January 28, 2015
January 27, 2015
A 365 year-old company expects to introduce 245 new types of scissors over two years, reports Sarah Kessler in Fast Company (1/26/15). That company would be Fiskars, the timeframe is 2014 and 2015, and to be precise, "scissors" includes "garden shears, loppers, craft punches and other cutting tools." Seventy-two of the 245 will be "what the company calls ‘new innovations,’" that are more than just incremental or cosmetic changes. Among them is a pair of scissors that "don’t lift fabric," which is really important to those who sew.
Another "new innovation" is a pair of "loppers with pivoting gear and a technology for cutting thick materials." This is important for those who "cut a lot of thick things like burlap and leather," who apparently are growing in numbers thanks to Pinterest. You likely know Fiskars best as makers of those stylish orange-handled scissors (image), introduced in 1967 and now its flagship product. Fiskars’ first variation on that theme was a pair of left-handed scissors, and "after 48 years, it is not out of ideas."
Fiskars is equally persistent about testing its new ideas, having "built what looks like a torture chamber for scissors." One machine "uses a prototype to cut thousands of snips out of a moving roll of paper to test how long it will take for a blade to dull." Another "tries to pull handles off blades to test whether they’re safe." An aquarium-style machine "spews a corrosive mist" to assess rust potential. The engineering team can put "10 years of wear" on a pair of scissors in a single afternoon, and if it survives, it just might be ready for prime time.
January 22, 2015
Big data makes us smarter, but also more timid, writes Rich Karlgaard in Forbes (2/9/15). The issue, says Rich, is that we tend to shrink from our instincts for fear the data will prove us wrong. As an example, he cites sportswriter Bill Simmons, who thought he saw signs of decline in LeBron James, but hedged in his analysis because he thought data might say otherwise and didn’t want to be embarrassed. Compare and contrast with, say, Steve Jobs, who went with his instincts, and "knew when to say no to data." Easy for him, apparently.
For others, it’s a fact that data "can show us patterns and opportunities that 99% of businesspeople would miss." If you have a subscription-based business, for instance, you would have "data on customers and their subscription terms." You also have "data on service problems. In theory the two data pools can alert your sales team to which customers might not renew because of a bout of dropped calls near the end of the service contract." Using the data to identify and close gaps in the brand experience has tangible value.
Then there’s Starbucks, a study in contrasts between two Howards — Behar and Schultz — some 15 years ago. Both Howards subscribe Starbucks’ "culture of warmth and belonging where everyone is welcome." However, where Schultz is analytical, Behar is empathetic. Rather than a data dive, Behar simply visited stores and found a cultural disconnect among its employees. His report to Schultz and the Starbucks board: "We don’t need more data. Our problem is simple. Our employees are unhappy. Is that enough data for you?"
January 14, 2015
Ron Johnson wasn’t the only JCPenney CEO who lost customers by misunderstanding them, reports Suzanne Kapner in The Wall Street Journal (1/20/15). Former and current JCPenney CEO Mike Ullman admits he made a mistake by pulling the retailer’s print catalog. That was in 2010, and at the time Mike thought "catalog shoppers would migrate online." He was wrong. "We lost a lot of customers," says Mike. It turned out that shoppers "still like browsing through the decidedly low-tech artifacts of page and ink."
This despite research via retail consultancy Kurt Salmon that says about "44 percent of consumers" would like to be mailed fewer catalogs. However, Salmon’s research also finds that "31 percent of shoppers have a catalog with them when they make a purchase." So, Penney will mail a "120-page book" featuring items from its "home department … to select customers in March." Home goods "have historically been among the top-selling items in Penney’s catalogs." "We are trying to get back those lapsed customers," says Mike.
Restoration Hardware is also embracing catalogs — mailing 13 of them, a total of 3,330 pages — to customers, which created some backlash. Bonobos, founded as an online menswear retailer, sees beauty in pages as well. "We found that the catalog allowed us to tell a fuller narrative about the brand and our products in a way that we were struggling to online," says Bonobos marketing chief Craig Elbert. He also says "catalog customers tend to spend more" and that catalog customers who shop in their bricks stores are their "best customers overall."
