Super-grocers are punishing convenience stores

Here in the northeast US, super-grocers like Wegmans are providing stiff competition to Wal-Mart in the grocery business, with more abundant produce, more ready-to-eat options and more attractive stores. But they are inflicting pain on convenience stores as well.

Consider my dad's recent visit from Connecticut. He reads the New York Post every day. You won't find the Post everyplace around Harrisburg, but you will find it in several local convenience stores. And at the enormous Giant grocery in Camp Hill.

I took him Friday morning to get the paper. I considered the Sunoco mini-mart, but decided on the Giant. My dad picked up the Post and a couple of scratch tickets. I got milk, orange juice and bread—-all things I could have gotten at the Sunoco. All told, the Giant siphoned $15 from the mini-mart. Not a big ticket for the Giant, but it is for the mini-mart. It made me think about the strategy that Giant is using. Why else would they stock the New York Post and offer easy lottery options if not to draw business away from the convenience stores? And, for me, at least, it's working.

Oh, yeah, our Giant is opening a gas station across the street from its main store. And when you spend $100 at the grocery, you get 10 cents a gallon off gas. Pretty soon the Sunoco will lose my gas business as well.

(Photo: "gas 5" by tome213 via stock.xchng)

retail strategy marketing competition

Most Significant Change - an update

A couple of months ago, I posted on Most Significant Change, a qualitative method to assess complex initiatives. Read here and here for some background.

Rick Davies, the developer of the technique, was kind enough to post a comment on the original post with some resources for those interested in MSC. Here it is in its entirety:

Hi John,

You and your readers might also like to know that there is an international email list, of 750+ people, who share information about the use of MSC. The members are mainly those using MSC in Africa and Asia, but there are also people from Europe, Australia and USA. People can join the list via this link:http://groups.yahoo.com/group/MostSignificantChanges/

I have also recently posted details about a related method of constructing stories, using a participatory process, called "Evolving storylines: A participatory design process?" at http://mandenews.blogspot.com/2007/05/evolving-project-designs-participatory.html

regards, rick davies

communications, storytelling, measurement, innovation, narrative, strategy

As Google buys Postini, corporate email surveillance grows

I shrugged my shoulders when I read the news the other day that Google was buying Postini, the corporate spam-filtering service provider. Oh, well, another acquisition. Google does about one of those a week, it seems. What's the big deal?

Then I read Stephen Baker's post on the subject in BusinessWeek Blogspotting, and I felt a weird vacuum in the pit of my stomach. Here's why: Postini's service searches all a company's emails looking for spam signals. It's trivial, especially given Google's expertise in real-time search, to expand that into looking for leaks of confidential information, customer or analyst communication that doesn't follow procedure, or... anything else. Writes Baker:

Once these data are searchable, it will become ever easier for managers to apply advanced analytics to corporate messaging. They'll be able mine these data for the latest trends of words and subjects that employees are writing about. Mapping the social networks inside and outside the company will be a cinch. And as automatic reading programs improve, companies will also be able to track the rising and falling sentiments of their work force.

Creepy, eh? Think about that the next time you send a dirty joke to your friends through your corporate email account. Or receive one, for that matter.

(Photo by hilaryaq via stock.xchng)

email acquisitions search information technology managed services surveillance

Nintendo breaks out of the living room and into the classroom

It's generally known that Nintendo deftly sidestepped the video-game console testosterone wars by focusing on an innovative motion-sensitive controller rather than amping up processing and graphics power (and price). As a result, Nintendo's Wii is the fastest-selling third-generation console in the world, well ahead of both Microsoft's XBox 360 and Sony's Playstation 3.

They've done a similar trick with their handheld device, the Nintendo DS. Also at the top of its market, the DS has two screens and recognizes handwriting. Which may not help a great deal to play Super Mario Brothers, but has opened up a brand-new market for video-game consoles: schools.

