business news in context, analysis with attitude

Got this email from an MNB reader the other day:

Your FaceTime today focused on the choices employees have when responding to corporate mandates/policies/encouragement about working from home.  The choice, you said, was about a job versus a career and that managers who see employees in the office are more likely to promote those physically present and if you wanted to become the "go-to" you had to be in the office.

For almost three years the job was done.  With little to no notice we were ejected from our cubicles and required to recreate our workspaces at home.  We had to juggle the impact on every aspect of our family life while also achieving our work goals. People were hired, recognized and promoted during our time away.  There were employees who became the "go-to" person while working from home.  Managers had goals to achieve and employees either achieved them or were gone.  It was business as usual because employees figured it all out.   Now managers are struggling to find employees who want to come back - why has three days in the office become the norm?  Not because management wants to give employees a choice of job or career but because management saw people leave in droves and new hires won't come in five days a week.  And guess who else doesn't want to be in the office five days - managers!

I believe management has the real choice.  Do they want to get the job done or not.  To do so they will have to recognize the need for workplace flexibility.  They will have to understand that many employees have made their choice that a job is all they want because their work/life balance is more important than a career.  They will have to overcome ingrained misogynistic blindspots (yes I went there) and realize the employee sees a commute as a complete waste of time - theirs and their employers.  And that the employer can't pretend they are fairly applying new "in the office" rules when they won't comply themselves.

I agree with you about employers who want staffers to be in the office three days a week and then want to manage them from the Hamptons or some other enclave where they nurture their own work-life balances.  They may be able to manage from a distance, but that's different from leading.

We had a story the other day about Steve Jobs' three tenets of teamwork, leading one MNB reader to connect the dots to the work-in-the-office piece:

1) Trust

2) Good constructive, respectful arguments.

3) Focused on Ideas not Hierarchy.

All require excellent, engaged leadership.

None requires being face-to-face - especially with the newer generations of employees who are often very intimidated by face-to-face communications.

We also had a story the other day about private label advances, prompting this email from an MNB reader:

“While Americans still love their brands, the pandemic and inflation have turned the past year into a showcase for private label power.” – This is old-school thinking, and was happening long before the pandemic. Trader Joe’s, Great Value, 365, and many other “private label” products are also brands. And, they have their own distribution network, shelf space and advertising platform. These brands have learned marketing from the traditional brands… and they are now seen as equal to or better in terms of quality or value.

But, from another reader:

The PLMA has always touted the rise of private label.  That is their job.  I do agree that there is additional growth in PL from new offerings and some consumer switching, however that growth may not be that sustainable for a couple reasons, quality being the first.  There have been improvements, but still not the same or better than the like brands.

In the article Forbes references many retailers showing growth that have been in PL for a long time or base the majority of their marketing as own brands.  TJ’s for one.  It was interesting that Aldi’s didn’t show, being one of the largest PL retailers in the country. These PL retailers see increases (which plays to PLMA’s story of growth) through the attraction of more customers, not brand switching.   Retailers that are feverishly attempting to provide the PL offer will struggle, because they are so dependent on the brand funding, that they can’t pull that needle out of their arms. So, they are inherently creating competition with the very funding “partners” that they rely on.  I believe retailers are still a long way from being able to dramatically redirect their corporate approach to greater dependence on PL offerings.  Brand dollars are too imbedded in the retailers DNA.

On the subject of logistics adjustments being made by Amazon, one MNB reader wrote:

Amazon’s refinement of its logistics network…and resulting cost saving should be recognized as a significant positive…and a reflection of its focus on improving its core competencies following its aggressive expansion to capitalize on the pandemic-driven surge in its online retail business.

You seem to think this is a negative…that the bloom is off the rose for Amazon.

I think it reflects strong management discipline and only strengthens their foundation for long term success.

On the contrary.  I thought I was saying the opposite - that while I've questioned some of Amazon's recent choices, this suggests positive movement that could have long-term positive implications.

Sorry if I was unclear.

From another reader:

Regarding the story in the WSJ on Amazon and why they shouldn’t be counted out of the grocery wars: I agree with the story’s points that Amazon will continue to pursue the grocery market because of its size potential. I also agree that Amazon’s approach has been largely “whiz bang” and that is simply not enough. Amazon is an information and logistics genius and while you are correct that they lack a clear sense of strategy regarding solutions to customer problem/need/desire, in my mind the biggest area of that challenge is around perishables. The challenges of doing fresh food well, including logistics, handling, product development, romance, connection to the producers, etc., is best served by what Amazon does worst—development of its people. In other words, all of the technology and AI in the world is not (yet, at least) good enough to help Amazon gain significant share from retailers who do fresh foods really well.

