game really compensate for all that friction?  It did for us last night. 

Well Done Sir!  You have a reserved parking space in my head.

I'll try not to abuse the privilege.

Yesterday we took note of a Fast Company report that "at the 300 publicly held U.S. corporations with the lowest median wages, the gap between what CEOs and median-wage workers earn has grown to a ratio of 670-to-1, according to a new report—up from 604-to-1 in 2020.

"That’s just the average gap; the ratio at 49 of those 300 companies is larger than 1,000-to-1, according to the progressive think tank Institute for Policy Studies, which released its annual Executive Excess report on Tuesday … While CEOs at those 300 corporations saw their pay increase by $2.5 million in 2021 - to an average of $10.6 million - median pay at those companies went up by only $3,556, to an average of $23,968. At more than a third of those firms, median pay didn’t even keep up with the 4.7% average inflation rate in 2021."

One MNB reader responded:

It's just infuriating to read stories like this.  I've given nearly forty years of loyal service to the company I work for, and yet even this year, with costs skyrocketing, I was given the same cost of living adjustment that I normally get (which, by the way, never covers the current inflation rate). The "c suite" makes no attempt to hide the fact that they view their associates as a cost rather than an asset.  Very sad.

But another MNB reader offered:

If employees do not like how they are treated they have every right to leave, and try and find something better. Numbers don’t tell us where the company’s profits are going but it’s not all going into the pockets of CEO’s ….matter of fact … CEO’s that can’t usually are gone ! Employee’s are hard to come by these days… believe me, we know! We pay way more than $15/hr and yet now that’s not enough? The bar keeps moving up … mainly because of rampant inflation which is man made and out of control. Why not rant about bringing costs down… not up!

I've always thought that it is a mistake to suggest that people can just leave and/or work somewhere else.  We don't know what people's circumstances are, or why they stay at companies with which they are unhappy.  I would not presume to make that determination for them.

As to one of your other points … sometimes costs should not be brought down, as in a customer service-oriented store where it actually drives sales and profitability to have more people working in the store.

I would also suggest that if employee costs are being driven up right now, it may be that this is poetic justice.  It has been a long time since the pendulum swung in the direction of labor.  Which is why everybody ought to behave as if the pendulum is going to swing the other way, and create sustained, sustainable management-labor relationships built on a mutual sense of investment in the success of the business.

Another MNB reader wrote:

Hmmm… salaries you say? I can tell you that our salaries are not the bloated salaries those execs at national chains enjoy but still our profit margin is just as low. Of course, being smaller, our cost of goods is higher and we can’t spread the central duties like accounting and marketing over hundreds of locations. 

And, from MNB reader Rich Heiland:

I get that CEOs are important. I always said my role as a CEO was to set the vision and supply the resources for everyone in the company to chase that vision. It's a critical and vital function. But was I worth 670 times my lowest paid employee? Not in a million years.

From a customer perspective, when was the last time a customer interacted with a CEO? Now, when was the last time a customer interacted with a front line or even mid-level employee?

To reward CEOs obscenely while slighting, and even abusing, the point-of-contact employees is....well....stupid. While customer service practices, training, hiring-to-service is critical, customer service will always be a point-of-contact business. Companies that don't get that ultimately will lose, in my humble opinion.


On another subject, from MNB reader Mark Kramer:

I’ve been following the Starbucks situation for some time.  Clearly the company is having serious  trouble connecting with its associate base.  The deepest irony here is that Schultz had without doubt the industry’s  premier ‘people person’ in Jim Donald.  I had the opportunity to work with Jim when he was CEO of Pathmark before he left for Starbucks.  In my view there is no-one more capable of connecting with and motivating an associate team than Jim.  Schultz may be out looking for what he already had!!!

And finally, regarding the Fox Business report that "Chick-fil-A is testing fully automated delivery with a small army of robots in pilot programs across the country," in markets that include Austin, Texas, California and Florida, one MNB reader wrote:

Chick-Fil-A should design their delivery robots to look just like their cow mascots.  Just imagine a robotic cow flying in to make a delivery.  Then they would have something.

Udderly brilliant.