In Wednesday's Wall Street Journal, reporter Yuri Iwatani Kane writes about the use of DS's for education in Kyoto's Yawata school district (link - $$). The students use them to learn English handwriting, with software written by IE Institute, a Japanese educational-software maker. And it's not an isolated anecdote. Writes Kane:

Behind the fastest-selling portable videogame player in Japan is an unusual shift in the culture of gadgets: People are clamoring for it not just for games, but also to keep a household budget, play the guitar, and study the Buddhist scripture Heart Sutra. Since its introduction in 2004, the DS, which responds to writing and speech, has spurred software makers to fill the Japanese market with an eclectic array of reference guides, digital books and study tools.

Nintendo's greatest feat, in my mind, is its ability to expand the video-game market beyond its core audience of boys and young men, to bring in women, girls, and, as the article points out, even students.

Which is great "outside-in" thinking many companies could learn from.

(Disclosure: my six-year-old son has announced that he wants a DS for Christmas.)

marketing innovation technology videogames Wall Street Journal

US Broadband prices vs. rest of the world--nothing has changed

Let's face it. For pervasive use of advanced web applications, like streaming video, you need affordable broadband access. And the US is way behind on this count.

I talked about this in a January post, using numbers from 2005, and today I saw an update on Muniwireless.com. I was hopeful the situation had changed. But, alas, no. Even with the fall of the US dollar over the past few years (a nearly 20% decline vs. the euro since 2003), European and Asian prices for broadband are in some cases far less than ours. Here's a brief comparison:

Price per megabit:

South Korea: $0.34
Japan: $0.70
France: $1.68
Italy: $3.45
USA: $3.33 (fiber), $7.16 (cable)

(sources: US - company websites, other countries - Muniwireless.com)

Now, if you sign up for a bundled package, your price will be somewhat lower. But I can't help but feel a bit of envy for people in Seoul who can buy 50 Mbit/sec access for $17 per month. Imagine watching "Lost" reruns over that kind of connection.

On the bright side, we get a far better deal on broadband than our friends in the United Kingdom. They pay $11.31 per megabit, according to the Telegraph. Remember that the next time you pay your Comcast bill.



(Photo: "fiberoptics" by rotorhead via stock.xchng)

broadband technology pricing

T-Mobile USA turns a bug into a feature

T-Mobile is the smallest nationwide US carrier, has the fewest cellsites, and the weakest coverage. Problem, right? Well, in general, yes--but with its new product, HotSpot@Home (link), T-Mobile is turning this weakness into a strength.

HotSpot@Home relies on hybrid cellular-WiFi handsets and an elegantly-designed handoff process to allow phones to hop seamlessly from wireless LANs to T-Mobile's GSM network, and back. All for $10 per month on top of your cellular plan. (New York Times personal technology columnist David Pogue raved about the service in last Thursday's paper.)

So, lousy cell coverage in your house? Don't worry, use your home WiFi network to make your calls, without burning up cellular minutes. You can also connect at T-Mobile's 8000+ hotspots (in places like Starbucks) or, with some limitations, other public hotspots.

Are any of the other network operators going to imitate HotSpot@Home? Not likely. They're terrified of WiFi calls siphoning off minutes that they currently bill for.

Turning a bug into a feature, changing the ground rules for competition. No matter what you call it, it's innovation at its best.

It's so cool, I'm almost ready to give it a try.

Voice-to-Screen messaging - powered by SpinVox

(Photo: the Nokia 6806 with WiFi and mobile calling)

wireless innovation WiFi mobile New York Times

Did the Bear Stearns CEO golf too much? (UPDATE 16 July)

In Sunday's New York Times there appeared an article about Bear Stearns CEO James Cayne, disparaging his work ethic during the company's recent hedge fund crisis.

