Category Archives: Business

The Next Right Thing

Panera BreadWhen I hear the words “Customer Service” these days the first thing that comes to mind is the nightmare experiences of recent years. The hours on hold, the “I-could-really-give-a-rat’s-ass-about-your-silly-problem” attitude of whatever uncaring person stood between you and an acceptable experience. Just this morning I discovered I was absolutely lied to by a sales agent when he told me he did something on an order when in fact he most certainly had not. His co-worker got the impact of my displeasure. Nobody seems to want to do the next right thing anymore.

On occasion you hear these stories about a company that steps up, goes beyond customer service and does extraordinary things. Today that company is Panera Bread.

So here’s the story.

Panera Bread had an idea. It was bold, it was unheard of in this era of corporate greed and to be successful it depended solely on one thing. Would the customer do the next right thing?

The concept is their menu would not list prices, only suggested donations.  There would be no cashiers, no checks, no haggling over pricing. The customer would drop their money into donation bins at the exit.

The concept is everyone would pay what they can afford. Conceivably that mean the well-to-do would drop in more than the suggested amount. They might, without batting an eye, drop in $100 bill for a $10 sandwich and a glass of ice tea. Those that are down on their luck and just need a meal could eat free, if that’s the had they are dealt.

Panera Bread

By Tim A. Parker for USA TODAY -- A sign in the Panera Cares Cafe in Clayton, Mo., at its opening in 2010 sends the message..

In many ways, “it was a test of humanity,” says Ron Shaich, president of the Panera Bread Foundation and executive chairman of Panera Bread company. “We didn’t know if people would help each other or take advantage.”

I’m the first to tell you I would have given an operation like this practically zero chance of success. This it’s all about me society doesn’t seem to embrace charity or responsibility as generations past.

A year after lauching the test program Panera plans to branch out to more locations in other cities, adding to a growing number of pay-what-you-can cafes being opened around the country by churches, community groups and other benefactors.

“To put it simply, these are nonprofit community cafs of shared responsibility,” Shaich says. “They will only survive and self-sustain if people in those communities do their part.”

“We try to build relationships with people,” says Colleen Kincaid, who manages the cafe in Clayton, Mo. “We rely on those repeat customers — people getting coffee on the way to work or coming in for dinner with their families. In order for this to work, people have to do the right thing,” she said.

“You give what you have, and if you have a little bit of extra change, you might toss it in. It’s hard to ask in a society where we’re more used to taking.”

To discourage abuse of the system, people are asked to take only one free meal per day.

“If they come in a couple of times a week, we ask that they volunteer,” Kincaide says. “It helps them not feel like they’re taking advantage.”

A sign hanging in the cafe reads, “We are not about a handout. We are about a hand up for those who really need it.”

Estimates run that about 20% of customers pay more, 20% pay less or none, and 60% stick to the suggested price.

Customers like Jae Komnenic, 39, of Dearborn, Mich. praise the cafe’s work.

“They help support the community. That’s the No. 1 reason I come here,” she says. “The employees are also superb. They’re all so nice to everyone. … We always pay more when we come here to help support people who need it.”

To customer Eric Falkiewicz, 44, also of Dearborn, the cafe is a safe and comfortable place to study, meet people and — occasionally — eat when he doesn’t have much money.

“I’m a full-time student, I don’t have a job. … Sometimes I can pay full price, and sometimes I can’t. It’s nice to know you can come somewhere like this and they don’t judge you. I’m very grateful for this place.”

I’m encouraged when I see mustard seeds of hope being planted in these troubled times. Perhaps the day will come when charity replaces greed and poverty is a thing of the past.

I still believe in a place called Hope, a place called America.

— BILL CLINTON, speech at Democratic National Convention, August 29, 1996[/box]

1800 Flowers-Valentine Rage

There’s an old saying in the Public Relations world that goes like this…

“Bad press is better than no press.”

I’m pretty sure the folks at 1800 Flowers would disagree with that statement.