January 6, 2015
Tesla and SpaceX founder Elon Musk gets to what’s right by focusing on what’s wrong, reports Mike Ramsey in The Wall Street Journal (1/12/15). "I have OCD on product-related issues," Elon says. "When I see a car or a rocket or spacecraft, I only see what’s wrong. I never see what’s right. It’s not a recipe for happiness." He may not have been referring to his own happiness as much as that of certain "high-level managers" at Tesla, who "quit or were fired" because of Elon’s "insistence on doing things his way."
So intent is Elon Musk on what he calls "nano-management" that he "set up an office in the middle of the factory floor" during the Tesla S launch in 2012. "If you are fighting a battle, it’s way better if you are at the front lines," he says. "A general behind the lines is going to lose." Just three weeks ahead of the delivery of the first car, Elon "demanded that the sedans have larger rear tires because he felt they looked better." This was unrealistic for a number of reasons, but Elon insisted, and the "design change went through without a hitch."
This style doesn’t play well with everyone, but that’s fine with Elon. "He used to say that he only wanted ‘special forces’ working for him," says Ricardo Reyes, Tesla’s media relations head. "No normal people." Supporters say this "relentless perfectionism has steered Tesla to where it is today." His "unwavering determination" helps explain why "investors have flocked to Tesla and shrug off the fact that the auto maker has never made an annual profit." "You take Elon out of the company and the market cap would go down 80%," an analyst says.
January 5, 2015
Beautiful design is the organizing principle at Intuit, writes Brad Smith, the company’s CEO, in Harvard Business Review (Jan/Feb 2015). The essence of beautiful design, says Brad, is not simply "ease of use" but also an emotional connection based on "deep customer empathy … how customers feel about our products and whether they take pleasure in using them." Yes, we are talking about financial software — a category not typically thought of as "driven by emotion or design." However, where there’s money involved, inherently there is emotion.
Consider, for example, that "most taxpayers are owed a refund — and for 70% of them, that refund is the single largest check they’ll receive during the year." This insight shifted Intuit’s focus from "the pure functionality of its software" to "the emotional payoff of reducing drudgery and speeding the way to a big windfall." Eventually, this led to development of SnapTax, an app that enabled users "to take photos of their W-2 forms" and "completely prepare and and e-file federal and state returns from their smartphones."
Intuit refers to its brand of design thinking as "design for delight," or D4D, and it is premised on everyone within the organization "thinking about design" — not only of its products but also throughout the organization. "In HR we talked about the overall design of the job application and interview process," Brad writes, while those in the finance department considered how to streamline purchase orders. The path to D4D began in 2007, and the goal is for Intuit to be "considered one of the most design-driven companies in the world" by 2020.
December 29, 2014
Brand chief Richard McDonald on the past, present and future of the Fender experience (Hub cover story interview, Jan/Feb 2015). John Lennon once said that Shake, Rattle & Roll was the greatest rock ‘n’ roll song ever written, and that it could not be improved upon. The same could be said of another icon of the genre: the Fender electric guitar. In the early 1950s, a radio repairman named Leo Fender designed and built the first Fender Stratocaster and Telecaster guitars, and the Precision bass.
Sixty years later, Leo’s wildly innovative designs remain essentially unchanged, captives of their own excellence. His inventions by no means were the first electric guitars, but they set the standard Leo’s legacy of innovation is both a blessing and a curse to those who lead Fender today. On the one hand, the man is an inspiration. But how do you innovate when the product is perfect? It’s a question Richard McDonald, EVP Brand, a former touring musician himself, must answer every day. Fortunately, Richard gets a little help from the likes of U2’s Bono and The Edge, recently appointed to Fender’s Board of Directors.
Richard also has a mandate to leave behind the way Fender guitars were bought and sold in the past, bringing the brand ever closer to its customers. For the first time, Fender is now selling instruments directly to consumers, online. It has also banned the ‘Manufacturer’s Suggested Retail Price,’ bringing a whole new level of transparency to the brand relationship. The price is the price. Most important, Richard and his team take an expansive view of innovation and the brand experience that starts exactly where Leo Fender did. It’s not about the guitars. It’s about those who play them. Read The Interview with Richard McDonald of Fender.