On the subject of how and why companies are depending on retail media networks to drive economic growth, one MNB reader had a simple point:

Slotting fees used to drive revenue… next is advertising dollars?

Sounds like it.

I did my FaceTime yesterday about why I love the Sur La Table physical store experience.  MNB reader Robert Wheatley offered his analysis:

You have landed on the essence of brand building best practices in the age of cultural influence. The strongest brands are actually cultural markers for “tribes” of believers who resonate to the story/lore/environment/belief systems of the brands that matter to them.

You are clearly part of the culinary adventure tribe that holds love of food and food creation in high regard. Sur La Table is actually a temple that celebrates the beliefs and values of people like you (me, too). They curate an environment with symbols and markers of what food lovers believe in. You likely buy from them because purchases today are mostly symbolic of what we want others in the world to see about what we hold to be important. The store is a reflection of who you are.

Sur La Table started in Seattle when I was living there (many moons ago). My favorite thing was to go to the Pike Place Market on a Saturday morning to buy fresh salmon off the boat and produce from local farms, then wander up the street to Sur La Table to ogle the “instruments” of food creation they so artfully presented.

The very best brands are respectful of tribal membership and work hard to activate the communities of believers that circulate through their aisles. It’s a shame so many in food retailing don’t fully see this and instead define their business as selling boxes, can and bags off shelves at velocity. If the business is redefined as a temple to those searching for food adventures and the way the stores is organized serves to activate the beliefs and values held by those who love food experiences, it would be a game changer.

It's exciting when you come to discover the “tribes” of interest you hold dear as symbolic flags of who you are as a person. Strong brands know it is no longer about products and features and benefits, the paradigm of cultural influence centers on shared beliefs and values.

I'm part of a tribe?  Yikes.

I'm tempted to use the old Groucho Marx line:

I refuse to join any club that would have me as a member.

On the subject of why retailers are leaving cities behind - which some argue is more complicated than just crime - one MNB reader wrote:

While it is true that there are many aspects to the exodus of businesses and tax payers from the cities the glaring issue is safety. Crime and safety go hand in and hand and people want to feel safe. If they do not feel safe they will not go into an area no matter what the attractions or amenities.

I just moved 30 miles north of Nashville from the Houston TX area. While in Houston I stopped going downtown to the restaurants I loved and even the ball games due to all the homeless people on the streets who were aggressively panhandling and sleeping (and other nasty things) on the sidewalks. I am hoping that Nashville is better but I have not been here long enough to venture into the downtown area yet.

Having to walk city streets with my wife to enjoy those things we love is not in the equation anymore. We simply could not take the risk of something happening so we stopped spending my money in downtown and found other safer options.  This is  true for the cities we used to visit on vacation as well- we will not go anymore. For my vacationing I actually feel safer in Latin American than I do in major metro areas of the US.

I have to travel to Chicago for business soon and I am dreading just having to go. I do not want to put myself into a situation where a group of wild teenagers robs me, beats me or worse. There are no more safe areas of town in most large cities and good honest people are fleeing and choosing safer options-business are following.

Without a return to good policing where criminals are prosecuted and deviant behavior is punished I don’t hold out much hope for urban centers.

I agree with you on a number of your points, but I must point out that we went to Chicago for a weekend at the end of March and had a terrific time - stayed downtown, visited a number of neighborhoods, and never felt unsafe.  I would agree that vigilance makes sense, but not to the point that we all stay in our cocoons.  That's just boring.

From another reader:

I am concerned about this snowball getting bigger.  Empty offices, and buildings equates to default on property taxes or zero property tax income to the city, therefore less money for the city to allocate and so on.  Not a pretty picture.

Yesterday we took note of an interesting piece in the New York Times that charted a shift in the corporate mindset from a focus on "diversity and inclusion" to "diversity and belonging."  The Times wrote that "the question of belonging has become the latest focus in the evolving world of corporate diversity, equity and inclusion programming.

I commented:

Too often these kinds of initiatives are cast as efforts at being more "woke," when the fact is that more diverse companies tend to be more responsive to different customers' needs.  Different insights create more intelligent companies - and not just emotionally intelligent.

At the same time, companies where a wide range of people feel like they belong are more likely to be companies in which employees feel invested - and that's good business.