Facebook, Twitter and social media in general have become, for better or worse, the customer complaint department. Companies and organizations are grappling with how to manage social media and online presence. In the case where customer service fails like the Valentine Day massacre of public outcry lit up Twitter and Facebook faster than cupid’s arrow.

1800-FlowersSo here’s the situation as the media is reporting it. People by the thousands ordered flowers and such from to be delivered on Valentine’s day. Seems easy enough. You take the order, you fill the order, you deliver the order — happy company and happy customer.

Except that’s not what happened. Judging from the volume of messages on Twitter and Facebook there was an epic fail on the part of 1800Flowers to deliver as promised. Girlfriends and wives were left standing at the mailbox in droves, tissue in hand wanting for promised roses that would not arrive. It’s a boyfriends worst nightmare.

The simple thing at that point is to make it right. That’s where epic fail transcended into epic tragedy. When the unhappy customers started piling on the 1800 Flowers customer support line, reportedly staffed by outsourced contractor, customers were left stranded on hold or hours into the hold, dropped off-line without talking to a customer support rep.

So that’s where Facebook and Twitter became the public complaint desk. People unable to get satisfaction from the company defaulted to the Facebook account and literally by the thousands started posting the visions of their experience on 1800 Flowers wall.

The company seeing the bad-light of scorn pasted across their public wall did the one thing that made it worse. They started deleting the customer complaints off the Facebook page.

It’s a PR nightmare swirling around the corporate drain and 1800 Flowers may never fully recover. There’s an old adage in business that goes like this:

[box] If I don’t take care of my customers someone else will.[/box]

So what’s the lesson here?

For the customer I think it’s – pay the extra and support your local florist.

For 1800 Flowers I think it’s – Fix the processes, product sales/order fulfillment and customer service.

Frankly in today’s social world where customer’s are talking to each other like never before situations like this can drown a business in the swarm of negative conversation.

That’s the double edge sword of Facebook. Businesses understand the need to be there to compete, but I don’t think they understand the potential for public disaster. It’s like a company keeping a blank sign out by the street inviting graffiti artists to post to your hearts content.

Companies that don’t understand the power of social media and negative press should contact Guy Collision, Executive Director of the Arizona Humane Society and ask him about their Facebook experience related to “Scruffy.”

The only one smiling here may be the folks at 1-800-SEND-FTD.

Washington Post story on 1800-Flowers

Countrywide-Fleecing Heroes

CountrywideThere was this mortgage company a few years back named Countrywide. They started out a small company in New York founded by the son of a butcher, Angelo Mozilo. A few years after founding the company he moved the business west to make his fortune in the Southern California mortgage  business.

The California property market was on the rise and a good mortgage lender was the ticket to home ownership.

How they got to the front of the subprime mortgage debacle is anybody’s guess, but the fact remains with Countrywide holding roughly 20% of the American subprime mortgage paper of the late nineties, early 2K, their hands were elbow deep in the crisis.

When the wheels fell off the mortgage industry and foreclosure rates rose faster than the space shuttle, one casualty was many of the deployed servicemen holding Countrywide mortgages. In spite of a law on the books known as the  Servicemember Civil Relief Act (SCRA), it is alleged that Countrywide systematically and knowing violated the regulations by carrying out foreclosures on homes belonging to deployed U.S. Servicemen.

Bank of America purchased Countrywide in January of 2008 for over four billion dollars. I don’t know what they got for their money other than a boatload of trouble. They have spent millions in legal fees defending their acquisition and operation, but the hits just keep on coming.

A class action lawsuit against Countrywide/Bank of America was recently filed on behalf of servicemen who lost their homes to foreclosure. The lawsuit alleges Countrywide was fully aware of the laws set forth by the SCRA but moved foreward with foreclosure proceedings on deployed service members anyway.

To be honest in the course of researching this blog I was overwhelmed by the sheer volume of injustice and greed at the root of this sub-prime mortgage and subsequent foreclosure crisis. Good people by the hundreds of thousands lost their homes. In many cases it was out right fraud and there hasn’t been any true accountability. People should be in jail for this travesty.