December 11, 2014
Mattel CEO Bryan Stockton wants to "overhaul a culture of conference rooms," reports Paul Ziobro in The Wall Street Journal (12/23/14). "We need to push ourselves a little further, let ourselves be a little freer, a little less formulaic," he says. Too many meetings apparently have hampered creativity at the toymaker. For example, a "school crest for the fictional Monster High … was debated over at least eight meetings and went through nearly 30 iterations." A Mattel site re-design "involved nearly a year’s worth of monthly meetings."
Some Mattel executives say "they were so inundated with meetings that they would put fake appointments on their Outlook calendars so people would think they weren’t available and could get other work done." Accordingly, Bryan has instituted some new rules, including no meetings "without a specific purpose … no more than 10 people" in a meeting unless it "is for training purposes" and "no more than a total of three meetings to make any decision." The rules are intended to help Mattel "get back to thinking about toys."
Bryan also hopes to reignite Mattel’s magic with the return of Richard Dickson, who had left the company in 2010, as Chief Brands Officer. Before Richard could get started, he says he had to sort through "wheelbarrows of information" and, in the case of Barbie, "a hodgepodge of ideas." He settled on Superhero Barbie because, "Girls have a bit of princess fatigue." He also plans "to re-brand Fisher-Price as a child development company" and generally "reshape the company’s approach to toys" with a creative team housed in "a former airplane hangar."
December 9, 2014
LL Bean’s homely duck boots have become "a totem of agrarian-chic trendiness" reports Claire Suddath in Bloomberg Businessweek (12/10/14). The style is 102 years old, and Bean traditionally has sold about 100,000 pair a year, primarily to "loggers and farmers," according to LL Bean spokesman Mac McKeever. However, sales of the "leather and rubber" boots "have quadrupled over the past three years and are on track to hit more than 450,000 in 2014." They are currently "on backorder until at least February."
It’s a trend Bean has seen building for the past two years, "specifically in urban areas filled with college students, who were embracing understated, even bland styles that highlighted their authentic ordinariness," sometimes known as Normcore. "I think a lot of it has to do with the fact that they’re still handmade. People really value that stuff right now," says Mac. This homespun appeal is exactly what makes it so hard for Bean to keep pace with demand, as duck books are made on "old fashioned stitching machines … still run by hand."
The duck-boot boom recalls the Hush Puppies phenomenon of the 1990s, as documented by Malcolm Gladwell in a New Yorker article called The Coolhunt. At the time, those buying the shoes associated them with their grandparents and the buying spree began in SoHo thrift shops. Birkenstocks, the hippie sandals, made a comeback this year, as well. How long the duck boots bender will last is anybody’s guess, but Mac McKeever says Bean is already noticing the next big thing — "a spike in sales of wool coats."
December 3, 2014
A beauty brand is embracing the unpopular cause of mental illness, reports Andrew Adam Newman in The New York Times (11/28/14). Philosophy, "the beauty brand owned by Coty, is introducing an effort to raise a projected $10 million over the next five years to combat mental illness." Hope & Grace, as the campaign is called, is named after the brand’s "two most popular products … Hope in a Jar moisturizer and Amazing Grace fragrance." One percent of sales from the two products will be donated to the cause via grants.
"The DNA of the brand is really about inspiring women not only to look their best but to feel their best," says Coty CMO Jill Scalamandre. Jill says the impetus is "how big the issue is, with one in four women struggling with a mental health challenge." The effort is supported via videos on the brand’s website, televised public service announcements, and a forthcoming song called Hope, by Natasha Bedingfield, "with 20 percent of the proceeds from iTunes downloads going to the initiative."