One MNB reader responded:

I don’t see a lot of companies going around firing people based solely on these principles or that anyone is advocating for that.  In my view this is mostly about virtue signaling which in today’s society I must admit might be used to attract more talent than it repels.  However, pushed too far and it runs the risk of becoming a signal that white males need not apply, or that existing white male employees are likely to be overlooked or un-promotable causing key talent to leave. 

I would say that today’s DEI initiatives are mostly aimed at new hiring processes.  Where I take issue with these policies is how they are executed.  I would much rather see people hired based on competence, experience, talent, aptitude or more plainly merit.  Best individual for the job.  True color-blind merit! 

Seeking diversity first only narrows the talent pool of available candidates.  If you seek first to hire a woman for a role for example, you’ve eliminated 50% or more of the candidates.  If you then seek to hire a woman of color you’ve narrowed field by another 40%.  The odds that you will have hired the most qualified candidate are virtually zero.  You’ve basically said 8 out of 10 qualified candidates need not apply. 

We know from psychology that men and women differ in interest.  Men are more attracted to careers in engineering and finance, where women outnumber men in health and human resources for example.  It doesn’t mean that there aren’t top women in engineering, because there are but there are just fewer of them to go around because of differing interest levels among men and women.  Many of these natural difference in interest are used as proof of some systemic perceived issue with diversity where one may not truly exist.

I once recommended a woman for an open position that was backfilling my role after a promotion and was quite offended when a colleague suggested that same candidate based some notion of diversity.  I picked her because I thought she was the best candidate of the people that applied.  To place gender above her qualifications and talents seemed to me to diminish her as a person worthy and deserving of the role.  I was raised to see people as individuals rather than some amalgamation of gender, race or tribal affiliation that can lead to stereotyping based on those same affiliations. 

Maybe these initiatives are an attempt to counter the racist misogynistic managers that are perceived to exist within organizations?  If true, maybe it would be better to ferret out those individuals and show them the door rather than sacrifice the best candidates on the altar of DEI.  Business is about competition and by not hiring the best talent, you do so at your own peril.

I'm sure this all makes sense from your point of view.  The problem is, I suspect that there are women and people of color who would see your argument as not very progressive (and I do not use that word in the political sense).

I also think that unless businesses are aggressive about being diverse, all the people in the room where it happens end up looking the same and reflecting the same perspectives.  They end up with blind spots.  And women and people of color end up looking on from a distance.  They're not looking for a favor.  They're just looking for a chance.

And finally, from MNB reader Dan Blue:

Regarding guns being the #1 killer of children… I see this stat repeated everywhere and objectively it’s not true. They get to this number by counting 18- and 19-year-olds as children which they aren’t. Remove 18- and 19-year-olds and the number of deaths is cut in half. Why the dramatic drop? Because the VAST majority of gun related teen deaths are caused by inner-city drug and gang violence. Remove those drug and gang deaths from the 13–17-year-olds and the number drops precipitously. Why is the data presented in this way? Because when people hear that guns are the #1 killer of children, they think of school shootings and a little kid tragically getting killed by finding an unsecured firearm in their house. Framing it in this way fits their goals.

This is true of many of the stats parroted in the media. Of course, any death is tragic, but lives lost is never offset by defensive gun use statistics – between 60k-2.5M per year according to government statistics. Why don’t you hear those statistics? Because the CDC, who commissioned the study, was pressured by anti-gun groups to remove it from their website.

You have said in the past that you aren’t a gun owner, and you don’t understand the argument for many of the firearms people buy. I suggest you seek out a few reputable resources to get their perspective. People like Colion Noir or organizations like USCCA have resources and counterpoints to many of the arguments out there. Watch a video or two if you have the time. I’m not saying it’ll change your mind, but it might give you perspective.  

For the record, what I have said is that while I am not a gun owner and do not come from a gun culture, I want to be respectful of people's Second Amendment rights and of the cultures different from the one in which I was raised.  And I know gun owners, by the way.  I don't live in a bubble.

This is not the place for a full-fledged gun rights debate;  it will send MNB down a rabbit hole from which there may not be an exit.  

I will just say this - I don't think most people have a problem with folks who use a gun to defend themselves.  But kids are being killed in schools.  People are being killed in churches, in malls, at concerts.  Way too many people, and largely by weapons that I just don't see the justification for owning, used by people who largely should not have access to weapons.

We're talking about the 200+ mass shootings that already have taken place in the US this year.  When does it end?   What will cause it to end?  I have no answer, but I have to believe that reasonable people on both sides of the issue could figure out a compromise that would at least address the problem.  The problem is that the narrative has been taken hostage by too many unreasonable people.