It’s not light reading. It’s not fiction. This really happened. It’s still happening.

If you don’t quite get what happened with the sub-prime mortgage fiasco, this animated documentary does a great job of simplifying it for you.

Could Chuck Norris Defeat China?

Chuck NorrisI don’t know whether John Q. Public knows it or not but I am about to clue John in.

The numbers are out and we are seriously getting our ass kicked by the Chinese. We are falling so far behind we may never catch up. And the bad thing about us the deeper we get in debt to the Chinese the worse it seems to get.

The shock of these numbers is so severe I thought it prudent to hide the data inside the pulldown boxes below. I did not want to be responsible for any window jumping or such nonsense if someone freaked out on the extreme visual of seeing these numbers together on one page.

Click  arrows for more info:

[learn_more caption=”1-STEEL”] China production: 627 million metric tons in 2010

U.S. production: 80 million metric tons in 2010

U.S. position: 3rd

In 1973, the U.S. was the largest producer of steel, making more than 136 million metric tons of crude steel, according to the International Iron and Steel Institute. Up to that point, the U.S. had enjoyed many decades of industry dominance, centered around the city of Pittsburgh. [/learn_more]

[learn_more caption=”2-COTTON”] China production: 7.3 million metric tons in 2011

U.S. production: 3.4 million metric tons in 2011

U.S. position: 3rd

In 2000, the U.S. produced 4.2 million metric tons of cotton — the largest amount in the world. China was not far behind, producing 3.81 million metric tons. By 2008, however, China had not only surpassed the U.S., but made nearly double the U.S.’s production amount. China produced approximately 8.1 million metric tons to the U.S.’s 4.2 million. A year earlier, the U.S. lost its second spot among top cotton producers to India, thanks in part to technological breakthroughs in seed and production practices.[/learn_more]

[learn_more caption=”3-INITIAL PUBLIC OFFERINGS”] China production: $73 Billion raise in 2011

U.S. production: $31 Billion raised in 2011

U.S. position: 3rd

Even in the world of finance the U.S. is losing its dominance to China. According to the National Bureau of Economic Research, “the yearly average of U.S. IPOs has decreased from 27 percent [global share] in the 1990s to 12 percent in the 2000s.” And as the U.S.’s share of IPO proceeds decreased, China’s share increased. It is now the world leader in IPOs.[/learn_more]

[learn_more caption=”4-TOBACCO”] China production: 3 million metric tons in 2011

U.S. production: 0.33 million metric tons in 2011

U.S. position: 4th

Until 1976, the U.S. produced the largest share of the world’s tobacco. Today, the U.S. only produces 6% of the global output, according to Stephan Richter, editor-in-chief of The Globalist, in an interview by Marketplace. The most recent data from the Food and Agriculture Organization of the United Nations places the U.S. as the fourth-largest producer of tobacco in the world.

I’m okay with losing the tobacco race.[/learn_more]

[learn_more caption=”5-AUTOS”] China production: 18.3 million autos in 2010

U.S. production: 7.8 million autos in 2010

U.S. position: 3rd

Automotive manufacturing is considered one of the U.S.’s most critical industries. But in recent years, other countries have surpassed the U.S., which is now the third-largest producer of autos in the world, according to the International Organization of Motor Vehicle Manufacturers.[/learn_more]

[learn_more caption=”6-BEER”] China production: 443.8 million hectoliters in 2010

U.S. production: 227.8 million hectoliters in 2010

U.S. position: 2nd

Now this one is the worst. I’ve seen those beer bellies out there. I know blue collar America is fueled by beer and we should be beating the beer mugs off those Chinese. Come on guys, this is embarrassing.