The focus is "on issues that particularly affect women, like postpartum depression and psychological trauma linked to domestic abuse," which have largely been ignored by other companies. "The stigma around mental illness is so entrenched," notes Dr. Belisa Vranich, with issues such as breast cancer and pet causes far more popular. However, Joe Waters of Selfish Giving sees an upside in less popular causes. "Taking on issues that are less popular is disruptive, in a good way, in terms of making people notice what brands are doing," he says.
November 26, 2014
"Stores may have found the vulnerable soft tissue of Amazon: its lack of stores," says NYU’s Scott Galloway in a New York Times piece by David Streitfeld (12/2/14). "This is the revenge of the brick," says Scott, who "argues that the future belongs to multichannel merchants — those who let customers order online and pick up in a physical location, or who ship online and allow for returns in a physical location, or who allow browsing in a store but ship to a home." Scott predicts Amazon will soon open "dark" stores to enable this.
This will happen, says Scott, within a year’s time and may involve a "transformative acquisition" of, say, Best Buy or Radio Shack. Word that Amazon would open a store in Manhattan over the holidays turned out to be false, as the 470,000 square foot building it recently leased there will be mostly Amazon offices, with ground-floor retail space rented to others. In the meantime, Amazon pursues its disruptive ways — so much so that it is even disrupting itself by offering "free or nearly free music, video and e-books."
If this is Amazon’s plan, it has apparently already cost the retailer about a quarter billion dollars in its third quarter. The idea, some say, is that offering free content will "draw tens of millions of people into its ecosystem," who will then buy "devices, entertainment and services as well as basics like milk and toilet paper." "They’ll have your credit card purchase history, be able to do data-mining on your needs, offer massive selection with a reputation for low prices," says Scott. "I don’t think they want to own a piece of retail," he adds. "They want to own all of it."
November 14, 2014
The late Donald Stookey discovered Corningware after putting a piece of glass in an overheated furnace, reports the Economist (11/22/14). The glass turned a milky white, and when Donald dropped it, bounced off the floor "with a clang like steel." It had crystallized with incredible intensity. This was "patented in 1960 as Fotoceram and marketed as indestructible Corningware dishes, so popular in America that by the 1980s six pieces of it (originally white with blue cornflowers) could have graced every household." (image)
Donald’s many other inventions were not by accident. Among other things, he "perfected a glass which, in daylight, looked like marble, and now covers the north face of the UN headquarters in New York." He used "a process called ‘nucleation,’ in which the smallest stable trace of any element, added to molten glass, became a nucleus around which crystals would grow until, by cooling, he chose to stop them." He made glass "photosensitive, so that after exposure to ultraviolet light photographs could appear within it."
During "wartime the Treasury Department almost took up his idea of making pennies not of scarce copper but of copper ruby glass, with Lincoln’s portrait magically suspended in them." He also came up with the "idea of making spectacles for spies, which, when exposed to light would reveal secret messages … He made glass that was rubbery and easier to saw" and "imagined a future in which glass, with its raw material so abundant everywhere, could replace not only petrochemical plastics but also metal and wood." Donald Stookey was 99.
November 5, 2014
The man who transformed Trader Joe’s into a "billion-dollar enterprise" has died, reports Paul Vitello in The New York Times (11/13/14). John V. Shields, 82, was not Trader Joe’s founder, and before he took its helm as CEO had no experience in the grocery business. He was a department-store executive who was hired by founder Joseph H. Coulombe. The two had been Stanford University fraternity brothers. During his tenure, Mr. Shields expanded Trader Joe’s from 27 stores to 138, and its sales from $132 million to $2 billion.
He kept the retailer’s quirks — the Hawaiian shirts worn by its staff, and the "exotic low-cost offerings," while also establishing a "management system that made the company’s retail culture exportable. He standardized the layout of stores, started a management training program and brought market analysts into the decision-making process, innovations that made Trader Joe’s one of the nation’s most profitable grocery chains." He carefully located new stores in college towns and "gentrifying communities."
Mr. Shields "personally interviewed store manager candidates … Applicants who did not smile in the first 30 seconds, he once said, were crossed off the list." He said that people were either right for the "crew" or not. "I would talk with the new people for about two hours," he told an interviewer. "and I always ended up saying, ‘Look, at the end of 30 days, if you are not having fun, please quit." Joseph Coulombe said his friend’s lack of grocery background was irrelevant, explaining: "We’re closer to the fashion business than the supermarket business."