By consulting GHIN, an online database for posting scores and calculating handicaps, Times reporter Patrick McGeehan determined that Cayne played golf on days when important events were playing out in the hedge fund drama. A sample:

On Thursday, June 21, as several big banks pressured Bear Stearns to increase the collateral on loans they had made to its sinking fund, Mr. Cayne was back on the course. That day, he shot a 98.

The implication is Nero was fiddling as Rome was burning--that Cayne either didn't care, couldn't be bothered, or delegated management of the crisis to others.

I'm deeply suspicious of the subtext of the article. I hear these undertones: CEOs are supposed to work long hours. They need to have their hands on the wheel during a crisis. Playing golf or otherwise doing something relaxing on a weekday is loafing off. Anyone who would golf on all those days must be disconnected from his company's day-to-day reality.

But what if the truth is more complicated? Is it possible to help manage through a crisis and still get eighteen holes in after five p.m.? I don't think McGeehan wanted to know--it could have spoiled his clever story.

I'm rooting for Cayne here. Maybe he's more than a big-shot prima donna who lands his helicopter on the practice range. Maybe he's figured out a way to get some balance in his life.

If, while he was out on the golf course, he was working his lieutenants twenty hours a day on this situation, that's one thing. But if the entire executive team or for that matter if the entire company is able to create some kind of work-life balance, as opposed to grinding it out sixty or seventy hours a week, then I have three words for Mr. Cayne:

Good for you.


UPDATE 16 Jul 2007: New York Times Dealbook reports that Cayne's club is investigating him for possibly changing his score in order to win a recent tournament at the club. If this allegation turns out to be true, then he's a loser in my book and I will disavow what I wrote in this post. Because if you will cheat to win at golf, then you unquestionably lack balance in your life.

Voice-to-Screen messaging - powered by SpinVox

balance work ethic leadership golf New York Times

Author Haruki Murakami explores the similarities between music and fiction

In today's New York Times Book Review, a brief essay by Japanese author Haruki Murakami sets down in his typical crisp language how his early career running a jazz club set the stage for his move into writing world-class fiction.

Murakami, who's been the subject of an earlier post in this space, finds analogues for rhythm, melody, harmony, improvisation and performance in the creation of novels and short stories. In short, he was able to transfer the songs he heard in his head into words on the page.

It's a fascinating essay for anyone who likes to write (or read) fiction.

(Those wanting a good introduction to Murakami's fiction should check out Norwegian Wood.)

creativity fiction storytelling narrative music jazz New York Times

Great companies learn from mistakes

In the July-August Harvard Business Review, Prof. Christian Stadler of the Innsbruck University School of Management writes about "The Four Principles of Enduring Success." He's taken the "Built to Last" approach to studying successful companies and applied it to long-term leading European businesses (see the project home page). Stadler and his colleagues compared top companies ("gold medalists") with good-but-not-great companies ("silver medalists") and sorted out the differences between them. The four principles they discovered were:

• Exploit before you explore
• Diversify your business portfolio
• Remember your mistakes
• Be conservative about change

I'm particularly interested in #3. Stadler writes, "Great companies tell and retell stories of past failures to make sure they don't repeat them."

He uses Royal Dutch/Shell as an example. A close call where the founder nearly committed the company to support Hitler in the 1930's led to a policy that corporate governance could not be dominated by a single person. Similarly, HSBC learned from losses suffered from an 1873 recession that it needed a more balanced management approach than it had used, so it established two head offices--London and Hong Kong--to represent its dual interests of trade financing and capital allocation.

Great companies don't sweep mistakes under the rug. They remember them and act with those memories in mind.

mistakes failure learning leadership strategy Harvard Business Review

It's not just the network, it's making the network work

I was discussing this recent post about the ability to connect being more important than one's individual work output with my Vice President of Common Sense (a.k.a. Maura).

She said, "There are lots of people who can create networks, but there aren't many who can use those networks to get things accomplished. That's the real difficult task."

And I really couldn't respond to that at all, because, you know, she's right.

networks social networking connection collaboration