The U.S. lost its top position even in beer production. In 2000, the U.S. beer industry was the greatest in the world, producing 232 million hectoliters, compared with China’s 220 million. One decade later, and China is in first place, generating 443.8 million hectoliters of beer, versus the U.S.’s 227.8 million. Not only does China have a population that is more than four times that of the U.S., but beer consumption in the country has increased dramatically in recent years. According to the World Health Organization, the average Chinese citizen drank about half a bottle of beer in 1961. By 2007, that amount had increased to 103 beers per year.[/learn_more]

[learn_more caption=”7-HIGH TECH EXPORTS”] $348 billion in 2009

U.S. production: $142 billion in 2009

U.S. position: 2nd

High-technology exports are defined as “products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery,” according to the World Bank. The U.S. remains home to the largest pharmaceutical industry in the world, and the rest of industries mentioned are also huge domestically. According to the World Bank, China began earning more from high-technology exports than the U.S. as recently as 2005. In 2009, Chinese high-technology exports were worth $348 billion. High-technology exports from the U.S. were worth a more modest $142 billion.[/learn_more]

[learn_more caption=”8-COAL”] 3.24 billion short tons produced in 2010

U.S. production: 985 million tons produced in 2010

U.S. position: 2nd

America led the world in coal production up until 1984, and it is now a distant second to China. According to the BP Statistical Review of World Energy, the U.S. produced just under 1 billion tons of coal in 2010. China produced more than three times that amount, generating 3.2 billion short tons. There has been exponential growth in the Chinese energy infrastructure in the past decade. Since 2005, American coal production has decreased slightly, while Chinese production has increased by nearly 38%. Despite the U.S.’s decline in coal production, it is still the world’s second-largest producer, and combined, the two countries account for more than half of the world’s total coal production.[/learn_more]

Source: Fox Business News

Is GE Helping China Compete Against Boeing?

Nelson Ching/Bloomberg News - Lin Zuoming, president of Aviation Industry Corporation of China, with Jeffrey R. Immelt, G.E.'s chief, at a 2009 event in Beijing.

Things that make you go hmmmm.

The NY Times recently reported that GE would sign a lucrative joint-venture deal with a state owned Chinese manufacturer to provide the same high-tech avionics technology Boeing uses in their new advanced airliner the 787 Dreamliner.

Considering China’s recent introduction of a stealth fighter, does anyone besides me see this technology share as a bad thing. The technology includes the highly sophisticated computer control and networking system, core to the avionics brain of the Dreamliner. This sounds like a very bad idea to me.

The first customer of this joint-venture is the Commercial Aircraft Corporation of China, also a government owned company. They manufacture the C919 Airliner which is a 200 seater and directly competes with the Boeing 737.

This comes on the tail of Boeing’s recent announcement that a soft aircraft market has pushed them to layoff 1,100 workers across multiple locations.  How many more layoffs will come should Boeing begin losing airliner sales to the Chinese?

Chairman of the Board, CEO and President of Boeing, Jim McNerney Jr., was recently overheard musing about the possibility of moving the company to China. McNerney is no stranger to the GE company having spent over 19 years in various GE businesses, including President and CEO of GE Aircraft Engines, President of GE Asia-Pacific, and an Executive VP position at GE Capital.  His GE roots run very deep.  Somewhere in a back office where billion dollar deals are made, the GE/Boeing connection runs to the very top executive levels. You can bet that Boeing’s McNerney and GE CEO Jeff Immelt talk frequently.

Which brings everything back to here.  In Immelt’s own words, he’s “A nut for China. Every business discussion at GE should be including China, China, China, China, China.” The funny thing about that is, I’m struggling to see how helping China build jobs helps the US build jobs at home. (GE Laid off approximately 18,000 US workers in 2008) Jeffrey Immelt is President Obama’s pick to lead the Council on Jobs and Competitiveness.

Here’s another little tidbit. In March of 2010, President Obama appointed Boeing CEO, Jim McNerney, to chair the Export Council, which operates as an advisory committee on international trade. You would think the kind of technology transfer this GE deal contains would have to be signed off on by this council. Hmmmm… coincidence?

If this joint-venture is successful, US Jobs will be lost. And GE does not get into these things to lose. More will be revealed, hopefully before another million US jobs are lost.

Corporations have neither bodies to be punished nor souls to be damned. ~Chinese Proverb