November 4, 2014
Hollywood is setting examples that other industries should follow, reports the Economist (11/1/14). In some ways, "food and consumer-goods makers" already resemble the movie business, with its focus on "a narrower range of ‘blockbusters’" and endless pursuit of "buzz." Of course, any successful business requires creative people, and understand "how to harness their strengths for commercial gain without strangling their free-spiritedness." Hollywood does this well by hiring "a fresh creative team for each film," giving them control and credit.
Few other industries foster Hollywood’s brand of teamwork, notes Mark Young of USC, or temper it with a heavy dose of job insecurity. Indeed, people tend to "work hard and collaborate well in the movie business in part because" they are freelancers who know they "will not get hired for the next film unless they prove themselves on the current one." Hollywood also embraces "constant revisions," and encourages "constructive criticism" that improves the product. Failures "are tolerated because they are so common."
The movie business is remarkably good at "launching brands that achieve global prominence in a matter of days." It invests nearly as much on promoting its films as it does on the films themselves, and "manages to come up with new brands on a near-weekly basis. The key is to treat the marketing as a core part of the project, rather than as an afterthought." Ultimately, Hollywood fixates on profitability, and, like Silicon Valley, increasingly relies on outside financing, which "protects against crippling losses when a film flops."
November 3, 2014
Macy’s Herald Square "now encompasses nearly an entire city block," reports Natasha Singer in The New York Times (11/3/14). This means the store "occupies a singular place in American retailing," and the intent is to offer "a vast array of goods at prices so varied that everyone can afford to buy something." Tourists, especially: "Because of its location a block from the Empire State Building, the store attracts roughly six million tourists a year, several million of them from outside the United States."
Tourists from "Brazil, China and other emerging-market nations with growing middle and upper classes" are "hungry for luxury logos." This factored heavily into the four-year, $400 million overhaul of Macy’s flagship, spearheaded by CEO Terry Lundgren. Once completed, next year, the renovation will add "100,000 square feet of selling space" and will be poised to set a new standard relative to Selfridges in London, Isetan in Tokyo, Galeries Lafayette in Paris and El Corte Ingles in Madrid, for example.
In part this involves installing luxury boutiques from Louis Vuitton, Gucci and Burberry, as well as a new upscale cafe serving Starbucks Reserve coffee. "It’s more of a European style for you to relax during the day," says Terry. The store will also be easier to navigate — the original layout actually was designed to cause people to lose their way, in hopes they would spend more time and money. Macy’s has also streamlined its logistics for timely merchandising, and armed associates with iPads to improve internal communications and customer service.
October 28, 2014
Manufacturing chocolate bars and dog food are more similar than one might think, reports Annie Gasparro in The Wall Street Journal (10/30/14). Bret Spangler of Mars Inc. knows this because he’s run chocolate and dog-food factories — Mars makes both products. "Pet-food factories have to be just as clean — you could eat off the floor — and the kibbles have to have the right density and look," he says. Hank Izzo, also of Mars, "meets regularly with R&D leaders from" both pet food and candy segments.
"There’s a massive amount of collaboration," he says, noting that the two groups discuss "things like packaging materials, production processes, and mixing and pumping technology they can share." They don’t eat their own dog food, but they do sample the chocolate on a daily basis. Frank C. Mars founded the company as a candy-maker in his own kitchen in 1911. His son, Forrest, started his own company in the UK in 1932, "where he acquired a dog-food maker and came up with the idea for M&Ms."
The two companies merged in the 1960s and today "also owns the Wm. Wrigley Co. stable of gums and confections, and produces a pantry-full of other products from Uncle Ben’s rice to Palmesello grated cheese to Flavia coffee." Mars remains "owned by its founder’s descendants." Its recipes for nougat and caramel are closely guarded secrets and "M&M’s secret candy-shell-making station" is closed to the public. A single factory in Topeka, Kansas turns out "39 million peanut M&Ms every day."
October 28, 2014
The Patagonia brand experience emanates from those who experience it, says Joy Howard in a Hub Magazine interview (Nov/Dec 2014). If you haven’t watched Worn Wear, then Google it. You’ll meet Christo Grayling, an Australian surfer who replaced the backside of his ‘boardies’ with a scrap of beach umbrella. Kristin Gates, who has hiked about 10,000 miles, much of it in a particular wool cap. Steve Sprinkel, a farmer in love with what he does and the used, yard-sale jacket in which he does it. Each character seems a little crazier than the next, and at the heart of their endearing insanity is an intense, emotional connection to a brand. Patagonia. Joy Howard isn’t in the video, but she would fit right in. In 1992 — more than 20 years before she would join Patagonia as its head of marketing — she got rid of her car and rode a bicycle instead.
This wasn’t easy, especially after she had kids. When it rained, well, she just put on her Patagonia raincoat." It was a constant companion for me wherever I went," says Joy. "I had it in my bag and it definitely got me through many a rainy day-care dash." That degree of intensity likely only affects a small percentage of those who buy into the Patagonia brand and its marketing, which Joy suggests is more like anti-marketing. Where most brands use marketing to convert prospects into customers, Patagonia wants to turn customers into activists.
That’s why it famously runs ads urging people to avoid buying things, and produced a documentary film, DamNation, advocating the removal of dams that disrupt salmon populations. The purpose of this ‘marketing’ is less about making us buy and more about making us think. Yes, this does tend to have the reverse effect: Patagonia sells quite well. The difference is, its marketing is not an overlay wrapped around a soft, green promise. It’s not perfect, but it is true to the spirit of the days when founder Yvon Chouinard sold rock-climbing gear out of his car (perfection would have required a bicycle). "It’s not a brand experience that comes out of endless meetings debating what the brand experience should be," says Joy. "It’s just a reflection of our values and the way we work." Read The Hub Interview with Joy Howard of Patagonia.
October 16, 2014
Which brands do consumers love best, despite their flaws? ‘Responsibility’ is the weakest of the weak links in the brand experience across a plurality the 12 top brands offered for assessment in the latest reader survey from the Hub Magazine (Nov/Dec 2014). For some, this was defined as ‘social responsibility’ while for others it meant the brand’s responsibility to its consumers on measures like price/value and reliability. The survey presented a set of six attributes that shape the brand experience (quality, availability, personality, responsibility, usability and remarkability) and asked respondents to pick the weakest point of each of the brands. It also provided ‘perfect’ as an option for those who couldn’t find fault of any kind, as well as a comment box to provide the reasons behind their choices.
Of the 12 brands, ‘responsibility’ was the number-one flaw among five (Apple, Google, Disney, Coca-Cola, and Facebook). The word ‘responsibility’ certainly can mean different things. For example, while some cited Apple’s manufacturing practices, most of the criticism centered on the brand’s price/value proposition. Coke, not surprisingly, was knocked for the potentially adverse health consequences of its flagship product. With Google, ‘responsibility’ was tied to matters of privacy. The same issue surfaced with Amazon to a relatively lesser degree. Facebook, meanwhile, was in a league of its own, with 50 percent of readers citing ‘responsibility’ as its greatest weakness. No other brand scored higher than 33 percent on this measure (Coca-Cola).
Samsung was found lacking in the ‘personality’ department by 37 percent. Interestingly, both Amazon and Google scored poorly on personality, too — perhaps surprising for enterprises that tend to be widely admired. On the flip side, Mini Cooper oozes personality but ‘usability’ is its soft spot. ‘Quality’ is Ikea’s greatest handicap, mitigated for some by a strong sense of style. Starbucks and American Express were notable in that the criticisms were fairly evenly distributed across the various attributes. Neither led the pack as ‘perfect,’ however. That honor went to Nike, which was deemed flawless by 22 percent, compared to 19 percent for Starbucks and 15 percent for Amex. Ironically, the overall report on Nike was something less than perfect. Its lowest-scoring attribute is ‘remarkability’ — surprising for a brand associated with innovation. It also scored relatively low on ‘quality’ and ‘responsibility.’ Read The Complete Survey Results.
October 16, 2014
Kip Tindell thinks paying store staffers "nearly $50,000 annually" is a key to success, reports Rachel Feintzeig in The Wall Street Journal (10/15/14). Kip is CEO of The Container Store and says the higher pay produces better productivity. "One of our foundational principles is one equals three: one great person can easily do the business productivity of three good people," he says. "If you really believe that they can do three times the productivity, then you can pay them 50% to 100% above industry average."
By the way, Kip’s college roommate was none other than Whole Foods CEO John Mackey. He also believes in keeping the most productive workers "tickled" by giving them sizeable annual pay increases commensurate with their contribution. The goal, for example, is to ensure that the "17th greatest contributor gets the 17th largest piece of the pie." This requires "a highly evolved review structure," says Kip — "a formal written review" that takes employees and their supervisors up to eight hours to complete.
The two parties "then take another four or five hours to go over it with each other," Kip says. "It’s really now getting to where you and the person who reports to you actually agree on their compensation." Meanwhile, Kip doesn’t believe in having a Human Resources department, and instead relies on employees to recruit new hires. This can include hiring family members. "People know which of their cousins are great and which aren’t," says Kip, adding: "It can be as simple as recruiting a waiter at a restaurant that you think is just the best you ever had."
September 12, 2014
More CEOs discover that strong operations trump flashy merchandising, as reported in The Wall Street Journal (10/14/14). Target CEO Brian Cornell, for example, and incoming Gap CEO Art Peck, "are valued more for their ability to run large organizations than for their gut instinct about the next hot trend." The same could be said of Marvin Ellison, who is slated to take over as CEO of JC Penney, in the aftermath of the Ron Johnson debacle, in which efforts to "make the chain more hip … ended up blowing a $4 billion hole in company sales."
This trend toward "detail-oriented operators over executives mainly lauded for brilliance in merchandising" comes "as the industry faces giant new challenges in managing its supply chains and keeping customers from defecting to the web." Penney is particularly vulnerable in "the discount-driven apparel business, the traffic-challenged world of shopping malls and the beleaguered middle-class consumer." Marvin sees beauty in stability: "The last 18 months have proven that turning the company upside down and shaking it … was not necessary."
Marvin joined Home Depot 12 years ago, running "areas including loss prevention and global logistics." As executive vice-president of stores, he "helped lead Home Depot’s transformation from a cluttered big-box store with antiquated operations and employees who spent the majority of their time unpacking boxes and restocking shelves, to a retailer that devoted nearly two-thirds of its labor hours to serving customers on the sales floor." He also "made sure items stayed in stock" and the stores were "easier to navigate."
Minecraft succeeded by running in the opposite direction of other game companies, reports Nick Wingfield in The New York Times (9/11/14). It’s a more than $2 billion success story, now that Microsoft has decided to buy Mojang, Minecraft’s parent company, in "an acknowledgement that gaming is central to people’s lives." But its real success is at least partly because it broke down the "generational and gender boundaries that usually carve the games business in to separate categories."
Indeed: "Girls are among the most avid players of Minecraft, and it is one of the few games that parents play with young children." Joel Levin discovered Minecraft’s charms in 2010 while playing it "with his daughter, who was then 5 years old. Although his family had no backyard of its own in the city, she constructed a tree house in Minecraft." He says she "even learned to spell her first word … HOME so that her avatar could teleport back to her treehouse." Joel, a second grade teacher, began using Minecraft "as a teaching tool."
"People were ready for a game like Minecraft whose purpose is creation instead of destruction," says Joel, who went on to found TeacherGaming, which makes Minecraft games for the classroom. The game’s creator, Markus Persson, says that’s exactly the kind of thing he had in mind: "No fake doors that don’t lead anywhere, no trees you can’t cut down, and no made-up story being told to the player to motivate them," he says. "Instead, the player would make up their own story, and … decide for themselves what they want to do.’